International Trade Committee on Oct. 7th, 2024

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

This is meeting 119 of the Standing Committee on International Trade.

Good Monday morning to everybody.

We will spend the first hour and a half with our witnesses today, and the last half-hour to consider Mr. Savard-Tremblay's motion from last week.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, September 16, 2024, the committee is commencing its study of Canadian women and international trade.

With us today, from the Réseau des femmes d’affaires du Québec, we have Ruth Vachon, chief executive officer, by video conference. From Samdesk Canada Inc., we have Ashlyn Bernier, chief operating officer. From Women in Governance, we have Caroline Codsi, founder and chief equity officer, by video conference.

Welcome to you all. Thank you for making the time to be with the committee today.

We will start with Ms. Vachon for an opening statement of up to five minutes, please.

[Ruth Vachon, Chief Executive Officer, Réseau des femmes d'affaires du Québec]

Thank you for having us this morning.

The Réseau des femmes d'affaires du Québec, or RFAQ, has been active for 42 years. It plays a key role in supporting women entrepreneurs on the ground so that they can expand their professional network. The RFAQ also helps them conquer local, national and international markets and win contracts in the public and private markets. RFAQ does this in various ways, whether by creating networking opportunities between women entrepreneurs and large businesses or by organizing events to give them visibility through structured networking.

The RFAQ's uniqueness stems from the fact that we have developed our own expertise in supplier diversification when it comes to promoting under-represented groups in entrepreneurship, including women, in medium and large business supply chains. For example, for the past 14 years, as part of supplier diversification, we have been accompanying and preparing women on trade missions, mainly to the United States and France, so that they can meet with the large companies that could award them contracts.

The women entrepreneurship strategy has helped the RFAQ in a number of ways. First, I want to highlight the importance of this strategy, because it has played a crucial role over the past five years for the entire women entrepreneurship ecosystem. We can talk about the extraordinary work that has been done as part of the Women Entrepreneurship Knowledge Hub, or WEKH, and other initiatives that have enabled all women, including those from under-represented groups, to benefit from programs focused on their specific development.

Through this strategy, the RFAQ has established a pan-Canadian project with an exceptional vision for women entrepreneurs in all sectors, including manufacturing and services.

Our project connects Canadian women entrepreneurs with large businesses to increase business opportunities, including through a web platform that is unique in Canada, called Maïa. This platform has an algorithm that connects women entrepreneurs to potential partners, thereby maximizing their chances of successful collaboration.

The site operates in a number of ways. Large companies submit requests for proposals, or RFPs, through the platform, and then a robot extracts RFPs from government contracts that match the profiles of women entrepreneurs on Maïa. Women entrepreneurs are trained to respond to RFPs, just as large businesses are trained to better understand the benefits of supplier diversity. In addition, women entrepreneurs can also do business with each other.

It is important to build on that momentum. Over the past three years, we were able to build a solid foundation and demonstrate that the project meets specific needs, both for women entrepreneurs and for large businesses, which are constantly looking for under-represented suppliers in their supply chain.

We operate in a market where businesses are small. The majority of them have fewer than five employees. They need help on the ground selling the products and services they design and manufacture. The RFAQ is the ideal partner for them. It is a unique way for these women entrepreneurs to expand their markets, in which it is often difficult to break through.

The last three years have allowed us to set the stage, but three years is not a long time to implement a new, more inclusive business vision in Canada and the tools needed to make it happen. Canadian women need ongoing support on the ground. We believe it is crucial to continue our work, but financial support is still important for the RFAQ, as we cannot carry out a major societal project such as this on our own.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll now go to Ms. Bernier.

[Ashlyn Bernier, Chief Operating Officer, Samdesk Canada Inc.]

Good morning, honourable Chair and members of the committee. Thank you for the opportunity to speak today.

My name is Ashlyn Bernier and I'm the chief operating officer at Samdesk, a technology company based in Edmonton providing real-time crisis alerts and monitoring powered by artificial intelligence. Our clients include NATO, the U.K. Ministry of Defence, the U.S. State Department and major global companies like Exxon Mobil, Ford, the UnitedHealth Group and Uber. Our technology helps organizations protect their people, assets, brands and public safety.

Today, I'm here representing Samdesk, but I'm also speaking as a member of the Council of Canadian Innovators. My goal is to share insights from our journey as a Canadian tech company expanding globally and from my experience as a female executive, as well as offer recommendations on how we can better support women entrepreneurs in international trade.

While I don't claim to be an expert on international trade policy, I do understand what it takes to build and scale a global business. That experience has helped me understand where government initiatives can play a crucial role and where they may fall short.

Bear with me, but I believe one critical area is actually domestic procurement. If we want more small businesses and start-ups to succeed internationally, they first need opportunities at home. When a government buys domestically, it provides vital early revenue and product validation, helping businesses like ours refine products, attract investment and build the confidence to scale internationally.

Unfortunately, many small businesses struggle to access these opportunities. While programs like innovative solutions Canada have good intentions, they haven't been effective for companies like ours. There's a need for programs that actively ensure Canadian SMEs are included in government procurement processes. Giving companies like ours a fair shot at selling to our own government not only helps us grow but also makes us more competitive on the international stage.

The second issue is the focus of government programs and grants. Too often, these initiatives underemphasize the true driver of growth: revenue. For Canadian companies to succeed, they need to discover if there is a large market for their products or services as quickly as possible, and if there isn't, to be encouraged to fail and move on to the next venture. This is especially important for programs that support women-owned technology businesses, where encouraging rapid validation and iteration is crucial. Companies should be encouraged to pivot or even fail quickly if their product doesn't meet market needs, and programs often inadvertently keep businesses operating when they should evolve.

A third challenge is access to capital. Many Canadian companies, especially women-led businesses, face significant barriers when raising the funds needed to scale and expand internationally. Samdesk will have to look outside of Canada in the future, as the domestic venture capital pool is too small to support the level of growth that many tech companies need. Seeking growth capital from international investors will make it difficult to maintain our Canadian-controlled private corporation, or CCPC, status, which complicates access to certain government programs. This can reduce our incentive to keep operations in Canada, as the pull from international investors and customers often leads businesses to consider moving south of the border.

Finally, I want to highlight the importance of Canada's trade commissioners. They are a valuable resource, but I believe they could be better equipped to support modern businesses, especially in tech. Enhancing the digital literacy of our trade commissioners and creating more opportunities for female entrepreneurs to network would better support Canadian businesses in global markets.

In conclusion, I would like to leave the committee with three recommendations.

First, leverage domestic procurement to provide early revenue and product validation for Canadian SMEs, ensuring they're better prepared to compete internationally.

Second, focus government programs on helping SMEs generate revenue and validate a sustainable growth model, which is critical to long-term success and reduces dependency on government programs and grants.

Lastly, upskill trade commissioners to better support businesses through e-commerce and digital channels and create more spaces for women entrepreneurs to network.

Female entrepreneurs are a tremendous yet underutilized force in Canada's economy. With the right support, these businesses can not only succeed at home but thrive on the global stage.

Thank you for your time. I look forward to discussing how we can better support women entrepreneurs in Canada's international trade ecosystem.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Ms. Codsi for up to five minutes, please.

[Caroline Codsi, Founder and Chief Equity Officer, Women in Governance]

Thank you, Madam Chair.

Good morning everyone.

I'm Caroline Codsi. I'm the founder and chief equity officer at Women in Governance. Our core is around supporting corporate Canada to close the gender gap in the workplace. Unlike RFAQ, we don't work directly with entrepreneurs. We work with large corporations that want to bring women to the top of the house.

We have more than a million people working for parity-certified organizations. All the largest banks, financial institutions, insurance companies, etc., in all the different industries, including a lot of government bodies as well, have been certified by our organization in both Canada and the U.S.

To dive into the focus of today's conversation, first of all, I'm truly honoured to be invited to testify here today. I will speak as a female entrepreneur myself. Women in Governance is going to be 15 years old in 2025. It's not quite as old as RFAQ, but we've been around and we've done a lot. We've also seen the negative impact in terms of achieving social equity when it comes to looking at how women are able to advance versus men.

Research from the BDC reveals that levelling the playing field for women entrepreneurs could inject an additional $150 billion into the Canadian economy over the next decade.

Despite what we see in terms of talent and tenacity, women still own less than 16% of Canadian businesses. Even though we do a lot of work at Women in Governance to support women through governance training and mentoring, etc., I think it's a stark indication that there's still a lot of work that needs to be done.

It's not all on women's shoulders. There are structural barriers and funding disparities that have always existed and that we still see today. Women entrepreneurs, especially those who are in early-stage ventures, encounter deeply ingrained structural barriers. Funding is among the most significant hurdles that women face.

According to the Brookfield Institute, I believe, women entrepreneurs not only receive less venture capital than their male counterparts, but they also face a higher likelihood of being forced to rely on personal debt. That's a scenario that impedes scalable growth and sustainable success. This funding gap is even more pronounced in traditionally male-dominated sectors like technology and science, where gender bias often results in a lack of confidence in women entrepreneurs. These are sectors with immense potential for innovation and economic growth. Women remain drastically underfunded and undervalued. That obviously stifles their capacity to drive progress and to contribute to a diverse economy.

Government programs are crucial, obviously, but they are not sufficient to close these gaps. Although grants and resources have been made available, I'm not sure all women entrepreneurs even know where to turn. I can speak for myself. I find it very complicated to navigate the different government bodies to know where exactly the pockets of money are and what is required. I think it would be helpful to make it easier to find. Some women are really good at working with organizations that specialize in helping them find the funding, but I think it needs to be more accessible. I think that women also need more training, better networking and more mentoring; this is critical to their success. A holistic approach is really important.

We need to address the unique challenges that women face. It's different from what men go through. The EDC, or Export Development Canada, reports that only 11% of Canadian exporters are women. That reveals the limited reach of existing initiatives. In 2024, it makes no sense to me.

Obviously, we have the invisible burden of caregiving. Quebec is a leading province in terms of offering affordable child care. It's fantastic that the federal government has followed up and it's now available across Canada, but I think this still largely falls on the women. McKinsey and Company has documented how this dual responsibility—the need to manage both your household duties and professional ambitions—disproportionately limits women's ability to scale their businesses, especially during critical growth periods when a lot of women are at that age when they still have young children at home. Without access to long-term and consistent support, women are often forced to make difficult choices between their personal lives and professional aspirations. It's a dilemma that not many men have to face, and that hampers economic advancement on a macro scale.

We need to strengthen the collaboration between the government and financial institutions and train the people who make the decisions on validating funding for women. They need to go through unconscious bias training to understand how to speak to women who are looking for financing. We need to raise awareness in these financial institutions, which play a critical role in either enabling or hindering entrepreneurial growth.

We need to support women in high-growth industries like technology, AI and renewable energy, where women remain vastly under-represented. Government-backed initiatives could target these sectors and provide these women with the resources and the confidence they need to enter, grow and lead within these fields—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Codsi. You'll have plenty of time—

[Caroline Codsi]

I could go on for the whole day, honestly, but—

[The Chair, Liberal, Judy Sgro]

We can hear that. It was fascinating. Members will be anxious to ask you lots of questions.

We'll start with Mrs. Gray for six minutes, please.

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

Thank you, Chair.

Thank you to all the witnesses for being here.

My questions are for Ashlyn Bernier. The Council of Canadian Innovators commissioned a survey of entrepreneurs in July, which showed that 90% of respondents believed the Liberals' capital gains tax hike would have a negative effect on the innovation economy.

Do you agree with the overwhelming results of that survey?

[Ashlyn Bernier]

I do.

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

In your opening address, you touched a bit on access to capital. I know for myself, as a former woman entrepreneur, when I was looking at this back in 2002, it was difficult, in particular because I was a woman. I actually recall a bank loan officer asking if my husband was coming to the meeting. I ended up getting a high-interest loan through the women's enterprise centre, which was funded through Western Economic Diversification. It was for women entrepreneurs, and I was very thankful for that. We became a business that was at the top of our field, and we won local and national business awards.

My question for you is about women tech entrepreneurs. Is one of their top challenges access to capital, and has it been more difficult because they're women?

[Ashlyn Bernier]

I would agree that the major challenge for tech entrepreneurs is access to capital. In a sense, it should be. Venture capital is competitive, and you should be able to demonstrate that there is going to be a significant return rate on that investment to the venture capitalists you're asking for funding from.

I'm the chief operating officer of my company. I'm not the founder, but I've been there for seven years, which is the majority of the growth of the company, so I'm squarely a member of the leadership team. When we have raised venture capital, I've been at every meeting and in every conversation with my CEO, who is a male. It has been interesting to observe the dynamic and how he's treated sometimes versus how I'm treated in some of those conversations.

I can only really speak from my experience and reading between the lines a bit here. We've been very fortunate to have the chance to work with some venture capitalists who have been incredible. Actually, in our series A round of funding, which is a major milestone for a technology company, we raised series A in 2021 from McRock Capital, which is based in Toronto, and the partner we worked with there is a woman. It was a great experience for me to be able to work with her. Two of the partners there are female.

However, I would counter that with other experiences we've had with other institutions and venture capitalists—again, this is just my perspective—who have questioned my right to be in those conversations and in that room, as I wasn't the founder, even though based on my CEO's experience, I should be and need to be in those conversations in that room. I have definitely had to justify my participation in those discussions in the past.

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

Thank you very much for sharing that.

You mentioned that you've gone through multiple fundraising rounds to raise money from investors, and that investors expect a return on their investment as they've invested under a certain pretext. However, the Liberal government has changed the goalposts, and investors will pay more taxes now.

Are you concerned that your investors will now likely have to pay more capital gains taxes and have less of a return on their investment?

[Ashlyn Bernier]

Yes, that will absolutely impact us. It goes to my earlier point. We're going to have to broaden our horizons as we look for venture capital in the future and potentially look to the U.S., where there's just a different system. We may potentially lose our CCPC status, which would also prohibit us, in the future, from participating in the entrepreneurs' incentive program.

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

It has been widely reported how Canada's GDP per capita has dropped over the last nine years compared to that of Canada's largest trading partner, the United States. It's making Canada one of the worst-performing advanced economies, which will continue for 40 years unless substantial changes are made to federal fiscal and economic policies.

Will Canada be less competitive for talent, investment or capital in the global market because of this capital gains tax hike?

[Ashlyn Bernier]

I believe so, yes.

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

One of the things you talked about in your opening intervention had to do with domestic procurement. I want to ask you a little bit more about that.

Specifically, we know there was nearly $2 billion spent in 2017-18 on IT contracts, which have gone to three firms, namely IBM, Bell Canada and Microsoft Canada. How does overreliance by the current government on these large tech firms harm small and medium-sized Canadian start-ups?

[Ashlyn Bernier]

That's a great question. No one gets fired for selling to or buying from IBM. Taking a chance on a small company can be a risk, and I appreciate that.

We still want to compete. We're happy to compete, but we have to be part of the competition. That can be a challenge for us, because IBM has teams of people whose job it is to find these procurement opportunities. We're small and lean. We're just trying to find the time to make sure we find the right opportunity, when that window is open, so we can compete. It's massively challenging for us.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next, we have Ms. Fortier, please, for six minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you very much, Madam Chair.

I thank the witnesses for being here today.

Ms. Vachon, Ms. Codsi, it is a pleasure to see you again. We have crossed paths a few times over the years.

Good morning Ms. Bernier. I am happy to meet you.

This study was truly necessary because we wanted to find ways to encourage women to take an active part in international trade. However, first we need to figure out which current initiatives work and which do not. Maybe we should also look at new measures to meet the needs of women entrepreneurs and women on the ground who want to do business internationally. That is one aspect that I, for one, would like to explore.

You have suggested certain initiatives and made recommendations, but I will go even further.

My first questions are for Ms. Vachon and Ms. Codsi. If we have some time left, I will also ask for Ms. Bernier's input.

Of the initiatives currently in place, which ones should we keep?

Should we introduce new measures? If so, which ones?

[Ruth Vachon]

I do not think that we need to reinvent initiatives. What has been introduced over the past five years has paid off with amazing results.

We often talk about funding, but I believe there is a discrepancy between investing in funding and investing in support for businesses. For instance, businesses are often a blind spot for the government. Large businesses get a lot of support, and maybe they need it, but let us not forget that today's small businesses are tomorrow's big corporations. Because they are small, their needs often go unnoticed. Calculations are based on dollars rather than numbers. I would like to tell the government to let us work based on numbers so that today's small businesses can grow into tomorrow's big corporations.

The last time I did the math, I believe that $18 million was set aside for women entrepreneurs. We have to keep in mind that these women, often small business owners, are facing growth issues because they do not have the contracts. In those cases, it is obviously more difficult to fund a small business and meet its needs.

One of my recommendations would be the following.

If the government invested a bit more to help women access the market, they could then show up to the bank with a contract in hand. Their projects would therefore be more likely to benefit from bank advances, which is not the case at this time.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you.

Ms. Codsi, if you could please give a brief answer, it would allow Ms. Bernier to comment as well before my time is up.

[Caroline Codsi]

One aspect that was not really discussed and that I find extremely important is intersectionality. We are talking about women—all women. We all know the phrase, “show me the money.” Money is the sinews of war. To own and grow a business, one needs money, but money lenders are still very often—too often—men. In the venture capital world, decisions are primarily made by men. The questions they ask women looking for a loan are always heavily focused on risk, while men looking for a loan are usually more geared toward potential and growth.

As far as argumentation skills go, women are already at a disadvantage, unfortunately. There could be training and supports offered in that regard as well so that women could learn to navigate through all of that. We should also take into account the fact that decisions are primarily made by white men who are more hesitant when they are addressing women, especially in traditionally male-dominated sectors, such as everything tech-related.

So there is this incorrect assumption that these investments are riskier. However, statistics show that women are just as, if not more, successful than men. It is only a matter of training women to improve their argumentation skills. The groups who make decisions regarding loans also need to be trained and diversified so that their decisions are not biased against women—think of a black woman in the AI sector, for instance.

It is crucial to start talking in more positive terms to encourage women to do this.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you.

Ms. Bernier, you have the floor for the remaining 30 seconds.