International Trade Committee on Feb. 19th, 2019

[The Chair, Liberal, Mark Eyking]

We're going to go to the Conservatives now for five minutes.

Mr. Allison, go ahead.

[Dean Allison, Conservative, Niagara West, ON]

Thank you, Mr. Chair.

To our witnesses, thank you for being here. I love hearing from chambers, and I am certainly a big fan of Startup Canada and Futurpreneur. Thank you for the work you do.

I'm just going to ask one question, and I'll let both of you answer it. In terms of what you offer, in terms of services—Karen, you mentioned it before—you offer money, mentoring and so on. I don't know if it was $5,000 or up to $50,000. It's not that you offered it. It's what you had access to through various programs, either BDC or whatever it was.

Second, in terms of mentoring, we've had the Greater Vancouver Board of Trade and the Toronto Region Board of Trade in here talking about the trade accelerator program, TAP, which is good.

You talked about mentoring. Richard, you guys also do some mentoring as well. Talk to me about the things that you do to help connect the dots for entrepreneurs. You had a little bit of time in your opening remarks. Maybe just talk a bit more about how you facilitate those relationships that are key for helping your start-ups. You have a couple of different things going on. You're trying to get the businesses to actually be successful and stand on their own two feet. Export is not always the first thing you think about, but obviously it is part of the opportunity for small businesses, as they move forward.

Karen, why don't you go first, and then Richard.

Richard, say hi to Victoria for me. We're sad she's not here today, but tell her Dean Allison said hi.

[Richard Rémillard]

I will pass on your kind regards.

[Karen Greve Young]

I do think we're sort of complimentary cousins in this ecosystem.

Futurpreneur provides up to $15,000 of collateral-free loan financing. We're the only organization in Canada that is authorized to adjudicate on BDC's behalf. If an entrepreneur qualifies for up to $15,000 from us, they automatically qualify for up to $30,000 from BDC. It's an envelope of up to $45,000 with a low-ish interest rate, but it's collateral-free, character-based lending.

We also partner with Community Futures organizations across the country for entrepreneurs who are looking for more.

On the financing side, it's non-diluted financing, which is important for these entrepreneurs. It's non-collateralized, so it is available to entrepreneurs who are younger, who are early, or who, for whatever reason, don't have the assets to borrow against. Often, in that critical first step, we're the only financing. In Knix's case, it's a $35-million company, and the only financing has come from us. In some cases, we help a company make their first payroll before their series A.

From a mentoring perspective, we have this network of mentors. We use them in a very specific way. We pair a mentor one on one with an entrepreneur to help them in their first two years, specifically on all of the pitfalls that they might come to. When businesses fail, it's often at that two-year mark. It's at that early stage. It's more of a general business mentoring, and then we can pair them with other resources.

We do have more advanced programs, like a growth accelerator that invites entrepreneurs from across the country who are at that growth stage. There are others who do that on a larger scale. I think of us as the junior hockey or high-school basketball stage of the journey. We help people launch and have a successful launch.

[Dean Allison, Conservative, Niagara West, ON]

Thanks.

[Richard Rémillard]

We have a very small program of micro grants that are disbursed out of two networks. One is a maximum of $2,500; the other is $5,000. It's a very small proportion of what we do.

I come back to my earlier comments about our big assets. Number one is that we have these start-up communities in around 50 locales across the country. They're active doing their own thing, and they interact with other parts of the ecosystem, for example, the chambers. I can't tell you which city interacted with which chamber, but they're often embedded in accelerator incubators such as the ones out west in Edmonton and Calgary. They are entrepreneur-volunteer driven. We think that gives them a certain credibility in the ecosystem and with our target group, which is entrepreneurs and people who would like to be entrepreneurs and want to see what that journey might look like.

Secondly, and I think importantly, we do have quite a robust digital suite of programs in which we introduce entrepreneurs who are known to be successful to the wider public, people such as Randy Cass from Nest Wealth, which is a robo-adviser, a new fintech in the space...the challenges that presents in Canada's financial system. Another example is Anthony Lacavera, who was been on the board of Startup Canada before and is a serial entrepreneur with a huge string of successes.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're going to have to wrap it up. It was a good question and a good dialogue, but Mr. Allison has gone way over his time.

We're going to the Liberals.

Mr. Fonseca, you have five minutes.

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

Thank you, Mr. Chair.

I'm going to keep going where Mr. Allison was going with his questions regarding loans and grants.

Karen, where do you see most of those loans going? Would they be for all parts of the business, payroll or equipment? Are they looking at building their sales force? Where are those loans being used?

[Karen Greve Young]

It really depends on the business and the sector it's in. They're all within the first year, right? That loan is coming within a year of the company's launch or within a year of the company having launched, so it's for any of those early needs. It really depends on whether it's a more main street business. If it's a restaurant, it's likely going toward lease payments. If it's a software company, it's likely going to payroll.

I should note also that some groups for cultural or other reasons are averse to loan financing, so we have introduced some smaller grant programs. For example, our thrivenorth program in northern B.C. is for northern rural and indigenous entrepreneurs. They have the option for the $15,000 loan. They also have the option for up to $1,500 in grant financing, which can make all the difference in a smaller community.

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

Richard, would it be the same with the grants?

[Richard Rémillard]

Again, they're micro grants and they're quite small. They're very limited in number. What we usually do is arrange a partnership deal with a major private sector partner that will provide the capital for that. We've done that with people in the financial sector. Another one is coming up for this year.

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

Thanks.

Karen, you mentioned that with many of your members, the percentage of their exports within North America versus outside North America would be fifty-fifty. In terms of CETA, were members primed to get them ready for when that agreement was launched so they could capitalize on it?

[Karen Greve Young]

Some of them were.

I should clarify that Futurpreneur Canada doesn't have firm data on that. I say it based on my past experience with MaRS.

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

Okay.

[Karen Greve Young]

I think some of them were, in fact, primed. A great example from Quebec is a company called Wilder Harrier, which is a non-meat pet food company that started exporting to Europe pretty much as soon as CETA was signed, particularly to France. We've tried to help them get access to that information. Realistically, the companies that are accessing it now are the companies that know how to look for it. I think our opportunity is to make more of that information more accessible to companies that have export opportunities and don't realize they should be looking to CETA and the others. They don't realize that those could be opportunities for them.

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

Take us through that, to the trade commissioner service in France. How did they open up that distribution, the marketing and sales chain?

[Karen Greve Young]

I don't know the specifics, I will admit. We support roughly 1,000 entrepreneurs getting new financing every year. I have met the Wilder Harrier team, and I know that Europe has become an important new market for them, but I'm not actually sure how the mechanics works.

I'd be happy to set up a conversation with them.

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

Richard, through the podcast/webcast, is that where you take people through case studies? Is that how it would work?

[Richard Rémillard]

That's exactly right. It's mentorship on the one side, digital; and it's professional development on the other side, learning what you need to learn in order to succeed. And that's the whole focus of it.

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

Okay, thank you.

[The Chair, Liberal, Mark Eyking]

We're going to go to the Conservatives.

Mr. Hoback, you have five minutes, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I want to thank all the witnesses for being here this afternoon. It's great to see you all.

It's nice to see you mention the trade commissioner service. Whenever I travel, I always try to stop in at our local embassy or trade commission and sit down and talk to them and just get a lay of the land and what's going on in those markets. I know in Japan, for example, they do a great job.

I'm curious. We have a lot of different groups doing the same thing it seems to me now. We have your two groups here. I was just in Vancouver talking to the Greater Vancouver Board of Trade. They do something very similar, and they all do good work...STEP in Saskatchewan.

But it's confusing if you're an entrepreneur. Where do you go? Who should you see? Is there any way we can streamline this and get more efficient? Is there anything we can do there?

[Richard Rémillard]

First, on principle, there are always things that can be done to streamline and make more efficient one's operations—period, full stop.

Second is I think we have to be sensitive to the different audiences that we're targeting. We have an audience, as I may have mentioned earlier, that goes beyond folks in the 18-to-39 category. Even though we're technologically proficient, a lot of our entrepreneurs and those who sign up to events, who log on to Thrive podcast, are not necessarily tech focused. It's really quite broad—

[Randy Hoback, Conservative, Prince Albert, SK]

You're saying basically because of the sectors or the people you represent, it creates the meaningful—

[Richard Rémillard]

That's right. You have to throw the spaghetti at the wall and hope to hit different parts of the wall with your spaghetti.