International Trade Committee on April 17th, 2018

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

[The Chair, Liberal, Mark Eyking]

The trade committee deals with everything, even romance.

[Mitch Garber]

We don't say no to anything.

[The Chair, Liberal, Mark Eyking]

We're going to go over to the Conservatives.

Mr. Carrie, you have the floor.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

I want to thank you both for being here.

I'm like Ms. Ramsey, though. I'm worried about perception. Perception is reality.

[Mitch Garber]

Yes.

[Colin Carrie, Conservative, Oshawa, ON]

There's a lot of negative perception out there.

According to StatsCan, over the last two years, foreign direct investment in Canada has fallen to its lowest level in a decade. It's only half of what it was in 2015. Canada's traditional strengths, whether in mining, energy extraction, manufacturing—which is really important to my community—softwood lumber, fisheries.... There's a lot of concern about rhetoric and what's coming out of the current government. I was curious to see, when we had a budget, that even people like John Manley, who used to be the finance minister, said there was nothing in it to address our competitiveness challenge. Doug Porter said that people are giving up on Canada as a safe place to invest in natural resources. It's seen as a very hostile environment now.

I was wondering how you are going to get the perception out there that we're open for business and ready to do investment when there seems to be so much negativity around government policy.

[Mitch Garber]

I think you see more negativity than I do.

By the way, I've been talking to business people for 20 years. I've never heard any rhetoric ever, in the 20 years that I've been travelling around the world as an executive of public companies, that Canada is not a welcoming and open place for business and immigration. I've never heard that.

I will agree with you—

[Colin Carrie, Conservative, Oshawa, ON]

In terms of foreign direct investment, I will say that, because right now you know the pipeline issues that are going on. As I say, it's not me talking. This was John Manley, Doug Porter, and the Canadian Chamber of Commerce. With last budget, we are having a competitive issue, as you've recognized. The Prime Minister came out in 2015 and said that we have to transition away from manufacturing. That sent a chill throughout my community. What was it that he said, that we we have to phase out the oil sands—but not overnight? We're seeing that language.

[Mitch Garber]

So, even if—

[Colin Carrie, Conservative, Oshawa, ON]

I want you to comment on that.

[Mitch Garber]

Sure.

I have to ignore all of the language. I'll tell you why. First of all, I'm not partisan in any way. Second, this agency, which is a baby, is going to survive this Prime Minister, the next prime minister, and the prime minister after that. It's going to survive this party, the next party, and the party after that.

We need to build it so that it's selling the great product of Canada, regardless of who is talking which rhetoric. I hope it answers your question, but I am not focused on what the policies of the government are. What I would like is for government to be co-operative. If we go to government and we say, “Listen. We are uncompetitive for the following reasons. We are competing against the Dutch and the Japanese for this investment, and we're unable to compete effectively against them unless we do X, Y, and Z.” I'd like to be able to do that. I haven't had an opportunity. I don't know how that works. I hope it works.

If you invite me back, I will come, and you can ask me the same question and I'll have a more informed answer.

[Colin Carrie, Conservative, Oshawa, ON]

You know what? I love your attitude. I really do. Maybe we're not listening to the same people.

[Mitch Garber]

Clearly.

[Colin Carrie, Conservative, Oshawa, ON]

In October 2016, the Advisory Council on Economic Growth report advocated for the creation of a Government of Canada agency that would increase inward foreign direct investment in Canada's sectors that are “aligned with the government's economic growth strategy”, and that this would be overseen by an advisory council.

Can you point to any single policy of the current government that you have to align with that has increased investment into Canada? We've seen this record drop in the last two years. What policies are there that you may be aware of? Maybe Mr. McKay would—

[Ian McKay]

I think the drop has been over a couple of decades. I think there is a lot of sharing of that responsibility. We have the strongest economy in the G7. I think when investors are looking for where to deploy dollars, they look at good strong domestic economic growth.

I think one of the most dramatic answers to questions I've been asked is what is happening in the domestic venture capital markets. If you look at the first quarter report of the CVCA, the Canadian Venture Capital and Private Equity Association, you'll see that we've never had so much activity in domestic venture capital deployment in Canada. It's a hockey stick curve, and I think foreign investors look at that and see confidence domestically and with startups. They see confidence among people who put money at risk all the time.

The folks I'm speaking to abroad are very, very bullish and happy with the economic fundamentals of Canada. What they're looking for is a more streamlined approach to get their questions answered, to get their issues resolved, and to get their dollars on the ground here as quickly as possible. That will be a big part of what we do.

[Mitch Garber]

I take your question seriously. I don't paint a rosy picture.

I think Canada is the greatest place in the world. I think we are unanimous on that point. If you ask about a policy that I think is helpful, I believe the immigration policy is helpful.

I believe that I—and when I say “I”, I mean on behalf of Canada—can sell foreign investment to Canada by people who find other countries' immigration policies less friendly, and I'd like to try to take advantage of that.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Chair, on a point of order, if I could just correct the record, from the researcher's notes, apparently there was a record amount of foreign direct investment of $126.1 billion observed in 2007. Mr. McKay was saying it was going down for the last couple of decades. I think there has been a little shift in there. Maybe we should get that on the record.

[The Chair, Liberal, Mark Eyking]

You just put it on the record.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, sir.

[The Chair, Liberal, Mark Eyking]

We'll just move on.

Mr. Fonseca, you've got the floor.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Mr. Chair.

I'm more of a glass-half-full than a glass-half-empty type of person, so I'm optimistic about Canada. I think it is great that Mr. Garber and Mr. McKay are here. Listen, our unemployment rates right now are at 5.8%, the lowest in over 40 years—actually, the lowest recorded. We've added more than 600,000 jobs, so Canada is booming and we want that to continue, and we see foreign direct investment as being one of the opportunities we can seize today.

We look at what Amazon has done. Amazon is looking for its HQ2, and many global cities have put their best case forward. We were blessed that the Toronto region was able to come together and actually be shortlisted with the other, I believe, 19 cities; so there are 20 altogether. I think it's the only city outside of the United States that Amazon looked at for its HQ2.

How would you help in a process like that? How do you see your involvement?

[Mitch Garber]

I think we can both answer the question.

Amazon is not an ideal example, because they got to set the rules in a way that was mostly advantageous to them. If they hadn't set their RFP the way they had, I would love to have been able to bring Canada together and say, “Okay, no one city can house 50,000 employees. No one city can offer everything Amazon wants. How about if we do some of the AI and developments in Montreal; a lot of the other development, all of the cybersecurity and all of whatever else they needed to do, in Vancouver, with some in Winnipeg; and we split the country in three or four, where we have 12,000 and 10,000 and 5,000?” I would liked to have been able to do that.

I'd like to be able to do that for the next Amazon, one that doesn't come and say, “You can't do that”—which they did. They said, “One city, one bid”, and Ian is well aware of it.

[Ian McKay]

If I could add, Mr. Fonseca, Amazon's project is an outlier, certainly, in terms of how companies are looking at long-term strategic investments. It's a massive project. At the same time, it's an extraordinary example of what this agency can do. At the time of the Amazon proposal, I was the CEO of the Vancouver Economic Commission. I led the bid on behalf of metro Vancouver. I congratulate Toronto Global and everybody involved in the Toronto bid for being successfully shortlisted.

We determined through that process that there was an enormous appetite on behalf of the federal government, the provincial government, and the lead agencies, which were at the cities. Remember that Amazon asked cities to bid, but there was an enormous appetite at every level of government to make every city's bid the best it could be. There was great co-operation, but we were starting from a new business model. It hadn't happened before. We were almost speaking different languages. We had great help from the Prime Minister and from other ministries in Ottawa, but we hadn't been forced into the room together the way we will be through the creation of this agency.

So I think Amazon was an extraordinary example of what the outcome needs to be for future projects like that.