International Trade Committee on April 27th, 2015

[Nicolas Letenneur]

Yes, but as I explained earlier, transportation costs are still an issue. Having some transportation support may help open up the market to us. The other option is technology transfers. That's the only method I've been able to find so far. It's definitely a step in the right direction, as far as opening up the Asian market and promoting our products are concerned.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

How would Canada's non-participation in the TPP agreement affect you? Would it be a problem?

[Nicolas Letenneur]

It would be unfortunate. I think it's important for us to be involved.

[Denis Leclerc]

What we want is access to the markets.

It's access to market and access to capital.

So how do we gain market access? How can we be at the table when decisions are being made?

Increasingly, we are going to see tariff barriers, as well as efforts to counter competition. There is movement right now in the technology sphere and with respect to resources. The whole circular economy could impede commercialization. It's truly in our best interest to be at the table and to sign agreements with a variety of markets to help Canadian businesses so they can export their products to other countries.

[The Vice-Chair, NDP, Don Davies]

Thank you.

Mr. Cannan, you have seven minutes.

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

Thank you, Mr. Chair.

Thank you too, lady and gentlemen, for being here and sharing your stories.

The committee has been hearing from a variety of small and medium-sized enterprises from coast to coast to coast. It's very interesting to hear the stories. I'm a former small business owner myself, an operator. I can see sometimes, especially the start-ups.... Mr. Hall, you might have thought there was more month than money sometimes.

There's that saying that first your three or four sources of funding are your family, friends, and fools. Once you get after that, you start to second-guess yourself. But I applaud each one of you for your entrepreneurial innovative drive.

Mr. Hall, I was reading online the story about how you acquired this company. It's an idea that you've taken now to the mining industry. Did you attend the PDAC conference in Toronto earlier this year, or any trade shows?

[Brandon Hall]

We did not attend PDAC. That's more for development and exploration than it is for operators. I will be attending the CIM in two weeks in Montreal. But last year was a tough year in mining in Saskatchewan; it was a tough year in everything in Saskatchewan. Cash was pretty tight, and we didn't have money to be going to trade shows last year.

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

Moving forward, now you have 45 employees and $6 million in growth, exponential numbers. It is an incredible record in rapid growth. What do you see as a projection here? What are you looking at in the future, and what can we do as a government to help continue that growth?

[Brandon Hall]

I guess I could have put a little bit more detail in there. In 2013, I went from 5,000 square feet to 45,000 square feet and from four employees to 45 employees, with $6 million in sales. Then, with the downturn in the economy last year, I laid off roughly half of my employees. I was down to 26 people. Then, as of December 31, I was officially acquired by Prairie Machine and Parts. Now we are 150 strong and have 300,000 square feet.

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

Is labour an issue?

[Brandon Hall]

Typically, labour has not been an issue. No, I wouldn't say labour is an issue. There have been some targeted, specific skill sets that I haven't been able to find, but just general labour, no.

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

I am going to throw this open to all the witnesses. I will start with you. We have something called GMAP, the global markets action plan. That's the broad framework of our government's aggressive trade agenda. When we started in 2006, we had five trade agreements. I have been on the trade committee for just over nine years, and now we have 38 additional trade agreements.

Are you aware of what's called global workshops, which have taken place across the country and are available to help small business owners such as you?

[Brandon Hall]

Yes. I have been to a few of the global workshops in Saskatoon here. The Go Global event was maybe a month ago. Last year, there was another global export workshop through the chamber of commerce here.

Yes, I am aware and I do attend when I can.

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

Have they been helpful?

[Brandon Hall]

Yes, definitely. They are good networking. As I said in my introduction, it is things like this that the Canadian business owners need to attend. If they can't attend, maybe some form of small blurb and outline, a kind of bulletin of what was presented, what was talked about, and what the programs are would be very beneficial for those who were invited but could not attend.

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

It could be something like a YouTube recap video of some sort that you could watch at home.

[Brandon Hall]

Yes, or it could even be a letter in the mail that says, “Sorry you couldn't attend. This is what we talked about. These are some of the programs and services that are available.”

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

I appreciate it.

Ms. Laflamme, I appreciate your innovative master of laws degree, and now you are studying anatomy. You have very diverse education and expertise. Can you explain a little bit about Go Global? First of all, are you aware of these workshops, and have you had any assistance from the federal government?

[Michelle Laflamme]

About a month ago, I attended a Go Global event. From an information and networking standpoint, it was very insightful. But it's the only event I've been to.

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

As far as the opportunities for your innovation are concerned, sharing that knowledge not only with Canada but around the world, what is your plan? Have you worked on a business plan or a model with any assistance from our trade commissioners to try to export that intelligence, that innovative knowledge that you have?

[Michelle Laflamme]

We are currently looking for foreign distributors. I have met with a number of trade commissioners, and I am working with them to establish the profiles of the distributors we are looking for. We have been working on that together since the beginning of the year. We have meetings and discussions on the topic fairly often.

My second challenge is the financing of that part. We have been funded by Fonds Bio-Innovation, which receives its money mainly from Quebec's Fonds de solidarité FTQ. The problem is similar to what was just discussed. In 2012, I went to the United States to obtain funding with the help of the Trade Commissioner Service. They helped me participate in a competition, which I won. I had an opportunity to make a presentation to some 325 U.S. investors. That fostered interest in investing in Emovi Inc.

I was facing two challenges. First, for a U.S. investor, venture capital must come from my province, Quebec, or at least from somewhere in Canada. But very little venture capital is available in Canada or Quebec.

Second, there were test beds or technology showcases in Quebec. We also had some sales in France and Australia, but the test bed had to be in the United States. They encouraged us to set up free systems in the United States. That is very expensive for us. It's a vicious cycle. We need money to do that.

The funding was being discussed and could have come to pass, but not a lot of money is available in Quebec. Two funds were interested. There was a disagreement in the—

[The Vice-Chair, NDP, Don Davies]

I'm sorry, Madam Laflamme, I have to cut you off there because we're approaching well over the time.

Madam Liu, you have five minutes.

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

Thank you for your testimony, Mr. Drouin and Mr. Leclerc.

I remember that, in 2012, the committee discussed your idea of a tax credit for the commercialization of natural resources. I know you have been putting the same solution forward for a long time. It's just as relevant today as it was in 2012. So we will continue to look into that recommendation.

Before I discuss the tax credit for commercialization, I would like to address Ms. Laflamme. You mentioned you were facing some challenges in terms of commercialization. Could a tax credit help you out with that?

[Michelle Laflamme]

Although we have not talked to each other, I share their views. Some sort of assistance should be provided for setting up technology showcases outside the country. We had a technology showcase with the Quebec government's support, but it was for Quebec only. However, to sell in the United States, we must have a presence in that country. We invested in exporting our products to the U.S., but some sort of support would help those following in our footsteps a lot.

I think a Canadian study was carried out on the matter a few years ago. For each dollar invested in research and development involving a patent, at least $8 or $9 are spent on commercialization. It's difficult for us to achieve profitability.

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

Duly noted.

Regarding the tax credit you are suggesting, why is it important for it to be part of the scientific research and experimental development tax credit?