International Trade Committee on Oct. 9th, 2024

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

Thank you so much.

My next questions are for Adriana Vega.

The Canadian Venture Capital and Private Equity Association co-signed a letter with the Canadian Chamber of Commerce to the finance minister in May, saying that the Liberals' proposed capital gains tax increase “sows division at a time when we need a Team Canada approach economic growth.”

Do you have a dollar figure on how much the Liberal capital gains tax hike may hurt the Canadian economy?

[Adriana Vega]

I unfortunately don't have a figure with me today. I can probably find one for you and follow up. What I will say, though, is that our organization has been very vocal on the issue of capital gains. The staff and the minister have engaged on this issue.

At the end of the day, investment and specifically private capital—in our case, venture capital, private equity—is a risky business. In French, venture capital is

capital de risque,

so it's in the name itself.

The whole thing works on the basis of risk and reward. You're taking high risks by investing in Canadian innovators. Some of these companies are not revenue-generating companies, let alone profitable, and so the reward has to be right, and I do think that this is impacting the current investment climate—

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

Thank you. I have about 15 seconds here, so I'll ask this quickly: Would Canada be less competitive for talent investment or capital in the global market because of the Liberal capital gains tax hike?

[Adriana Vega]

Certainly. The short answer is yes.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Fortier, you have six minutes, please.

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

Thank you, Madam Chair.

I'd like to thank the witnesses for being here today and taking part in this important study to see how we can further help women engage in international trade.

We've talked a lot about challenges. We know that Canadian women entrepreneurs are facing a number of challenges in terms of not only foreign markets, but also limited access to financing. Yes, there are assistance programs, but more needs to be done. I would like to explore possible solutions with you.

Most of you have talked about what we do well and what works. That said, what could we do better? What more could we do to help women entrepreneurs be more successful in international trade?

Ms. Vega, I think you might have a suggestion for us related to venture capital.

[Adriana Vega]

I consulted our membership and peers in the industry around what else the government can do, and overwhelmingly what I heard is: Stay the course.

We have a lot of programs that are succeeding in our industry, and when you think about this industry, we're really about a decade old. After the financial crisis, there was very, very little capital in the venture space, and there's only so much you can do in a decade.

Nonetheless, some of the funds that are specialized in investing in women-led companies are about five years old, so we're really looking at beginning funds, emerging, funds. They have one fund race under their belt, and hopefully we'll start seeing the results of those investments create a track record for them to go back to their investors and say why investing in women-led companies is a good investment for you on a return basis, purely market-led.

If you look at the programs that BDC has implemented, for example, you see that the fund for women in technology has only been around since 2017, I believe.

I think that the best thing that the government can do is stay the course and continue to send that signal, because that's how our market works. You need to send a powerful signal that you have an interest in investing in this. I would just say congratulations, of course, for what's been done, and keep it up.

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

Thank you.

Ms. Reimer‑Epp, you have 27 years of experience. You've spent many years in the field. You have been involved in international trade, as you mentioned earlier. Do you have any suggestions on how women can get support to engage in international trade?

[Heidi Reimer-Epp]

I believe that looking at government red tape and some of the regulatory restrictions, as I referenced in my opening statement, are key, because we have some really excellent programs that we're able to access as women entrepreneurs, but that comes to a halt because of our inability to navigate the regulatory requirements or to navigate the red tape aspect of international trade. It is a real shame, because many dollars have been spent and much effort has been given to get to that point.

This is a big ask, I recognize, because it's a big government, but in my experience, we've been able to access the program successfully, and the hiccup has been when we need to work with the regulatory requirements.

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

That's great. Thanks.

Actually, I do appreciate that. I was privileged to be president of the Treasury Board, and we looked at the red tape. There is still a lot we can do, and I know that the regulatory group that looks into this had proposed S-6, an act respecting regulatory modernization.

There were things there that could have been...and it's still in the House of Commons. Hopefully we can pass Bill S-6 to help reduce the red tape that exists.

Maybe I'll give a chance to Rosalind Lockyer, if she had something else to add before my time is up, because I know it's almost up.

[Rosalind Lockyer]

I'll speak quickly on it.

We need more money for repeat delegates and we also have to give funding and support to women who are on their first trade mission. Very quickly their businesses become very robust, but cash flow is always a struggle for growing businesses. Maybe we could have more funding to support repeat delegates, and I don't only mean from PARO. We have our BizGrowth program as well.

We also need more money for CanExport. It's oversubscribed and it doesn't have enough money for underserved women entrepreneurs, so that one is really important.

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

Madam Chair, the interpreters are saying that the audio is cutting in and out, which is making their job difficult.

[The Chair, Liberal, Judy Sgro]

We're having a problem with translation.

[Rosalind Lockyer]

I'm sorry.

To end that, I would also say that the women entrepreneurship strategy is significant and vital for the programs across Canada to move forward. A lot of the funding was two or three years—mostly two, and not even two. You can't build on that kind of funding. I hope that at the end of March that will also continue.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Savard-Tremblay, please.

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

Thank you, Madam Chair.

Witnesses, thank you for your opening statements and for sharing your views today.

At the last meeting, witnesses told us that one of the factors that makes it harder for women entrepreneurs to obtain financing is the fact that they aren't as brash, so they are less comfortable when it comes to pitching.

Do you share that opinion? I find it quite surprising, because we've seen so many women whose ability to be bold and assertive far supersedes that of men.

If you agree with the witnesses, what measures do you think could be introduced to help women entrepreneurs overcome what could be considered a lack of confidence?

[Khadija Hamidu]

I would like to answer that question. Thank you for it.

I definitely believe that women are having a difficult time pitching, but I think what is most important is that women are having quite a lot of stress in regard to the funding pieces. Within our programs of PowerUp Live and PowerUp Explore, we've actually trained women to have a better confidence level to perform and be able to address their business plans as a whole. However, I think the big issue within the women and entrepreneurship program is a lack of ongoing funding for the programming that has produced these strengths of skill building for programs like this.

I just wanted to emphasize that yes, we can grow in showcasing our business plans, but I think that continuing within the programs we already have in Canada as a whole is the most vital piece.

[Lechin Lu]

I would like to add to that, because we do see research showing that there are different perceptions by funders or investors when they are assessing the qualities of business opportunities pitched by women and men. There's research that actually shows that even when they were giving the same pitch, women were generally evaluated lower.

Then also during the processes, they were asked different types of questions. Women usually received questions like these: “How do you mitigate this risk?” and “How do you manage this downfall?” When men are pitching, they are more likely to get questions like these: “What is the business growth opportunity? What's your growth strategy?” Research shows that when these different types of questions are being asked, they lead to different outcomes, and more promotional questions are associated with higher dollar amounts being invested.

There are also systemic barriers and stereotypes and implicit biases that exist that perceive women entrepreneurs as less confident. A lot of the time, as we often say at GATE, “Fix the system, not the women.”

[Adriana Vega]

I don't know if you have time for me to respond.

[The Chair, Liberal, Judy Sgro]

Hold on, Ms. Lockyer. Ms. Vega wants to respond as well to that question.

[Adriana Vega]

Thank you.

I do want to address the issue of biases, because that is true. A lot of the comments that I was hearing from my colleagues on the call were resonating with me, because we hear this as well.

The women entrepreneurs and founders go and prepare and do the work, and they have a profitable business, and then when they meet with investors, everybody at the capital table is a man. Women are not represented. It just perpetuates the cycle of biases in the investment decisions.

When you look at some of the efforts that we're making as an association, you'll see that they are to precisely tilt the balance at the decision-making table so that women are not just represented and are not just at the table but have power in making decisions, in having that investment allocation and in understanding the struggles of women entrepreneurs and are meeting women where they are. That's why some of our efforts actually seek to reduce those biases in the investment decisions, because biases are an issue. I think you will hear from the investor community as much as from the entrepreneurs that access to capital and making that pitch are challenges, for sure.

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

I think another witness wanted to add something, and we can probably let her do so later.

Ms. Vega, your point about the investors being men is an interesting one. How is it that the investors are men? Why is that the case? Does capital seem to be concentrated in male hands, in your opinion?

[Adriana Vega]

I think our industry is not exempt from dynamics that impact other verticals in the financial system. I think that there are biases, and overall, I think it's just that the path to enter into our industry is not really clear.

As I said, our industry is not very old—it's just a decade old—so for a lot of these things, we're innovating as we go along. There is an awareness that this is a problem, and funds themselves will tell you that they want to increase the representation of women and other underserved communities at the capital table.

I don't have an answer, really, as to why this is, but I would say that it is a problem that persists across the industry.

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

Madam Chair, I believe another witness wanted to add something.