Thank you, and thank you for the opportunity to be here today.
As mentioned, my name is Corinne Pohlmann. I'm the senior vice-president of national affairs for the Canadian Federation of Independent Business, and I'm pleased to be here to share CFIB's perspective on the Trans-Pacific Partnership.
Let me start by saying, though, that I'm not a trade expert nor has CFIB been as involved in discussions around TPP as some of the other groups that you have before you here today may be. However, I can tell you a little about small and medium-sized businesses in Canada and provide you with some of their reflections on international trade and how this deal may impact them.
You should have a slide deck and presentation in front of you that I'm hoping to walk you through over the next few minutes.
First, CFIB is a not-for-profit, non-partisan organization that represents more than 109,000 small and medium-sized businesses across Canada. Our members represent all sectors of the economy and they're in every region of the country.
It's important to remember that Canada's small and medium-sized enterprises employ 70% of Canadians in the private sector labour force. They're responsible for the bulk of new job creation and represent about half of Canada's GDP, so addressing issues of importance to them can have a widespread impact on job creation in the economy.
I want to remind you that CFIB takes its directions solely from our members through a variety of surveys, and we do this throughout the year. In all previous members' surveys around free trade, a strong majority of members have been supportive of free and fair trade. This is because most of them understand that trade is good for Canadian small business, for the economy, and for jobs.
We also know that many of our members appear to be in a position to benefit from TPP. A few others, including supply-managed producers and small auto parts manufacturers may have strong concerns. We continue to carefully listen to our members as more details unfold and will communicate any of their concerns to the government. One concern we have already expressed, for example, is the importance of ensuring that any economic harm to supply-managed producers as a result of the trade deal be fully compensated.
First, though, it's important to know how much small and medium-sized businesses in Canada currently trade. About one in five have sold goods or services to other countries, while about half have purchased from other countries, with another 6% planning to do more trade in the future. Where do those that trade do their business? The U.S.A. remains by far the most likely place that Canadian small businesses trade, followed by the EU, Mexico, Australia, New Zealand, and China. In fact, three of the top five are TPP countries, so those businesses would benefit from the lessening of trade barriers and tariffs that may be making it difficult for them to expand their markets in those countries.
Of those that are not currently involved in any kind of trade, a good proportion of them do not believe that their products or services are exportable. However, that still leaves about 38% of those that are not involved in exporting that could be, so making sure that trade deals like TPP address the barriers they face and that greater effort to highlight what the benefits of exporting can bring to their business in the community may result in more of them taking the plunge into new markets.
Ultimately what smaller businesses want to see in any free trade agreement is clear understanding of regulations and standards, simpler border processes, less paperwork and red tape, and lower costs. It would seem that the TPP does try to address many of these issues in some form.
Of the many features we understand the TPP will offer, those listed here are among the most important if we want to see more smaller firms engage in trade or expand their markets. They include lower taxes and tariffs; greater transparency around customs procedures; streamlining trade barriers, especially regulations and standards, by reducing paperwork and being more transparent about what is required; greater access to new markets, which is especially important for service providers, which is a growing and important segment of the small and medium-sized business community interested in trade; as well as a chapter dedicated to small and medium-sized businesses.
We're pleased to see a chapter dedicated to small and medium-sized enterprises, as it does indicate that the various TPP countries recognize that smaller businesses have unique needs and may need additional or different tools to successfully trade across borders. We also like that the chapter suggests that each country will have accessible websites that will be designed and tailored for small and medium-sized businesses. It will be very important that these websites be done in plain language and that they easily interconnect with each other where it makes sense.
Finally, that the committee on small and medium-sized businesses with representatives from each country will meet within one year to discuss small business issues is a positive sign. However, we also see some uncertainties, mostly concerning the fact that the committee will only be composed of government officials. We believe it should also have some representation from smaller businesses to ensure that it is truly addressing their needs and concerns.
Also, we hold out a lot of hope, but we do have some concerns that this law looks great on paper, but will small and medium-sized enterprises feel the impact on the ground and will it truly make a difference?
In summary, a strong majority of CFIB members has been supportive of free and fair trade. Many of our members appear to be in a position to benefit from the TPP, but a few do have strong concerns. We have communicated these concerns to government and have already stressed the importance of finding ways to mitigate any economic harm to sectors that may be adversely affected as a result of the trade deal.
We are encouraged, however, to see that the agreement has a dedicated chapter with specific measures to help small and medium-sized businesses take full advantage of the opportunities created by the TPP, but action must follow the words in order for it to have an impact on the ground for smaller companies.
As I mentioned at the outset, CFIB's position on issues is solely determined by our members, so we continue to carefully listen to them as more details unfold. We will continue to communicate any feedback shared by our members to the federal government as it moves through its consultations.
Thank you for the opportunity to present.