International Trade Committee on Jan. 30th, 2024

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

I'm calling the meeting to order.

My apologies to all our witnesses for the technical difficulties that we've experienced today. We appreciate your patience. We will get the meeting under way.

Welcome to meeting 89 of the Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those online, please mute yourself when you are not speaking. For interpretation online, you have the choice, at the bottom of your screen, of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

I would ask all participants to be careful when handling the earpieces in order to prevent feedback, which can be extremely harmful to interpreters and cause serious injuries. Please speak only into the microphone that your headset is plugged into. Place earbuds away from the microphone when they are not in use.

All comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we would appreciate your patience and understanding. If any technical issues arise, please let me know immediately and we will suspend in order to ensure that interpretation is properly restored.

All members have received a copy of the draft budget from the clerk. I will ask whether the committee is in agreement to adopt the budget, in the amount of $38,900, for the study of Canadian businesses in supply chains and global markets.

Is everyone in agreement to adopt the budget?

(Motion agreed to)

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, October 17, 2023, the committee is beginning its study of Canadian businesses in supply chains and global markets.

We have very patient people with us today. From the Department of Foreign Affairs, Trade and Development, we have Sara Wilshaw, chief trade commissioner; and David Hutchison, director general, trade portfolio strategy and coordination. From Export Development Canada, we have Mairead Lavery, president; and Stuart Bergman, vice-president and chief economist.

Welcome to all. We will start with opening remarks and then proceed with rounds of questions.

Ms. Wilshaw, I would invite you to make an opening statement of up to five minutes, please.

[Sara Wilshaw, Chief Trade Commissioner, Department of Foreign Affairs, Trade and Development]

Thank you, Madam Chair, for the opportunity to address—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Madam Chair, I'm just wondering what we're doing. We have two panels but only one hour. How are we going to run the meeting today?

[The Chair, Liberal, Judy Sgro]

I'd like to suggest that we could extend the meeting. We do have resources to extend the meeting until as late as 6:30, if the committee chooses to go along that line.

I see that Mr. Cannings is ready for something different from a committee that late.

What about going until 6 p.m.?

[Chandra Arya, Liberal, Nepean, ON]

Madam Chair, I have to drive to a commitment that's constituency-related.

[Maninder Sidhu, Liberal, Brampton East, ON]

Could we bring back our second panel another day?

[The Chair, Liberal, Judy Sgro]

It means we'll have to invite the officials back again.

I have to tell you that we have a huge number of people and companies and so on who have indicated an interest in this study.

We'll go to 6 p.m. Is everybody in agreement with that?

[An hon. member]

No.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

They said no.

As you know, I'm always very courteous to my colleagues, so I'll defer to them. I would suggest that if we're not going to go until 6 p.m. or 6:30, we use the first panel for the hour that we have, dismiss the second panel and apologize that they've come. We won't be able to hear from them today.

That's what I would propose.

[The Chair, Liberal, Judy Sgro]

That's a good suggestion, Mr. Seeback.

To our second panel, we will have to invite you back as soon as the clerk can get that coordinated.

We will just go forward with the current panel that we have before us, and we will adjourn at 5:30.

Everybody is in agreement. Thank you very much.

Ms. Wilshaw, we're back to you for five minutes of opening remarks, please.

[Sara Wilshaw]

Thank you again, Madam Chair.

As noted, I'm Sara Wilshaw. I'm the assistant deputy minister of international business development, investment and innovation at Global Affairs Canada. I'm also the chief trade commissioner. This means that I lead a network of almost one thousand employees at Global Affairs Canada, where we serve Canada from over 150 locations around the globe, as well as 600 employees in 14 offices across the country.

I'm very pleased to speak about how the trade commissioner service, or the TCS, supports the integration of Canadian businesses into global value chains. The TCS is a client service organization, first and foremost. We aim to support the sustainable and equitable growth of Canada's economy by providing free services, support and funding to qualified Canadian exporters and innovators, educational institutions and foreign investors. With nearly two-thirds of Canada's GDP linked to international trade, our work helps to make Canada's trade and economy more resilient.

The TCS generates real economic results for Canada. In the 2022‑23 fiscal year, the TCS provided over 52,000 distinct services to more than 11,000 Canadian businesses and clients. With that support, those clients achieved over 1,000 new international business deals and partnerships with an estimated value of $4 billion.

In the same year, we supported foreign direct investment worth an estimated total of $16 billion and over 13,000 new jobs in Canada. Foreign multinationals are actually a really important part of the Canadian economy, accounting for over 60% of trade in goods and services. Not only does FDI contribute significantly to Canada's integration into global supply chains, but it also strengthens our domestic supply chains by acting as a stable source of demand for Canadian industry suppliers.

It should be noted that the TCS shares this mandate with Invest in Canada and with provinces, territories and municipalities to promote FDI into Canada, just as we share the mandate to support exports with a number of other government departments, EDC, CCC and provincial and territorial counterparts.

We know that Canadian companies that use TCS services export to nearly 25% more markets. They export 11.2% more product varieties and earn 19.8% more value than non-clients do. I should add that, of course, Canadian imports and Canadian direct investment abroad are not part of the core mandate of the trade commissioner service. We are outward-facing and focused on inbound investment primarily.

In 2018, the Government of Canada launched the export diversification strategy, with a goal of increasing Canada's overseas exports by 50% by 2025. Canada is on track to meet that target, with the help of the TCS.

Canadian businesses and clients that export their products to multiple markets seem less vulnerable to supply chain disruptions and to sudden changes in demand.

Since over 90% of TCS clients are SMEs, our services can make the difference for a Canadian business being able to successfully enter a new market.

In addition to diversifying where we do business, where we export, the TCS is also committed to diversifying who trades by providing targeted support for traditionally under-represented groups in trade.

This work is all in the service of helping Canadian businesses integrate into global supply chains that will define key and emerging sectors for the future and promote Canadian prosperity.

Supporting the expansion of Canadian businesses in high‑growth sectors of interest across the globe, such as the green and digital economy, is also in line with our commitment to responsible business conduct, or RBC, as highlighted in our strategy.

To build on these successes, the TCS Canadian technology accelerators and some of our other flagship programs have been expanded to help more Canadian entrepreneurs find investors, customers and partners in innovation hubs all around the world. We have also expanded the Canadian international innovation program to help Canadians commercialize their innovations through international partnerships.

Madam Chair, I just want to end by highlighting the TCS work in the Indo-Pacific region in particular, given the strategy and the focus on that area. With over 350 trade commissioners already based in the region, providing thousands of Canadian businesses with services and support, we have long recognized the importance of the Indo-Pacific to global economic growth. In support of that strategy, the TCS is organizing the team Canada trade missions to the region. We will have missions to Malaysia, Vietnam, South Korea, Indonesia and the Philippines coming up this year.

As noted, we do all of this alongside a lot of partners and a lot of folks who are engaged in the international trading and investment-attraction space. We know that increased international business for Canadian companies is key to our future prosperity and to our economic security. We're proud to be helping Canadian businesses on that journey, and we look forward to adapting to their needs along their journey.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Wilshaw.

Ms. Lavery, you have five minutes, please.

[Mairead Lavery, President, Export Development Canada]

Thank you, Madam Chair.

I also want to thank the committee members for inviting me to take part in this important study today.

As president and CEO of EDC, I'm eager to discuss with you the work we do to support Canadian businesses in supply chains and international markets. I look forward to sharing data and insights on the context and the conditions in which Canadian businesses are operating. I'm joined today by the EDC chief economist, Stuart Bergman.

As Canada's export credit agency, we operate with a mandate to support and grow the country's export trade. We do this through a suite of financial solutions to help mitigate risks for Canadian exporters and investors, as well as through knowledge products like webinars and digital content. Together, these offerings give Canadian companies the tools they need to reduce financial risk, and the capital to enter and invest in new markets with confidence and to grow internationally.

As the committee may be aware, EDC operates on commercial terms, and throughout our 80-year history, we've been consistently profitable. We ensure complementarity with the private sector, both bankers and insurers.

EDC's contribution to the Canadian economy relies on the hard work of exporters in virtually all sectors of the Canadian economy and companies of all sizes, from micro to large, as well as our under-represented groups in trade.

In order to best serve all of these businesses, we have 16 offices across Canada, from British Columbia to Nova Scotia. To ensure that we are meeting the country's exporters where they want to go and where we see the greatest potential for businesses and for the Canadian economy, we have 23 representations in international markets, with three more scheduled to open in 2024. EDC is putting feet on the ground in so many regions and markets worldwide, and it's because of the growing number of Canadian companies operating in those markets, as well as the potential of those markets.

We are confident that our medium-term and long-term plans will help make Canada and the world better through trade. In fact, last year, our economics team enlisted the support of Statistics Canada to help better understand the value proposition we provide to Canadian exporters. This seminal study found that Canadian exporters receiving EDC support generated 22% more revenue, had 15% higher employment and had 5% greater employee productivity than similar exporters that were not EDC customers.

Still, as everyone in this room knows, Canadian businesses have faced many serious challenges for several years now.

Although the direct effects of the pandemic and the war in Ukraine started to wane in 2023, we still saw high inflation, rising interest rates, another war, slowing domestic demand, and weaker-than-expected growth from our largest trading partner, the United States. These were real challenges that caused real difficulties for our customers, but at the same time, the breadth of international opportunities has never been greater. At EDC, we're working to ensure that the country's exporters are primed to seize the opportunity.

For example, we're expecting to see Canada's natural resources and world-leading clean technologies play a key role in the ongoing global energy transition. EDC is a steadfast supporter of this sector, having worked with more than 440 Canadian clean-tech businesses in 2023. Together, we facilitated a record $12.2 billion in exports, foreign investment and trade-development activities for these companies.

We are also seeing new commercial partnerships in rapidly growing regions, giving Canadian exporters more reasons to diversify beyond our long-standing trade partners. To support this opportunity, EDC has devoted teams to the markets and regions where we see local demand dovetail seamlessly with strong Canadian capabilities.

Another significant opportunity lies in Canada's standing as one of the world's most agriculturally self-sufficient countries. This distinction means that Canada's agri-food supply chain has a critical role to play in feeding an increasingly resource-constrained world. Given Canada's abilities and strong reputation in the sector, EDC selected it as one of our priority sectors, alongside clean tech, advanced manufacturing and digital industries, as well as other natural resources.

Thank you for giving me time to share some information regarding Export Development Canada and international trade.

I look forward to offering more information and details as the meeting progresses.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to our members.

Mr. Martel, you have six minutes. Please proceed.

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

I want to thank the witnesses for joining us.

Thank you for your patience.

In terms of Canadian business development, what interests and concerns me are the ports, especially the port of Vancouver. I have a question about that.

Is the sound working?

[The Chair, Liberal, Judy Sgro]

Mr. Martel, just give us a second here.

Start again, and we'll see if it's better.

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

I want to thank the witnesses for joining us.

I'm concerned about the state of Canada's ports, particularly the port of Vancouver.

I want to know the following. In your opinion, does the port of Vancouver hinder the development of Canadian businesses?

We often hear that there are lines, that things take a long time, that the unloading process could be further modernized and that we're lagging behind other ports, particularly American ports.

Do you think that Canada's ports, in their current state, hinder business development?

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

Madam Chair, there's a problem with the interpretation.

I'm listening to the French channel and I can hear the English interpretation. There's an issue with the transmission of the interpretation.

[The Chair, Liberal, Judy Sgro]

Okay.

The English channel was clear.

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

We'll get there. Don't worry.

[The Chair, Liberal, Judy Sgro]

Mr. Martel, can you say something in English?

I keep stopping the timer, by the way, so you're not losing your time.

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

Do I have to speak in English?

What should I do?

[The Chair, Liberal, Judy Sgro]

Say something in English.

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

Do I have to speak in English?

[The Chair, Liberal, Judy Sgro]

I'm not hearing French interpretation.