International Trade Committee on May 4th, 2015

[The Chair, Conservative, Randy Hoback]

Welcome back to Ottawa everybody on a nice Monday afternoon.

We're here at the trade committee and pursuant to Standing Order 108(2), we are studying small and medium-sized enterprises.

The witnesses we have in front of us are the Canadian Association of Importers and Exporters, the Canadian Federation of Independent Business, and the Canadian Manufacturers and Exporters.

You will have 10 minutes for your presentations.

We'll start with the Canadian Association of Importers and Exporters. Joy Nott is the president and chief executive officer.

[Joy Nott, President and Chief Executive Officer, Canadian Association of Importers and Exporters]

Thank you very much, Mr. Chairman, and members of the committee, and thank you very much for giving me and my members the opportunity to have input on this very important topic.

My name is Joy Nott, and I'm the president and CEO of the Canadian Association of Importers and Exporters, otherwise known as I.E. Canada. It's a privilege to appear today to testify with respect to the March 18, 2015, announcement of support to help boost Canadian exports by providing both financial assistance for SMEs and by further funding the trade commissioner service.

I.E. Canada, the Canadian Association of Importers and Exporters, is a national trade association that's been speaking on behalf of the Canadian trade community for more than 80 years. Our members include importers, exporters, Canadian manufacturers who both import and export, wholesalers, distributors, retail importers, and supply chain service providers.

Our members employ over one million Canadians and contribute approximately $270 billion in annual revenue to the Canadian economy, which translates to approximately $40 billion in annual taxes paid federally, not including the GST and duties.

We represent some of the largest importers and exporters in Canada as well as small and medium-sized businesses. Our members import and export across most commodities and product lines.

While most trade associations focus on the policy end of lobbying, I.E. Canada has a long history of both commenting on high-level policy issues as well as actively looking into facilitating international trade at the operational level where exporters often face the largest hurdles. The phrase, while cliché, the devil is in the details, resonates to most Canadian exporters who have experienced both the best and the worst that policy has to offer once it's translated to its most basic level, operational policy.

In short, I.E. Canada is very pleased to read the announcement that was made by the Prime Minister in Mississauga on March 18. Many of the points in his announcement are welcome news to small to medium-sized exporters who are still struggling to find their export footing in a global economy that is still somewhat soft. Any help offered no matter how small is both needed and appreciated.

I would like to divide my comments today into two general sections: first, the new export market development program providing a total of $50 million over five years; and second, the additional financial support for the trade commissioner service.

While Canadian exporters face a number of different challenges when wanting to expand their sales beyond the domestic Canadian marketplace—and I'm sure that's not a surprise to anyone in this room—I would like to spend a moment, looking at what the challenges actually are and commenting on how this money might best be spent and most importantly tracked in order to help Canadian exporters in a substantial way moving forward.

Canadian exporters face challenges from both the foreign markets they seek to enter and the Canadian domestic regulatory environment they must wade through in order to be able to compliantly export product from Canada.

As an example, with the new Safe Food for Canadians Act, exporters who wish to export a product that requires a licence, for example, meat, fish, and seafood, must have a CFIA licence in order to export under the act. In order to get that licence, they must show they have implemented a preventative control plan. This preventative control plan must include, at a minimum, a fully documented product and process manual and a process to ensure traceability, recall and complaints of any product they export. Many SME exporters do not have the staff or the funds to comply with the above requirements making Canadian domestic regulation yet another hurdle they must conquer before they can actually export.

Another example would be the SME companies who deal in articles of defence, which would fall for various reasons under the U.S. international traffic in arms regulations, otherwise known as the ITAR. In order to be able to handle goods that fall under this regulatory umbrella, of which many defence articles that float through the North American supply chain do, the SME must not only work with Public Works and Government Services Canada to register for the controlled goods program, which would make them subject to numerous record-keeping and audit requirements, but on top of that they would have to deal with the Department of Foreign Affairs, Trade and Development to obtain any export permits that are required when exporting to countries other than the United States.

While the above two examples are not a comprehensive list of domestic export hurdles facing SMEs, we must be clear that the reasons behind these regulations may be valid and may be required in order to keep Canadians and our trading partners safe. We understand that.

The scope and the minutiae, however, of some of the requirements can really bog down SMEs that simply don't have the in-house expertise to either understand all the rules or to set themselves up in such a way that they can successfully comply with the rules while simultaneously thriving in a competitive export sales environment.

While there are many programs and attempts to make exporting both easier and more appealing to Canadian SMEs, there seems to be a gap in that no single body oversees the export regulatory regime. There is no government export ombudsman, for lack of a better term. We believe there should be one checkpoint through which all government agencies that wish to apply any sort of requirement on exporters should have to go, to explain and prove why another regulatory requirement needs to be placed on exporters, before any new regulation or legislation is passed.

DFATD should be tasked with maintaining some sort of an inventory of all these export-focused regulations, and working with the red tape reduction initiative to streamline and remove domestic barriers wherever possible.

With respect to foreign market barriers, I'm sure it's no surprise to anyone here that another major hurdle faced by Canadian exporters is the regulatory environment in the country of import. Challenges range from non-tariff trade barriers meant to discourage importers into the foreign market to government websites with vitally needed regulatory information available only in languages other than English or French. These sorts of barriers, while often expected and impossible to avoid, result in the Canadian SMEs having to hire subject matter experts in the foreign market to help them understand what must be done in order for their products to successfully enter that market.

The trade commissioner service does a wonderful job of helping Canadian SMEs find local lawyers, customs brokers, tax accountants, and other trade and subject matter experts to help them negotiate and navigate the new market and its complex rules. While the trade commissioner service's assistance is helpful, it takes money to engage these experts. Depending on the complexity of the goods being exported, these professional service fees can add up to relatively significant amounts fairly quickly.

We are pleased to see a recognition that SME exporters require financing, which they often cannot find through mainstream financial lending streams. They need funding to help them hire subject matter experts so that they can wade through either the domestic regulatory environment or the foreign regulatory environment. One recommendation we would make with regard to this program is that metrics be kept to track how much of the $50 million is spent helping Canadians work through domestic programs, and that those efforts be directly linked to the red tape reduction initiative and the DFATD export regulation inventory mentioned earlier.

Moving on now to the additional financial support for the trade commissioner service, we would like to make a few comments relative to the service overall. For starters, the trade commissioner service is one of the best-kept secrets of the Canadian government. While we see television commercials and other media highlighting all sorts of government services available to Canadians, there's rarely any mention of the Canadian trade commissioner service to explain what they do and how they can help SMEs, and in fact all Canadian exporters. We would strongly suggest that better marketing around the services available to SMEs be undertaken.

The Honourable Minister Fast has said on various occasions that historical trade agreements require historical trade promotions, and we agree that's true. In recent months Canada has implemented or negotiated some of the most important trade deals in Canadian history. The programs announced on March 18 are headed in the right direction to take negotiated deals and turn them into economic growth for Canada.

Persuading SMEs that their businesses are big enough or important enough to actually consider exporting is a different matter. In a rapidly changing and evolving world of international trade, strategies and solutions that worked as recently as 10 years ago may be sorely out of step with the new reality that Canadian exporters of all sizes face. The Internet has levelled the playing field globally, so the ways in which we position our exporters and the tools we as Canadians provide them have to be ahead of the curve to strategically place our exporters in a favourable position.

If we want to pull ahead in the global foot race in which every country in the world that trades is taking part and truly give Canadian SMEs an edge when entering these markets, we should consider working more in tune with the host country and its focus on exporting its products and services to Canada to identify mutually beneficial opportunities.

Formally and openly accepting the fact that signing trade deals means goods will be imported into Canada can be used as a strategic advantage as opposed to merely being seen as a lag on key economic factors. Strategically choosing which imports we facilitate in exchange for being able to target exports is a sound business strategy that should be in place along with a government strategy. Our goal as a country should be to plug into global supply chains, which often means exporting but does not relate exclusively to exporting.

Sometimes in order to be plugged in globally, we must import into Canada. DFATD's own statistics indicate that 48% of Canadian exporters must import in order to be able to execute their exports, but still our trade strategies only involve promoting exports and disregard how we can use imports.

I'll just wrap up by saying that we have an opportunity to use our Canadianness and the fact that we are known around the world. We sew flags on our knapsacks when we travel around the world and we're proud of saying that we're Canadian. We're known as being friendly and easy to deal with, and I think we have an opportunity to use our Canadianness to engage our trading partners in ways other countries don't.

With that, I will wrap up.

[The Chair, Conservative, Randy Hoback]

Thank you, Joy Nott.

We'll move on to the Canadian Federation of Independent Business.

Corinne Pohlmann, you have the floor for 10 minutes.

[Corinne Pohlmann, Senior Vice-President, National Affairs, Canadian Federation of Independent Business]

Thanks for the opportunity to be here today to share CFIB's perspective on exporting among SMEs and recent announcements that aim to assist them in that process.

First, though, CFIB is a not-for-profit, non-partisan organization representing more than 109,000 small and medium-sized businesses right across Canada that collectively employ more than 1.25 million Canadians and account for $75 billion in GDP. Our members represent all sectors of the economy and they're found in every region of the country.

Canada's small and medium-sized enterprises collectively employ over 60% of Canadians in the private sector. They're responsible for the bulk of new job creation and they represent about half of Canada's overall GDP, so if you start addressing issues of importance to them, this can have a widespread impact on job creation and the economy.

Let me start by saying that while we're optimistic about the intent of the recent announcements to assist SMEs with exporting, we're unsure of how it will be delivered and ultimately how effective it will be. Our focus here will be to share with you some of the challenges that smaller exporters face and how these announcements could be designed to best assist them with that.

We regularly ask our members about whether or not they're involved in trade. We last asked in 2012 and what we found was that about one in five, or 21%, are telling us that they had sold goods or services to other countries in the previous three years. About half had actually purchased from other countries. What's also interesting is that another 6% had planned to get more involved in trade in the future but weren't currently doing it.

Now these results have been fairly consistent over time. We've seen some similar results from a survey done in 2009. I would note that these are quite different from what you're getting from Statistics Canada, for example, that say that only about 10.4% of small and medium-sized enterprises are actually involved in exporting.

This is likely due to a number of reasons, including the fact that Stats Canada data comes from the exporter register database, which only includes exporting of commodities, not services, and those establishments whose merchandise exports exceed $30,000 a year, whereas our data has no such limits. Our data includes businesses that may not trade as frequently and in lower volumes, and may also include services only. For example, in a previous survey done in 2009 that was focused on trade with the United States, we found that 4% of our members were actually exclusively involved in exporting services only. So that just gives you a sense of what's not included in some of the data you are hearing and reading about.

Many of those included in our data may not be captured, necessarily, in the national data from Statistics Canada. But for us, we need to know more about this particular group and capture their experiences, as it may influence whether they plan to continue to export or move into new markets. One bad experience could make a potential exporter feel that it may not be worth it, simply because it did not have the support, financing, or information that could have made all the difference.

Where do those that trade go for their business? The U.S.A. does remain by far the most likely place that Canadian small businesses export to, followed by the EU, Mexico, Australia, New Zealand, and China.

While still a very small proportion—and you can see from my slide presentation that it gets fairly small as we get into some of the other emerging markets—I would suggest that it's actually the smaller firms that often enter new emerging markets first. Finding ways to support and encourage to help minimize the challenges they will inevitably face is an important area of focus for these types of programs, because, should those smaller exporters experience one or two difficult challenges along the way, it may discourage them from even continuing to export to that market or potentially exporting to new markets in the future.

Of those that are not currently involved in any kind of trade, a good proportion of them do not see their business as one that would be involved in exporting, as they believe their particular product is not exportable. However, that still leaves about 38% of those that are not exporting that could potentially get involved in it, so finding ways to address the barriers they face and highlighting what the benefits of exporting can bring to their business and to their communities may result in more small businesses taking the plunge into new markets.

Other reasons they've identified for not exporting include those who feel the domestic market is sufficient. Now, this particular group may benefit from a better understanding of how export markets may help them grow and expand their businesses. We see this as something the department of international trade, the trade commissioner service, and even groups like us and those of us around the table could certainly help focus on a little bit more.

In addition, though, about 1 in 10 said they lacked the resources, expertise, and contacts to expand into new markets, and about 1 in 20 said they lack information on trade opportunities and appropriate financing, all of which can and should be addressed to some degree by the recent announcements to create an export market development program and enhancements to the trade commissioner service.

Even among those who do already trade into other markets, such as the European Union, there are challenges associated with cost, complexity, and paperwork. These recent announcements could assist with some of these issues as well, in particular, through the trade commissioner service, which could provide the information and advice on how best to deal with the various rules and standards, and assist with the paperwork, and even help interpret certain requirements, if needed, which I think is quite similar to some of the things Joy was saying as well.

We certainly welcome the recent government announcements to provide further support for export among SMEs, as that could help relieve some of the constraints small businesses face, if these supports are properly designed and properly invested.

CFIB would recommend first and foremost that the export market development program be focused on small and medium-sized companies by somehow limiting the size of the businesses that can actually access the program. We would suggest keeping the program simple and accessible, which means that there should be a limited number of restrictions to access the program and it should be made available to both new and existing exporters looking to expand into new markets.

It also should be as open-ended as possible so as not to limit users to specific markets, such as emerging markets only, and should also focus on those markets where potentially recent trade deals have been signed, at the very least.

We would also suggest that the government refrain from being too limiting in what costs could qualify for the program. As long as the cost is clearly associated with efforts to expand into a new market, it should be considered. We also ask that red tape associated with this program be minimized by making sure the forms are easy to understand and that there are resources available to provide support to the SMEs applying for the program. In other words, they shouldn't have to actually get a consultant to help them apply for this program.

It's essential that the program be thoroughly evaluated on a regular basis to determine how effective it has been in helping small and medium-sized enterprises get into new markets, and there should be a willingness to make changes along the way to ensure that it's actually assisting the intended SME market and that it is doing what it was intended to do in the first place.

Finally, as part of the March announcement, the government also committed to additional funding for the trade commissioner service to support SMEs. Unfortunately, I have to say that most SMEs are unaware of the trade commissioner service and when they do know about it, they often feel they're too small for the trade commissioner service to assist them. There's a perception out there that the service is reserved for larger firms only who conduct higher volumes of exports. We encourage the government to do a better job of promoting these services generally, and especially, that they be willing and able to help support smaller companies.

There has also be an issue of some SMEs, which may come from more traditional sectors of the economy, not being able to get as much assistance from the trade commissioner service as there has been a tendency in recent years to have trade commissioners focus on key sectors of the economy only, which can sometimes limit their ability to assist a business that might not fit into one of these predetermined sectors. We would continue to encourage the department of international trade to ensure that there are some trade commissioners who are able to have a broader mandate and properly assist the smaller types of firms.

Thank you for the opportunity to present here today and share our views, and I'll be happy to answer any questions when the time comes.

[The Chair, Conservative, Randy Hoback]

Great. Thank you very much.

We'll move on to our next witness, the Canadian Manufacturers and Exporters.

Philip Turi is the general counsel, director of global business services.

You have the floor for 10 minutes, Philip.

[Philip Turi, General Counsel and Director, Global Business Services, Canadian Manufacturers and Exporters]

Thank you, Chair.

Good afternoon honourable members of Parliament. I'm glad to be third because I think my comments will dovetail nicely with those of my colleagues up here with me.

I'm pleased to be here this afternoon to discuss the Government of Canada's recent announcement relating to supporting SME exporters in my capacity as the head of CME's global business services department, where I oversee CME's national trade and export promotion initiatives.

Canadian Manufacturers and Exporters is Canada's largest not-profit industry association representing manufacturers and exporters in every business sector across Canada. Collectively our members represent more than 80% of Canada's non-commodity exports and thousands of high-paying jobs across the country.

I will start off by noting that my team is quite literally at the front lines of trade promotion and facilitation in Canada and has witnessed first-hand the impact of the GMAP, the global markets action plan.

Over the past two years my team has organized six sector-specific trade missions to the EU, and to Mexico in particular, each supported by federal government funding. We have also coordinated the reception of numerous incoming trade missions and hosted over 40 export opportunity webinars featuring trade commissioners posted abroad, and other international business experts. We launched the Enterprise Canada Network, a single-window platform that has helped over 700 Canadian firms identify and connect to thousands of international business and technology partners; and over the coming months, working with our government and not-for-profit sector partners, we will be launching export mentoring and learning workshops to help build capacity among Canadian SMEs.

CME has also worked extensively with DFATD and the government's trade portfolio partners, including the trade commissioner service, Export Development Canada, Business Development Bank of Canada, and Canadian Commercial Corporation, with respect to coordination and information sharing to better support Canadian enterprises. For example, my team at CME has partnered with these agencies in the delivery of a national outreach program called “Go Global: Supporting Export Success”, a series of practical business workshops geared toward SMEs that highlight the business services each government agency offers.

To date, we have held more than 15 Go Global events in communities across Canada and have engaged more than 2,000 attendees, most of which are SME representatives. I have moderated at most of these sessions and would be happy to answer any questions about them during the Q and A period.

Today you have asked my organization along with my colleagues to appear before you to discuss the government's recent announcement relating to funding for SMEs to assist with the development of export opportunities, especially in high-growth markets. Before providing my insights on the subject, it's important to note the present export climate in Canada.

ln a period of low oil prices and declining investment in the oil sands region, the pressure on Canadian exporters to buoy the economy has grown more acute. Fortunately, and as recently noted by Bank of Canada Governor Stephen Poloz, the lower Canadian dollar has been a boon to non-commodity exports in Canada, especially in sectors tied to U.S. business investment, with the machinery and equipment, building materials, metals, and aerospace sectors, all showing very positive signs of growth as of late.

However, notwithstanding this recent surge and notwithstanding data limitations, challenges with respect to increased exports to emerging markets remain. ln a January 2015 report released by Industry Canada, it was noted that of the 10% of Canada's SMEs exporting, most continued to focus on the United States. This is not a surprise. Only 10% to 12% of Canadian SME exporters currently sell to Latin America, China, or other Asian markets. Furthermore, exports to these regions account for less than 10% of total export revenues. As such, the GMAP quite correctly emphasizes these markets as priority growth markets moving forward.

With respect to funding export assistance for SMEs, it's perhaps best to tackle this question by looking at the what and the how. What to fund was hinted at in the recent economic action plan, in which the government noted the program will help to finance activities such as market research, participation in trade fairs and missions, shipping prototypes, and pilot projects to create new business opportunities.

While time does not permit me to examine each of these examples, it is important to note the several provincial and local government programs available to exporters that provide funding for similar activities. ln provinces such as Saskatchewan, Nova Scotia, Quebec, and Ontario, for example, local exporters have leveraged programs that assist with visiting trade fairs, carrying out foreign market research, and international marketing. These programs are often well subscribed and fill important gaps in the funding needed to accelerate export growth.

There are aIso export assistance programs available at the federal government level, most notably the global opportunities for associations fund administered by the Department of Foreign Affairs, BDC's market expansion funding, and EDC's financing solutions for exporters. Common among all programs is direct funding, albeit in the form of repayable loans in some instances, for international business development on a broad and targeted basis. Most of these programs require the recipient exporter to meet basic criteria, including being a resident Canadian entity and having an exportable product to service.

Most of these programs and products are also well suited to companies of a particular size, for example, with more than 50 employees, revenues north of half a million dollars, and some experience exporting, usually to the United States.

This begs the obvious question, what can the recently announced export market development fund program do differently than what is presently being offered to SMEs? For starters, funding needs to be made available to medium and small enterprises, meaning companies with less than 50 employees, less than half a million in revenue, and little or no export experience. Export growth potential should be the primary funding criteria. Eligible applicants should be existing exporters, those planning to export, or those selling into a value chain and supply chain leading to exports.

Funding needs to be easy to access—I would echo the comments of my colleagues—and efficiently administered, especially if the audience consists of small businesses. Consideration should be given to whether it's best for the government to administer this funding directly or through a delivery agent. Careful consideration needs to be given to administration costs as well as Canada's international legal obligations regarding subsidies.

Funding should also be structured so as to encourage the uptake of existing services from organizations like EDC, BDC, and TCS, for example, by awarding points to applicants that are existing clients of these agencies, or are on their way to becoming clients.

In terms of fund structure, it would be helpful to look at CME's SMART program as a model. The SMART program administers FedDev funding to companies looking to invest in advanced technology linked to growth in terms of enhancing productivity or exports. SMART includes an assessment component and a project funding component. The assessment component helps companies assess the current state of operations and understand the barriers they face in the globally competitive environment by working with a qualified expert and tools available through the assessment program to develop a vision and a strategy. The findings from this assessment will allow companies to implement a project, under the project funding component, where companies will receive a percentage contribution of eligible costs up to a maximum of $100,000, whichever is less, to implement the strategy developed during the assessment phase.

Using SMART as a model, export market development funding would be project oriented, based on an assessment and strategy developed specifically to the individual SME, and provide sustained internal resources to drive that export strategy plan over a number of years by greatly increasing the chances of meaningful foreign market penetration.

With respect to the assessment of applications to ensure impartiality and to emphasize the funding of export projects with high growth potential, the assessment team should be a steering committee of seasoned exporters from industry and hailing from the priority sectors identified in the GMAP.

As I'm near the end of my comments, I want to conclude by saying that as this committee considers how best to advise on the structuring of the export market development fund, I would urge you to not replicate the myriad existing provincial and local programs available across Canada. Instead, move the needle on exports by targeting companies with the highest export potential and provide funding that leads to sustained foreign market penetration over a period of time.

Thank you for your time, and I'm happy to answer questions during the Q and A.

[The Chair, Conservative, Randy Hoback]

Thank you, witnesses.

We'll move on to our question and answer period.

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

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair, and thank you to each one of the witnesses for being with us today. Those were very helpful and detailed submissions you all made.

I'm going to start with access to capital. We're at the end of our study. This is the last day for witnesses and we've heard from a number of SMEs who have testified before our committee from a variety of industries and sectors. Many of the SMEs told us about the difficulty accessing capital as a major impediment to moving toward exports, or expanding export opportunities. What suggestions do you have to address this challenge? Mr. Turi, I think you just spoke of one, the $100,000 targeted amount. Do you have a cost for that program? Do any of you have any other suggestions for how we can make capital more accessible to SMEs?

[Philip Turi]

Sure. Specifically the SMART program as an example is FedDev funding. CME has been running that out of Ontario for the past eight years. The funding amount is provided by FedDev and administered through CME. The cost to administer the fund typically, and it happens in two-year periods, is about 5% to 10% of the overall fund. The amount of funding to companies is up to $100,000. That portion of funding can go toward developing the strategy, whether it's looking at a company's floor, or looking at their people. Oftentimes that money goes toward investing in new machinery, new equipment, and new processes. It goes to a maximum of $100,000. Companies are usually putting up matching funds for that.

[Don Davies, NDP, Vancouver Kingsway, BC]

What's the total annual amount of money that is dedicated to that program?

[Philip Turi]

It's $20 million over a two-year period.

[Don Davies, NDP, Vancouver Kingsway, BC]

Ms. Pohlmann or Ms. Nott, do you have any ideas about access to capital?

[Corinne Pohlmann]

Access to capital is a problem regardless of whether you're exporting or not, especially as you grow beyond the start-up stage. I think that for start-ups there is a variety of different formats now from which people can potentially get funding. It's still tough, but at least there are some programs out there.

It's when you get to that next stage of growth—sometimes moving into an export market can be that next stage of growth—that it can be very difficult. This is where places like EDC and BDC can certainly play a role.

To be honest, I think EDC is perceived as being an organization that helps larger firms more than smaller firms; BDC is less so. I mean, BDC does have a mandate to help small businesses.

Again, I think it's a perception problem. EDC will provide funding and financing to smaller firms as well, but I think people are just not aware of them, and if they are they don't feel they're big enough. That's part of the issue we're grappling with here, that small exporters don't feel that government cares about them so they have to do it on their own. Again, that doesn't mean that's true; it's the perception that exists.

[Don Davies, NDP, Vancouver Kingsway, BC]

Ms. Nott, perhaps I'll direct a more targeted question to you.

We also heard from witnesses who talked about CBSA. We know that imports are as important as exports to an SME's trade success. We heard from some SMEs about some particular struggles they face with CBSA inspections, and other impediments.

I wonder if you have any feedback for the committee regarding CBSA and any way that we can hone that process to better help SMEs with imports and exports.

[Joy Nott]

As Corinne and I look at each other and smile, I know there is a time limit on these things, so I'll just—

[Don Davies, NDP, Vancouver Kingsway, BC]

That's a weekend seminar-type question.

[Joy Nott]

CBSA, in all fairness.... Just for complete transparency, I co-chair the BCCC steering committee, which is the border commercial consultative committee; I co-chair the CBSA's public outreach committee. For total transparency, I want to put that on the record.

I think CBSA faces a number of different challenges. Probably the biggest challenge that they face from an export perspective is the fact that, quite frankly, 95% of all attention—money, staff, training, infrastructure, anything you can think of at CBSA—is focused on the import side of the house. The remaining 5% is on the export side of the house.

I'll say quite frankly that a lot of CBSA officers are sorely lacking in export training. For example, when we go through major change in export, such as sanctions with Russia—Russia went from being on GMAP and the R in BRIC to suddenly being sanctioned—it takes turnaround time. Often you have the exporters, in many cases SMEs, training customs as to what the sanction says. The officer is stopping it at the border because he just knows that Russia equals bad, and the exporter is saying that the shipment is okay for the following reasons and having to walk CBSA through it.

That sounds like a disparaging remarks against CBSA; in many ways, it's not. Those individuals work very hard. There are a lot of new and changing regulations, and they desperately need training. There needs to be a central focus on how they actually help exporters, especially when it comes to detaining goods.

The final comment I'll make is that they have a definition as to what they consider to be “detained”. I currently have an exporter whose shipment has been held by CBSA for three weeks while they consider whether or not they're going to detain it, because a “detention” is an actual defined term.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm going to move to the subject of people.

I think over the last 25 years we've focused on moving goods and services more efficiently across borders, but people seem to be the remaining frontier, whether it's the visas and transit system at airports, or companies being able to move professionals or senior managers seamlessly across borders to conduct work.

How do we strike the right balance between improving the international mobility of skilled people and safeguarding jobs for Canadians? Do you have any thoughts on that?

[Joy Nott]

Actually, not to defer to Corinne, but I think that CFIB might be in a better position to give you a more substantive answer on that one. From Canada's perspective, our members—for the most part, we're talking about business people travelling, and visas and that sort of thing.... Of course, the stereotypical example is Mexico. They're a NAFTA trading partner, yet there is the requirement for visas.

I will shift to Corinne, who I think can give you a more substantive answer.

[The Chair, Conservative, Randy Hoback]

Sorry, Corinne, we're going to have to stop you right there.

Your seven minutes are up, Mr. Davies.

We'll go now to Mr. Gill.

[Parm Gill, Conservative, Brampton—Springdale, ON]

I want to thank our witnesses for appearing before the committee and helping us with this study.

My question is to all of you. To what extent do you feel that Canadian SMEs know about the full range of trade promotion services that are available to them?

[Corinne Pohlmann]

I'll go first. They don't. They really don't.

A number of times over the years we've asked about awareness of these bigger services, and a very small number of people have any idea that they exist. As I mentioned in my remarks, even if they do know, many of them feel as though they're just too small to be seen as being important enough for the government to want to invest any time and energy in them. So it's a challenge, a big challenge.

[Joy Nott]

Quite frankly I don't have anything to add to that other than the fact that in recent times we've seen television ads specifically by EDC that speak directly to this issue. So kudos to EDC for putting out those television ads that point to the smallest of Canadian companies and point out to them that they're not too small to export and that they really should be thinking about it. I think more of that sort of mainstream media attention to the fact that these services exist would serve SMEs well.

[Philip Turi]

I would echo both of those sentiments. I am amazed by the panel sessions of the Go Global: Supporting Export Success series, which is attended by Minister Fast. We've now done 15 of them, and we've engaged over 2,000 companies or company representatives. At every single session, during the Q and A, which I moderate, there are companies that have no idea that certain agencies, such as CCC, exist. Now, CCC works primarily on behalf of the aerospace and defence industry, but it can also be leveraged by other SMEs.

I've engaged with a lot of companies at this series in particular, the purpose of which, by the way, is to tell the story of which agency can be leveraged for what purpose. Oftentimes companies have no idea that some of these agencies exist. Obviously that fact presents a challenge for all of us. I think we as industry association representatives play a role in telling that story.

In the Go Global series, I usually play the role of the CEO of Canada Inc. and I will walk through the life cycle of exporting. I'll turn to the TCS to identify international opportunities and they will then talk about how they do that. I then turn to EDC to ask what I have to do now that I have a deal. They speak to their various services with respect to deleveraging risk. I can then talk to BDC about their export strategy consulting offering, which can help companies in the early stages, and then to CCC as well if they're doing government-to-government contracting.

That story is a really simple one. We're finding that when we tell that story companies walk away having a very solid understanding of who to turn to and when. That's literally the strategy, right? You turn to each of these organizations for various things. That needs to be your strategy if you're an SME.

[Parm Gill, Conservative, Brampton—Springdale, ON]

You mentioned the Go Global initiative launched by Minister Fast. Can you just share your experience with the committee regarding the kind of feedback you've gotten from some of the participants as to how well put together that is? Is it really serving the requirements of some of these SME participants? How well would you say it's working?