Evidence of meeting #12 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was support.
A recording is available from Parliament.
Conservative
Conservative
Randy Hoback Conservative Prince Albert, SK
Mr. Kennedy, why isn't Canada part of the picture in 2050? Why aren't we part of that group of 20 countries?
Managing Director, Centre for Global Enterprise, Schulich School of Business
Well, Canada in 2050—and again, this is just one forecast by PwC—is going to be ranking about 23rd or 24th, for a number of reasons: population size, scale, and demographics—the age of our population and the fact that growth in the Canadian population is essentially through immigration. That's our primary growth source. We've already achieved very high education levels. We could do better on productivity.
Other countries, if you move subsistence farmers and you give them a primary education so they can operate sewing machines, drive trucks or operate lathes, they are going to catch up, in terms of their ability to generate value, much faster than we are trying to grow incrementally from.... Tertiary education is where we are now.
It's not so much that Canada is going to fall behind. The Canadian economy is expected to top $3 trillion by 2050, up from about $1.9 trillion today. It's just that other countries are moving faster.
Liberal
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Thank you.
It's been very insightful to hear from all of you.
Mr. Kennedy, my first question is perhaps to you. I hear this all the time, and it's a very good point, that manufacturers should diversify their exports so they're not hinging on one country that may impose tariffs or block them or use unfair safety measures to shut an industry down. But what I also see is that SMEs don't have the ability sometimes. They get one client who is taking all of their product and paying them a good price. They customize it for them. Then all of a sudden this happens, and they're not able to diversify. Many of them end up being beaten up before they decide to diversify. The softwood lumber industry is a prime example. It was heavily reliant on the U.S. It's now diversified with Japan and China and others, so it can now take a hit and still be able to absorb it because it's retooled for others.
How can Canadian SMEs diversify or how can the government help them diversify their exports so they're not reliant on one market only?
Managing Director, Centre for Global Enterprise, Schulich School of Business
Thank you very much for that question. It's a good one. It comes up all the time.
I think the key observation here is that it may be less about Canadian manufacturing and just doing pure exporting than about Canadian companies' engagement with international markets. If you are producing plastic stampings for the auto industry, for example, and you're reliant on a limited number of plants here in Canada or in North America and you're looking to grow your business and trying to export those same components to a growing auto industry like the one in Thailand, for example, parts of Africa or the Middle East, it may be less efficient for you to export the actual components than to do joint ventures—keep the engineering, research and development, finance, branding jobs here in Canada but build a supply chain or build a distribution chain where you can get access to those markets indirectly.
In many cases, there are lots of Canadian companies with technology, with client relationships and so on, that can be leveraged in these other markets. It's not just a matter of Canadian companies scaling up and then moving offshore all at once; it's actually building into their business plans the ability to take advantage of what they are best at here in Canada and finding a way of exporting that DNA to other markets.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Thank you.
In the presentation we received from the Centre for Global Enterprise, it was mentioned that in future international trade deals we should “take advantage of uncertainty to seek out partners with similar risk concerns”. What countries would you identify as having similar risk concerns?
Managing Director, Centre for Global Enterprise, Schulich School of Business
In terms of risk concern, it's essentially some of the risks that have been labelled. There are physical risks: What countries are vulnerable to pandemics? What countries have key parts of their infrastructure in transportational logistics, warehousing and so on that are vulnerable?
Also, just looking at the political dimension, what other countries have a dominant trading relationship that they may no longer be completely comfortable with and are looking for alternatives? Again, Australia and ASEAN countries have a similar relationship with China as we have with the United States. We are actively seeking to grow our integration with the United States, but also to expand into other markets. These countries have exactly the same objectives, and they make them natural partners for us. So, again, looking at the China example, there are the ASEAN countries, Korea, Australasia.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Thank you.
Mr. Watson, we know that indigenous communities have been disproportionately affected by COVID-19. Specifically, women entrepreneurs in your community have been hit, so you have a double whammy on it. How can we continue to work with indigenous communities to bridge the gaps they are experiencing as a result of COVID-19 and other systemic barriers related to international trade?
Director, Public Policy, Canadian Council for Aboriginal Business
Thank you very much for the question.
As I described in my statement, it's about creating those opportunities and building indigenous capacity. If there's one idea that I would like to leave with the committee today, in a good way, it is that when we ask ourselves what we're doing, we should ask whether it is building indigenous capacity. Is it raising up indigenous leaders, nations and institutions? I think if we do that, we'll find much greater success.
I want to note something that my colleague noted earlier, about needing oil in the machinery to make it work more efficiently. I think that having a lot more of that CanExport support for building up indigenous nations, leaders, and institutions is the kind of oil that we need in that machinery to make it work more effectively and allow more equitable outcomes, no matter where that indigenous business might be. It might be in an urban area, a rural area or a remote area.
By building up institutions.... As Ms. Dawn Madahbee Leach, who is the vice-chair of the National Indigenous Economic Development Board, asked yesterday at a Canada 2020 event, how are we building indigenous institutional infrastructure?
I think we want to be mindful that we want to see indigenous export growth and drive indigenous prosperity while being in indigenous economic recovery. We want to support indigenous institutions.
Thank you.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Watson.
We'll go on to Mr. Savard-Tremblay for six minutes.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
I'll begin by thanking all the witnesses for their comments and their support.
My question is for the representatives of the Union des producteurs agricoles. Thanks to Mr. Groleau for his presentation.
We are here today to comment on the future of trade once the pandemic is over. The current health crisis could be repeated in other forms. Some people feel that trade, for as long as we continue to promote it—and we intend to promote it even more—provides protection to various sectors and industries, the environment, human beings, forms of social justice, and agriculture.
Canada and Quebec have a supply management system. As you know, it is eminently typical of Quebec. You spoke to us about the agreement with the United Kingdom and about your fears, expectations and hopes with respect to a future renegotiated permanent agreement. We also heard from the dairy producers a short while ago. If we were to summarize their comments on this agreement it would be something like, "that was a close call."
However, this doesn't mean that there won't be other gaps in the supply management system. For example, under the agreement with the United Kingdom, their cheese producers are applying pressure for more exports. So perhaps it's only a postponement.
As you know, the Bloc Québécois tabled a bill that prohibits any weakening of the supply management system. As the different parties take their turn running the government, they continually make commitments, but end up telling us that there are gaps in the system. We want to put an end to that and we hope that any mandate for the ministers in question will include defending the supply management system.
Do you believe that this bill is a good idea?
General President, Union des producteurs agricoles
Thank you for your question.
This bill is definitely a good idea if it confirms the genuine commitment of all the political parties to this principle, and even whichever of the parties might one day form the government and be involved in bilateral or multilateral negotiations.
Your question is nevertheless rather broad. What would we do, in the context of future agreements, to include aspects other than trade issues, such as environmental and social issues? In my view, agriculture and agri-food would probably be one of the priority sectors. We saw during the pandemic that the poorest segment of the population was affected in various ways, including higher food prices. This year, a growing number are suffering from hunger. As for the previous year, we would have to admit that while this number had been stabilized, it had certainly not been reduced.
Within the Union des producteurs agricoles, and also in Europe, more and more people are arguing in various ways that it is essential to adopt a global approach to food as well as a global approach to dealing with food trade issues. By this we mean more than an agreement on sustainable agriculture. It would include population health, the environment,and soil, with a view to achieving sustainable agriculture. Doing so is all the more important because climate change is going to have a major impact on the farming sector in many countries.
What we're talking about is the need to protect farmland, which is what feeds humanity everywhere on the planet, and to protect biodiversity, or at least what's left of it. If opposition and competition between the world's agricultural systems continues without any concern for social and environmental issues, then we'll see a rising number of people suffering from hunger, and a failure to meet the environmental commitments we have all made under the Paris Accord. It's therefore important to view agricultural trade from a standpoint that is not strictly commercial, and equally important to include other challenges facing society today and for decades to come.
Supply management is a model that addresses these issues, but there are others too, including national agri-food systems. In Europe, people are talking about this more and more. Europe fiercely maintains non-tariff barriers to ensure that it can feed most of its population from its own farming operations, and at the same time protect its farmers' revenue. The Americans too are applying a significant amount of protectionism for its agricultural sector. Japan has maintained measures for its rice and beef to assure a basic level of agriculture at home.
National food security is mainly based on each nation's level of food self-sufficiency. International trade has not yet factored in this concept.
Food and agricultural trade will definitely have to be approached differently over the coming years.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Groleau.
I want to recognize that, filling in today, we have Mr. Green and Mr. Sangha.
Welcome to our committee.
Mr. Green, you're on for six minutes, please.
NDP
Matthew Green NDP Hamilton Centre, ON
It's the last day of the last week of the Zoom apocalypse of COVID, and I have done what everybody has done. I remained muted.
I want to begin by thanking members for allowing me to join this important committee today in the place of my very esteemed colleague Mr. Daniel Blaikie. I see my friend Mr. Ziad Aboultaif here from another committee. I'm pleased to be here.
Mr. Watson, I want to take this opportunity to draw out the critical calls to action in the COVID-19 indigenous business survey, particularly the points on development and implementing a proactive procurement strategy for government procurement officers to directly engage indigenous businesses that can supply or pivot to PPE.
I bring that up because in one of my other committees I've actually done a demand for documents on the federal government contractors program. I just wanted to draw attention to that in this committee, as there are many policies in place that state the set-asides at 5%.
I would like Mr. Watson to comment on what we know to be a well-intentioned policy, but which continues to fall short on any given day. What confidence does he have that this government will be able to actually deliver on this pivot to PPE in the context of the report?
Director, Public Policy, Canadian Council for Aboriginal Business
Thank you very much, sir, for that question.
I would be remiss if I didn't note that that objective did come through a very detailed research report that the CCAB published last year, called “Industry and Inclusion”. That report essentially set the benchmark for the 5% in recommendations, and for 1% increases per annum, which found its way into the mandate letter of Minister Anand. I just want to thank my colleagues on the research team for that important piece.
What we found, especially during the course of the pandemic, is the incredible importance of procurement to ensure that indigenous communities are well serviced. We're finding that it's spotty at best, if I may be so bold. I do find that there could be significant improvements, in terms of the government spend from indigenous businesses. I appreciate that you're seeking documentation. What we have found, in information provided to us by PSPC, is that it is less than 5%.
I think this is an important facet of indigenous economic recovery. We need to ensure that the government continues to make progress towards its 5% target and continues to include indigenous organizations such as the CCAB, among others, in the conversation about how the Government of Canada can successfully obtain that 5% objective.
As I said earlier, it's about building indigenous capacity. That also includes how indigenous organizations can contribute to the policy conversation, because at the end of the day, you need to have pragmatic policy that's informed by the realities on the ground and achievable for indigenous businesses.
I would like to make a note that the CCAB, among other national indigenous organizations, has worked quite closely with indigenous organizations in Australia, principally Supply Nation, which has been quite successful in the implementation of indigenous procurement policy in that country. Back in 2014, the government of the Commonwealth of Australia was saying that this is an overly ambitious target and they were not sure how they were going to meet it. Then they met it in short order, and now they're actually exceeding their targets. I think that's—
NDP
Matthew Green NDP Hamilton Centre, ON
Let's actually dial down on that. As I understand it, I'm hearing that we're only getting something like a 2% set-aside on some of the procurement side policies. I'm wondering about that, given that your report on outreach and programming states that over a quarter, or 28%, of the respondents were unsure if they would even apply for government supports.
I'm wondering if there's a correlation between that reluctance or the barriers presented to first nations and indigenous businesses for supports and some of the barriers that are presented on the procurement side.
December 11th, 2020 / 2:15 p.m.
Director, Public Policy, Canadian Council for Aboriginal Business
Absolutely. What we've found from our important work with our indigenous counterparts in Australia is that there is a need for a navigator function. This is something that my boss, president and CEO Tabatha Bull, has made the case for time and time again. There is a need for a navigator function to assist indigenous businesses in navigating the bureaucracy to draw down these procurement opportunities.
If you're a small-scale enterprise, perhaps in a rural, remote area, and you see a bid, and it's many pages long.... I don't know many SMEs that have the opportunity to go through that in detail. What they really need is a bit of support. They want and seek that support, often from indigenous organizations. Who's going to play that navigator function?
We're doing some excellent policy work right now that's been commissioned by Indigenous Services Canada, which is talking about procurement from subcontracting to indigenous businesses from corporate Canada. There are a lot of very good lessons learned that we've submitted through draft to Indigenous Services Canada, PSPC, TBS and others.
I'm really hoping that this will form some of the foundation of excellent policy development going forward. The key in that is that navigator function, to ensure that indigenous businesses have the opportunity to pull down these procurement opportunities.
NDP
Matthew Green NDP Hamilton Centre, ON
I want to draw attention to my colleague Mr. Blaikie, who has done.... He is a humble man, and I don't know that he would bring this up, but I certainly will, because it's an interest of mine. I want to point to the Canada-U.K. trade continuity agreement, the TCA. He moved a motion to put a clause in the forthcoming TCA—he attempted to do this in past with CUSMA, but he was unsuccessful, and now he is trying with the U.K. agreement—to include the language of “indigenous peoples of Canada” to have the meaning assigned by the definition “aboriginal peoples of Canada” in subsection 35(2) of the Constitution Act. It also said, “For greater certainty, nothing in this Act is to be construed as abrogating or derogating from the protection provided for the rights of the Indigenous peoples of Canada” by the Constitution.
I am wondering if Mr. Watson can comment on the need to ensure that our international trade agreements have baked-in language to ensure that these protections are in place via legislation.
Director, Public Policy, Canadian Council for Aboriginal Business
Yes, thank you, Madam Chair.
NDP