International Trade Committee on April 1st, 2015

[Martyne Malo]

Yes. When we participate in fairs and exhibitions, there are trade commissioners from Quebec and Canada. We meet with both, and it is clear that they don't work together. That can create confusion. In addition, the attitude of some of them can be biased, in the sense that they sometimes talk more about their programs and play down the benefits of those provided by the other level of government. In some cases, the climate is competitive. The fact remains that our goal, as entrepreneurs, is to find the program that works best for us.

[The Chair, Conservative, Randy Hoback]

I'm going to have to stop you there; your time's up.

We're going on to Ms. Grewal.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Chair.

Thank you to the witnesses for your time and your presentations.

Doing business internationally brings a lot of challenges, particularly while dealing with a new culture and a new language. How have you managed to navigate the language and the cultural barriers in foreign markets?

Could each one of you please tell us?

[Charles Cartmill]

I can tell you that we're very fortunate to have several universities in Halifax, and we have people attending university from all over the world. We've been careful to select employees from Africa who speak Swahili, from Brazil for Portuguese, Colombia for Spanish, and so on. We also have someone from the Philippines.

I think there's a great opportunity to hire people with a language skill, perhaps by allowing a little more immigration. I think we have some pretty strict immigration limits here in the region. We have a shrinking population, and we could use more immigration to help us out in this area.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Williams, do you have anything to say?

[John Williams]

Thank you. Yes.

I alluded to this earlier too. As Chuck just said, when we hire employees we first look to Canada. If we can't find the employees with the local knowledge we want in the market we're expanding to, we're forced to hire within that market. Sometimes it's an arduous process to get the immigration papers and to get a working visa for Canada.

With respect to cultural norms and values, again, we haven't looked to the Canadian government for any assistance on this front. Usually it's just through our network, our suppliers, or other partners we're working with at the time.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Ms. Malo.

[Martyne Malo]

The same goes for us. In terms of Japan, the advantage is that we are established there.

We have a studio in Japan. The advantage is that we have people there who are Japanese, so it helps a lot.

You have to do your homework. You have to go through each culture you want to visit, and then you have to know more about the business you're in, the way they do business. Likewise, we didn't go through any Canadian agency to do that.

Still, immigration is a burden for us. As I explained, we have to hire a lot of people. When we have to go to these markets, for example the employment market, we use our people inside the company from other countries to post jobs, for example, in their local newspapers, and so on. Again, we need to have them, or a small number of people. We do the same. We hire from Canada first, Quebec, Canada, and then we have to go out for 15% of our employees.

It would help a lot if we had a fast track for immigration, even more so in the high season when it can take up to six months before we get someone. The average is three months. But you already must have your business volume in December, let's say. If you want to have your people for June 2015, you need to start the process in December of the previous year. You have to post for three months to show that you've done your homework and that you have no one to hire from Canada. Then you have to go through the whole process again, and it could take an additional three months. That's a huge amount of time during the high season, from June to, let's say, September.

It would help a lot if you opened up these policies to ease the process, and had fast tracks for businesses like ours.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Could you also comment on the positive impacts that small and medium-sized businesses have on their local communities?

[Martyne Malo]

Our communities in Saint-Jérôme?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Yes.

[Martyne Malo]

We moved from Sainte-Adèle to Saint-Jérôme last May. We do have, I would say, a fair impact on homeowners, and so on, as our foreign employees who come to Saint-Jérôme rent houses. The homeowners are very happy about that. Retailers around the company have also seen an increase in their business.

[The Chair, Conservative, Randy Hoback]

I'm going to have to cut in there and move on.

Ms. Liu, you have five minutes.

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

Thank you, Mr. Chair.

Thank you very much for that, because it is important to keep the jobs in the Laurentians. La Presse has recently published an article on the demographic boom in the Laurentians. I was told that half of the people who lived in the Lower Laurentians were working there as well. That is great news.

Another article in La Presse talked about an entrepreneur at the helm of Absolunet in Boisbriand. He said that, when he was hiring people, some asked him which metro station Boisbriand was at. I found that funny. That being said, I think it is very important to develop the Lower Laurentians region, because it is experiencing a significant demographic increase.

Based on what you said, SMEs need quick answers because they must act very quickly. Do you think tax credits are useful for your business? Do the tax credits for research and development in technology apply to your business?

[Martyne Malo]

They do not apply in their current form because we don't develop software. However, it would be useful to expand this grant, especially if we want to compete with countries whose economy is emerging—Eastern European countries or India, for instance—and where the salaries are much lower. We would then look at productivity gains by introducing a first test with a computer application, for instance. That might help us stay competitive or bring us closer to the prices of those countries. The prices are lower because the salaries are lower there.

The business model would then change completely. If we change the service production chain with a new approach—no one is actually doing tests online—and if we need to test the approach, those credits would be useful.

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

And your company's office in Japan—

[Charles Cartmill]

Can I respond to that tax credit question?

[The Chair, Conservative, Randy Hoback]

Go ahead, Mr. Cartmill.

[Charles Cartmill]

Tax credits are a value when you're profitable and your business is up and running, but many SMEs are operating on the line as they grow their businesses, especially start-ups. It would be a long time before they start to see the benefit of tax credits, so you're far better off.... A program like SR and ED, the scientific research and experimental development credit, is really only a rebate, and it's good, but it's a rebate to companies that are already profitable.

I started all three businesses I'm talking about today from the ground floor, from concept to completion, and I can tell you, it's a long time and quite a battle. I've never taken a penny of profit out of those businesses, and as they make profit, I put it back in to grow the business. I'm fortunate to have had a career where I was able to make enough money to finance this, but this is where I've obtained my experience with financing and venture capital and BDC and EDC. I think the tax credits are good for the big companies or companies that are already making money. Many companies don't fight for them—

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

Yes, and what you said about SR and ED is interesting because I've been hearing from a lot of SMEs that the capital cost allowance has been eliminated from SR and ED. Then the changes that were made in 2012-13 have dissuaded a lot of SMEs from taking advantage of it, so certainly that merits being explored further.

I would also like to talk about venture capital. We briefly touched on the topic at our last meeting.

Ms. Malo, does that apply to your company? You have never had to use venture capital?

[Martyne Malo]

No.

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

Is that true for LTP Sports Group as well?

[John Williams]

No. Only if we're looking for a way for the shareholders to divest their interest.

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

And LED Roadway Lighting, you wouldn't have any comments on that?

[Charles Cartmill]

I have a lot to tell you about that. It's the business where I obtained equity to help finance the growth of the business and new product development, and it's an absolute nightmare. I'd never do it again. I'd shoot myself before doing it. I can tell you—