Evidence of meeting #139 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 businesses.
A recording is available from Parliament.
Conservative
President and Owner, Manna International Inc.
Yes, we built a relationship with the guy we were working with shipping certified organic grains to Europe, and he said that that someone had called him. They were looking for someone in Canada to work with, and he said, “You have to work with this guy because he does business differently.”
He contacted me. His name was Vandemoortele. I met him in his office and he didn't measure up to who I thought I was going to talk. I was trying to make business, not feeling very comfortable, and I asked, “How's business?” He said, “Pretty good, we broke two billion this year.” I had an image of a small guy in a small office somewhere, and I asked, “Was that billion with a 'buh', or million with a 'muh'?” He said, “With a 'buh', and I thought, “I'm in the wrong place.” His very next question was, “What do you know about soybeans?” I said, “Nothing, but I'll learn.” He said, “Well, I've heard that about you.”
That relationship building is absolutely critical in the international trade world. Unless you're out there, unless you talk to them, unless you build a relationship, it's going to fall off the rails pretty quickly.
Conservative
Randy Hoback Conservative Prince Albert, SK
It's funny that you say that. I was talking about the trade commissioners in Japan. They said exactly the same thing. To get into the trading houses there, you build that relationship and then all of a sudden the market price is not a factor as much.
President and Owner, Manna International Inc.
In those places you have to be very careful. That's where trade commissions are great and come in really well. They help you understand the culture in a different country.
Liberal
The Chair Liberal Mark Eyking
Thank you, Mr. Fowler. I didn't mean to cut you off, but we're over time.
That was a very good dialogue and a very impressive story.
We're going over to the Liberals.
Mr. Dhaliwal, you have the floor for five minutes.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you, Mr. Chair, and thank you to the presenters.
I will continue with Mr. Hoback's line of questioning.
Mr. Fowler, we were hearing from the chamber of commerce that the government is not doing enough, or they're not in touch with the businesses when it comes to retail. In fact, last night I met with the minister responsible for small business, Mary Ng, and she was telling me that she's working very hard to go from city to city, town to town, to bring awareness and have consultations. Do you have the same feeling as the chamber of commerce from Quebec?
President and Owner, Manna International Inc.
Yes, I think the challenge is that we can encourage companies to get involved in exporting, but we also need to enable them to get into exporting, and that's the next step. I think sometimes the wheels have fallen off in the past because we encourage them, and the trouble is we generate potential, but in the business world, generating potential doesn't cut it. I needed to convert potential to cash for me to survive; it's that transfer of potential to cash that's my challenge. That's why I think we need to be careful with new companies coming in, because the excitement of the international marketplace is there, but unless they're sustainable by having some income source and not just going after the potential, they're going to die on the vine, so we need to enable them as well as encourage them.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
When you talk about potential, in fact, there's a market demand now. When you started in the 1980s, there wasn't demand over there, and the awareness wasn't there. I was travelling to India recently, and they are asking for pulses from Saskatchewan, Manitoba and Alberta. They can't even meet that demand right now.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
How would you tell those farmers sitting in Saskatchewan, Alberta and Manitoba that they should be able to avail themselves of that opportunity and convert that potential into money?
President and Owner, Manna International Inc.
The challenge in the agricultural sector is there are multiple layers, and the farmers are going to grow it for them, but they're not going to export it. Typically, you need something that's called an elevator—it's a distribution hub in reverse—and they're going to take the stuff in from the farmers. They're going to pay the farmers. It's those elevators that are actually going to export, because they have enough critical mass, enough volume to ship it, and they have the ability and potential to ship it. There are multiple layers.
You almost have to sell the elevator, as opposed to the farmer, because the elevator's the one that's going to contract the farmer. The farmer's the one who's going to grow it for them, but typically, an average farmer doesn't have enough volume to satisfy the needs that you're talking about or have enough critical mass to put a shipping program together to line containers up. There's a big challenge out of Saskatchewan, for example, in that area, getting containers to ship out. Most of that stuff is going to go out by container. Getting containers to Saskatchewan and to the east coast is a bit of a challenge. It's logistical.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
To the chamber of commerce, are there particular things that the minister responsible for small business can do, particularly to help chambers of commerce like yours to address your needs?
Director, Export Assistance, Chambre de commerce de l'Est de Montréal
As Mrs. Fréchette explained, we work with exporters every day and will continue to do so. There could be a stronger link between our day-to-day work and the federal government.
A search of the government's website will turn up tools. However, an entrepreneur does not have the time to sift through the site and understand the differences between existing programs. The federal government has many programs.
We are a matchmaker of sorts. We simplify and summarize all the information, then we direct businesses to the right programs and the right trade missions, if we have advance knowledge of the government's plans.
We need a more direct and closer link to the trade commissioners in Quebec. We know a few of them, but not all. Our clients could benefit from a greater availability and an enhanced presence of representatives.
Liberal
The Chair Liberal Mark Eyking
Thank you.
The time is up, Mr. Dhaliwal.
We're going to the NDP and Ms. Ramsey for five minutes.
NDP
Tracey Ramsey NDP Essex, ON
Thank you.
Thank you, everyone, for appearing.
I'm certain that some of the soybeans from Essex County make their way to market through you, Mr. Fowler. We're quite known for them.
We've heard a consistent theme about a lack of communication from the federal government about the programs that exist. You've mentioned several of them here today that you've found on your own and have access to. We hear consistently from SMEs that they don't know where to go.
What you've done, Mr. Fowler, is quite positive and unique, but it shouldn't be that it's in isolation. It shouldn't be that it's a community that's trying to find solutions on their own. There should be government support and a very clear path on how to access, what the programs are and what they offer.
The other thing is the trade agreements themselves. Madam Fréchette was talking about trade agreements. I think one of the fundamental flaws that we have is that SMEs aren't at the table in negotiations. On the opportunities that exist in trade agreements, the big players are already there. It really is for the SMEs. I hope that, going forward in future trade agreements, SMEs have a particular focus. I know there's been an attempt in some of the more recent ones to have a chapter to at least have the beginning of a conversation. I think it needs to be more extensive if we're to see those opportunities realized.
The question that I would have for all of you is: What would you incorporate into trade negotiations to address the issues of SMEs to ensure the best possible language and outcome for them? I know it's a bit of a big-picture question, but what do you envision that looking like?
I'll start with the chamber.
Ms. Fréchette.
President and Chief Executive Officer, Chambre de commerce de l'Est de Montréal
As you mentioned, it would be very interesting to have SMEs around the table before free trade agreements are signed. Engaging in dialogue with SMEs and the associations that work closely with them is certainly one way to determine which countries to engage in free trade agreements.
Once a free trade agreement is signed, the government should also be able to explain to SMEs and businesses the content of the agreement. Our organization did that after the Trans-Pacific Partnership Agreement was signed. We took the initiative. We hade to navigate various government entities to find out who to contact. When the government signs a new agreement, it should automatically have a more technical briefing, beyond the usual departmental one, to properly inform businesses of the impact of the free trade agreement on them.
Those are certainly tools that could be developed and that we could distribute to chambers of commerce. First, there could be consultations, and once the free trade agreement is signed there could be information sessions. Those are certainly solutions to be considered.
My colleague might be able to suggest other measures.
Director, Export Assistance, Chambre de commerce de l'Est de Montréal
No, that is a good overview of the situation.
President and Chief Executive Officer, Chambre de commerce de l'Est de Montréal
That essentially sums up the situation.
President and Owner, Manna International Inc.
The challenge is that they are the domain of larger businesses, typically, and the energy that I think is latent in Canada's economy is in small and medium-sized entities that are involved in more niche markets. I can't compete with the Cargills, ADMs and Bunges of the world—I can't do that. The only way I can come in is underneath their radar in a niche market.
The challenge for niche markets is it's like driving a car. When you drive a car at 60 miles an hour, you have a focal point that's relevant to your stopping and changing direction at 60 miles an hour. In a niche market, if you drive that same car at 120 miles an hour, you have to force yourself to look farther down the road and be more aware of what's going on, because it takes longer to react.
The other challenge for niche markets is they move quickly. The ability to give organizations and entities the ability to move quickly is a challenge. If it takes too long to get everything processed, the market's closed.
Finance Manager, Iafrate Machine Works Ltd.
I think you also have to appreciate the impact of supply chains. Even though 30% of our business is in the automotive industry, we are part of a supply chain that feeds into another supply chain that feeds into another one. A trade agreement is a great opportunity to get into a new area with a more level playing field, but we need to understand how the supply chains operate in that area. We need to somehow figure out where we fit in. That's been the challenge we've always faced.
Liberal
The Chair Liberal Mark Eyking
Thank you. That wraps up the time.
I'll go to the Liberals. Mr. Sheehan, you're good to go for five minutes.
Terry Sheehan Sault Ste. Marie, Lib.
Thank you.
Thanks to all our presenters as well.
Gerry, it's good to see you and your lovely wife, Elizabeth, too. I'd like to extend the welcome to her, too.
Getting back on track, Gerry, you mentioned these breakfast club meetings that you used to attend. You were invited by FedNor to chat with some new entrepreneurs, new inventors who had created a new widget. We're back at it, pushing that innovation agenda here in Canada. What's the biggest thing stopping those inventors of the widget or the new entrepreneurs from getting into the export market in Asia, where you are, and in Europe?
President and Owner, Manna International Inc.
There are all sorts of things, various ones. I think the challenge, in many ways, is qualifying the entrepreneurs. Entrepreneurialism is the fundamental, let's say, the foundational bit, but they also have to be culturally relevant. They have to be innovative. They have to be a little bit more multi-talented people because there are a lot of aspects they're going to deal with. Most of them in small to medium-sized enterprises aren't going to have a full complement of expertise there. They're going to go, and to get funding, dutifully so, they'll be asked to do a five-year pro forma balance sheet, a pro forma profit and loss, and they won't have the expertise to do that.
I think one challenge is to get those people who have wonderful widgets that have market potential—if they could identify the market potential first—from this point.... To get them from here to there is going to take a team of expertise. Sometimes those people don't have that. They need mentors, perhaps, but they need some sort of an escalator, almost, where they can say, “I want to get involved in exporting”, and there are services available that they can step on and that take them through all the various processes they have to go through: cultural expertise, shipping, logistics, pricing.
We are facing an issue—present tense—in Europe. There are other risks involved with exporting that aren't involved in typical business. There's exchange risk. There's cultural risk. There's political risk. There are all sorts of other risks, which are another factor that needs to come into that equation to protect them from stepping over the edge, basically.
They need some sort of expertise they can lean into.