Evidence of meeting #138 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was entrepreneurs.
A recording is available from Parliament.
3:30 p.m.
Liberal
The Chair Liberal Mark Eyking
Good afternoon, everyone, and welcome back from a week in your riding.
Today, we're going to continue with our study of the Government of Canada's support for the international trade of small and medium-sized businesses.
Ms. Ramsey.
3:30 p.m.
NDP
Tracey Ramsey NDP Essex, ON
Mr. Chair, I'd like to move my motion. I gave notice of my motion to the committee dated Monday, February 18, 2019,
I move that the committee invite officials from Export Development Canada to appear before the committee and answer questions regarding the 19 loans from Export Development Canada to SNC-Lavalin or its customers since 2002, including any financial support provided after the news of an RCMP investigation into alleged corruption at the company.
3:30 p.m.
Liberal
The Chair Liberal Mark Eyking
You're just giving us notice, because it requires 48 hours according to the clerk.
3:30 p.m.
The Clerk
It came on Friday, but on Friday it needed to be in before four o'clock.
3:30 p.m.
The Clerk
No, it was at 4:30, sorry.
3:30 p.m.
Liberal
The Chair Liberal Mark Eyking
We're back to our agenda on our study of small and medium-sized businesses.
We're fortunate to have some witnesses with us today, and a couple by video conference.
Some of you may have been in front of the committee before. We try to keep your presentations to around five minutes, if possible. If it goes over a little bit, that's fine. Then we have a dialogue with the MPs.
I usually try to begin with the folks who are on video conference in case we have any technical glitches. I see we have our two witnesses.
From Futurpreneur Canada, we have Ms. Karen Young.
From the Windsor-Essex Regional Chamber of Commerce, we have Mr. Rakesh Naidu.
From la Chambre de commerce et d’industrie de Dolbeau-Mistassini, we have Ms. Audrey Jobin.
Ms. Jobin, do you want to go first?
3:30 p.m.
Audrey Jobin Chief Executive Officer, Chambre de commerce et d'industrie de Dolbeau-Mistassini
Good afternoon.
Is there a specific question I have to answer?
3:30 p.m.
Chief Executive Officer, Chambre de commerce et d'industrie de Dolbeau-Mistassini
Do I have to talk about any subject in particular?
3:30 p.m.
Liberal
February 19th, 2019 / 3:35 p.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Mr. Chair, maybe you should be clear to Ms. Jobin that if she wants to make a presentation for five minutes, she has the time to speak.
3:35 p.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Maybe you would want to clarify, just in case there was a miscommunication.
3:35 p.m.
Chief Executive Officer, Chambre de commerce et d'industrie de Dolbeau-Mistassini
No one has told me exactly how the meeting is supposed to proceed.
3:35 p.m.
Richard Hébert Lac-Saint-Jean, Lib.
Mr. Chair, maybe she needs to get some questions first. She doesn't have a presentation.
3:35 p.m.
Liberal
The Chair Liberal Mark Eyking
What I suggest is that we hear the other three presentations and if she wants to follow up or add something before we get into questions, we can go that way.
We're going to go to the Windsor-Essex Regional Chamber of Commerce, Mr. Naidu.
3:35 p.m.
Rakesh Naidu President and Chief Executive Officer, Windsor-Essex Regional Chamber of Commerce
Thank you, Mr. Chair, and thank you, committee members. It's a pleasure to join you through video conference. Thanks for the opportunity to present.
Today, I'm presenting on behalf of the Windsor-Essex region, from a perspective related to federal government support for the international trade activities of small and medium-sized enterprises. The comments I will be making reflect what we are hearing from our key sectors in the Windsor-Essex region, based on our interaction with small and medium-sized businesses in our community.
Windsor-Essex, as most of you know, is located in the heart of the richest consumer market in the world. More than half of the North American population lives within driving distance of the Windsor-Essex region. The 10th-largest market in the U.S., which is metropolitan Detroit, is less than a mile away. The Windsor-Detroit border is the busiest border crossing point between Canada and the U.S. It handles approximately one-third of all trade crossing the border, which is as much as about half a billion dollars in trade every day. This unique geographical location places us at the very heart of trade agreements, specifically the USMCA, impacting the two key sectors of manufacturing and agribusiness.
Windsor-Essex boasts an industry profile of more than 1,000 manufacturers, which are all part of an integrated global value chain. Of these 1,000, almost 90% are export-oriented. Windsor-Essex has a significant auto cluster, including OEMs. We have FCA and Ford, and many large tier one suppliers, both domestic and foreign. Three of the five largest mould-making companies in North America are based in Windsor-Essex. The mould, tool and die manufacturing cluster employs more than 7,400 people in the Windsor-Essex area. This cluster represents more than one-third of Canadian MTDM employment, which was estimated to be about 20,000 in 2016. You can understand that we are a very strong manufacturing location, which largely consists of small and medium-sized businesses, most of them into exports.
There are more than 2,900 acres of greenhouses in Ontario, and approximately 2,300, or 80%, are in the Windsor-Essex area. Ontario agri exports to the U.S. in 2016 totalled $683 million, and 78% of Ontario's greenhouse producers exported to the United States. This sector is growing exponentially, with expansion plans under way for the next five years. As I speak, there are about 400 acres of greenhouses being built in the Windsor-Essex area. This contributes significantly to the exports of fresh produce from the Windsor-Essex area into the U.S. market and elsewhere.
The following items address where we see the federal government assisting SMEs with support for global competitiveness, innovation, a more business-friendly environment and greater access to new markets.
The first point I would like to make is on competitive advantage. We applaud the federal government for the new equipment accelerated depreciation rules for manufacturers as presented in the recent fall economic statement. This helps our companies access more resources to reinvest capital into business, thus driving economic activity. This was a significant move towards levelling the playing field with neighbouring competing jurisdictions.
Further support for a more business-friendly tax regime would certainly ensure our competitiveness. Manufacturers are seeking a gradual reduction in the federal and provincial general corporate tax rates, to offset recent U.S. tax changes, which reduce our roughly 14% to 15% advantage from one year ago. Corporate tax reform should focus on assisting SMEs and manufacturers, with a more favourable tax rate that would allow them the resources to scale up and perform more strongly domestically. This will better position them to expand internationally, through increasing their capacity. All businesses would benefit from an efficient and expedient program application and approval processing time that operates at the speed of business and its various industry sectors.
The second point is on support for innovation. SMEs would benefit from programs structured for easy access, with lower thresholds, more inclusive categories and less restrictive parameters. Most programs are structured for a large company that has the resources to participate. Small companies are often disqualified from the application process, due to limited thresholds. An example of this is the recent change to the SIF, resulting in missed opportunities for R and D innovation. Furthermore, there needs to be balance between the focus on job creation versus capital investment, when developing criteria for support programs.
The third point is on support for exporting. Access to markets is critical for our manufacturing and agricultural sectors and central to our trade. Our automotive parts manufacturing sector exports approximately 80% of what it produces, thus the domestic market is not a significant market for the industry, which relies heavily on NAFTA—now USMCA—regions of U.S. and Mexico.
Although CETA is providing some opportunity for accessing new markets, support for reaching well-developed markets outside of the regions and diminishing existing commercial values there would assist in the expansion of many of our manufacturing companies. The establishment of long-term and structured programming to support new market development would align with sector growth and strategic investment for the agribusiness sector in both existing and emerging markets. Market expansion is often hindered by non-tariff barriers and would benefit from the help of government in navigating these processes, recognizing that the sales and business development cycle is often long.
SMEs suggests that they would benefit from extra training that is accessed either locally or regionally. SMEs across all sectors are often new to exporting and lack the experience in market intelligence and in the cultural, legal and business norms needed to be successful in reaching, and doing business in, global markets.
In summary, SMEs look for opportunities to strengthen their export foundations and increase their capacity to be export-capable to gain access to markets, all in preparation for taking advantage of the foreign trade links.
Thank you.
3:40 p.m.
Liberal
3:40 p.m.
President and Chief Executive Officer, Windsor-Essex Regional Chamber of Commerce
That's correct. These are all in the manufacturing sector, and 90% of them are export-oriented. Roughly 900 of these are exporting largely to the U.S., and to other countries as well.