International Trade Committee on Oct. 9th, 2024

[The Chair, Liberal, Judy Sgro]

I'm sorry. You have no time left. You managed to get a lot of information, though, during your time.

Mr. Cannings, you have six minutes, please.

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

Thank you all for being with us today.

I'm going to start with Ms. Campbell.

This is the international trade committee, and in your opening remarks, you mentioned trade agreements that Canada has. Certainly in the modern trade agreements, the more recent ones, there are chapters on women's place in the economy and on promoting gender equality. I didn't really catch your thoughts on that, and I'm wondering if I could give you a bit of time to expand on that.

I guess I have two questions. What has been the effect of those chapters? Have they done anything to promote women's participation in international trade, and if not, what would you like to see in such chapters that would have a positive impact?

[Karen Campbell]

It's clear to me that Canada is, and has been, a global leader in terms of gender-inclusive free trade agreements. We have a fairly pro-feminist trade and development strategy. I think the big push for that initially came from South American countries that push things forward with gender mainstreaming, and Canada really did pick that up and follow suit. I think it helps that there are some Canadian women in top leadership roles. We have Minister Freeland, Minister Joly and Minister Ng in key positions to help move that forward. I do see that financing women's small and medium-sized enterprises, focusing on agriculture and other sectors, has been helped by the addition of gender chapters and provisions in free trade agreements. I think it's great to see, but it doesn't fix all of the issues that we have with regard to women gaining access to international markets.

It's a good piece, and at the Canadian Women's Foundation, we certainly encourage that effort. However, all of the other pieces around supporting the women entrepreneurship strategy, the investment readiness program and all of these other initiatives that have been happening also need to continue so that we can provide domestic support to the businesses that would take advantage of those provisions.

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

Are there specific ways in which you'd want to strengthen those chapters to provide the framework for both countries or both parties in these agreements in order to make sure women have that support?

[Karen Campbell]

I have to admit that I am not an international trade expert, so I couldn't really provide detailed recommendations around how those chapters specifically could be strengthened. However, I can say that the mere presence of them is encouraging and something that we'd like to see.

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

Okay.

Ms. Lu, I think right off the top in your remarks you mentioned that women's enterprises are often different. Smaller self-employment is common. Those kinds of businesses are often overlooked in some of the investment opportunities.

I'm wondering if you could expand on that. How should we be looking at smaller, often self-employed companies that need support and aren't getting it now? What should we be doing differently?

[Lechin Lu]

Thank you very much for those questions.

We definitely have seen research around how women's entrepreneurships differ from those led or founded by men. One distinction, very clearly, is that they are more concentrated in small enterprises with fewer than 10 employees. Often there is also a lot of self-employment. By definition, I think a lot of the entrepreneurship program research doesn't really look into this group of entrepreneurs, but they are overrepresented by women.

Other research shows that women pursue growth very differently because of all the other circumstances. They shoulder a lot of the unpaid labour at home, and also even within the business. They often assume a lot more of the administrative type of roles that are undervalued.

In terms of better policies, I don't have a silver bullet to solve this problem, or any specific recommendations, but when we are considering policies or programs to support women entrepreneurships, even in accessing international markets, I think we need to look into this special segment of entrepreneurships and tailor more targeted programs to support them.

Speaking from my own personal experience, I once was a self-employed consultant with international clients. I never even considered that any kind of trade policy or program support could apply to me, but looking at it now, I think I was exporting my service. I think Canada would benefit from expanding these definitions and looking into this group of entrepreneurs.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Martel, you have five minutes, please.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

Thank you to the witnesses for being here.

Ms. Vega, while Canada invests more in supporting women entrepreneurs, countries like the U.K. and Germany have significantly higher rates of women entrepreneurs. In the U.K., it's almost double. Do you think that in Canada, funds are misdirected or underutilized when it comes to supporting women entrepreneurs?

[Adriana Vega]

I'm not sure I can comment on the results in other countries and I'm not familiar with the statistics for the countries you were mentioning, but I heard my colleagues talk about the booming number of women in tech and women entrepreneurs, and we hear the same. This is a very positive trend. We want to see more of that.

I think part of the challenge, at least in our industry, when you have fund managers who are fundraising and then allocating this capital into businesses, including women-led businesses, is that a lot of them are competing with each other for the same pools of capital that are available in this country.

When you are a GP, a general partner, managing a fund and venture, you go to different pools of capital to source that and raise your fund. You go to the corporations, institutional investors, individuals, angel networks and so on. As long as that pool of capital doesn't grow, it will be very difficult to ultimately funnel that into the funds and eventually to the entrepreneurs. I do think perhaps a better way to look at it is just to look at the whole chain of capital formation and how best we can channel that.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Canada provides financing for women entrepreneurs. However, it seems not to be well spent when it comes to developing infrastructure such as incubators or mentorship programs specifically for women.

I know that sometimes you have a hard time comparing Canada's situation with that of other countries. However, compared with the United States and the United Kingdom, how could Canada better use existing resources to really strengthen the women's entrepreneurship ecosystem in the country?

[Adriana Vega]

Part of it is time to allow these results to start delivering, because, at the end of the day, the general partners that are fundraising and allocating funds have to deliver results to their investors. Eventually, when you exit a business, ultimately it has to be an asset business, and so they have to demonstrate that their thesis is correct and that these businesses are succeeding.

As compared to the U.K., I'm not quite sure how we benchmark. I don't have the stats in front of me, but just to give you a sense of the gaps between the Canadian and American markets, at the height of capital allocation, 2021, Canada had about $16 billion deployed into the asset class. By comparison, in the U.S. it was $300 billion. Of course, that right there gives you a sense of the gaps that exist in capital allocation, so when I talk about how, perhaps, the priority is to grow those pools of capital, I think that goes to the core of the argument.

As for the biases that exist overall, whether it is in the U.S. or Canada, we're no strangers to that and we see those same biases. We're looking to address them, but I think that perhaps there's also an element of just waiting for the sector to mature.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

In the United States, women created a lot of new businesses after the pandemic. In Canada, we're mainly talking about support for recovery.

I'd like to hear your opinion. I don't think we're seeing the same growth in women's entrepreneurship here. Does that show that government intervention is not as effective as we think?

[Adriana Vega]

To a certain degree I disagree with that. I think that our statistics show that start-ups are really picking up now, so perhaps that cycle bottomed out and is starting to increase.

There are a lot of programs the government has implemented that have a good track record of success, but, as I said, the cycles in our industry are very long. From the moment that you raise the fund to deploy until that capital is returned takes a decade. I think that the statistics are showing that women entrepreneurs are starting to really pick that up. We'll see some results in the next few years.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Even with the initiatives in place, access to financing for women entrepreneurs remains a major challenge in Canada. Do you think the current programs are not effectively targeting sectors where women need support, particularly in comparison with the U.S. and Europe, where access to capital for women seems to be more effective?

[Adriana Vega]

Perhaps that's debatable. Are they going to the right sectors? At the end of the day, capital allocation has to continue to be market-based. There's only so much intervention that you can have in the market before you start distorting that risk-reward aspect, so entities have to continue to behave.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Sheehan, go ahead for five minutes, please.

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

Thank you very much, Madam Chair. This is just so informative and interesting.

Thank you to all our presenters for their testimony and their work on improving women entrepreneurship and women's involvement in trade as well.

We'd been talking about enterprise centres, and I had a bit of a flashback. I used to be a general manager of an enterprise centre in northern Ontario, in Sault Ste. Marie, which serves Sault Ste. Marie and Algoma. Then I went on to work at Ontario Ministry of Northern Development and Mines, which is like FedNor for Ontario, and I looked after all the ones in northern Ontario. What you're saying today is what I used to hear back then as well. How is it that we're going to move these yardsticks forward?

Heidi, your testimony was just excellent. You're a co-founder of a great business, the Botanical PaperWorks Inc. It's just not a micro-business with 50-plus people. After reading through your stuff and in listening to your testimony, Heidi, can I ask you how important mentorship is to you? I know you're involved in mentorship. How can the federal government improve women mentoring other women, in particular as it relates to trade as well?

[Heidi Reimer-Epp]

I'm lucky at this stage in my career to be a mentor to others, but I've definitely benefited from mentorship in one form or another over all these years of business. I accessed it through that enterprise centre at the beginning. I didn't actually show up there looking for mentorship, but it was something that was almost a requirement in order to look at the financing and the other services I was accessing.

I thought in retrospect that it was interesting to realize that when we are giving out funds, if we pair that up with a mentorship requirement, it boosts the effectiveness of the dollars being handed out because you also then have the support of someone who has gone before you and can point out your blind spots or give you some expertise that you don't have.

Of course, that was a government mentorship program, but later I found mentorship through other private groups, such as Entrepreneurs' Organization and things that I was paying into as an entrepreneur, which helped me scale the business to a million and then beyond.

I don't have any other recommendations for what the government can do, but I hope my story helps illuminate the idea or provide some ideas.

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

Thank you very much. That's absolutely and critically important.

When you're doing your business, how much of your market share is related to trade? Are you delving into that greatly? Can you tell us a little story about that?

[Heidi Reimer-Epp]

For us, because we are a niche product—seed paper is a pretty specialized area of business—exporting was the natural place for us to go in order to have access to a wider market. This is something I recommend to people who are producing a niche product: Go beyond Canada to scale and get volume.

International trade has been part of it since the first couple of years that we were in business. That was also partly driven by the fact that Americans were going online faster than Canadians were at the time, and of course there are more of them. There were very few trade barriers at the time, so it was quite easy to export our product across the United States.

As the years went by, we would do our own planning in order to select one export market, then drop into that and really optimize our sales and our marketing reach to each market one by one, and we kept adding more and more.

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

That's really great. Thank you very much for that.

My next question is to the PARO Centre from Thunder Bay in northern Ontario. Congratulations on your success. I always run into people in northern Ontario, whether it's Sault Ste. Marie or otherwise, whom you've helped considerably.

One of the things I want to ask about is regional economic development agencies such as FedNor. There's a regional economic development agency for every part of this great country. I've seen lots of things that FedNor has done. They've funded individual people to do trade missions for different communities. They've done breakfasts. They've done networking. They've done mentorship programs.

What can they do better? How important are the regional economic development agencies to delivering regional trade opportunities? Do you have any ideas around that?

[The Chair, Liberal, Judy Sgro]

Ms. Lockyer, I hate to ask this, but can we have a brief answer, please?

[Rosalind Lockyer]

I'll try my best. I'm sorry that I'm not very brief, Madam Chair.

I would suggest that it would be by connecting businesses. That's why I invited government representatives to go on the trade missions with us. FedNor does provide funding for us, but there are some doors that are very difficult for us to open, even on a trade mission, without a government representative there. That's something that would help. All trade missions should have someone from the government who has doors open to them that they can then open to the businesses.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

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