International Trade Committee on Oct. 7th, 2024

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses.

I'm going to follow up with Ms. Bernier.

The Council of Canadian Innovators recently had a “Prosperity for Every Generation” petition. That petition talked about how the government cannot tax its way to prosperity and how the Liberal government's federal budget will stifle innovation and growth. In terms of Samdesk, can you elaborate on which taxes are stifling growth potential?

[Ashlyn Bernier]

Potentially the changes to the capital gains taxes will.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Yes, considering that you don't have that in the United States, and that notion of venture capital.

[Ashlyn Bernier]

Yes. I know of businesses that have moved their operations to Austin, Texas, for example, for that reason, because of the more favourable taxes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Wow.

I have one last question. You talked in your presentation earlier about how companies such as yours, Samdesk, struggle to do business with Canada and that there are more opportunities in the United States, the European Union or Mexico. You talked about NATO, for example. In one of your recommendations, you were talking about leveraging domestic procurement opportunities, and that also goes to your earlier point about scaling operations, if you can get access to those opportunities. What are those areas that we could assist in to open up those opportunities or to make you more aware of those opportunities?

[Ashlyn Bernier]

I think some of the systems are just antiquated in terms of how we can find out about these opportunities without having to check a website once a week. A lot of the other systems we experience have a bit more of an automated way to let you know about opportunities that might be of interest to you. It would be very helpful to look at something like that here.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Madame Fortier, please.

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

Thank you very much, Madam Chair.

Again, I'd like to thank the witnesses for being here.

I think it's very important to see how we could do better. From what I understand, we're doing a lot already, but we could do more. Some of you mentioned that incentives might be necessary. If you haven't had a chance to name any, I'd appreciate it if you would do so now.

Are there any best practices or models elsewhere in the world that Canada should adopt?

Ms. Codsi, you talked about France's model, but are there others?

Ms. Bernier, you mentioned that the United States had set up incentives and support programs.

I'd like Ms. Vachon to answer my questions first. Ms. Codsi and Ms. Bernier can answer afterwards.

[Ruth Vachon]

Thank you for the question. It's almost my favourite question.

Our women entrepreneurs have a lot of trouble accessing government contracts, because the majority of them are small business owners.

The U.S. government offers tax incentives to private companies. For example, it asks them to buy 5% of goods and services from under-represented suppliers. If they don't reach that percentage, they aren't punished; rather, they're rewarded if they do, thanks to the tax measures in place.

In Canada, we've always shied away from the term “tax incentive”. I think that's a shame, because this practice would give women entrepreneurs much greater access to markets. Strategically, we're looking at U.S. companies, because we know they have quotas to meet.

Take Costco, for example. When Costco buys from us in Canada, I know very well that my dollar ultimately goes to them. Every time Costco does business with a Canadian company, that company is helping Costco reach the quotas set by the United States, which is very advantageous for Costco.

For our part, from a strategic standpoint, we focus on companies that have programs and on those for whom this has a decisive effect. The good thing is that our women entrepreneurs don't necessarily have to export their products now. They get an order in the U.S., then fulfill it in their Canadian subsidiary. It allows their business to grow without necessarily exporting. Sales increase. Later, these entrepreneurs can take an order directly from the U.S.

Personally, I think it's a great program. Canada is very close to being able to contribute directly to business development through a tax incentive. That would be a huge help to women entrepreneurs and large businesses.

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

Ms. Codsi, do you have any other suggestions on incentives?

[Caroline Codsi]

I'll be brief.

Canada is well known for its tax burden, which is very high compared to most other countries. Intuitively, we know that this will encumber or slow down innovative entrepreneurship, for example.

Ms. Vachon agreed with me that women entrepreneurs favour places where there's a quota. They say that women are needed to meet certain criteria, that these women exist and that we need to move forward. This reinforces the idea that a structure needs to be put in place.

I don't know what the federal government's requirements are for suppliers. Perhaps Ms. Vachon knows this better than I do. Does it ensure that some of its suppliers are women? I imagine so. Does it ensure that its suppliers are companies that have parity certification, for example?

In other words, is work being given—

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

So it's a matter of ensuring the best possible participation of women by proposing an incentive.

[Caroline Codsi]

I think the federal government needs to lead by example. It must be the first to say that it does business with women, in part. A quota could be reserved for women or businesses that have the parity certification, in other words, businesses that allow women to contribute at all levels of the organization.

I think this is the kind of incentive that leads to a societal shift. Businesses are saying that, if they want to do business with the government, they have to show their credentials, that more women are in positions at all levels. They may be women entrepreneurs, through the Réseau des femmes d'affaires du Québec, or large corporations or businesses that have thousands or tens of thousands of employees and parity certification. In addition, they must show that corporate initiatives, policies and culture are reviewed annually, and ensure that women and men have equal opportunities.

I see that Ms. Vachon wants to say something. I've said everything I wanted to say.

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

Unfortunately, I'm out of time, but if you have an example to share, Ms. Bernier, we would appreciate it.

[Ashlyn Bernier]

Okay. I have just one quick point, and I think it is a really important one.

If we are going to explore introducing incentives and quotas, we have to consider our definition of a woman-owned business, because as a venture capital-based business, no one owns over 50% of our business. We have many shareholders. If that's going to be our definition, that's going to automatically preclude a lot of women-run businesses.

[The Chair, Liberal, Judy Sgro]

That's great advice. Thank you.

Monsieur Savard-Tremblay, you have two and a half minutes.

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

Ms. Vachon, we know that most export companies owned by women tend to be smaller than comparable companies owned by men. That alone raises questions.

In addition, women concentrate their activities in the service sector, including professional and technical services, as well as in retail.

How do you interpret that?

[Ruth Vachon]

It's a bit like the natural law that has governed this for years.

A link can be made with an earlier question. A small tax incentive could reverse the process. That would put it back in the hands of the large companies, which would be looking for those companies to include them in their supply chain.

It's up to the government to get the system moving. I know it's difficult, but if there were a small incentive in place for large companies, they'd be the ones getting the system moving. The problem would disappear, and at the same time, it would make your job a lot easier.

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

Ms. Bernier, you work for a technology and artificial intelligence company. Is this a field where women particularly stand out?

How is the workforce distributed within the organization itself? Are women more involved in design, business relations or administration?

What is the ratio of men to women, and how is this reflected in the various areas of the organization?

[Ashlyn Bernier]

We have women in technical roles in our company. Something we strive for when hiring for technical roles is bringing in as many female candidates as we can during the interview process. We still want to hire on merit, of course. What we're finding, because Edmonton, in particular, has an excellent university—we have the Alberta Machine Intelligence Institute—is that a lot of women are coming up through that system and are able to join us in software development, machine learning and artificial intelligence roles. They tend to be early on in their career.

What I'm really excited for is this: In the future, are they going to be the next wave of entrepreneurs who will be starting their own technology-based businesses because of the training and experiences they had through working with a start-up like Samdesk?

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings has two and a half minutes. He will be our last member for questioning.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to continue with Ms. Bernier and follow up on my earlier questions about government procurement and that process.

You indicated that you were having trouble getting in the door for any government procurement in Canada, yet you've worked with NATO and big firms and agencies outside Canada. Does that not give the Government of Canada or other agencies here the confidence to employ you? It's the opposite of what we would normally think. This isn't an issue that specifically touches on international trade and women entrepreneurship, but it's just one more thing that women-run companies have to deal with.

Could you provide some background on your experiences and why you think the government is failing you here?

[Ashlyn Bernier]

It's an interesting question. We have some ongoing conversations with Canadian government agencies about potentially using our product. We are generally selling into military and intelligence, so it just becomes a question of scale. NATO, the U.K. Ministry of Defence and the U.S. military are just on a bigger scale.

Conversations here tend to be slower, and they tend to be on a smaller scale. We're spending a lot of time waiting right now. Things just seem to be slow-moving here. What I'm hoping is that, as Canadian defence and military spending increases over the next 10 years, we might see more opportunities here.

[The Chair, Liberal, Judy Sgro]

Mr. Cannings, you have 30 seconds.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I have one more follow-up question.

You seemed to indicate that the federal government was interested in talking to big companies from outside Canada and not to your company; to me, it's a bit of a conundrum.