International Trade Committee on Feb. 19th, 2019

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

So the modelling aspect and the mentoring that some of you have mentioned here today are critically important.

I'd like to hear from the chambers of commerce on this. We've heard from women who talk about the challenges of accessing debt financing, access to mentoring. Women tend to operate businesses that typically—not all the time, but typically—can be quite small. The networking opportunities are low.

Mr. Naidu, how do you work within your membership to help expand on networking, mentoring and capital financing?

[The Chair, Liberal, Mark Eyking]

Mr. Naidu, a short answer, please.

[Rakesh Naidu]

You've pointed out that this is really an issue here. I would say it's not necessarily only for women. This goes for pretty much every young entrepreneur, all those who are coming in through the system. We have a group of women entrepreneurs who are affiliated with the chamber of commerce. They are providing the mentorship, those who have been successful. There are Athena Award winners who have formed an alliance with the chamber of commerce to use their experience to help start-up companies and advise them on what to do.

I should say that accessing funds—whether it's women entrepreneurs, start-up companies or small businesses—is definitely a challenge. The previous question was about whether we see an opportunity for Startup Canada or Futurpreneur Canada and the chamber to work together. Yes, we do.

However, for young companies that are starting up and those that are in the initial stages, it is very challenging to find funding opportunities, and it's even more challenging to be funded and access programs through EDC or BDC because the threshold for accessing programs is very high. Plus, they require a minimum of three years of financial statements, a certain amount of profitability, and a certain amount of investment and equity that becomes very challenging for small businesses.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to go to the NDP now. Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Good afternoon, everyone. Thank you so much for being here.

It's good to hear from a diversity of voices talking about young entrepreneurs, women and local chambers.

I want to address my first question to Mr. Naidu. It's nice to see you, Rakesh, from our wonderful, vibrant chamber down in Windsor—Essex. I know how successful we have been and will be under your new presidency.

I want to talk about the communication, because I think the heart of what we're talking about here is the way we communicate with our members—the way our members are wishing to be communicated with, both when times are good and they're looking for opportunities and when times are difficult.

For us, in Windsor—Essex and southwestern Ontario, the steel and aluminum tariffs have hit us quite devastatingly. We know now that a 232 decision has been submitted to the President of the United States around the auto tariffs. We don't know what the decision will be yet, but we know it could bring very widespread devastation.

It really is about the communication on both of those levels. I hear that a lot of groups—and we've heard from other witnesses about SMEs—are doing wonderful things in their own silos. It's good that you're working together and we hear of a partnership, but I really want to hear from you of a way that we could streamline this so that we have a program available across the country to everyone who is looking for this information and simply can't find it.

I'm asking you, what should this export training look like, and how should it be financed and delivered?

[Rakesh Naidu]

Tracey, you know in the region there are a lot of small businesses and many of them are keen to export to U.S. markets, so there's always an area of interest for us to find opportunities to export through programs and through any other assistance we can leverage.

Having said that, I'll give an example. There's a company in our region that manufactures a very well-known brand of sauces used in many different products. It's a company that has great brand value and they intended to have this exported to countries in the Middle East as well as Europe, especially after CETA came in. This is something that they really thought they would be able to do.

As they started doing that and learning about the opportunities, there were challenges in tapping into the programs. One is that the information on these programs is not readily available. I think one of the previous speakers mentioned the challenges of even understanding what kind of foreign trade agreements exist, how you leverage them, what the benefits of the free trade agreements are, what the rules and regulations are that need to be followed, and how to access the market over there. I think there is a big disconnect between the programs that exist today and the information that can be made easily accessible to small and medium-sized businesses.

Going back to this company, they have a significant challenge in exporting to the Middle East and Europe because they didn't have the capital to come up with the minimum order requirement needed to ship into the European market or the Middle East. So, access to capital was a big challenge, and then once they were ready—

[The Chair, Liberal, Mark Eyking]

Excuse me, sir. If I may, maybe Madam Jobin would like to say a few words on this, too. If we can move over to her, I'd appreciate it.

Go ahead, please.

[Audrey Jobin]

As I was saying earlier, we do very little in the way of imports and exports.

Ours is a community of small businesses. Here, our realities are local, regional and provincial. Some of those small businesses have tried to break into European markets. However, the current labour shortage in our area means that our businesses have difficulty finding the time to develop other markets because they have to concentrate on dealing with the labour shortage.

More or less as I heard earlier, we lack available resources. No representative of Economic Development Canada comes to support our businesses by providing them with programs. We are often looking for those resources and tools. It would be good to be able to count on those tools and to have them more accessible.

[The Chair, Liberal, Mark Eyking]

Thank you very much. That wraps up the time, Ms. Ramsey.

We're going to move over to Mr. Sheehan. You get the floor for five minutes.

[Terry Sheehan, Sault Ste. Marie, Lib.]

Thank you very much, Mr. Chair.

For my first question, I'm going to ask about some of the mentorship programs that were announced in the mini-budget. I'll go to Futurpreneur and Startup Canada. Back in the day, I used to manage an enterprise centre and the guy who worked for me, Nevin Buconjic, now is the head of future Canada.

In the fall economic statement, they announced $13.5 million for a mentorship program to put some new entrepreneurs in touch with some seasoned people in the export business. It was noted by many that the Government of Canada really has not been putting a lot of money into exporting. It has been 15 years since we have seen a lot of money put into inbound-outbound trade missions, through FedNor and regional economic development agencies, while the chambers were always involved and groups like yours.

I'd like your comments and thoughts about the mentorship program that was announced, Richard, and then to Karen.

[Richard Rémillard]

Several comments come to mind, in which I hope capture, without being overly long, some of the prior questions by your colleagues. I think it's time for all hands on deck. The world's getting very dangerous. Barriers are going up. Bad things are starting to happen internationally. Without suggesting that there's no room for streamlining, each of us in the ecosystem of innovation occupies a little space. Ours is not particularly Futurpreneur's. I'm just thinking that we do micro grants and I think Karen does loans—

[Karen Greve Young]

Loans and other stuff.

[Richard Rémillard]

—at a higher level. Ours are really small and they're just grants.

There are other differences as well. As my presence attests, our membership goes beyond the 18 to 39 group—well beyond the 18 to 39 group—so there's room for many parties in this ecosystem to do their bit. The international world is so challenging these days that it demands a full-court press.

To answer your question as well, more precisely, what seems to resonate in our own experience is that our attendees at events, people who participate in podcasts, Thrive podcasts and webcasts—everything on social media—like to hear from other entrepreneurs. When I look at our Canadian export challenge, as it was last year in 2018 and as it will be in this May-June period, we start off the day with a panel of entrepreneurs saying, “here's how I exported”, “here is what my company was like”, “here are what the barriers were” and “here's what you have to watch out for”. That brings immediate credibility, with people saying, “Yes, indeed. That's nice.”

Then we move to presentations by the likes of UPS— Are you sending a package? How do you get it to New York? What do you need to do?—and EDC and the trade commissioner service. In my own humble view, there has to be a public-private mélange or partnership—I know that might be a loaded term—but a public-private enterprise to actually deliver successfully and get the message through to get awareness up from where it has been.

I'm not sure if that answers your question.

[Terry Sheehan]

Those are good comments.

Karen, perhaps we could hear from you, too.

[Karen Greve Young]

Absolutely.

We think of entrepreneurship and innovation as a team sport. It just is. We want to get every asset that we can get that's relevant to these entrepreneurs' small businesses to help them succeed.

In our case, our mentorship program has a network of 3,000 mentors across the country. They are experienced entrepreneurs, business leaders and business owners who can help entrepreneurs, particularly in their first couple of years. I think the program that you were referring to is more for those who have decided on and established exporting as their next priority, and they are learning from someone with that export experience.

[Terry Sheehan]

Yes.

[Karen Greve Young]

What's critical for us all is a sort of “team Canada” entrepreneurship that provides the right kind of mentoring and the right kinds of resources at the right stage.

The question came up about communications. Innovation Canada has a great website. It has the resources there. We need to help entrepreneurs find the parts of it that are relevant to them. That's where the compelling communications and the compelling guidance comes from: organizations like Startup Canada, which is all over the country and has a huge digital presence, and Futurpreneur, which is partnering with entrepreneurs as they're starting out by providing loan financing and mentorship. They are supported by our program, which is 40% women, by the way. In addition, we have the regional innovation network in Alberta and the regional innovation centres in Ontario. We've got this connection and that program is an important part of it. What's important is getting the whole puzzle together.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

That wraps up our first round, which is going well.

It looks like we're going to have time for a second round, which will give everybody a chance to have dialogue with our witnesses here.

We're going to start the second round off with the Liberal Party.

Mr. Hébert, you have the floor.

[Richard Hébert]

Thank you, Mr. Chair.

My thanks to all the witnesses for their testimony. It was very interesting.

My question goes to you, Ms. Jobin. Thank you for taking part in this exercise, which is not always clear, especially when you are really not used to it.

Just now, you mentioned the city of Dolbeau-Mistassini, with its 15,000 inhabitants in an RCM of 25,000. I know it well. You gave examples like the SADC, which is established in the area. You also emphasized that EDC does not have a real presence in Dolbeau-Mistassini and the immediate area.

Generally, in your view, what is the first barrier to get over when businesses where you live want to export their products outside the country?

[Audrey Jobin]

I do not really have experience as such with any particular company. However, I would think that finances are probably a barrier, not to mention the time that has to be spent. I do not know the specific export-assistance programs, of course, but, in terms of exports, I think that time, money and support are the factors that play a role for our businesses here.

[Richard Hébert]

You know that we have created a website called “Innovation.canada.ca” that can certainly help the small businesses in your chamber of commerce to export more.

My next question goes to Mr. Naidu.

I want to talk about the specific services provided by the Government of Canada and that are helping you to export or to make more intense efforts to export. Mr. Naidu, do you have specific examples of small businesses that have benefited from our government's assistance in your region?

[Rakesh Naidu]

We do have small companies from our region that have been successful but these are not actually small. These are probably medium-sized businesses. As I said, it's very challenging for the small businesses to access the services and the programs, primarily because of the threshold limits in most of the cases. I know that there are medium-sized businesses in the region that have taken advantage of the services and the programs.

[Richard Hébert]

My question goes to Ms. Jobin.

I was saying to you earlier that our department offers specific services. Do you believe that the businesses that are members of the chamber of commerce are aware of all those programs, such as BDC and Export Development Canada? It seems to me that there is a lack of information.

Could you tell us whether the members of your chamber of commerce are aware of the services that our department provides?

[Audrey Jobin]

Not aware enough, I would say. The role of the chamber of commerce is to be a conveyor belt. I also think that it is our duty to provide our members with tools that they may be able to use, to establish contacts among organizations that already exist, and to hold activities that enable them to take advantage of the services your government offers, in various forms, through various departments.

It is our role to inform them. Their role then will be to take the steps required.

[Richard Hébert]

Thank you.