International Trade Committee on April 1st, 2015

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Cartmill. I'm sorry, your time has expired. I know you'd like to say more.

I'm going to proceed with Mr. Allen.

We're expecting votes any minute now. So, Mr. Allen, we'll give you the floor until we see the lights flash.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair. I'll probably hardly be able to get started with the time I have left.

Ms. Malo, I just wanted to ask a quick question about the technology nature of your business, your experience, your profile of outsourcing, and those types of things. You hit on it a little bit when you were answering Ms. Liu's question. Regarding your capability of using testing when you're hiring employees to actually grow your business, is the capability there for you to actually be able to outsource this to other countries, as other businesses are doing, so that you avoid all the challenges you might have in bringing people in and you can actually source people to do the work in that country and in that language?

[Martyne Malo]

Yes, do you mean if I would have kind of a platform to do testing online, for example? Yes, if I could have this technology, of course it would help.

The other thing is that it could help some clients who don't have any issue about security, because when it comes to AAA titles, for example, you have to have very secure facilities because they're investing a lot of money. We're talking about millions of dollars, so they wouldn't go for that. So mobile testing, for example, or indies, they would go for that, but not for the AAA.

The other possibility to avoid immigration or having people come in would be to open offices in different places, which would give the employment outside the country, so you don't want to do that.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

No, I just wondered about the possibility. Thank you.

Mr. Cartmill, one of the things you mentioned was the regional development agencies like ACOA giving loan guarantees. I just would like to refer you back to the tremendous history we've had in New Brunswick with loan guarantees for companies. You know the Atcon debacle we had and the situation with the provincial government trying to set up with caisses populaires to be a loan guarantor for businesses at the same time. That was a real challenge. From what I understood from businesses, they were having a hard time actually getting this even set up so that this could actually happen. Is that really practical for that to happen, given the climate that governments seem to overly subsidize business?

[Charles Cartmill]

I'll tell you, it wouldn't be a problem if you could eliminate the politics from it, because generally the staff are excellent. I find that I work with the staff, not with the politicians, and they're looking long-term at their jobs and want to make good decisions.

If you want to help SMEs, the biggest problem they have is financing growth and financing exports. There is nothing better than a line of credit. It ties into equity. When you get equity, some of that looks like debt, and it also completely transforms an entrepreneurial business into a behemoth. You have to have a board of directors. BDC and EDC will not invest directly in an SME. They insist on having a venture capitalist in to value the enterprise and the venture capitalist's total goal is to take over control of the board—

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Cartmill. I'm sorry, but we have the bells going off here now.

We have to stop now, unless I have consent for Mr. Allen to just finish his minute of questions, if you want to Mr. Allen.

Do I have consent to do that?

So finish your questions.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay.

[The Chair, Conservative, Randy Hoback]

I think what we'll do then is adjourn this meeting and let the witnesses leave, because by the time we vote and get back, we may have time for another five to ten minutes, maximum, so it's just not worth holding witnesses for that period of time.

Mr. Allen, you've got about a minute and a half, and then we will adjourn.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I just want to pick up with Mr. Williams. Just on the question of inventory outside of Canada, it's a good point because as you're financing growth and locating that, you indicated that you're having some challenges with the banks wanting to take the risk to cash-flow and fund that. Given your background, what do you see? Even if another entity were actually financing that, would that change the actual reporting that you would have for that on your balance sheet? Would it actually change very much? Have you seen any movement in that regard in the past few years?

[John Williams]

Honestly, I don't have a solution for how you would finance outside of Canada right now. I think it just slows down the pace of growth as you build up equity in those countries and you establish banking relationships in those countries.

Philosophically I'm kind of opposed against guarantees from the government. I would like less government involvement, not more. So I really don't have an answer for how we provide financing to Canadian companies for working capital outside of Canada.

I will give thumbs up to EDC. It does an outstanding job on the receivables side of the business.

[The Chair, Conservative, Randy Hoback]

Thank you very much.

Thank you, colleagues.

We will adjourn, and I trust you will all have a good time. Thank you very much.

This meeting is adjourned.