International Trade Committee on Jan. 29th, 2021

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sarai.

I try to keep everybody in line here as much as I can.

Thank you very much for that.

Mr. Savard-Tremblay.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

Thank you to all of the witnesses for their presentations.

I am pleased to be with you on this first committee meeting of the year.

I would like to ask you for a clarification, Ms. Lenton. In fact, a lot of questions will no doubt be directed to you since you have touched on the subject of education, which is a priority for all of us. This can be a very sensitive issue.

You said that a business-like agency could oversee education. Could you please explain what you meant by “commercial-type agency”?

[Dr. Rhonda Lenton]

What I want to say is that in some countries—and I gave Australia as the example—there is one agency that actually coordinates the national approach to education. Right now in Canada, we have three different federal ministries that in one way or another deal with higher education, and that means that sometimes students can get different messages about what's attractive about coming into the country but then the visa application takes many, many weeks.

When you have one agency, a national agency, there's a greater opportunity to have alignment of the same message but also to think about how the education strategy aligns with strategies on things such as tourism, goods and services, and so forth. It's that concept of having one federal agency that would far better allow coordination not only at a federal level but also with all of the provincial ministries.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I understand that one might wish there was a federal agency, but what would it mean in practice if there was a commercial-type agency?

Of course, the challenges can be vast and education has a certain role to play when it comes to business issues. However, if a commercial-type agency were to oversee the education system, wouldn't this open a potentially dangerous door to the commodification of education?

[Dr. Rhonda Lenton]

I think it's very important when we look at how this has been working in a country such as Australia. It's true that it is the international trade promotion and investment attraction agency, but the goal of the agency is to align Australia's import and export, investment, tourism and education strategies.

I think this is part of the challenge of what we are facing in Canada—the alignment of those strategies—but even to have just one agency that would focus on bringing together all of the aspects about higher education that are now in three different federal ministries, just even that, if we were to have a more focused national strategy on higher education within one area, rather than having to coordinate different aspects of higher education in these three different ministries, even that would be a significant improvement. It would really position Canada more competitively compared with these other countries.

[Jan De Silva]

Madam Chair, time permitting, I wouldn't mind responding as well.

Prior to moving back to Toronto, I was running Ivey Business School's Asia campus out of Hong Kong. I can echo what Rhonda is saying. Our biggest competition for Canada was not the U.S. The U.S. was on a different level in terms of how Asian students were looking at university opportunities. Our competition was the U.K. and Australia.

The focus Rhonda has outlined was very much the Australian model, very much the U.K. model, about how you brand Canadian universities as a destination for talent development, how you make sure that you have the visa processes simplified and aligned and how you think about opportunities for extended work visas or paths to citizenship.

I would encourage us to use the U.K. and Australia as our competition. Those really are jurisdictions that offer much better harmonization of effort, of branding and of support for students coming in.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. De Silva.

We will go on to Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

One of the questions I'd like to probe, because I feel that this is a theme that has come up not just today but generally in my time here on the trade committee, is that it sounds to me like we're often hearing from different organizations that Canada has gotten out ahead in terms of its market access on paper, of its ability to actually exploit the opportunities that are in trade agreements, and that we stand out—against our western competitors anyway—in terms of our government having a real strategy for what we want to produce and how we want that to benefit Canadians.

I know that's a very general topic, but I think Mr. Dade touched on it a bit in his own remarks, and I've heard it peppered in elsewhere. I wonder if folks just want to speak very directly to this question. We know that Canada is now party to many agreements. Some of you will know the NDP has had its critique of those agreements over the years, to put it mildly, but it does seem that Canada is way out ahead in terms of market access on paper than what we're able to exploit, in the best sense of that word.

I wonder if any of our witnesses would like to speak to that theme.

We'll start with Mr. Dade because it was in his opening remarks and then hear from Ms. De Silva after that.

[Carlo Dade]

I thank the member for Elmwood—Transcona for that question.

I would actually counter that, for Canada, on paper we do have a long list of agreements, but our ability to actually have agreements that work with business, that reduce the cost for businesses and the ability of businesses to get there, is not as good as those of our competitors. I would point to the work we did at Canada West—it's in the briefing material you have—on the problems we have with our export support services for business.

The issue there, like trade agreements, is that we have so many, but they're separate and they're disparate. It's confusing for businesses, especially businesses that are trading in the U.S. and haven't traditionally used trade services, to figure out from this long list of services who does what—EDC, BDC, TCS. We have some real fundamental problems in terms of rationalization and organization here in Canada. The paper I just referenced looks at the American experience in bringing rationality and coherence to their disparate trade services to enhance the ability of American firms abroad.

We lack a strategy, especially for Asia and for booming markets in Asia. We do not have a white paper on trade strategy. We do not have a white paper for Asia, for China. One of my colleagues on the panel was mentioning Australia. One of the reasons why Australia has had better performance is that they've managed to have government policy and have clear objectives set through white papers. There are problems with that, but I think this is a real problem, and on the overall strategy level, it has been a major issue. I do not think that Canada is performing as well as it can.

Our absence from the Regional Comprehensive Economic Partnership is another indication of a problem. Our problem in getting into the trans-Pacific partnership, later the CPTPP, was an indication of another problem that did real damage to Canadian trade aspirations in Asia.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

Ms. De Silva.

[Jan De Silva]

My focus would be simply that I think we have incredible market access. As I alluded to, I spent 15 years living in Asia, running Canadian businesses there and then the Ivey Business School. When I was coming back into this role, the board of trade was doing a study on our SMEs and trade. I can tell you from living in Asia that the challenge is not market access. The challenge is that our companies need more support in terms of activating trade.

I think Australia is an excellent example. They didn't have the U.S. next door. Their next door is Asia, and that's why they had no choice but to focus. Some of the smaller European counties are far more active in trade than we are, because they just simply didn't have big enough markets. They had to go global, and they have done it with a concerted strategy.

The work we've done through Leigh's organization, the trade accelerator program, is an effort that's proven to be very successful to bring EDC, BDC, the trade commissioner service and the private sector to the table to help small and medium-sized enterprises get practical tools for exporting.

While I fully acknowledge that there's more we can be doing within Canada to help companies scale and grow—for instance, the dreaded interprovincial trade barriers, which mean our small companies have to go global to scale instead of scaling in Canada—the reality is that the work the World Trade Centre is doing is proving to be effective. It's really helping businesses understand what it's going to take to trade, and then connecting them to the right growth markets for them, rather than having them simply pivoting south and thinking that the U.S. is where they should grow.

Leigh, I don't know if you have anything you want to add to that.

[Leigh Smout]

I would add that while we have all of these wonderful trade agreements in place, the ability for companies to understand them is challenging. To Mr. Dade's and Jan's points, we bring together groups, the groups that understand this, so that companies can get to it.

I would also say that there are opportunities in things like our agreement with the EU—CETA. Everybody understands that we've dropped tariffs on maybe 98% or 99% of goods now. What they don't necessarily understand is the opportunity to bid on infrastructure projects of every level across all of those government contracts, which are all in one place on one website. I think a lot of education and a lot of training are still needed in order to get SMEs up to the level of some of our larger companies in terms of trade.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mrs. Gray for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair, and thank you to all of the witnesses for being here today.

I have a couple of questions for the Canada West Foundation. In your testimony, you mentioned that the current government is in talks right now to create a trade agreement with Indonesia, and I think the word you used for that was “suboptimal”. Can you go into some detail as to why you had those thoughts and what the rationale is?

[Carlo Dade]

Sure.

Very briefly, the one-on-one bilateral agreement sets up rules on things including origin, phytosanitary measures and other arrangements that work only for that market. As a business, if you have a supply and production chain that, say, goes into other countries—Japan, Singapore or Australia—and you want to use goods and services from a wider array of economies to make you more competitive as a business, you run into problems with having to retool things to work just with Indonesia. That creates yet another set of rules, and yet another set of bureaucracy and paperwork.

The strategy that we're seeing other countries pursue is to move to regional agreements, whereby that cost of compliance is then spread out amongst several economies. We have a progressive trade agreement, which I know is important to the country, to this government and to many members of committee—I think all members of committee—and the ability to do that on an individual bilateral basis will also be more challenging. For all of these reasons, we have a very good high-level agreement. That agreement is attractive to countries because it has Japan, Canada and other markets. My point is that when you have the option to increase a large-scale multilateral progressive agreement, that's where you should be putting your resources. A bilateral agreement may give tariff benefits to one or two major companies, but for smaller businesses, SMEs that we want to grow, I would argue that expanding the trans-Pacific partnership agreement is the way to go.

I forgot to note that the U.K. Parliament is now holding hearings about their joining the CPTPP, so that's the type of agreement we want to focus on.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

That's great. Thank you.

That sort of leads into the next question I have. In your earlier testimony you mentioned focusing on trade agreements that we currently have, and I want to ask you about non-tariff barriers and how those fit in. We hear from a lot of different industries about how those are some of the barriers they're seeing. Those could be a number of different things, depending on what the sector is. I'm wondering if you could speak to those, if that ties in with your comments.

[Carlo Dade]

Modern trade agreements have moved from reducing tariffs, which are already generally fairly low—the World Trade Organization rounds have done great work there—to focusing on those issues. I think the new trade agreements we see are working very diligently to address these issues. We just put out 90 pages on the Canada-China relationship, focused on non-tariff barrier issues in agriculture, so we and others are doing a lot of thinking about how to resolve those issues.

I would note though, that a non-tariff barrier can be in the eye of the beholder. What is protecting health and safety or social concerns on one side can often be viewed as protectionist on the other. It's a thorny issue and has persisted and been a problem for that very reason, but there is progress being made. There is international best practice and, fortunately, work on that is being done in Canada.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

On that same topic, if you were to break it down to maybe one, two or three very specific top issues or top ways that existing trade agreements could be focused on, what would that very concise list include?

[The Chair, Liberal, Judy Sgro]

Please give us a brief answer, Mr. Dade.

[Carlo Dade]

I'll give you one: On the procedures taken with the Americans in the U.S.-China phase one agreement, there are stricter requirements, yes or no, no fudging in terms of compliance with non-tariff barrier issues. We've done an exhaustive look at the U.S.-China phase one agreement. I would recommend skimming the part of the paper on that to get some insights there.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Dade.

We go now to Mr. Sheehan.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

Thank you very much for this very important information that we're receiving today. There's a lot for us to think about. It's very good testimony.

I'm going to start with President Lenton. I really liked your approach in what you were saying about the international students. In 2019, we leapfrogged both England and China and moved into third as the top destination for international students, with America and Australia in one or two. It's quite amazing. Half of the 642,000 students choose Ontario, and I recognize the work that York does.

In Sault Ste. Marie, we have Algoma University and Sault College, which have quite a few international students. I've been working with them, and I'm also working with other universities and colleges across northern Ontario as they adapt, because within the context of what's happening, we have provincial stay-at-home orders, etc. We're very hopeful that as of September we'll be able to get back to more students being here, but until such time, with the health plans the provinces require from international students, we have to ensure everyone is safe.

How are you using IT to reach those students and keep them engaged to make sure that we still remain in the top three destinations, as we recently enjoyed in 2019?

[Dr. Rhonda Lenton]

Thank you so much, Madam Chair.

I'll answer the member in this way. I want to say, first of all, that each student's circumstances are quite unique, and within each country there are different kinds of issues that students face, even some going down to access to high-speed Internet. The universities have very quickly pivoted. Only a very small number of courses actually have an in-person component right now—in arts and in certain labs. We knew that we were going to have to ensure that our students—by far the majority—were able to continue their programs. We have faced a number of issues. In fact, at York, we even did an entire laptop rollout program whereby we purchased thousands of laptops and made those laptops available to students who didn't have access to the technology.

There also have been various issues around content in different countries, and we have to negotiate all of that, but what was imperative was ensuring that we made sure students could continue in their programs and that we were going to pivot to a digital reality. Even when in-person comes back, we will still be maintaining huge components of that digital reality.

We're also doing a great deal in the experiential education digital reality. We had all of our students in Lassonde engineering and the Schulich school of business, for example, partner with the City of Toronto and a ShopHERE program, where they work side-by-side with small and medium-sized businesses to help them convert their whole goods and services into a digital reality.

These are just a couple of the examples of what we have been doing to ensure we can continue high-quality delivery, make that commitment to the talent we'll need for the future and negotiate the different issues that our students have, depending on the countries they're in, such as how lectures have to be offered to ensure the students have that in-person experience, even if it's a virtual in-person experience.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you.

My next question is for the board of trade. Through the regional relief and recovery fund, we recently announced $50 million for the digital main street program, which I know you were a part of, along with some other folks in the Toronto area. It was done across Ontario.

How is that working for your clients? Are there any kinds of cross-pollination opportunities with the new virtual trade missions to try to get our SMEs more involved in trade? I'll start with Mr. Smout first, and then hear from Ms. De Silva too.

[Leigh Smout]

Thank you very much, Member Sheehan.

We are very integrated with the digital main street program. As you mentioned, it was funded across the province. Ours is a smaller portion of it from a funding point of view, but it's probably as critically important. As I was speaking about earlier, it's not just about retail and main street. It's actually focusing on a lot of manufacturing and so on.

As for what we found out from a lot of those companies, we start with a digital needs assessment and have more than 900 companies through that. The result has been that 70% of them are in either the explorer or the novice level of looking at digitizing their business and are very much in need of help. Only about 10% really would be considered leaders. That's against international benchmarks that we've worked up with partners, such as Foresters.

We have been very focused on practical programming and bringing in those organizations and doing intensive training, working with experts in the private sector. For instance, companies can work with a lawyer from BLG about regulation, as opposed to the local one or the one they might have been able to use. There's a lot of support that we're providing there.