International Trade Committee on April 24th, 2018

[Mark Nantais]

You hit the nail on the head. It has become a protectionist bloc. In order to compete, we have to look to other ways in which we can reduce our costs internally. It's about how we become more productive, which we've done. We have a great labour force. We have a highly educated and skilled labour force. Not so much anymore, but just as an example, the health costs and whatnot have been positive for us. These are the things we try to offset and put on the right side of the ledger, if you will, versus these things that appear on the wrong side of the ledger.

As I've said before, and as you just touched on with regard to Mercosur, for instance, the strategy they've used is to protect their domestic industry by giving them incentives, financial supports, and tax relief. That's how they've grown. That's how they grow their industry. That's how all these other countries grow their industries. They protect the domestic industry and put them in a position where they can build their capacity to export abroad. We're kind of going the wrong way here by adding more costs as we go forward.

It's something that takes a coordinated effort between the provinces and the federal government. It's not so much municipalities, but municipalities can do some damage, competitively speaking, by imposing localized regulations and costs that we don't have elsewhere.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're quite over time, Mr. Hoback, but it was a good question.

We have enough time for one more MP.

Madam Ludwig, you have the floor.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Good morning, gentlemen. My riding is New Brunswick Southwest, so I'll direct my questions to Mr. Lansbergen.

In terms of products, I have a list here: clams, mussels, oysters, winkles, scallops, shrimp, lobster, crayfish, and crab.

If you were looking at this, representing your council as the president, what would be the primary targets for products for the Mercosur countries? Would it be any one of those?

[Paul Lansbergen]

You went through that list pretty quickly, but in general shellfish are more valuable, with higher margins and higher value added. Looking at some of the trade data, shrimp and scallops are some of the big imports from Argentina, but in terms of the market development I talked about, I think we need to look at what type of fish and seafood the Mercosur countries consume now, where their interests are in increasing that, and what we can provide in terms of different species. Take lobster, for example. We have American lobster and they would have rock lobster. They taste different and things like that.

Those would be the types of things I would look at, if that helps answer your question.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

It does.

You also mentioned a 32% tariff. Is that on imports or on exports?

[Paul Lansbergen]

That is on imported sardines at their end. That would be a barrier that we experience right now. As to how much that really represents in terms of opportunity, sardines make up a small export product for us. Some of the other tariffs we see currently in Mercosur range from 10% to 16%. That is a little more modest, but still significant enough to create a prohibitive barrier in terms of export, which is why we export so little now.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you for that.

I did a little research, and I noticed that Clearwater Seafoods has operations in Argentina. I also noted that PC Blue Menu wild Argentinian scallops are being sold here in Canada. We have a lucrative and successful scallop industry, certainly in the east. Representing an area like that, I often hear from some of the fishermen—as of two weeks ago, even—on issues regarding quotas, marine protected areas, and the limitations on seasons. Do you know if there are similar regulations in, for example, Argentina in terms of our competitiveness?

[Paul Lansbergen]

I don't have any information about those types of rules that Argentina would have along their coast, but that is an important issue for us in terms of trying to take advantage of any free trade agreements. What's our investment climate here in Canada, our stability of access around fisheries licences and quotas, and the marine conservation squeezing some of our harvesting areas? Those are important issues that we're facing right now and that we will continue facing. How that affects investment for us to take advantage of these issues is important.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I think that is certainly important, to find that balance and look at the sustainability of these industries in Canada.

Mr. Lansbergen, you also mentioned sanitary and phytosanitary concerns. Are there any concerns on the importing side, for example, if we look at scallops or shrimp from the Mercosur areas?

[Paul Lansbergen]

Importing into Canada?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

From their products. Are we looking at apples to apples when it comes to sanitary and phytosanitary requirements?

[Paul Lansbergen]

To tell you the truth, I'd have to look into what their rules are in terms of the SPS rules to export into those countries. Certainly, our rules are quite strong. CFIA has a strong regulatory regime for food safety for Canadians.

How that compares to what rules they have at their end, I really don't know. I would have to look into that.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I have one last quick question.

You mentioned the opportunity of one kilogram additional per-capita consumption—the significance of that. As a Canadian company or entity exporting directly to Mercosur, would the target be supermarkets, hypermarkets, restaurants, but not necessarily the individuals?

[Paul Lansbergen]

Yes, that's correct.

That's part of the market development question we'd have to look at: How do they consume their fish? Is it at a restaurant, a fresh market that they buy for home, or is it grocery-store frozen or fresh? I'm not sure what percentages those represent, but those three are all opportunities.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're wrapping it up right now. That ends all the dialogue and questions, and that ends our first hour.

Thank you, witnesses, for partaking today. This report that we're doing is going to take quite a few months. We'll probably be visiting South America later on in the year, but, when we're done, you're welcome to have a copy of our report. Thank you again for coming and joining us.

Colleagues, we're just going to break for a couple of minutes, because we have EDC waiting to jump in.

[The Chair, Liberal, Mark Eyking]

Welcome back, everyone, for the second part of our meeting today. We have EDC with us.

Welcome, folks, and especially to the new chair of the board, Madam Martine Irman. It's good to see you here.

You know how we roll here. It's usually a five-minute or less presentation so we have lots of room for dialogue with MPs.

The floor is yours.

[Martine Irman, Chair, Board of Directors, Export Development Canada]

Thank you, Mr. Chairman and honourable members, for inviting me to appear before this committee.

As noted, my name is Martine Irman, and it's a pleasure to speak to you today regarding my appointment to the position of Chair of Export Development Canada's board of directors. It was an absolute honour to be chosen for this distinguished position, and although only a few months have passed since I started in this role, I can already say that the experience has been both enlightening and invaluable.

I come to EDC from the world of commercial and investment banking. I'm currently vice-chair and head of global enterprise banking at TD Securities, and senior vice-president of TD Bank Group. In this role I'm responsible for enterprise-wide banking initiatives at TD Securities, and I'm the lead executive for ensuring that senior client relationship management is seamless across the firm's key global businesses, namely, global markets, international, and corporate and investment banking.

I'm also a member of TD Securities' supervisory committee, and I play a key role in terms of the firm's strategy, as well as its leadership team.

I've been with TD Securities for over 25 years. I've held various executive positions over that time. I'm also a proud graduate of the University of Western Ontario. I have a Bachelor of Arts degree in economics and financial studies. I've also completed the advance management program at the Wharton School of Business at the University of Pennsylvania, and I hold the Institute of Corporate Directors qualification from the University of Toronto's Rotman School of Management.

This is undoubtedly a whole host of titles and qualifications.

Too fast? I can go slow.

This is undoubtedly a whole host of titles and qualifications. I had to work very hard to acquire them, and I am very proud of them. But to present myself properly, I must explain to the committee some of the values that are important to me.

Throughout my career, I have made a point of investing in the community and giving back to it. I owe this guiding principle to my parents, who taught it to me at a young age. I am currently on the board of directors of the YMCA of Greater Toronto, and I am co-founder and co-chair of the board of a United Way organization, Women Gaining Ground.

As someone who has built their career in a male-dominated profession, I am also very sympathetic to the cause of equity in the workplace. I am proud to be the second woman chair of Export Development Canada in its 75-year history.

I am fully committed to doing what I can to pave the way for more women to reach positions like this one, both within EDC and elsewhere in the corporate world. I'm also someone who believes in continuous learning and development, which, as you can guess, is a big reason why I stand before you today.

I first learned of EDC while working in the private sector, and it was from that vantage point that I recognized the kind of value-add that EDC could offer to Canadian exporters and financial partners alike. Now, after only a few months in my new appointment, I've already developed a greater appreciation for the unique role this organization plays in the Canadian economy. First, there's the corporate mandate to directly or indirectly support and develop Canada's export trade and Canada's capacity to engage in that trade and respond to international business opportunities.

In a time when international trade is only becoming more complex and more competitive, I find that EDC is an invaluable tool for Canadian companies of all sizes. The reality we see day to day, from small companies of five employees to large, anchored companies with thousands of employees, is that the global economic environment is changing fast. It's being driven by a number of potent forces, such as the global rise of protectionism, the changing political landscape in the EU, new free trade agreements, changes to existing agreements, the surge of emerging markets like China and India, climate change, and e-commerce, to name a few.

The only certainty we have about the future is that there will be change. It is the responsibility of Export Development Canada, or EDC, and its partners in Canada's trading ecosystem to stay abreast of these developments and keep Canadian businesses informed and equipped to adapt to change.

EDC is important for these reasons now, but I've also seen how in difficult times the corporation has been able to step up in a big way for Canadian business. The most relevant example that sticks in my memory is during the 2008-09 financial crisis, when EDC stepped up to the plate and was able to provide financing to struggling companies that the private sector banks simply could not.

It is my view that Canadian exporters need a stable and reliable source of financing and trade expertise. EDC has played this role for nearly 75 years. This is what I've learned about EDC through my career, and especially in the last five months as board chair.

I, of course, recognize that for the sake of this committee, there's much more to discuss about EDC than the 30,000-foot view I have just given you. Given that I've only been chair for the last five months, on the more nuanced issues regarding the corporation, I'll provide as much input as I can to this committee, but in some instances I might defer to my colleagues, Benoit and David, who will undoubtedly give you more details as required.

That said, I look forward to speaking with the members of the committee to discuss any issues that may be of interest to them.

I thank you for your time, Mr. Chair, and I look forward to your questions.

Thank you for your attention.

[The Chair, Liberal, Mark Eyking]

Thank you, Ms. Irman.

We're going to start off with the Conservatives.

Mr. Allison, you have the floor.

[Dean Allison, Conservative, Niagara West, ON]

Thank you very much, Mr. Chair, and thank you all for joining us today.

Ms. Irman, I had a chance to meet with the Ottawa liaison committee of the Canadian Chamber of Commerce yesterday. We were talking about what's going on in trade and competitiveness, and all that stuff. You also, from your day job, have this great vantage point for viewing capital markets, what's going on around the world. I don't think we differ a whole lot from our counterparts, the Libs, on trade deals. We all support these kinds of things. I need you to talk a bit about competitiveness at home here, and where we're at.

Some of the challenges that the Canadian Chamber of Commerce mentioned were excessive regulations, a whole bunch of additional taxes coming on carbon, all these things that affect our competitiveness at home, which makes it more difficult. Obviously, EDC has done very well, turning back a lot of money to the Canadian government because of Canadians doing well. Just talk a bit in the context of some of the challenges that we have.

Obviously, we need to continue to pursue trade deals. I think that makes tons of sense. We can agree on that. I think we may disagree with the party opposite about how competitive we actually are in terms of what's going on in the global market, specifically as it relates to the U.S., which has just gone through major tax reform. There seems to be this large sucking sound of money as it moves into the U.S. versus some of our markets. You have a 30,000-foot view, as you said. Talk to us a bit about some of the challenges we face here in Canada.

[Martine Irman]

I will preface my reply by stating that I have been involved with the Canadian Chamber of Commerce. I was on its board for four years, and I reluctantly left that position. I appreciate the incredible value that the chamber movement offers, representing, I believe, 200,000 organizations across Canada.

With respect to the competitive question, I'll just give you the view I formed while dealing in the international trade movement, both internationally and domestically, with the SMEs. I think there's an opportunity for EDC as it grows—and it has a fairly aggressive corporate plan—to be better known to the Canadian community, the SME base. They have a strategy behind that. I think there's always an element of global pressure from other countries, but specifically to Canada and the role that EDC can play, to be better known. If you look at its corporate plan, it has a strategy. Last year it touched just under 10,000 customers, up from 7,500. I think a lot of it is around awareness of opportunities, awareness of trade transactions, and being able to use them.

I'm optimistic that the competitive landscape, yes, is competitive, increasingly so, but I do think there's more to be done in terms of branding and awareness with respect to being known across the Canadian landscape by those clients.

With that, maybe I can turn to Benoit, if you would like to add anything.

[Benoit Daignault, President and Chief Executive Officer, Export Development Canada]

The only thing I would add is that a big part of the competitiveness in Canada is based on the level of the currency. If you look at our forecast for 2017 and 2018, you see growth at 3.5% in 2017 and 3.8% in 2018. The actual drivers behind that growth include, of course, the strength of the U.S. economy and the competitive exchange rate we have now, the Canadian exchange rate vis-à-vis the U.S., which gives a good competitive advantage for Canadian companies.

[Dean Allison, Conservative, Niagara West, ON]

Further to what we just talked about, I think EDC does a great job when it comes to promoting and helping our businesses. I think you guys do a wonderful job, so just talk a bit about how we engage more SMEs. You talked about awareness. It always seems to be a challenge that a lot of companies just don't know you exist, or how to access you. It's not because you're not there. I know you have people in every...you have an EDC member out at the BDC branch in Niagara, so you're there. How do we facilitate getting more SMEs to engage with you?

[Martine Irman]

Again I'll talk at the high level, but I would think, like any other corporation, it's also around how you touch people. We need to get more digital. We need to get more broad-based. We need to get more physical in some aspects, but the physical piece is only as good as you can engage. I think we look at how we engage online, how we have people come to us and be able to search...so the new potential customers. I think EDC has a fairly thorough strategy around its branding and its marketing around that kind of component.

Also, I'd stress partnerships. EDC has some great partnerships with the other crown corporations, great partnerships with financial institutions and other organizations like the Canadian Chamber of Commerce, and the local chambers as well.

[Dean Allison, Conservative, Niagara West, ON]

Thank you.