International Trade Committee on March 9th, 2015

[Susan Bincoletto]

In terms of the Trade Commissioner Service, we are realizing that there is a need for deeper and greater knowledge of what that all means. We are no longer selling a product. We are selling a sub-component of a product that can be used for a plane, an engine or many other applications. That requires knowledge of how the industry is evolving.

That is what the Canadian trade commissioners are trying to better understand so that they can then send the information to our trade missions. They then know, for instance, in the case of Boeing, Airbus or BMW, why those companies need that small component. We are no longer talking about the traditional sales. We still have the traditional sales of wheat, but there is also a lot of cutting-edge high tech involved in the system of value chains.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

So the approach is based on the ability of people and experts to acquire knowledge. We are talking about institutionalized knowledge and so on.

[Susan Bincoletto]

For trade commissioners, it is very important—I am talking about my service here—to be familiar with the new technologies and new developments and to always be on the lookout for them. They go to conferences to talk to business people and need to know the jargon of the business world; otherwise, they are not useful enough. The business community wants specific solutions. They do not want generalities. That is the challenge facing trade commissioners. They must always be learning.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Okay.

[Shereen Benzvy Miller]

We also invest in mentoring. It is very helpful when an entrepreneur has a mentor who knows how to make a business grow like theirs. The advice is very specific.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you very much.

[The Chair, Conservative, Randy Hoback]

Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

This is a very interesting and enlightening conversation. I want to touch on three final points.

Mr. Carty, you talked about CCC and what you have been doing, working with Western Economic Diversification.

We've talked to BDC. I have Scot Speiser as my regional manager. You work closely with BDC and EDC, Export Development. Maybe just share a little about the role of investment and access to capital for foreign investment and making Canadian SMEs and the tourism operators export-ready.

[Michel Bergeron]

I can maybe start.

As I mentioned in my remarks, it's very important that our Canadian entrepreneurs continue to invest, especially for those expanding into global markets, so that they have the ability to invest either in their capacity to serve those foreign markets, or in some cases something we've started doing is to help fund their acquisition into foreign markets, which is an important market development strategy for them.

As I mentioned, access to financing for what resides outside of Canada is often riskier for our private financial institutions, so access to financing becomes important. This is where EDC and BDC are trying to compensate for this limited risk appetite.

[Todd Winterhalt]

Maybe I'll just jump in quickly.

I think he's exactly right. As Michel says we do have a Canadian direct investment abroad program that allows us to finance a Canadian company's investment in the purchase of a foreign sub to really help grow their footprint. That's available for companies of all sizes, SME included.

As was also mentioned, on the venture capital side, we have an equity team at EDC that does direct venture capital investments into smaller Canadian firms here to help them better prepare and grow their businesses to go international. On the flip side, we also directly invest into international funds and then try to connect the investee companies with Canadian suppliers, so it's that pull strategy I referred to earlier.

Both internationally and domestically we can come to the table with equity investments for Canadian companies.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you.

Could you maybe expand a little bit on the connection between the SME exports and creating domestic jobs, and the fact that one in five jobs or 20% of our GDP is based on trade? We're a trading nation. We talked about the GMAP strategy going from 29% to 50% by 2018 for emerging markets. I think that's 11,000 to 21,000 companies, and that would create about 40,000 jobs.

How do we benchmark and move forward to get to that 40,000 mark? Maybe you could expand a little bit more on that linkage.

[Todd Winterhalt]

For us it's fairly simple math in terms of the economics behind it. You're exactly right. For every dollar of export, you generate a certain number of Canadian jobs. It is looking at doubling the number of exports to emerging markets. We're at roughly 10,000. You're looking at roughly four jobs created, maintained here in Canada, based on those incremental export sales. That's how we arrive at the 40,000.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Finishing off with our trade commissioner service, we have regional offices in Canada. Maybe you could expand a little bit more on how they are positioned and what the criteria are based on, as well as for some of our international locations and some of the new locations and why we've positioned them according to GMAP.

[Susan Bincoletto]

We have regional offices in every region of the country. Their basic responsibility is to make sure they understand the circumstances of the region they serve and know which sectors are the most promising for international opportunities. Based on their business intelligence gathering, they provide the names of those companies to our missions, our embassies, and our consulate generals abroad where their sister trade commissioners are. Then they see whether there are opportunities that can actually happen in those countries.

That requires working with a company, understanding if their assessment of their potential is right, and if they need to find solutions to problems that they think they can't solve, to solve them. That's where the regional office is the hub of determining the Canadian capacity in Canada so that they can feed the pipeline of the Canadian capacity to our posts.

We have 160 posts around the world. We reallocate depending on the priorities and we've now opened four offices in China in tier two and tier three cities because we want to make sure that we are present in China. The small cities in China are bigger than the biggest city in Canada, so there is a lot of opportunity, and the sales there can really make a big difference for an SME.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you very much. Did I mention we have some wine that we want to export too?

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Cannon.

Witnesses, I want to thank you for today. I have a little bit of homework for you.

Mrs. Grewal asked for some examples earlier on. If you could provide some examples to the committee, just within the next couple of weeks, that would be great and we can include them in the report.

[Susan Bincoletto]

Absolutely.

[The Chair, Conservative, Randy Hoback]

I will excuse the witnesses.

Colleagues, we'll let the witnesses leave the room and then we'll get on with the motion.

Mr. Cannan, let's get started here again.

Mr. Regan, you wanted to introduce the motion. If you want to go ahead and read it into the record, that would be great.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Chairman, I move:

That the Committee invite the Minister of International Trade to appear before it, for a total of one (1) hour, to discuss the 2015-16 Main Estimates, and that the meeting be televised.

[The Chair, Conservative, Randy Hoback]

Thank you.

[Geoff Regan, Liberal, Halifax West, NS]

I gather my colleague from the NDP will be moving an amendment to ask that this be after the report on priorities and planning for the department is tabled. If that is the case, it strikes me that what we ought to be doing is asking for the minister to come with his officials, for him to stay for an hour, and the officials perhaps to stay for the second hour.

My motion doesn't provide for that but I think that's probably what we ought to try to do.

[The Chair, Conservative, Randy Hoback]

Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

That's fine. I think that's reasonable.

Looking at the motion, there's only one item on the main estimates so the minister could probably wrap that up in about five minutes. I was just wondering if we could have a friendly amendment that says, “to discuss the 2015-16 Main Estimates, as well as the current SME study, and that the meeting be televised.”

So it's the same thing.

[The Chair, Conservative, Randy Hoback]

It's your motion, Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

It struck me that including the material in the report on plans and priorities makes sense. Is that your view as well?