International Trade Committee on Nov. 8th, 2018

[Tracey Ramsey, NDP, Essex, ON]

I'd be happy to share the study with you. It's from the economist at the National Bank.

The Canadian Horticultural Council is on the Hill. I have agriculture and manufacturing pretty equally in my riding, and I think that's pretty representative of Canada. They brought to us that they feel there's a lack of trade commissioners. They don't have the ability to understand or access funding. They're looking for the support of farmers in terms of exports. The U.S. just announced it's going to put up $200 million over the next three months to promote their agricultural exports.

SMEs are farmers. In my region, we have the greenhouse industry, which is a massive SME industry.

Again, I want to ask, what is your department doing to ensure that farmers are receiving, hopefully, similar support in order to export as well?

[Mary Ng]

To your question about the trade commissioners, I call them the greatest sales force for Canada. There are 1,000 of them around the world in 161 offices. We added $75 million to modernize and increase that capacity so there is in-country support for farmers, for all of our SMEs, looking to grow into export markets. That support is there. We have made that investment.

With respect to manufacturers and other SMEs who are looking to grow, in particular, into those countries, as I said earlier, we've heard from small and medium-sized businesses about understanding an in-country market and where they might be able to get those resources to help them understand that context a little bit better, to help them sharpen and grow. That's exactly what we want to do.

[Tracey Ramsey, NDP, Essex, ON]

They're not feeling that's the case. They're saying that there's a lack.

[The Chair, Liberal, Mark Eyking]

Sorry, we have to cut you off there. We're way over the time.

We're going to go back to the Liberals.

Mr. Dhaliwal.

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

Thank you, Mr. Chair.

Welcome, Minister.

As part of the 1,200 conversations that you had with the small businesses, I want to thank you for coming to Surrey and having a conversation with the Surrey Board of Trade and its members. That was very helpful.

Ninety-eight per cent of the businesses in Surrey are small or medium-sized businesses. They have difficulty accessing those programs that you are talking about. They're complaining that they don't have the time and the resources to do the research you're mentioning.

Is there a proactive approach that your department is taking to help educate those businesses about having trade overseas?

[Mary Ng]

Thank you for that question.

It was great to be in Surrey, to be with the board of trade and to meet so many of the great businesses in Surrey. I think it was just a few weeks ago.

I'll draw people back to Innovation Canada. I often say that it is a portal that's intended to help businesses that don't have a lot of time, which is why it really only takes you two minutes, literally, to go through it. It will then give you a list of the programs, services or supports in your area that will help you.

For those who need additional support, we have innovation officers or advisers who can help small and medium-sized business owners. They might say, “You should get in touch with the trade commissioner service in this area because it looks like this is where your business has growth potential”, and then guide you through the support that your business would need.

I know that I keep plugging this, but Innovation Canada is built specifically to be sensitive to the fact that SMEs don't have time, and to give them robust information so that they can get access to capital, to networks, etc.

I would also say—and I'm going to plug this a little bit—that just over the last couple of weeks I announced some funding for the women's entrepreneurship strategy. One is an ecosystem fund of $85 million, and another is a $20-million fund specifically to help individual women entrepreneurs grow and scale their businesses.

Why is the ecosystem important for women entrepreneurs? While I say that 99% of our businesses in Canada are SMEs, only 16% are women-owned and women-led. I have a mandate to double that by 2025. Studies, including that by McKinsey, will tell us that if we do that, if we improve and grow the number of women entrepreneurs, by 2026 we can add $150 billion of incremental GDP to the Canadian economy. An ecosystem fund really is to fund those organizations across the country that will provide the kind of support that women entrepreneurs need to start and grow their businesses.

Again, it's what we hear a lot from SMEs, whether it's about financing capital, getting the advice that they need, or getting the right expert advice as networks to help them scale, grow and hopefully do a whole lot of exports.

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

You mentioned women and entrepreneurship. When we look over the last decade and a half, we see that the manufacturing industry is almost dead in British Columbia, where I come from. Now we see that more and more women are getting involved in the knowledge-based economy, in the sciences.

If we have to compete in the coming years, it'll be hard to compete with China and India when it comes to labour-intensive jobs. Are there particular programs available to help women be competitive in the knowledge-based economy?

[Mary Ng]

Yes, indeed. It's not a program. It's a series of investments in.... It's a growth approach. It's the supercluster based out of Vancouver. There is expertise there in academia, along with some very robust digital companies that actually provide and offer a supply chain for the emerging SMEs that are growing exactly in the digital industries right there in B.C.

There are four more of them across the country in different clusters where Canada really has an expertise, whether it's advanced manufacturing in Ontario, oceans in the Maritimes, or agri-food and proteins in the Prairies. There is a real ability for the emergence of these great Canadian SMEs. It's these very companies that we want to be able to help support in their efforts to become more export ready so that they can grow, not only here in Canada but abroad.

This is the work that I would love to learn more about. In B.C. there's a great export navigator program. If an SME wants to look at growing and exporting, then there's an export navigator program that's offered by the province.

[The Chair, Liberal, Mark Eyking]

Thank you, Minister. I'm sorry, Mr. Dhaliwal, I know you're on a roll, but maybe the next Liberal can pick up where you left off.

We're going to go to the Liberals now.

Mr. Fonseca, you have the floor.

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

Thank you, Chair, and thank you, Minister. Welcome, it's great to have you here.

I know you took us through a little bit of what the ministry is doing to offset those mental and physical steps—as well as the risks—that small and medium-sized enterprises have to take before they can think about the reward of getting into exporting.

You talked about knowledge, time, coordination, infrastructure, local knowledge. You've had the opportunity to go coast to coast. There ae 1,200-plus businesses you've heard from. I'm sure you heard a lot of success stories and you also heard from those businesses about some of the challenges they have. I'm sure they talked about the risk level.

With the five barriers you outlined for us, was there any particular one that stood out among the others—the knowledge, time, coordination, infrastructure, local knowledge—that came up in your town halls and your meetings with chambers of commerce?

[Mary Ng]

I would say it's probably fairly consistent. It's important to know where the resources are, to know where there may already be something that might be done locally to help companies understand what they need to do to get ready for export. I've talked about the export navigator program. I would love for this committee to look at others that might exist across the country. That's one that I know from having made a trip out to B.C. There are other comparable programs.

There's one in the Atlantic region. It's not quite called “export navigator”, but essentially these are programs offered by either the local board of trade or an economic development organization in the province or even in the municipality. They're doing some really good work to provide tools and supports to help companies think about what they need to do.

They have to determine, first, if they're ready, and then, if they are ready, they have to look at what is out there and learn how to get on the road to exporting and growth. If you're not ready, you need to know how to find out what kinds of tools or support you need to get yourself competitive so that you can start growing your SME, growing your business, and finding customers that are beyond the Canadian marketplace.

I would love to hear about the work and the study that this committee is doing so that I can know what stage some of these businesses are at. We want to look at how we might collaborate with these SMEs, to let them know about some of the tools and supports that are already in place at the federal level. We want to give these SMEs access to the resources they need to grow.

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

We can look at the opportunities with CETA, where 98% of tariff line items came off on product services. One in particular that we heard about at the committee, which I also read about, had to do with the lobster fishermen. I think it was a 20% price advantage that was there and it put us in a great competitive position over the United States with our exports to Europe. We've seen some great growth.

Is there something through your ministry that you're able to highlight? Do you know of some really tremendous opportunities that we can take off with?

[Mary Ng]

I have an expert on that here with me, and I'm going to let Chris take it, because we're doing some really great things and she'll be able to give some advice to the members.

[Chris Moran, Director General, Trade Portfolio Strategy and Coordination, Department of Foreign Affairs, Trade and Development]

Thank you.

To answer your question directly, yes, we are engaging. We work very closely with ISED, with the regional development agencies and with a number of those parties that you raised earlier to cover off the promotion of those opportunities.

We know that it's very difficult for SMEs to access the information that they need. We're taking steps now to increase our promotion so that SMEs know where those trade agreements are and what benefits we can bring to them. Also, the Canadian trade commissioner service abroad is able to bring those opportunities back to us through our network here.

We're disseminating that information to our partners along the ecosystem—ISED, through RDAs; with BDC and EDC; with provinces and territories; and with chambers of commerce—to make sure we're promoting the opportunities that exist. We want to make sure that we're well-equipped to take up those opportunities and that Canadians can find ways to export.

They know the environment, that local knowledge piece, for example. We're gathering intelligence about the environment that they need to know beforehand, those regulatory issues. All of those issues we're helping them navigate through the trade commissioner service.

[The Chair, Liberal, Mark Eyking]

Thank you, and that wraps up the time, Mr. Fonseca.

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

Mr. Carrie, you have the floor.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair, and thank you, Minister, for being here.

I'm glad to hear that you've met with about 1,200 different companies since you've been minister. What is confusing for me, though, is that you brought five things they brought to your attention: knowledge, time, coordination, infrastructure and local knowledge. We're hearing a little bit different. We're hearing from companies that are saying your government is not listening. There seems to be a focus on program development, but what we're hearing about is the lack of competitiveness. Canadian companies are great quality companies, but they're finding it hard to compete around the world.

I don't think I have to tell you, Minister, that 76% of our trade is with the United States, but we're at a distinct disadvantage on personal and corporate tax rates, resource development, labour productivity, regulatory burdens, internal trade barriers, access to capital, size of the market, incentives to invest and encouragement for entrepreneurship. Some of theses companies, as my colleague said, are in a very dire situation right now and they're waiting for Minister Morneau, who was here in front of committee, to come up with his economic update on November 21.

I was wondering. With all the different companies that you have listened to, what recommendations have you made to Mr. Morneau to address the competitive disadvantages that Canada has, especially with the United States?

[Mary Ng]

The five areas we talked about, that I illustrated, are actually with respect to exports, but of course when you talk to companies they talk to you about more than exports. Because the work here and this committee is about your work ahead and helping provide some recommendations about how we can help companies become more export ready, I highlighted those five—

[Colin Carrie, Conservative, Oshawa, ON]

Minister, my apologies for interrupting, but some of these companies are at the precipice right now. They've been talking for months. We had emergency meetings in the summer and their complaint was that you're not listening. In two weeks Minister Morneau is coming up with an economic update with a plan to move forward, and it needs to address the competitive disadvantages we have. As you said, Minister Carr can open the doors, but you can't help him through the doors if the doors keep getting slammed shut because we can't even compete in that international market.

What I'm asking specifically is.... Obviously you've listened to 1,200 companies, what recommendations have you made to Minister Morneau to address the competitiveness crisis that we have in this country right now?

[Mary Ng]

With respect to competitiveness and the sensitivity of costs, absolutely we're listening. We had six economic tables that have worked solely with the private sector so that we are understanding their issues and their needs. I would say with respect to regulatory changes, we're making inroads on that. We have repealed 108 regulatory titles, and the previous government had 23, so competitiveness is important—

[Colin Carrie, Conservative, Oshawa, ON]

Minister, excuse me, but the question is, have you made recommendations to Minister Morneau yet? You've talked to 1,200 companies. The number one issue we're hearing about is this competitiveness disadvantage, particularly with the United States, where 76% of our business goes. Have you made those recommendations yet?

[Mary Ng]

I, like you, listen to companies. I'll continue to listen to companies. I will continue to work to help companies start and to help them grow. I am the person who has the responsibility around the cabinet table to be sensitive and to advocate for small and medium-sized businesses.

[Colin Carrie, Conservative, Oshawa, ON]

Minister, respectfully, the situation is dire. We have a capital bleed of $70 billion. In other words, like my colleague was saying, $70 billion more left Canada than came in. This is unprecedented. Right now we have good quality Canadian businesses, who want to stay in Canada and love doing business in Canada, but the competitiveness issue is huge. It's dire. It's an emergency.

What recommendations have you made to Minister Morneau to address the competitiveness issue, and have you made...? I'm not getting from your answers that you even made any recommendations. This is the emergency that we're hearing about. This is dire. You're here. Could you please explain to us what recommendations you're making?

[Mary Ng]

Small businesses are as important to me, just as they are to you. We've created 600,000 jobs in this country. We have a plan for skills to help those companies grow.

[Colin Carrie, Conservative, Oshawa, ON]

They don't want programs, Minister. They've been here. They don't want loans.

[Mary Ng]

They're not programs. These are jobs. There are 600,000 jobs that have been created.