International Trade Committee on April 17th, 2018

[The Chair, Liberal, Mark Eyking]

We have the pleasure today to have with us Invest in Canada. Thank you for coming.

I know you're a new organization that was just put together over the last couple of years. We're very interested in what you're all about and in your vision. We're hoping that you can give a short presentation, and then the committee members will have a little dialogue with you to get a sense of where you're at and where you're going.

Without further ado, we'll let you guys have the floor.

[Mitch Garber, Chairman, Invest in Canada Hub]

Thank you very much, Mr. Chairman.

My name is Mitch Garber. I am the chairman of this new organization. It's true that it was conceived a couple of years ago, but it's really come to life in the last six weeks, when I was named chairman and Mr. McKay named CEO. We'll be happy to take your questions.

Invest in Canada, as you may know, has been created to position Canada as a premier destination for foreign direct investment, and to make it easier for investors to build and/or expand their businesses in Canada.

In preparing for my position in Invest in Canada, I studied what other countries are doing in this space, and realized quite quickly that all of the other G7 countries have a similar entrepreneurial organization, but that we're the last of the G7 to have one. The area of attracting foreign investment is growing and is extremely competitive.

Just to give you a couple of examples, we would compete with an agency in a country like Holland. Holland would talk about itself as having excellent port cities; being in a very advantageous geography; having a highly educated, multilingual workforce, with political stability; a strong banking system; and a high-quality of life, or all of the same things we would say about Canada.

So as I speak about a very competitive arena, this organization becomes ever more important. Canada needs this agency for that reason, and the agency will need to perform at a very entrepreneurial and high level.

I am personally quite excited to move into this phase of my life and to be part of Invest in Canada, making sure that Canada is at the forefront of the innovation and prosperity that come with global investment to our country. I believe we have a tremendous product; the product is Canada.

We intend to build on what the provinces, the cities, and the regions are already doing. We can talk about why this will be additive to what the cities, provinces, and regions are doing, but we need to band together and sell this great product together in a cohesive fashion. This is a critical point.

We should not have dozens of touch points, especially if those touch points are not communicating with each other or singing from the same hymn book. This is an issue that we currently have in Canada, which we hope to play a small or even larger role in fixing.

As the chair of this new organization, I will lead a highly qualified board of directors responsible for overseeing the management of Invest in Canada, and will ensure, along with the CEO, the highest level of public stewardship, governance, and compliance. The board will also play an advisory role to the minister.

In this role, I hope to draw on my experience in international business and my entrepreneurial spirit as a business man to create effective processes with a focus on speed. I also have a lot of experience as a board member with for-profit and non-profit organizations.

We will aim to break down some of the walls, barriers, and delays that come with bureaucracy. It is no secret there is red tape in government. There is red tape in private business as well—I can share that with you too. What we need to do as entrepreneurs and as proud Canadians is to find the red tape where we can and cut through it.

Canada has more to offer than any other country in the world. I have discussed this with representatives of the various political parties. We all agree on this. We have so much going for us: economic and political stability, quality of life, low crime rates, which means peace and security, a highly skilled and well-educated workforce, as well as international relationships, trade, and agreements with various countries, offering very inviting conditions and access to markets.

I am quite pleased to have found a way to combine my experience as a lawyer, as a long-time business executive, my love of business, and my love for Canada in this new role with Invest in Canada.

Those, Mr. Chairman, are the reasons why I am here today.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, and if there are no more comments, we're going to go right to questions.

Mr. McKay, do you want the floor?

[Ian McKay, Chief Executive Officer, Invest in Canada Hub]

I was instructed to give some opening remarks as well. I will defer to the Chair's direction.

[The Chair, Liberal, Mark Eyking]

You go ahead.

I didn't know if you were good to go.

Go ahead, Mr. McKay.

[Ian McKay]

Thank you, Mr. Chair.

Hello everyone. My name is Ian McKay and it is truly an honour to have been appointed chief executive officer of Invest in Canada. Thank you for inviting us here today.

Mr. Chair, I'll try to be brief in my remarks, as I look forward to answering your questions, which I'll try to do to the best of my ability and to your satisfaction.

As one of the key recommendations contained in the report by the Prime Minister's advisory council on the economy, Invest in Canada is being launched to address a gap in Canada's efforts to increase our share of global capital flows. The OECD will tell us that, over the past two decades, OECD member states have increased their average share of FDI by an annual rate of seven percent. In Canada's case, we've seen an average growth of just two percent per year. This is a significant shortfall and it must be addressed.

There are a number of reasons that we should work harder to be competitive globally in order to attract direct foreign investments. With those investments, we see a transfer of knowledge, the adoption of new technologies, human capital development, and access to new markets.

As Mitch said, Canada is the only G7 country and one of the only G20 countries without a federal agency platform focused on attracting foreign direct investment.

The last time Canada had, what we would call, a banner year in FDI attraction was 2007 when, driven by our very innovative and exceptional resource and energy sector, $127 billion in FDI found its way to our shores. Since that time, we've been on a steady decline. I cannot think of a better or more important time for Canada to up its game and create not just a globally competitive agency, but also the best platform in the world.

We need to better equip decision-makers all over the world with the information and the assistance they require to quickly make decisions to direct their investment to Canada. I think the irony of our below-average performance in recent decades is that Canada has an extraordinary story to tell about the diversity of our economy, and our leadership in a variety of sectors, from more traditional areas to cutting edge, 21st century technologies that are changing the world.

From advanced manufacturing to autos and aerospace, and whether in life sciences, resource extraction, bioproteins, artificial intelligence, quantum computing, and the list goes on, Canada has an extraordinary story to tell. However, absent a focused, coordinated, and cohesive federal agency in Canada in the pursuit of FDI, many other stakeholders have stepped up to fill the void. In particular, cities across Canada have developed robust and effective economic development and FDI attraction agencies. From Vancouver to Halifax, 13 of Canada's largest cities have formed an alliance together to pursue global investment and to work under the brand of Canada, with their target being cities. As well, a number of provinces, like New Brunswick, Alberta, Quebec, and others, have developed significant capacity in this regard.

Now, it's time for Canada to step up and play its part. Invest in Canada is still in the start-up phase, but our organization will be driven by research and data. It will be collaborative, ambitious, and aggressive. We will build upon the capacity that currently exists within the federal government and all of our partners across the country.

I'm honoured to have been given the opportunity to be the inaugural CEO of Invest in Canada and I commit to you and to all Canadians that I will perform my duties to the best of my ability, with passion and hard work, and a true dedication to raising the bar in Canada's efforts to attract global FDI.

Thank you, Mr. Chair, and we're happy to take some questions.

[The Chair, Liberal, Mark Eyking]

Thank you, gentlemen.

We're going to go right into dialogue with the MPs, with the Conservatives starting.

Mr. Allison, you've got the floor for five minutes.

[Dean Allison, Conservative, Niagara West, ON]

Thank you very much, Mr. Chair.

Gentlemen, thank you for joining us today. I think that Invest in Canada has the potential to do some good things.

I read in the backgrounder that part of the funding was for 25 new trade commissioners as well. Was that part of it? These are important and good things.

You alluded in your presentation, Mr. McKay, to how FDI is slowing down. We've seen many projects pulled back in the energy sector. When you talked about record investments in 2007, it was about record investments in the energy sector. You also acknowledged in your notes that red tape continues to be an issue.

Just talk to us about some of the challenges you have to overcome in the environment right now. We have the U.S. cutting its taxes, and we're looking at adding new taxes like carbon taxes and some things that are going to put us at a competitive disadvantage relative to the U.S. specifically.

How do you see our working around that? I think Canada is the greatest place to invest, but all of these other things have to line up too. It's not just free trade deals. It's not just about having a smart workforce and a good immigration policy. It's also about the red tape. It's about taxation, and the list goes on and on in terms of the challenges. Talk to us about some of those challenges we have to overcome if we're going to get people to invest in Canada.

[Mitch Garber]

First of all, I think it's the right question. I think it's the reason the agency has been created in the first place. As Ian pointed out, we have some really excellent regional foreign direct investment offices. Montreal last year brought in $2 billion in foreign direct investment. Ian is the outgoing CEO of the Vancouver Economic Commission, which has done an incredible job, including securing billions of dollars of foreign film production in Vancouver.

While I've not been involved in the political arena at all, it's my understanding that the red tape is really more about agencies that don't speak with each other. There's a lack of coordination. You have an agency in Saskatchewan, one in Quebec, one in Ontario, one in B.C. None of them knows what the others are doing. They're all pursuing similar deals at times.

I've been told by a number of people that every day in the Vancouver airport, there may be 20 government officials who are totally unaffiliated, flying to China from Vancouver, many of them for the same reason, without knowing they're going for the same reason.

There is a lot of time and money being wasted. There's a lot of efficiency that is not being met. Creating an agency that has as its goal bringing some entrepreneurship to this area of government may be an ambitious goal, but it's the only reason I'm here, quite honestly, apart from my patriotism. The idea is to go and find these areas where coordination is lacking, and bring coordination to them. To the extent that there are deals being pursued by more than one province, or that should be pursued in partnership between two cities or two provinces, there is no Canada in this particular situation. There are cities and towns and provinces, and we need to bring them together and figure out a way to go out and get this business.

One last point has to do with your comment about benefits. Certainly, if we were to compete only on tax, then on the recent tax reduction in the United States, we would probably lose that battle, but as you also pointed out, we're competing on the basis of quality of life, education, a diverse workforce, and a number of other areas where I also believe that Canada is the best place to invest. I think that if it were easy and we had a super competitive advantage, we wouldn't need this agency. It's because the advantage is so thin that we need to have an agency like this that's going to aggressively pursue these competitive bids, and face some benefits that we can't offer, and hopefully find some that only we can offer.

[Dean Allison, Conservative, Niagara West, ON]

How will you define success? Will it be in terms of dollars invested in the country? That's certainly one metric. It's a challenge at the best of times to get provinces to work together, but doing so I think it makes total sense, if you have multiple competing factions versus partnerships. How do you see, one, your measure of success, and, two, getting the provinces, towns, and cities to work together? How do you see that as a coordinating effort?

[Mitch Garber]

I only know one way to measure success. If I'm a hockey player, I measure it in goals scored. If I'm a CEO, which I've been for almost 20 years, I measure it in terms of my quarterly and annual results, and my growth rate in business. So if we're doing x dollars of foreign direct investment today, and we do less the next year, then I think we're not doing a good job, and we will have shown that this agency is not the right agency.

In terms of coordination, one of our ideas is that we have all these agencies set up across Canada. The original idea for Invest in Canada was to set up offices in many of the major cities in Canada. We think that's the wrong idea. We have offices currently in Montreal, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver. We think we can occupy those offices with Invest in Canada people working side by side at the same desks in the same areas as those people working in the regions, and show them that we're a coordinated team and that we're not trying to go out and take business away from them, or that we have a disjointed effort with them.

Having that dialogue, which we had in our cross-Canada tour with Minister Champagne, was met with great enthusiasm. We currently have only one employee, but assuming we find more employees, we plan to use the existing infrastructure to show that we're meaningful partners.

[Dean Allison, Conservative, Niagara West, ON]

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Allison.

Before I go to the Liberals, I would like to welcome in our audience the Canadian Cattlemen's Association and thank them for dropping by. It's good to see you.

We're now going to move over to the Liberals.

Mr. Dhaliwal, you have the floor for five minutes.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Mr. Chair.

I'd like to welcome both Mitch and Ian.

Mitch, as you mentioned, Ian's being here is certainly a loss for B.C., but a gain for Canada.

With your successful previous experience, Ian.... I was recently in Taiwan. It is looking to Canada, even though Mitch said that we will lose when it comes to taxation here versus in America. However, Taiwan is not looking to our neighbour to the south; it is looking to Canada, where there is the energy sector. Taiwan is going to be a nuclear-free zone in a few years, and there will be a shortage of energy. Where is it's energy going to come from? It says that it would prefer Canada. As for the agricultural sector, Taiwan has research and development, but it doesn't have land. We have an abundance of land.

How would you put this model together? You said the other countries have similar organizations. From that perspective, what tangible things do you foresee doing in the near future to get those investments in Canada?

[Ian McKay]

Thank you, Mr. Dhaliwal.

One of the things I alluded to in my remarks was robust data and research. I think Canada has done a pretty good job globally of branding Canada as a friendly place, a nice place, a good place to live, a place with good raw materials, including talent. What we need to do to accelerate the flow and the pace of investment coming into our country is build a database, and also research where global capital flows are trending. In other words, instead of the “spray and pray” approach of “come one, come all”, we need to find out where major global capital flows are pursuing opportunities. Is it in artificial intelligence? Is it in bioproteins? Is it in advanced manufacturing? Let's find out where the dollar is going, and then assess where Canada has clear global strengths and leadership in those sectors. That way we can avoid a lot of false leads and a lot of noise, and can really cut to the chase in matching investment interests with real opportunities that exist in Canada. I think that will be one of litmus tests of the success of the organization: if we're able to do that through a deeper, richer, robust data and research platform.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Is there a particular country that has already done it? Do you have an example in mind?

[Ian McKay]

Singapore is pretty good. Ireland is pretty good. The U.S. spends a ton of dough on this stuff with an organization called SelectUSA. I think it may be a bit too big and too cumbersome, but it certainly does a pretty good job.

Perception is reality. Another part of the job is building and growing the investment community's perception of Canada. My first job was on Wall Street in the eighties in the World Trade Center, where I was surrounded by Americans and Europeans who had such a romantic view of Canada. They didn't know that there was business going on here. They didn't know there were companies here with a global presence. A lot of those biases and perceptions still exist around the world, even within the United States, so we have to do a really good job of working with private sector companies to build the narrative of what Canada is and why it's a world-class destination for investment. Perception is a very important part of this effort.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Kyle, did you want to add something?

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I'm going to get my turn, aren't I?

[The Chair, Liberal, Mark Eyking]

I think we have enough time for everyone.

We're going to move on.

Ms. Ramsey, you have the floor for the NDP.

[Tracey Ramsey, NDP, Essex, ON]

Thank you for being here today, gentlemen.

When I look through all the documents that exist—and I understand that you're acknowledging that you're in the start-up phase—I think the worry at this committee would be that we're adding an additional layer of red tape. We hear from people consistently on all the trade deals, all of the SMEs, that they want to eliminate that red tape and the confusion of where they should go, whether they're here or abroad. We're looking for something that will streamline the process. I'm not clear if what you're saying to me is that the hub will streamline things and that you will be the touchpoint, as one window, versus having EDC, trade commissioners, and everyone else being involved individually. Are you talking about capturing all of these groups under this one hub?

[Ian McKay]

Folks like EDC, BDC, and even the trade commissioner service have some very specific mandates that have a some touchpoints with what our mandate is and will be. The last thing that we want to do—and I hope that I will be able to come back to see you again in a year or several months, or whenever—is to create another level of bureaucracy when, as I outlined, there is really remarkable work going on across the country and here in Ottawa in the federal government. In working as a facilitator in a collaborative way to streamline the efforts, if we don't accomplish that, then I would share your concern greatly. We cannot be viewed as being an extra layer confusing the landscape here in Ottawa or across the country. There is excellent work going on. We're going to be a facilitator.

[Tracey Ramsey, NDP, Essex, ON]

What in your directive will address jobs and ensure that jobs are attached to foreign direct investments, and that Canadians will have opportunities for those job opportunities resulting from any investments you're able to achieve for us?

[Mitch Garber]

I think it flows quite naturally. If you think about all of the different foreign direct investment, this is not new. We currently have approximately $800 billion in foreign direct investment in Canada. Much of that foreign direct investment has created jobs.

[Tracey Ramsey, NDP, Essex, ON]

I'm sorry to interrupt you, but to be more specific, when you're sitting with someone who wants to invest in Canada, what in your mandate will ensure that part of the conversation will be about how many jobs they will create in Canada? Is that part of your specific mandate?