International Trade Committee on Sept. 28th, 2016

[The Chair, Liberal, Mark Eyking]

Before we move to the MPs, there are a couple of things.

We operate in two official languages. There are translating machines in the back, and some coffee. You cannot take pictures or video during the process.

Before we move on, though, I have one other witness here, Kathleen Connors. I don't know if she's here. Her name was on the list.

If she's not here, we'll move on. That's fine.

We'll go right to the MPs. We'll start off with Mr. Ritz.

Go ahead, sir, for five minutes.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Chair.

Thank you, Mr. Taylor, for your presentation today. It's a little lonely at the table, but certainly we're all fixated on what you're saying. It's great.

There's a lot of discussion about the TPP, that it's only going to benefit the multinationals and so on. You don't head up any multinational organizations out of Newfoundland. It's more smaller memberships. What would be the average size of some of your members?

[Ron Taylor]

You hear in presentations across Canada the term “SMEs” used a lot: small and medium enterprises?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes.

[Ron Taylor]

Well, in Newfoundland that stands for “small and micro”. We deal with a lot of companies that are typically under 20 people. These are companies that look upon access to trade as very important to them. We're very good niche marketers here. We're not going after the next Google or something like that—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

But you might stumble onto it, you never know.

[Ron Taylor]

You never know. Exactly.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

The old cliché is that size matters, but in this case, the smaller size actually benefits from the strength in a trade agreement like this. The service industry is going to gain exponentially from something like the TPP. That can be very small shops, architects, engineers, all of that type of service that Canada is renowned for.

It was a Dutch company—is that not right, Mr. Chair?—that built the Confederation Bridge, but it was an engineering firm out of Calgary that designed it. There's that type of interoperability that is already out there. Or was it the other way around...? At any rate, there's that type of partnership on the global stage, and I'm sure you're striving to take part in that.

When you look at training for your members, how do you decide...? When you look to the future and you see these types of things opening up, is there a different training schematic that comes in, a different metric that you use?

[Ron Taylor]

There are a number of sectors that we represent as an organization. We represent the ICT sector, we represent the ocean technology sector.

When I say oceans, I'm not referring to shipbuilding or to fishing. I'm referring to things like—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Specialized equipment.

[Ron Taylor]

—maritime security defence, a lot of software. It's not much in the way of hardware. Most of our technology sector is made up of software.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Right. I've had that discussion with Rick Hillier.

[Ron Taylor]

Yes, exactly.

You don't see our names on a lot of products, but we're inside a lot of products. As a matter of fact, we do an incredible amount of work in the United States, in aerospace and defence, ocean security. We're dealing with a lot of the major defence integrators in the U.S. We deal with a lot of the major aircraft manufacturers in the United States, major financial institutions. We do a lot of things in the way of money laundering, terrorist tracking, that sort of thing. We have software-based companies out of here that are world leaders in that.

As a smaller organization, the easier the access is to market and not having to second-guess things going into it.... Traditionally we'll start off, if we're going into a market where there isn't a free trade agreement, by asking what are the impediments, what do we have to concern ourselves with—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

What are the safeguards?

[Ron Taylor]

—and what's the cost of entry? If there are a lot of regulations or impediments up front, the company may decide not to go in there. They're smaller companies, and they can't afford to spend $200,000 just to gain entry to do business.

In terms of free trade, I always go back to the NAFTA agreement. That opened up the United States to us. We went in there and made some great things there.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We've had a lot of people in here who've said that NAFTA gave us nothing, free trade gives us nothing, and trade goes down after we sign free trade agreements.

You're not saying that. You're saying it's actually a stage for you to take advantage of that global supply chain that's out there.

[Ron Taylor]

I found that Canadian organizations as a whole can compete with anyone—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Absolutely.

[Ron Taylor]

—either here in North America or globally. If you talk to people in the United States, they will tell you that we got the better part of the NAFTA deal.

If you look at the TPP, obviously people in the automotive sector are going to be somewhat concerned, but if you look to Newfoundland and Labrador and the type of industries we represent, I think open markets are going to be to our advantage.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you.

[The Chair, Liberal, Mark Eyking]

Ms. Ludwig, for five minutes.

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

Good morning, and thank you to the only panel member.

In terms of the tech industry in Newfoundland and Labrador, you represent 165 tech companies. Do you know roughly how many tech companies there are in Atlantic Canada?

[Ron Taylor]

That's a good question.

As a sidebar, I actually chair the IBDA ICT committee for Atlantic Canada, so I deal with this on an ongoing basis. I don't have that answer for you, but I know that Nova Scotia has a large presence, P.E.I. has a smaller one, and New Brunswick has a very healthy sector there. They all tend to be more or less small and microsize companies. Most of them are under 250 people, and that's what we call a small company if you look at the definition.

That's why I use the words small and micro, because in Atlantic Canada, a company with 250 people is considered a large company.

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

As we know, 54% of companies are micro.

[Ron Taylor]

Absolutely.