Mr. Chair and committee members, thank you so much. It really is a pleasure to be here.
Before I begin the official remarks, I want to thank the committee for the work that you're going to be doing. As the chair says, there are many trade agreements that have been negotiated and many that are to be negotiated, and others that have proceeded. It really is a good piece of work that your committee is going to be doing. I'm really looking forward to understanding and learning what you will find in the committee. I just want to thank the committee before we start for the great work that I know you will be doing.
I want to begin by thanking this committee for inviting me here, and for the study you will be doing. I look forward to seeing the results of your work.
Canada is a country built on trade. In our early years it was based on the raw materials that powered other nation's economies. Today, we provide value-added exports that increase prosperity for Canada and for our trading partners.
Exporting remains crucial to Canada's economic prosperity. It provides a future for Canadian businesses and for workers by creating great opportunities for Canadian companies abroad. I have a mandate from the Prime Minister to help small businesses in Canada start up, scale up and access new markets.
I am also responsible for the Business Development Bank of Canada, the only bank in Canada devoted solely to entrepreneurs.
As the Minister of Small Business and Export Promotion, I am focused on making it easier for businesses across the country to access government services and programs.
In partnership with the Honourable Jim Carr, the Minister of International Trade Diversification, who has the responsibility for Export Development Canada, we will work together to enable Canadian export success by helping Canadian SMEs become more productive, more innovative, more export-oriented and more export ready.
I often say that Minister Carr opens the doors for Canadian businesses with the trade agreements with other countries, and I help those Canadian companies, especially the small and medium-sized companies, walk through that door, or those doors.
Why the emphasis on small and medium-sized enterprises? The vast majority of exporters are large companies with 500 or more employees, but small and medium-sized enterprises make up 99% of all companies in Canada. They make up 90% of our private sector workforce and they employ close to 11 million Canadians.
And yet, only 12% of SMEs export. We want to significantly increase that number.
On average, firms that export invest more in R and D, pay 14% higher wages and enjoy up to 15% higher productivity.
There are opportunities to do more. Let me give you some examples.
There is the recently negotiated trade agreement between Canada, the U.S. and Mexico, which will preserve Canada's preferential access to the U.S. market, our largest trading partner, and will ensure most trade between these three countries remains duty-free. This translates into economic stability, future job growth and opportunities for Canadian small and medium-sized companies.
However, we also know that in order to create even greater success for Canadian companies, we must look beyond the traditional North American markets.
The comprehensive and progressive agreement for trans-Pacific partnership, also known as the CPTPP, will come into effect on December 30, giving us preferential access to markets in the Asia-Pacific countries, including Japan, Australia, Singapore, New Zealand, Vietnam and others. These markets account for about 18% of the global GDP and nearly 500 million new customers for our Canadian businesses.
ln September, we celebrated the one-year anniversary of the European Union-Canada Comprehensive Economic and Trade Agreement, otherwise known as CETA. ln the 11 months before CETA came into effect, Canada's trade with the EU totalled $38.4 billion. ln the first 11 months after CETA, trade with the EU increased to $41.1 billion, which is up 4.3%.
Altogether, CETA, the CPTPP and the USMCA are going to provide access to up to 1.5 billion customers for our Canadian SMEs.
Canada is also the only G7 country to have trade deals with all other G7 nations. Through our comprehensive and progressive trade deals, Canadian SMEs have preferential access to 60% of the world economy.
We're looking to always work on new ones, from modernizing the agreement with Israel, which is currently before Parliament, to the early-stage talks with the Mercosur member countries.
While Minister Carr is opening the doors for Canadian SMEs with these trade deals, how do we help grow exports for our small and medium-sized businesses? When a Canadian business owner first considers exporting, we need them to know that the Government of Canada is here to support them. That means better marketing and more innovative offerings.
I want to share with you the top five areas in which SMEs have told us that more needs to be done.
The first is knowledge. We hear that SMEs don't know where to go, in order to access the support they need to go global. We have the tools, but there's also a thriving ecosystem of third party programs that support the work for these SMEs across Canada. What are these? Where are they?
The second is time, which is something that SMEs don't have. Innovation Canada is a step in the right direction. lt brings together hundreds of programs—everything the government does for businesses—in a single portal. What more can we do to improve ease of access, ease of use and additional support to help them be successful?
The third is coordination. Small and medium-sized firms tell us that Canada lacks a coordinated value-chain or sectoral approach towards exports. We're looking very carefully at the advice from our economic strategy tables, which is an industry-government partnership that examines six areas where Canada is positioned for growth. These tables call for a national export promotion effort, where successful Canadian firms abroad enable further success for their value chains and sectors.
How can we enable a strategic and support approach such as this?
The fourth area is in infrastructure, improving our trade corridors as well as the availability of broadband to enable companies to become export ready and to grow the economy. “Trade corridors to global markets” is one of the pillars of transportation 2030, led by Minister Garneau. The goal of this pillar is to improve our transportation system to get products to market and grow our economy. What are the critical pieces that will have the most immediate impact on export readiness for our Canadian SMEs?
Last but not least is local knowledge. SMEs need more help to understand how businesses work in countries outside of North America. This is where the trade commissioner service—Canada's best sales force, as I often call them—has and continues to have a role to play in providing market intelligence and in making the right connections for our Canadian companies. It's also why we launched CanExport, where already more than $37 million has been provided to Canadian SMEs looking for new export opportunities and to grow abroad. How can we best support companies as they look for market intelligence, introductions, financing options and more?
These five focus areas require efforts that are greater than one minister or one government. They require all of us to pull together and to work horizontally to make a difference. We know that Canada is one of the best places in the world for starting a business, and has been ranked in the top 20 in terms of ease of doing business, according to the World Bank. We're committed to doing even better, creating the right environment so that entrepreneurs and business owners can succeed internationally and create middle-class jobs here in Canada.
I look forward to working with you to encourage more Canadian SMEs to market themselves to the world, to diversify Canada's export portfolio and to open up new opportunities through additional trade deals. I'm looking forward to your advice as a committee as we work to continue to support the success of our Canadian small businesses.
I look forward to your advice and to working with all of you as we continue to support the success of Canadian small businesses.
Thank you very much. I would be happy to take questions.