International Trade Committee on April 20th, 2015

[The Chair, Conservative, Randy Hoback]

Welcome back, colleagues. It's great to see everybody after you've had two weeks in your ridings, in your constituencies. I know you all were very busy and eager to get back to Ottawa to work on our file here, which is, pursuant to Standing Order 108(2), a study on small and medium-sized enterprises.

We have witnesses from the Conference Board of Canada; Deebee's SpecialTea Foods Ltd.; Lingo Media Corporation; and by video conference, Archipelago Marine Research Ltd.

I think I'll go in the order that we have on the document. I'd just remind the witnesses that they have eight minutes each.

Anyway, we'll start off with the Conference Board of Canada.

Mr. Hodgson, you have eight minutes.

[Glen Hodgson, Senior Vice-President and Chief Economist, Conference Board of Canada]

Thank you, Mr. Chairman and members of the committee. It's nice to be back. I was here probably four or five years ago talking about some aspects of trade.

The topic today is small business in international trade. I don't want to be the skunk at the garden party, but I thought I would start with a commentary that I wrote in The Globe and Mail about a year ago called “Governments need a surgical approach for helping small business”. Canada is small business-based economy—the data indicating that is there, which I took from the Startup Canada site—but I think the focus on small or medium-sized businesses is probably the wrong focus. I'd like to see us focus on growth-oriented companies. I came up with an expression in this commentary, “growth-oriented enterprises”, or GOEs, as the focal point.

In the commentary I talked about some of the data. There's a large productivity gap between Canada and the United States, and unfortunately a lot of that is attributable to small firms in Canada. So it's actually a negative factor, I would argue, in the functioning of our economy. I'm concerned about the fact that maybe we've done almost too much, that we've loved our SMEs to death when it comes to the tax system and other aspects of public policy intervention.

I would argue that we have to be really smart about how government intervenes to support small business. I like supporting small business. I spent a decade of my career at EDC, which I think has the model about right. It's very effective, but in a very efficient way. Maybe I could just read the last paragraph of my commentary as my first point.

Rather than supporting SMEs because of their size, governments should re-focus their energy and scarce resources on other more important business attributes, regardless of the size of the business: high growth potential; the capacity to innovate; a demonstrated ability to launch new products and services; and the willingness and expertise to tackle new growth markets successfully.

There's the starting point. I like small business, but I think what we're really looking for is companies with strong growth potential going forward. At the Conference Board we've done a lot of research over the years on small business and international opportunities. In fact, I brought two such studies just as examples. We probably have a dozen or so studies. I've been at the board for 10 years now, and in my decade we've done lots of research on small business and on Canada's fit into globalization. We have, I would hope, the strongest private sector research organization called the Global Commerce Centre doing a lot of research on Canada's fit into globalization.

We did two studies about six years ago, one called “Canadian SMEs and Globalization: Success Factors and Challenges”, and another, “Survival of the Fittest: Which SMEs Internationalize Most Extensively and Effectively?” The bottom line is that there is a prima facie case for supporting small companies, but you really have to think hard. You have to think hard about how our scarce resources can really be most effective.

I thought I would close my opening remarks with just a couple of comments on free policy advice for organizing the federal family in support of small business. First of all, going global is not for everybody. What the research shows is that firms succeed if they have key attributes going in: if they have international experience, if they have what is almost like the right ecosystem or culture. Do you have a cultural fit? Do you understand what you're getting into? Have you had experience in the past doing international business? Are you building up expertise and management capacity? You need to ask that before you even get into the attributes like finding partners abroad, finding customers abroad, and having adequate capital or risk capital. I would argue that there's almost a pre-screening required before we encourage firms to go global.

I had a chance within EDC to look at a lot of international business practices and actually do deals. I was the government relations director and then the VP of policy and then deputy chief economist working for a guy named Stephen Poloz—you may have heard of him. Steve was my boss for three years. We learned a lot about global value chains, about how business is done today. One of the things we focused on was trying to encourage Canadian companies to fit into the value chains of bigger enterprises. Rather than a B-to-C relationship, where you go from a business to a customer, you think of a B-to-B relationship, fitting into some value chain around the world. You can always find customers abroad directly, but more and more Canadian firms are having success when they fit into the global ecosystem and actually become part of global value chains.

I'm a big fan of the trade commissioner service, of EDC and BDC. In fact, I think we have the business model more or less right for all three, but you can always find ways to refine it and do better. I can recall the days when we actually used to pay small companies to go abroad to trade fairs and there were various government programs. I'm not sure there was a lot of value for money in that. I do like the focus that's been brought at EDC and BDC. We know Jean-René Halde very well. He's the president at BDC. He's really focused on high growth potential companies. I think that's a sweet spot for the conversation, thinking not about more money, but actually how to take the resources we have and focus them much more.

We should be proud of the fact we have two strong state banks in Canada in the BDC and the EDC, and an effective trade commissioner service. For me, it's all about refining that around growth opportunities: do the pre-screening, figure out which firms have the attributes to potentially succeed, and then provide the support from core government and the crown corporations to make them really effective.

I think I'll stop there, Mr. Chairman, with my opening remarks. I would be very happy to respond to questions from the members.

[The Chair, Conservative, Randy Hoback]

Thank you very much, Mr. Hodgson.

We'll move on to DeeBee's SpecialTea Foods Limited. I understand that we have with us Dionne Laslo-Baker and Stephen Baker, and you're both presenting.

I understand that we're starting with you, Dionne.

[Dionne Laslo-Baker, Owner and Chief Executive Officer, Deebee's SpecialTea Foods Ltd.]

Yes, it'll mainly be me making the presentation.

My name, as you know, is Dionne Laslo-Baker. I never thought that I would be here speaking to you as a representative of the food industry. I have a background as a medical scientist. I have a Ph.D. in an area called “maternal-fetal toxicology”. I studied the effects of exposure to drugs and chemicals in the environment on fetal development, child development, and human health.

My husband and I have a son, David. When he was three, we decided to take him off all refined sugar, artificial flavouring, and artificial colouring. We saw a noticeable difference in him. It was always a challenge for us to find for him what he would consider a treat or a dessert. When I was in the kitchen three years ago minding my own business and not looking for a new career, my son David was making organic herbal tea and his brother was making popsicles, and one of them said, “Mommy, let's make teasicles.”

To fast forward, my husband and I discovered that nobody on the planet was making an organic tea-based or herbal tea-based frozen novelty. Based on that idea, we decided to send our product out to the world tea media. We thought that if anyone would know if it existed, it would be them. They surprised us by giving us a new product of the year award, and we realized that we were onto something.

With Agri-Food Canada, we went to the Fancy Food Show, and this is one where the support for going to that show may have paid off. We met Mary-Jane Ginsberg, who was the trade commissioner in California. She was instrumental in helping our business. She introduced us to some of the big people at Whole Foods, as well as Kroger and a number of large companies.

At that time, we hadn't even completed a box. We decided to go out and see if this was really a viable option. Was it really something that would last in the market? After having lineups down the aisle and being rated top of the show by Good Morning America and The Wall Street Journal, we realized that we were onto something. We raced home, made a box, and got into the marketplace within about two months.

We launched into the United States market just a little over a year ago. We are now across half the United States. We've launched into Sprouts Farmers Market, a chain of a little over 200 retail stores. Our aim was to launch in the southern states, where our market would go throughout the winter months, where it's a rather dry marketplace compared to Canada's. We've quickly gone from a very small business in Victoria into Whole Foods in the Midwest and are hoping, in discussions with Whole Foods, to launch nationally. We're going to be in Whole Foods across Canada, speaking to Loblaw and Sobeys, and also holding discussions with Kroger and retailers in the States.

I'm one of the biggest proponents of knowing what you don't know. My team is aware of my philosophy of admitting that you don't know something and asking for help. You name it, you come and talk to me, and I'll ask for your expertise, because I know when I don't know something.

An area that I feel is lacking in a lot of new businesses, especially in the food industry, is knowledge around distribution. I asked in the industry who was the best in this area, and I was told about a team in California. I was told, though, that no one would take me on: they wouldn't take us, they were number one, they were maxed out, and they weren't taking anyone new. Anyway, needless to say, they're with us. They're representing us now, and they're assisting us with growth.

The government has been very instrumental. In fact, I've been very surprised at the level of assistance, starting with the trade commissioners, which I found very, very beneficial. Unfortunately, Mary-Jane Ginsberg's position was eliminated, which is a shame, because she was really incredibly beneficial. In fact, I think part of the reason for her strength is the fact that she and her husband ran the Blue Monkey Coconut Collection, so they knew the world of distribution. They knew who to speak to.

That was incredibly beneficial, and I think it made her stand out from others holding that position. I thought it was a shame, because she was gone and none of the other trade commissioners have come quite as close as she did, although we've gone on to work with the Investment Agriculture Foundation of British Columbia, which has really assisted us in some of our marketing efforts, and also Export Development Canada.

We have what you would call “bootstrapped” it to this point. My husband has a surgery centre—very fortunately—such that we've been able to manage the growth on our own to this point, realizing that we are going to need investment. We're going to need equity from an outside source. I think this is where we've run into a little bit of a challenge. We've gotten to a place that I think few companies have been able to reach.

Now we're at a place where we have POs coming in. We have retailers saying, “You cannot short me, or you'll be gone off the shelf.” We're trying to secure funds. We have reached out to EDC. They've been incredibly helpful. They've actually said they'll back us 100% with the banks.

They then suggested I reach out to BDC, where I found a few roadblocks, to be honest. When you're busy running an organization and you have two small children on top of that, and you're the head of each of your small departments, it can be quite challenging. We also run a centre for research and innovation under NRC-IRAP, where a number of our team members are under internships. I'm overseeing everybody. With BDC I found that each step of the way there was always kind of a “Well, this is what you're going to have to do. You're going to have to do this. You haven't got this. We want to see equity investors.” The fact that we had bootstrapped it actually went against us. They told us that they wanted to see others interested. I told them that others were knocking on our door, but we decided to try to keep this a 100% woman-owned, family-run company. That has been quite challenging.

One of my team members e-mailed me a few weeks ago and said, “Look: $700 million has been put aside by BDC for female entrepreneurs.” I got on the phone, I called BDC, and they said, “Well, we heard that, but we don't know anything about it yet.” Okay. So I spoke to them today and was told, yes, that just means it's been put aside, but it's still the same as the other investment in BDC, with the same things you have to go through. It's not much different from the other except that it's put aside for women.

They're really not accommodating, whereas NRC-IRAP has put someone aside as a specialist who has assisted me every step of the way. She and I speak almost weekly or biweekly and talk about how we can improve. We're innovating new products. We have three or four products in the innovation stage right now that we've been told will be as big as, if not bigger than, the products we have out right now. She's a direct link and has assisted me with growing that aspect of our business. I feel that if we had this on the financial end of things, it would assist companies that really can make it to this point.

I really like the idea—just as you said—of growth potential, growth-oriented companies, and, when you see that potential, to really be able to foster it by putting someone in place, similar to what has been done at NRC-IRAP.

We have interest from around the globe. We have a challenge with the EU. We're exporting to the United States, but we are at a disadvantage if we produce in Canada, because we don't have the agreement in the U.K. and in the EU that we have in the United States.

I think my husband might want to speak just a little bit about that.

[Stephen Baker, Deebee's SpecialTea Foods Ltd.]

With regard to the equivalency agreement for organic trade with the EU, they're happy to accept our raw materials but not our manufactured products. That's something that needs to be addressed. We have to go through additional certifications that are time-consuming and costly, and people just give up on that.

[The Chair, Conservative, Randy Hoback]

Thank you very much. The joys of the EU: I know what that's like from my previous career.

We'll move on to our next witness. From Lingo Media Corporation, we have Gali Bar-Ziv.

[Gali Bar-Ziv, Chief Operating Officer, Lingo Media Corporation]

Yes, Gali Bar-Ziv: “Bar” means son, “Ziv” means light—son of light.

[The Chair, Conservative, Randy Hoback]

Sunlight.

[Voices]

Oh, oh!

[Gali Bar-Ziv]

That comes with a different accent.

[The Chair, Conservative, Randy Hoback]

Well, please enlighten us, sir.

[Voices]

Oh, oh!

[A voice]

With your sunny disposition.

[The Chair, Conservative, Randy Hoback]

The floor is yours for eight minutes.

[Gali Bar-Ziv]

Thank you.

First of all, good afternoon.

Thank you, Chair and Vice-Chair. It's a privilege to be here.

As you can see, my name is a little different. Like many Canadians, I wasn't born here. I am a proud Canadian. I moved here about 16 years ago to pursue an MBA in Toronto.

I am originally from Israel and I will take a few paragraphs or sentences, if you will, to discuss the nature of that country, because I think that when you talk about international trade you can learn from a country that is miniscule in comparison to Canada. Obviously, it has a fraction of our population, with no real natural resources, yet the vast majority of the economy is based on one thing: commerce with the outside world.

If you look at the borders, there is no real trade with any of the neighbouring countries, but then you have the other countries. The country and the government traditionally have been very supportive of different companies and trade in general in terms of supporting both funding and relationships, etc.

When you look at technology companies, I don't know if you're aware but the second largest number of companies listed second on NASDAQ after American ones are not Canadian, but Israeli. A lot of that based on trade policies.

Having said that, thanks to the Canadian free trade agreement with Colombia, our company was fortunate enough last year to win against, among others, an Israeli company that did not have such an agreement. The free trade agreement with the point system made the difference.

Our company teaches English. We combine technology and content into an online environment. The contract we were awarded was to train Colombians nationwide, in a contract with the government. As a result, we hired 15 new employees—obviously on quite a fast growth trajectory.

We also have a contract with the Government of China, whereby we publish books in English. We have about a 60% market share in primary schools.

You'll be proud to know that most Chinese children learn Canadian English; that is quite a thing. We are moving beyond English, especially in Colombia, to French, Mandarin, and some other languages.

We use the trade commissioners, as we find them to be very helpful, as do some of our colleagues.

Unless you go directly to consumers, the nature of business is that it's all based on relationships and the best doesn't always win; many times it's who you know, who has the shortest distance to the end goal, which is the contract. Those relationships are paramount to any type of success. The trade commissioners do some of that field work. However, that's where it ends and, obviously, it moves into the company, which is fine.

We tried to cooperate with the CCC and we found it to be more challenging. I think they are much more targeted to large organizations—the Bombardiers of the world, the defence-oriented organizations—but I think you can find growth in the small or medium-sized companies that can bring funds into the country. This is the one opportunity where you can create something with your head and bring capital into the country. If you look beyond the relationship introduction, when we talk about support and not necessarily funding support, it is as much about trying to get to the goal.

Israel has something called the Office of the Chief Scientist. It's an organization that provides lots of funding for technology-wide research and development. They cooperate differently with different countries so we want some sort of a contract with the Chief Scientist in Israel.

Any Canadian non-profit cooperates to develop a speech recognition analysis, so when you speak English it will analyze how you pronounce the different words and you can work on your pronunciation. If you look at Asians or Latinos, you can improve the speaker's comprehension by using software with a very sophisticated algorithm.

Again, I think it would be very helpful for Canada to have different elements in terms of what it does with trade, and to maybe have more help or facilities or opportunities for the smaller companies rather than just for the big organizations.

Thank you.

[The Chair, Conservative, Randy Hoback]

Thank you very much, Gali.

We'll move on to our last witness, Shawn Stebbins, president of Archipelago Marine Research Ltd.

Mr. Stebbins, you have eight minutes, and the floor is yours.

[Shawn Stebbins, President, Archipelago Marine Research Ltd.]

Thanks, Randy.

You're not the only one to have trouble pronouncing that word. I've lived with that for over 30 years.

Good afternoon. Thank you for the invitation. I'm very sorry that I'm not able to attend in person. I regret not being able to make the trip. Ottawa is one of my favourite cities.

I'm a fishery biologist and president of Archipelago Marine Research. I'm also a shareholder in the company and I've worked here for most of my career.

Just before I start, I also want to support Glen's comments about trying to focus efforts on growth-oriented business and high-potential business. I think that makes a lot of sense. I like to think that we could fit into that category, but we'd have to have an independent assessment of that.

Our company was formed in the late seventies. We've been around for 38 years. It was formed by five marine biology graduates who basically wanted to strike out and do business on their own. I joined the company about seven years after that.

The company has a long history of steady growth. Our business is focused on delivery of marine environmental services, primarily from our Victoria head office, to both government and private sector clients. We are still a private company. We have four shareholders who all actively participate in the business.

Our two primary areas of business are marine environmental monitoring, assessment, and planning, and also commercial fishery monitoring, data analysis, and reporting. Archipelago currently achieves in the neighbourhood of $10 million of revenue annually, about 85% of which is associated with our commercial fishing customers.

Revenues are split between services at 90% and products at 10%. Our international sales vary considerably from year to year but are generally between 15% and 25% of sales and include both products and services.

We have between 170 and 200 staff, some of whom are seasonal. That's the equivalent of about 135 person years annually. The majority of staff are located in Victoria.

When we do international business, we do it primarily through contractors or short-term travel. In addition, we recently established a subsidiary in Canberra, Australia, to deliver electronic fishery monitoring services to commercial fisheries there on behalf of the Australian government.

The bulk of our international sales involve this new technology. Working with local industry back as early as 2000, Archipelago developed the technology. It involves a vessel-based industrial computing platform, along with sensors and a number of parallel software products that facilitate data collection, interpretation, and reporting from an active commercial fishing vessel.

We also leverage the new technology to deliver professional consulting services to the customers who are using the technology, so we help design monitoring programs and implement them and move them to an operational basis.

Archipelago has been marketing these EM products and related services internationally since 2007. Our customers include Australia and New Zealand in the southern hemisphere; Denmark, Scotland, England, Netherlands, Germany, and France in northern Europe; and the United States. We've also completed projects with NGOs and the fishing industry in some of these locations.

The primary motivation for customers to purchase these products is to improve the monitoring and associated data available from commercial fisheries in order to improve decision-making around science, management, and enforcement within these fisheries. The ultimate objective of all this, of course, is to increase resource health and improve the long-term sustainability of fisheries.

Another benefit can be accrued by the fishing industry if it is able to prove it is using sustainable fishing practices. Those in themselves benefit the long-term health of the resource, but seafood markets benefit since, increasingly, a higher value is put on sustainable seafood.

Archipelago, like DeeBee's, has chosen to self-fund the development and marketing of this new technology. Being a services-based business for decades, we've had relatively tight margins, and therefore we've had significant challenges in developing this new technology. It's been an ongoing struggle for us to develop and manufacture these products and to develop what's essentially a brand new market at the same time.

The challenge resides partly in our lack of expertise and knowledge in new areas of business—like Dionne, I'm not afraid to say what I don't know, and there's an awful lot to learn—but also in our limited financial resources.

I'd like to comment on some of the resources and programs that are available and have helped us along the way.

The first thing I would say is that our five-person R and D team represents a new cost to our business, with no direct offsetting revenue. The SR and ED tax credit program has been a considerable benefit to Archipelago's development in both the hardware and software products. Without this assistance we could not have made the progress we have.

Locally, VIATeC—the Victoria Advanced Technology Council—and the Acetech organization in Vancouver have played key roles in assisting me and others of my staff to acquire the expertise required to develop products and work to develop the resources for international business. These organizations have helped us to successfully develop products and also improve our business processes and expertise. This has been done through educational programs, mentorships, and facilitation of networking in our community. In my view these organizations are a key communication tool to get the word out to industry regarding government programs that assist with the development of international trade in Canada.

More recently we've begun to access the funding and technical support available through the IRAP program. As Archipelago has been experiencing a lag in sales recently, this program has been valuable to assist us to maintain our momentum with product development and innovation in functionality that we would otherwise not be able to continue. We're also currently applying for a term loan through our bank, with support from Export Development Canada under the export guarantee program. It looks as if this is going to be approved. I can say unequivocally that if this loan wasn't there to support the investment that we've made in establishing our Australian subsidiary, we would have some serious concerns moving forward.

Another challenge we face with international sales, and I think I heard this a bit from one of the other speakers, is nationalist protectionism. This has been evident in particular in the U.S., where we've lost some competitive tenders to what we feel are lesser-qualified competitors. Sometimes it's through legislated controls, such as small business set-aside in the U.S., but it can be dictated just by simple policy statements such as Buy America. In some locations we've come up against government-supported competition as well.

In summary, self-funding is likely our primary challenge for research and development, for international marketing and sales, and for establishing an international presence. Second is developing or acquiring new expertise in product development and international marketing and sales. Finally, it would be convincing governments, including our own, to adopt and fund the transition to a valuable new monitoring tool for fisheries.

Thank you.

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Stebbins.

We'll go to our first round of questions.

Mr. Rankin, you have the floor for seven minutes.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here this afternoon, both in person and by Internet.

I'm very pleased to be here. I'm not normally a member of this committee. It's particularly exciting for me when I have both Dr. Laslo-Baker and Dr. Baker from my riding of Victoria, as well as Mr. Stebbins of Archipelago Marine Research, so I'm grateful to you.

I want to say that you're both from Victoria and you're both winners of the BC Export Awards—one, in your case, for a new export category, and Mr. Stebbins, your firm for the sustainability category.

Congratulations to you both. It's really exciting.

I want to ask you both, and I'd invite as well, if I could, Mr. Bar-Ziv, to comment on the following. It's a very wide-open question, and each of you have touched a little bit on it. The question is on how the government of Canada could improve its service delivery to small businesses like yours. You've indicated some problems that you've encountered in trying to grow exports, and some great things you've encountered as well, it needs to be said.

Mr. Stebbins, you talked about VIATeC. You said they provide key communication tools to let you know more about the government programs that are available. This begs the question of whether we should rely on groups like that to get the word out or whether the government should communicate more directly.

I'd ask you to talk about efficiencies, overlaps, gaps, if you would.

Perhaps we could start with Deebee's.

[Dionne Laslo-Baker]

I have a Ph.D., so my background really is as a research scientist, so I kind of knew there was going to be funding out there and I really think that put me at a bit of an advantage. I think that for new companies starting out, if there could be a central system, something like NRC or IRAP, where a company starting out might be able to access somebody, that could help guide them in the beginning.

I know there is the issue of who will actually have this growth potential, but I think that you're really in new waters. Unless you're a really well-experienced entrepreneur, I think having some guidance to really maximize the brainpower that's in Canada would be very, very beneficial. A lot of people come to me asking for advice on where to get started, and I quickly tell them all the things they could access, but I also tell them about some of the challenges they may face.

As I mentioned, looking at strategic investors and even having, as my husband was suggesting, a central roster, would be useful. It would be something for when you're at the point where there is so much growth potential and you have to ask yourselves, “Wow, do we have to sell out in order to get there and make it?” We've had to ask ourselves that when we can hardly put food on the table because we're pushing so hard to meet the demand that is there, even though that is what we all want. So I think it would be very beneficial to have assistance both at the beginning to access what's there, but also assistance in growing financially, which is of course the basis of how we can grow.

[Murray Rankin, NDP, Victoria, BC]

Thanks.

Could I invite Mr. Stebbins to comment?

[Shawn Stebbins]

Sure. From my perspective it's all about getting the information out there. Most of us have our noses down, as you've heard. I'm a marine biologist and my partner is a marine biologist, and we don't have a lot of business background or training. So accessing the resources that exist, figuring out what they are, where they are, and how to access them is a big part of the challenge.

Generally we have our hands full simply trying to run the business. We're working in the business, and one of the things I've learned through working with colleagues and getting business training is to learn to work on the business. It's often hard for those of us who are trying to make payroll and keep the business afloat to think about some of these other things, so any mechanisms at all to distribute information....

I have mentioned from our community VIATeC and Acetech as organizations that are very good at disseminating information and creating environments where CEOs, who have more business experience than I have, work in groups to share their experiences with each other. That has been extremely helpful to me.

Another area that I could comment on, at least in Victoria, is to tell you that we have connected with some of the leaders in the University of Victoria business school, the Gustavson School of Business. We have also done some work with Royal Roads University and I find those connections are really valuable. Maybe there's something there with these business schools that might provide some potential to help disseminate information and break CEOs away from their business and think a little bit more about running the business. A lot of it comes down to networking and simply getting out there. I know that I've had to put a higher priority on those kinds of activities, and it has paid off.

[Murray Rankin, NDP, Victoria, BC]

Thank you.

Mr. Bar-Ziv.

[Gali Bar-Ziv]

I think I would divide this into three: first, domestically I've been involved in some panels, inviting some of the trade commissioners sitting with Ed Fast trying to share some of the experiences that we have experienced with companies that are looking to sell internationally and abroad. My colleagues here are communicating, networking with relationships, and sharing some of those ideas is vital.

Second, I think, are some events abroad, so when you look at different markets...because I see other countries do it. Really, in business you compete against everybody. The moment you go global, you're then competing against everybody. When you compete against the French, you're competing against whatever the French government is doing. When you're competing against Rosetta Stone, which is an American company, you compete against the mayor of D.C. who's going on their behalf to try to open business for them, so we have to remember that it's not only the company.

Third, like everybody else, it's always funding. I think that maybe there's an approach that looks at international trade almost like VC, so yes, there will be some losses, but I think in the greater scheme of things if the understanding is that there's a big payout in the end, which is great employment and exports, that may be bigger than whatever losses you may have incurred.

[The Chair, Conservative, Randy Hoback]

I'm going to have to step in right there. We're over your time, Mr. Rankin.

We'll go on to Mr. Cannan.