Evidence of meeting #57 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
Conservative
President and Chief Executive Officer, Canadian Association of Importers and Exporters
I think, for the most part, that is the employer's responsibility. Often, when you are talking about small to medium-sized businesses, a lot of government programs, including things like the trade commissioner service, are subject matter experts that a lot of these people get ideas from. They get general guidance from these sorts of programs. The Go Global program and the trade commissioner service give some good ideas to entrepreneurs and people who are looking to grow outside of Canada.
Conservative
Mark Adler Conservative York Centre, ON
We have some very favourable economic conditions here in Canada. We are number one in the G-7 in terms of job creation. We have the lowest federal corporate tax rate. We have seen a huge rise in investment in Canada as a result. We do seem to have some inherent competitive advantages.
My question is for Ms. Nott, and maybe Mr. Turi can also chime in on this. Are investment conditions favourable in the sense that, rather than being an importer, companies are looking at Canada and saying, “You know what? I want to set up in Canada and invest in Canada, given the favourable economic and business conditions”? How much of that are you seeing?
President and Chief Executive Officer, Canadian Association of Importers and Exporters
I can jump in first there.
I have probably fielded more questions on that particular topic in the past year than I have in the 10 years prior to that. Quite frankly it's because of CETA and the fact that Canada will have free trade agreements with the United States and Mexico, because we are first movers. I am getting asked a lot of those questions because people are considering Canada as a strategic North American footprint.
Then, they are a little bit discouraged by some of the regulatory frameworks that are around it. I am not going to go into any detail. I'll just say that I refer to something like an export ombudsman, because you have other government agencies that sometimes will put regulations in place that actually act as domestic hurdles to exporters. It is not intended to be that way. Sometimes it is necessary, but we need to be conscious of that.
Conservative
General Counsel and Director, Global Business Services, Canadian Manufacturers and Exporters
I would echo Joy's comments. My team gets an email almost daily right now from our partners in the EU, in particular, for incoming missions. We have one right now coming in from Portugal. We have others coming in from Lithuania, the Netherlands, and Poland. There is a lot of interest in investing in Canada. I think it has caught on. I would also echo Joy's comments that they are also very concerned about regulations, standards, bringing people here, finding space, all those normal types of questions.
Conservative
Mark Adler Conservative York Centre, ON
The fundamental business conditions and economic conditions are getting out to the world, and the global business community is learning about that and taking a hard look at Canada. Is that right?
General Counsel and Director, Global Business Services, Canadian Manufacturers and Exporters
Yes, I would agree.
Conservative
Conservative
General Counsel and Director, Global Business Services, Canadian Manufacturers and Exporters
Are you talking about the accelerator program that is being run by DFATD and some of their—
General Counsel and Director, Global Business Services, Canadian Manufacturers and Exporters
I know that there has been interest, particularly among the start-up communities in Canada. There are the funding challenges for those companies that are looking to access capital, but the fact that there is a presence for those start-up companies, particularly the technology companies, in foreign markets is a good thing. There is a lot of interest, so we are going to see more of it.
Conservative
The Chair Conservative Randy Hoback
Thank you. I am going to stop you there.
Mr. Davies, you have seven minutes.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you, Mr. Chairman.
I have heard, not only from this panel today but from other witnesses, that of course not every SME can export. We have the corner grocery and the local denturist. There are many SMEs that simply won't be able to import or export. You have identified the importance of trying to hone in on particular companies or businesses that may have increased chances of finding success on the international level. Can you identify any sectors or industries in the economy, broadly speaking, that you feel are the best candidates for international trade success?
Senior Vice-President, National Affairs, Canadian Federation of Independent Business
I can probably take that one because, in some of the surveying that we do, we can look at it by sector as well. I do have some of that data. Traditionally, manufacturing is by far where you are going to get most of the opportunities, and we represent about 12,000 to 13,000 small, independently owned Canadian manufacturing companies. Even in that group, only about 10% to 15% are involved in export trade. I think there is a huge opportunity there.
Agriculture, I think, is another sector in Canada. Our food safety rules are considered top-notch around the world, despite some stuff in the last several years, but we have a good reputation. I think that is another area of great opportunity.
Even natural resources.... We are seeing a bit of a slump at the moment. We have expertise in that area that, even on the small company level, can definitely be exported and sold into other countries.
Those are the three sectors that, among our membership, have the highest proportion already involved in trade. Those businesses are still a minority. Those are the three I would identify.
NDP
Don Davies NDP Vancouver Kingsway, BC
I'm going to shift a bit to e-commerce. We had a witness from Google come to our committee last week. It seems to me that the growing importance of the Internet and the worldwide connectivity and e-commerce has explosive potential for SMEs. It's not like in the 1970s, where you had to send salespeople to China and they had to go back every three months for two months to learn. It would seem to me that never before have we had a greater ability to research markets and learn about them, to market our own goods and services, to conduct commerce, and to basically do business electronically.
I'm just wondering, are there any government policies that you think would help your members better access that technology to help them get their goods and services flowing?
Senior Vice-President, National Affairs, Canadian Federation of Independent Business
I agree. I think e-commerce has huge potential. I think for very small firms it's actually through the Internet that they finally get exposure to other markets, and then somebody somewhere else comes to them and says, I'm interested. That's often how those conversations start.
On government policy, I'm not so sure. I think there are other barriers around the cost to set it up, and that's not always the technology side. Sometimes it's the actual ability to accept payments, for example, that can be very costly. That can be a barrier for some small firms. Understanding what the rules are when you sell product to another country, those are the types of barriers that I think small businesses will face when it comes to e-commerce, but I agree; I think it has huge potential.
I hesitate to say whether there's some government policy that can encourage that. I think it's something that's more about new technologies that can help open up and lower the costs of getting into that world. That will do more than anything else in getting e-commerce more accepted.
NDP
Don Davies NDP Vancouver Kingsway, BC
I have four minutes left. I've one more question, and then I'm going to give each of you one minute to answer my last question.
I want to talk a bit about green technology. I'm hearing a lot about green technology, environmental services, being a multi-billion dollar, many-billion dollar sector for many countries in the years ahead. Do you have any ideas for how we may stimulate our SME sector in terms of tapping into green technology or environmental goods and services around the world? Do you have any members who are pushing in that area? Would tax incentives help? Are there any kinds of programs that—
President and Chief Executive Officer, Canadian Association of Importers and Exporters
I'll jump on that one first.
There was something that came about eight months ago or so, six to eight months ago, the environmental goods agreement, which is being negotiated globally. Canada's at the table and looking at that. What the program basically is looking at doing is reducing duty rates and other traditional trade barriers to encourage green goods, goods that are specifically defined as being “green”, to be traded to try to enhance the economic attractiveness of those goods. I know that when DFATD came to us to find out from our members what the uptake or interest for that would be, it was very great when it came to very specific products. Then on the services side—granted we don't generally deal with companies that sell services, so I would have to default to Corinne for that—there was a lot of interest, but in a very Canadian way, very wait-and-see until there was more....
I would say that as long as we stay plugged in to what's happening globally, we can't be behind what's happening globally.
NDP
Don Davies NDP Vancouver Kingsway, BC
I think the Obama administration has done some work in that area of trying to reduce tariffs to zero for all environmental goods and services as a means of stimulating. It not only is good for business, but it may be good for the environment as well.
In my last time here, I want to give each of you a minute. I'm now deputizing—