Evidence of meeting #51 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.
A recording is available from Parliament.
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
Thank you kindly for making the trip to meet with us today.
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
Aside from language services, are there any other services you’d like the federal government to provide?
Director, Oviva
Yes. Our biggest challenge as a company is sending samples abroad for export. Right now, sending a case of maple water to Japan, as we did, cost more than $400. We sent one to China, and it cost $400. We sent one to Australia, and the cost was $400. We sent one to Europe for just under $400.
That’s a huge expense for a small business like ours. One exporter even told us that if we wanted to set up online ordering, it would be cheaper to send a container to China and then have people in Canada order a case online, because, in China, Internet shipping is subsidized. But we have to pay full price. Just sending our maple water from Quebec to Manitoba is extremely expensive. As far as online orders are concerned, we wouldn’t be able to compete. It would be cheaper to send containers to China and then have people in Manitoba order them from China. That would cost less.
The cost of shipping products domestically isn’t competitive. It’s much more expensive to ship something within Canada than it is to ship a large quantity to China. It makes no sense. Not only do we need help regionally, but we also need help Canada-wide. We need assistance so that we can accommodate online orders. We need some sort of subsidy to ship local deliveries commercially.
The trend is towards a distribution method based on online orders. In Canada, though, we don’t have the structure in place to compete with other countries.
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
That’s very enlightening. Thank you kindly.
Regardless, I think you’ve found some new customers right here.
To change the channel a bit, I'm particularly interested also in the question of venture capital, because we know that in Canada it's much harder to obtain. Also, we've been discussing for years how to encourage venture capital and what the right formula would be.
Could any of the witnesses comment—maybe Mr. Deveau, or you, Mr. Menawat, as I see you nodding—on their experience with this and how the federal government could encourage more investment?
President and Chief Executive Officer, Novadaq Technologies Inc.
It's really a very complex topic for sure, and I'll try to be very quick.
In our particular case, as I mentioned, we were able to raise the first $40 million or $50 million in Canada. However, the sources that we got the money from were rather unusual. The Richardson family in Winnipeg helped start the company. There were also the hospitals of Ontario pension plan and the Fairfax insurance company.
These are not typical venture capital groups, but in our case we needed long-term thinkers, and in venture capital in Canada, it tends to be that they put a little bit of money into a lot of things. That keeps everybody at very high risk and thereby the returns tend to be relatively low. I've actually talked with BDC and have given them some thoughts on this as well: take some bigger bets, put money on fewer things, and make sure you see them through for 10 or 12 years and see them to success. In a nutshell, I think that's what I would say.
Conservative
The Chair Conservative Randy Hoback
We have about two minutes, and I do have the chair's prerogative to ask a few questions, so I think I'm going to take advantage of that today.
My first really quick question is for Mr. St-Amour.
Conservative
The Chair Conservative Randy Hoback
Are you aware that there are workshops going on across Canada called Go Global? BDC, EDC, and the trade commissioners get together with companies the size of yours and pair them up with companies that are experienced in exporting, and explain the suite of goods and options and proposals that are available to small and medium-sized enterprises like yours so they can get started in the exporting sector. Have you been to any of those Go Global workshops? Are you aware of them? You are now.
Director, Oviva
Right now, the information I get comes from Laurentides Économique. The organization acts as a federal-provincial link, a kind of funnel, if you will.
Thank you very much for the information.
Conservative
The Chair Conservative Randy Hoback
I think some of the things you were talking about, some of the frustrations you're feeling, are frustrations that other companies your size have grown from and have gone through. Instead of reinventing the wheel, why not learn from them and what they did and see what options are available to you through the different organizations that are there?
To my friends in Winkler, Manitoba, I used to work for a little company called Flexi-Coil, which was bought out by Case New Holland. I used to spend a good chunk of my time in Europe. I was even responsible for eastern Europe, including Ukraine. I had lots of fun.
One of the biggest issues we had back then was getting paid. We bartered and we did all sorts of interesting things to get paid. I'm just curious: are you utilizing EDC and that factor to ensure payment and to take away the political risk you're facing in some of those countries?
Director of Finance, CanAgro Exports Inc.
We are as much as we can. A lot of our customers are resistant to submitting financial statements to EDC, but we've had a little bit of success there working with the EDC representative who works out of the Canadian embassy in Moscow. He covers the region of Kazakhstan. They are much more comfortable communicating with him because he's a Russian national. He speaks their language, and he knows their culture. Working with the EDC representative in our market as well as with our representative in Canada has really helped us.
We do get receivables insurance that way, and EDC is also working right now on actually providing us with bridge financing so we can purchase inventory and have six or eight months to pay for it, which gives us time then to ship it, turn it, and sell it. Then we need time to collect cash as well.
Conservative
The Chair Conservative Randy Hoback
I think I'm out of time here, so I want to thank all the witnesses here today. I'd love to talk with you guys some more, so maybe sometime I'll be out in Winkler and I'll stop in and have a coffee with you. It sounds very interesting.
Conservative
The Chair Conservative Randy Hoback
To all the witnesses, thank you so much for bearing with us today through our votes and for being here to give us the information you've provided.
The meeting is adjourned.