International Trade Committee on Oct. 9th, 2024

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

Thank you, Madam Chair.

Witnesses, on March 26, 2024, the Réseau des femmes d'affaires du Québec announced the Canada-wide launch of its Maïa inclusive growth project. The purpose of the project is to provide information, networking and advice to women entrepreneurs wishing to access new markets. A representative of the Réseau des femmes d'affaires du Québec who was here on Monday told us she felt that Quebec was somewhat ahead in this area, and that its institutions and more hands-on approach were a model for the rest of Canada. Quebec provides support to women entrepreneurs, particularly through Investissement Québec and the Caisse de dépôt et placement du Québec.

Are there any initiatives or programs in place in Quebec that would be worth implementing in the other provinces? Conversely, are there any useful initiatives in other provinces that would benefit from being shared with the rest of Canada?

Whoever wants to answer my questions can do so.

[Khadija Hamidu]

I would love to answer this question in regard to some of other initiatives that are happening in Ontario specifically.

One of them is through our YWCA programming. Once again, networking is a key way for women entrepreneurs to connect and to talk about not only the barriers that they're facing, but also some of the positive pieces that they're currently dealing with as they grow and scale up their businesses.

One of those pieces is a biweekly conversation that we have called PowerUp Live. The conversations are on different subjects. They're about different financial struggles or different entrepreneurship growth opportunities. We have over 80 people signing up for those, on a biweekly basis, for our programming. I think that's something that needs to be scaled out to different communities. We have started to work on scaling those out into Vancouver, Saskatoon, Manitoba and Calgary. It's an ongoing initiative that we're doing in regard to networking.

I think the one big piece within this networking opportunity is to talk about different ideas and different topics that women are currently facing within their entrepreneurship journey. One of the big pieces is financial literacy. As we continue to have those conversations, we always need to talk about what the current issues are that women are dealing with. As we continuously have these conversations, we learn more from women in their entrepreneurship journeys.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Cannings, please.

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

Thank you.

I'm going to continue with Ms. Hamidu.

In your opening remarks, you also mentioned the importance of government procurement. We've heard this from other witnesses, and this affects all enterprises that are starting up in that valley of death when you're moving from research and development to a commercial product, when you need to get the confidence of clients and buyers but you also need the cash flow to continue. Government procurement could provide both of those.

I'm wondering if you could comment on situations that you might have encountered with enterprises that women have been moving forward and that could have used that government procurement.

[Khadija Hamidu]

I can, absolutely.

We have had over 100 different entrepreneurship opportunities for the women who have participated in our program in regard to government procurement and were not able to get the sustainable funding to upscale and scale out their programming. We've had countless ones in health care. We have countless ones in tech and STEM who need the ongoing support and government assistance to scale out their programming.

We've recently come into contact with our Innovation Factory and our Centre of Innovation programming to once again scale out these programs and provide different materials for women to grow their businesses on a tech, STEM and skilled trade industry base.

Once again, when we're looking at government procurement and the initial funding opportunities that need to be, once again, targeted to women entrepreneurship, we need to really look into STEM. We need to look into technology. We need to look into skilled trades and the funding that goes into those programs to once again grow out women entrepreneurship businesses.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Jeneroux for five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Madam Chair.

Thank you, everybody, for taking the time today to be with us.

I have one question I want to get to the bottom of, and I'm hoping you might be able to help, Ms. Vega.

At the last committee, we heard from a witness who said it was rather difficult, after looking for venture capital and getting it through the United States, to then have the ability to have business eligible for funding and other supports here in Canada. It seems that once they go the United States route, they're gone to the United States route.

Is this experience that you've seen? Is this accurate? If so, is there a role that government could or should be playing in helping to keep these Canadian-owned businesses as Canadian-owned businesses?

[Adriana Vega]

Yes, it's an issue that we see. In a sense, it's almost a natural kind of trend that you see. A lot of the market for Canadian enterprises is outside of Canada. Most of the companies that will get venture capital have to have a thesis that they have a global plan to succeed. We're a smaller economy, relatively, or a small market in terms of customers. In a sense, there's a big magnet in the U.S. You have huge pools of talent, huge pools of capital.

We need to tilt the balance when it comes to incentives to retain some of those components within our borders, whether that is talent or capital. Then, as government, you have many tools that are available to you. We've looked at things like SR and ED, for example.

There is a review ongoing. We're expecting some developments there. We're looking at maybe making some of these programs a little bit more targeted, making them specifically available for companies that are at a specific kind of growth phase. If you're at your third fundraise, for example, you're probably a flight risk already, and you probably already have a lot of American dollars in your investment. Targeting some companies that are successful, that are aligned with some of our priority sectors, would be clever policy.

Then there are things like incentives. Today we've talked about perhaps doing some tax incentives or redirecting some of these programs in a way that incentivizes those Canadian companies to stay. I do think that they're all valuable, but at the end of the day, the tone is from the top. You have to have a real strategy that makes Canada a very appealing place to build a business.

A lot of these entrepreneurs want to stay, but we continue, in a sense, to make it easier for them to make the decision to leave. That's really where the focus of our efforts has to be placed. For example, capital gains taxation—I know I say that over and over—is really, truly at the core of the risk-reward balance in our sector. You can tweak with some tax incentives, but at the end of the day, that is probably the strongest signal that you can send to the market.

For an entrepreneur or an investor to decide if they build a company or grow their company here, those are the kinds of questions that we're hearing every day.

Yes, it really has to be an almost more strategic approach for that.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Are you hearing more of that recently, then? Particularly when it comes to capital gains, because you indicate that's obviously a hurdle, are businesses in your network coming to you and discussing this and saying that this is something that really is a make-or-break decision for them?

[Adriana Vega]

There are many different things that a business will take into account. I don't think there is any entrepreneur out there who sets out, early on, and says, “How much tax am I going to pay in this jurisdiction versus the next?” They're generally there to solve a problem. They're not even thinking about generating revenue. They're at the forefront of innovation, and so that's really what we see as their main driver. However, as they start fundraising and growing their business, I think that's really when they start taking into consideration that cost equation.

The problem is that we're raising the cost of capital, which might seem in principle that it shouldn't be a big deal, but it is when you're sitting next to the United States, because we have jurisdictions that....

I'm not even talking about California; I'm thinking about states like Washington state, Minnesota, Texas or Ohio. All of these are comparable hubs when it comes to venture capital fundraising, and we're more expensive now than most of them, so yes, we hear those conversations and we hear those questions. I don't think that there is an immediate exit button that's being pressed, but it's certainly something that is being considered a lot more closely.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Sidhu, you have five minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thanks, Madam Chair.

Thank you to all of our witnesses for taking the time to be with us here today.

Ms. Lockyer, you mentioned trade missions, trade delegations and the importance of government reps being on these trade delegations, as it helps to open doors in markets overseas. That's exactly what we're doing in the Indo-Pacific strategy. There are team Canada trade missions that are being led by Minister Ng to Japan, Malaysia, Vietnam, South Korea and many other countries. We found that there's tremendous success that came out of this because we were able to unlock doors and really connect entrepreneurs here in Canada to opportunities abroad.

You mentioned the CanExport program. Can you highlight some of the successes you had with that program? I know you said that it's oversubscribed and that you hope more funding is put towards it, but I'd really like to know the current successes with the CanExport program.

[Rosalind Lockyer]

We had a lot of success with the CanExport program because we were funding women to go on trade missions for the first time. We were training them in how to do this. Just when they're getting their feet wet, they're all enthusiastic about doing what they're doing, and now they want to go again. They probably need to go about three times before they really make the kind of progress that they want to make.

However, they're still starting and growing their business, and if you look at the stats, you see that start-ups are very good at exporting. They start out with exporting on their mind, so they're feeding their business and how they operate their business to be exporters. This is when they need this vital support.

Our funding originally came from, and still is coming from, the regional agencies, unlike those funded by ISED and so on. If they were funded by ISED, the government representatives automatically went. We were inviting them to go because they had [Inaudible—Editor] part of our original planning and programming, but I think it's vital that they go.

It could be because we're going to the United States rather than to the Asian market, the Netherlands or whatever opportunities might come their way. Maybe we need more exporting there, because I think that 60% of our exporting is to the United States. However, because there was easy access, we found that we wanted to start with the United States: The culture is similar, and it is easier to learn to become an exporter into the United States, especially in the food industry. It's easier to get into the food industry in the United States than it is across Canada, which is another problem we're trying to tackle.

[Maninder Sidhu, Liberal, Brampton East, ON]

Ms. Vega, you mentioned that there are many successful federal government programs. To the witnesses, if you could just pick one of your favourite programs, which one would it be in terms of the biggest bang for the buck in supporting women entrepreneurship and women in trade?

Maybe we can start with Ms. Vega.

[Adriana Vega]

I spoke in my remarks about the funding we got through the women entrepreneurship strategy. I think that has very concrete deliverables for us. I know there are a multitude of other programs at ISED, which we hear good things about, but when it comes to our sector at least, I feel that just having this impactful funding, having women join funds and join companies in our sector, is really the best we can hope for in our sector, for sure.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

Perhaps we can hear from Ms. Campbell or Ms. Hamidu.

[Karen Campbell]

I'm happy to intervene on this.

The women entrepreneurship strategy funding that we received for two years was critical. We have seven community partners who are working with women and gender-diverse entrepreneurs from the most underserved communities, providing them with all of that support to explore a business, to start up or to scale up. We couldn't have done it without the support of the entrepreneurship strategy.

As Rosalind has mentioned, however, two years is not enough. We have a lot more work to do, and our partners want to continue.

[The Chair, Liberal, Judy Sgro]

Ms. Hamidu, you can give a quick answer.

[Khadija Hamidu]

Great.

I would also like to highlight Uplift, a program provided by the YWCA with funding by the federal government, in regard to the longevity of advanced manufacturing data analytics and the growth of women in STEM and the skilled trades.

Once again, as we continue to invest in women and growth in their economic advancement, I think when we're looking at male-dominated fields and having women go into those male-dominated fields, we're going to see substantial growth as a longevity piece within our goal of economic empowerment for women.

[The Chair, Liberal, Judy Sgro]

I have to thank all our witnesses. I think we got invaluable information from each and every one of you today. Thank you all very much.

Committee members, we have a draft budget of $18,000 for the study that we need to approve.

Are we in favour? You're good with it. Okay.

Just for your information, when we return on the 21st, Minister Ng will be here for an hour and Minister Champagne will be here for the second hour. We'll have a full afternoon of witnesses.

Thank you very much. Have a wonderful Thanksgiving, everybody.

The meeting is adjourned.