International Trade Committee on April 20th, 2015

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

Thank you, Mr. Chair, and thank you to the lady and gentlemen for being here today. Glen, I've been here about nine years and I remember your being here. It's been about four or five years since the last time and I thank you for bringing your wisdom here.

I'm very excited about what I've heard so far this afternoon, being a former small business owner-operator.

Small and medium-sized businesses are economic drivers throughout our province of British Columbia and across Canada. They are really the backbone of our economy. Our committee has been doing this study to try to encourage and help our small, medium-sized, and growing industries take advantage of the 43 trade agreements we have in place now. I know that what we've heard is that it's like water taking the path of least resistance, so that the majority of Canadian businesses export to the United States. We're looking at ways to facilitate your business and others to take advantage of them.

I'd like to start off with the two doctors. I don't know if you ever imagined in your wildest dreams going to university for 12 or 15 years and then making popsicles.

[Voices]

Oh, oh!

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

That's very good, very innovative of you. I love your story.

I'm hoping that the EU agreement might address your organics standardization issue. As you know, 28 countries with 23 different languages have to ratify it and it's still going to take another 18 months to two years. We don't know for sure, but we're working on that to try to help give Canada that economic advantage over the United States. It would be a potential market of 500 million plus people.

One of the issues we've been having is to try to educate small businesses. We have the Go Global export workshops. I don't know if you're familiar with them or not. There's one in Nanaimo on April 24, so afterwards you can talk with my colleague here, and we can try to set up one for you and Mr. Stebbins, who is on the island as well, I believe.

It provides an opportunity for SMEs to take advantage of the international opportunities and answer those questions. Kelowna—Lake Country in the Okanagan has a BDC office. I know the manager well and he loves to hear these stories and is frustrated if there's a roadblock. I know they're happy to try to facilitate. There's always that balance of due diligence versus ensuring that it's not too bureaucratic or full of red tape, and we're trying to overcome that. That's one thing we definitely want to focus on and ensure that you are aware of those opportunities.

Mr. Hodgson, you talked about the pre-screening and I'm not sure if you're aware of the Go Global export workshops. You talked about the value of the trade commissioner service; we know that the TCS...I just put one of my constituents in touch with one in Vancouver the other day and had great conversations.

I just wanted to clarify. You're saying that we should be focusing on the value chains and the SMEs with the most potential. What do you think BDC and EDC can do better to help reach out to those SMEs that have a potential for growth?

[Glen Hodgson]

Do we have an hour and a half?

I was at EDC for 10 years and was there when, as an organization, we focused on serving smaller business better. I can recall the trade minister of the time coming into our board meeting and essentially lecturing management to get their act together and get serious about small businesses. I think EDC has come a long way.

The truth is that in a financial institution you're not selecting customers so much as customers are selecting themselves. The truth is that EDC intervenes when there is an exporter who has a prospective buyer with a deal and needs insurance, financing, bonding, or whatever else to bring the deal together.

BDC is a little different because they're further upstream and are putting cash onto your balance sheet. That's why they're doing the evaluation of management capacity. BDC has found a very clever way of combining financing capacity with an evaluation of management. As an investor they're peering over your shoulder.

I think to a great extent we have the model right. EDC has found a very efficient way to serve small business. They make the tools available online. Most of what smaller companies need from EDC is insurance. It's credits insurance so they can know that they're going to get paid on the deal.

BDC is more hands on and a little more rigorous and you were probably put through the [Inaudible—Editor] a little, Dionne, with your experience there.

We are far more advanced compared to the other G-7 countries and most other major industrial countries. We don't for example have a lot of public money as subsidies. Their capital bases are there and they have a mandate to break even plus, but not necessarily to compete with the banks. So based upon my history and experience as a public sector banker, I think our model is in pretty good shape. I don't know the TCS or the Foreign Affairs products quite as well.

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

I'm not sure if you realized that we're taking this almost to the letter of the law, but you said that government needs a more surgical approach to growth-oriented companies while you have two doctors sitting right beside you.

[Glen Hodgson]

Hopefully they don't operate in public.

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

Mr. Bar-Ziv, I appreciate the size of Israel and its dynamic and gigantic innovation and research and development. I've had a chance to tour through Tel Aviv and the high-tech community as well.

I'm just wondering, was your concept something you came up with and brought from Israel? Your concept to take it to market, what was that like? Did the trade commissioner service help you to facilitate that?

[Gali Bar-Ziv]

Actually, in my previous life I was involved in selling a very cool children's toy that was founded in Israel. I was one of the early guys there, and most of the sales were to the U.S. I can probably share some experience, and I did not use any of the government services because I didn't know about them. We did a fantastic business. We sold it in 2007 just before the crash, and I was always involved in one way or another with Israel. I was just in New York attending a high-tech sort of conference.

I think when you're trying to look at where the world is going into the future, you have to open your eyes. When I go to China, I look at what the Chinese are doing and when I go to Taiwan, I look at what the Taiwanese are doing and the same in Canada and the same in Israel. I think the idea is how we can bring our understanding of the Western world to other countries.

In Israel they have great minds. It's not great minds in the sense of smart; it's just they think how to improve. Sorry, for again being the one who....

[The Chair, Conservative, Randy Hoback]

Mr. Cannan, your time has expired.

We'll move on to Ms. Freeland.

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

Thank you very much, I really appreciate your stories.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Thank you very much, Mr. Chairman.

You've seen how excited my colleague Murray is to have the great Victoria companies. Since I'm the MP for Toronto Centre, I'm going to start with the Toronto companies. It's great to have great entrepreneurs from Toronto here too.

Mr. Bar-Ziv, I thought your points about trade being a global competition were extremely well made, and you clearly have experience, not only in this current company, but in your past life, as you put it. Based on that experience, what are a couple of the best practices that you've seen from other countries in supporting their entrepreneurs in global trade that we should be doing? Is there something you've seen Israel doing? Is there something you've seen the U.S. doing? I don't know, maybe Finland is great at it.

[Gali Bar-Ziv]

I think if you come to Toronto—

[Chrystia Freeland, Liberal, Toronto Centre, ON]

I live there.

[Gali Bar-Ziv]

—I don't know if you are invited by the Israel Economic Mission to Canada, but, whoever is heading it, they run events all the time. So they'll do technology for banking and they'll get a bunch of companies that develop something and they'll go and get all of the big Canadian banks to buy other countries' technology. They'll go and do something for communications. They'll get Rogers and the Bell Media all to buy something that was made elsewhere. How can we as Canadians do the same?

We may sell language, but we sell technology at the end of the day. There are lots of companies like us, and it can be very sector oriented or it can be category oriented, and I think the way to do it is for the trade commissioners to try to create these little events. I live on an airplane. I hunt all day and if I knew there was some sort of a schedule that I can go from one hive to another, I would, because that is what business is about. I think it brings the companies that you want, the Whole Foods of the world all together and then you get a bunch of companies.

What's the notion of a market? You may have the exact same provider, but everybody likes to be in one place where you may have all those providers. It's the same thing; create that mini-market for Canadian companies. That would be my number one advice.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Okay, and you think we're not doing that enough now?

[Gali Bar-Ziv]

Not enough, no.

There are economic trade missions, but those tend to be more political and involve bigger companies, not as much as, again, sector and getting the customers together.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Now to make that work, you've cited the Israeli example. Something Israel has been very good at is a cluster strategy and something sort of similar to what Glen was talking about, but really focusing on what it sees as the country's core strengths and building out from there.

Do you think Canada needs to do that? Are we in danger of sort of spreading the peanut butter too thin across too many different areas?

[Gali Bar-Ziv]

My experience is a lot more limited in terms of all sectors. From what I know, the resource and defence sectors are very strong and quite popular when it comes to the government. I think the government should look more into IT, high tech, and security. There were lots of Canadian companies back in the day, OpenText and the like, but you don't see as many these days.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Thank you.

Dr. Laslo-Baker, I was interested in everything you had to say. I have small kids too and I'm going to yell at them when I get home for not inspiring me to found a brilliant, successful company. In particular regarding your point about the difficulties that small trading companies can have getting credit, I'd like to ask you not so much about the government side of things but how you feel about the attitude of Canadian banks. We've heard from other witnesses at the committee that they feel that maybe those conservative lending practices that served us quite well in 2008 aren't so fabulous if you're an entrepreneur, especially one doing international trade. Has that been your experience?

[Dionne Laslo-Baker]

It has absolutely. It's very interesting because we bank with BMO Harris Private Banking, and while we were there they were wonderful—having our medical clinic, anything we wanted, anything we needed was not an issue. How much do you need? Sign away. As soon as I ventured out on my own and started a company, it was not the same. It's been much more challenging, especially as a woman. I have sat in a room with some men who were saying, “What are you doing? You're taking too much risk”. It was definitely not in a supportive role, I found. Definitely, there is where we're succeeding, but not as much as we're growing.

[The Chair, Conservative, Randy Hoback]

I'm sorry but you're out of time.

We're going to move on to Mr. Shory for seven minutes.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair, and thank you to the witnesses also.

I want to start with one question to all. Have you each had a chance to deal with the trade commissioner services? If yes, what are your experiences?

[Gali Bar-Ziv]

Maybe our colleague who has spoken the least should start.

[Devinder Shory, Conservative, Calgary Northeast, AB]

We'll start with Mr. Stebbins.

Mr. Stebbins.

[Shawn Stebbins]

We don't have a lot of experience with the trade commissioners. I suspect primarily that is because when we get focused on a particular project we end up following up on that and delivering on that project. Now that we're looking at starting up local businesses and partnerships, I think we'll use them more. I did meet with a local trade commissioner representative here and got some orientation probably about three years ago. The only experience I had since then was when I was trying to learn a little bit about a company in the Netherlands that we were thinking of doing business with. Unfortunately, I never heard back on that communication. So it's not necessarily been a positive experience. That's all I have to say.