International Trade Committee on Jan. 30th, 2024

[Sara Wilshaw]

Madam Chair, the top outcomes I can speak to for the trade commissioner service by region are actually.... The Indo-Pacific is the number one region for outcomes of the services that we in the trade commissioner service provide to Canadian clients. After that, it is the U.S. and Mexico, and then Europe.

[Chandra Arya, Liberal, Nepean, ON]

My question was what percentage of Canadian companies.... What are the top sectors within Canada that are looking to export outside of North America?

[Sara Wilshaw]

Oh, I see. I'm sorry. I didn't understand the question, Madam Chair.

They're the same areas, as a matter of fact. The same sectors are the key sectors that we see, although, as I think Ms. Lavery mentioned, it does depend a little bit on the market. It would be hard to paint everything with a single brush.

[Chandra Arya, Liberal, Nepean, ON]

In any case, the export outside of North America is so small that even when we segregate....

Coming back to, again, outside of North America, I know that Canadian agriculture produce and agri-food products are the stars that make Canada the fifth-largest exporter in the world. Whenever we sign any trade agreement—and we have signed many—I notice, as a member of the international trade committee, that this sector aggressively goes after and tries to expand its markets, its exports. I have not been seeing that from other major sectors in Canada. Take the steel and aluminum sector, for example. More than 90% of its exports are just to North America, other than the domestic market in Canada.

What can we do to motivate sectors like steel and aluminum to go after the new markets when we sign free trade agreements?

[Sara Wilshaw]

Madam Chair, I think this is a very good, important question—to try to motivate people beyond the North American space. Obviously, that is where a lot of our clients want to start, because it's an understandable market, a large market and a wealthy market, and there are a number of opportunities for Canadian businesses there.

We try to encourage people to go not just to the United States but beyond. Obviously, the U.S. is a big one. We do try. We offer different services that help to de-risk that. As I mentioned, we have CanExport as well, which helps to do some co-funding, matching funding for people to explore new markets. As I mentioned with the free trade agreements, we also try to put the information in front of clients to help them understand how to use the free trade agreements and what the benefits are. We've gone and negotiated all of these, and we'd really like our clients to take advantage of them. We are seeing a strong utilization of those.

I think a lot of it comes down to education. We work with a lot of partners all across the country—provinces and territories, as well as federal government partners, municipal partners and our Crowns—to put on webinars and all kinds of educational opportunities to help people understand how to use the FTAs and understand what the opportunities are for them around the world, and to try to encourage them to go as far afield as they possibly can.

These are some of the ways—it's not comprehensive; the trade missions are another way—in which we try to get people to explore new markets out there and show them that it's okay, that they can go farther than the U.S.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Now we'll move on to Mr. Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

If you don't mind, I would like to talk about fall 2018. The government's economic statement announced the export diversification strategy. The goal was a 50% increase in Canada's exports by 2025. It's now 2024. In 11 months, we can take stock of that announcement. As part of this strategy, the government announced an investment of $1.1 billion over six years, starting in 2018‑19, to help Canadian businesses access new foreign markets.

First, have the investments been made?

[Sara Wilshaw]

Yes, I'm happy to say, Madam Chair, that we did receive and launch a whole strategy toward trade diversification back in 2018. We've been rolling that out, and we are fully staffed up, with some additional resources that we received to support Canadian business around the world through different mechanisms.

We are, I'm very happy to say, on track to achieving that 50% increase in trade with markets beyond the United States. Last year, goods and service trade hit a record high of $1.9 trillion, and that is on track.

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

You're confirming that the investment of $1.1 billion over six years has been made. You're also confirming that exports will increase by 50% by the end of this year. Is that right?

[Sara Wilshaw]

Just to clarify, I think it is by 2025, yes.

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

Yes, exactly. Since it's 2024, it will be by the end of this year.

Can you confirm the information concerning both the investment and export growth?

[Sara Wilshaw]

Yes, sir, I believe that's where we are at.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds remaining. Are you good? Okay.

We will move on to Mr. Cannings for two and a half minutes.

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

I'd just like to turn to Ms. Lavery to talk about EDC and supports for businesses. I think of EDC as an organization that supports big business—pipelines, etc.—with big help. Where is the lower end of that?

As I was saying before, most of the businesses in my riding doing export business to the United States, primarily, are small businesses. I have a company, for instance, that happens to be the biggest lead-acid battery recycler in western North America. It wants to expand that, because competitors in the States have fallen by the wayside. They needed a small amount of money to make those expansions. I'm just wondering where you fit into that, and where BDC fits into that, or where they should turn for help like that.

[Mairead Lavery]

Thank you for the question. I'm really excited, actually, by this question.

I think that at EDC there was a perception over a number of years, because we kept talking about EDC and the products that it provides. We provide insurance to help make sure people get paid for the exports they make. We also provide financing and capital to actually help the companies.

However, we really have been expanding in the last five years, and one of the most-used products, by 80% of our small business users—because 80% of our customers are small and medium-sized businesses—is our knowledge products. How do they get into markets? We work very closely with the trade commissioner service on providing them tools, guidance and advice on how they export.

BDC has a different mandate, because it's the bank of entrepreneurs; we're very focused on just the exporters. However, we changed our whole organization to actually be structured by small companies, medium-sized companies and large, so that the whole of the EDC team is focused on meeting the needs, which are very different for small companies versus medium, versus large.

With our small companies, we find that products that include our guarantees with their local bank, where we guarantee the working capital for exports, as well as our credit insurance products, are really well used by those companies, because they provide working capital for them, versus very large companies that need a different financial solution.

We've really tried to focus on making sure we understand the needs. We do lots of surveys. We do lots of promoter score surveys as well as checkpoints with them, to make sure we're truly meeting their needs.

I think that, in the small and micro space, it tends to be that they need help to actually build the capability within the company. Often, even some of the questions we ask them help build their understanding of what they will need to do when they go to exports. We're very focused on meeting the needs by different segments.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Baldinelli, you have five minutes, please.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being with us this afternoon.

I just want to build on some of the comments of my colleague here, who was talking about the Indo-Pacific strategy. There was also a commitment within that for trade missions abroad. It indicated about $100 million over five years to be committed to that.

As we're two years in already, I was just wondering, Ms. Wilshaw, if you could provide an update on that.

[Sara Wilshaw]

Yes, Madam Chair, I'm very happy to.

The team Canada trade missions are well under way. We run trade missions regularly. We did two last year outside of the Indo-Pacific—we went to Chile and to the United Kingdom—but in terms of the Indo-Pacific—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'll just stop you there. That's my error, and I apologize for that.

I'm just looking at the Indo-Pacific regional capacity uplift, which is $100 million over five years. Trade missions are a different fund. I was just wondering where we stand on that two years in.

[Sara Wilshaw]

Do you mean where we stand on the capacity uplift?

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Yes, I'm wondering about new positions to significantly expand capacities at Canada's missions abroad and in Canada with a goal of advancing and defending Canadian interests in the Indo-Pacific.

[Sara Wilshaw]

Yes, sir, I'm aware of the commitment. It is being run by the geographic branch, which is a different part of Global Affairs Canada. That said, I can say that some of the positions, particularly those that have to do with supporting clean tech, are under creation. There is a process to go through to develop the positions, to get them approved, to put them in place and then to hire staff, so we have been in the process of engaging those folks for those positions and getting them in place.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Do you have a head count, for example, that you could provide us as to how much has been spent to date, two years in?

[Sara Wilshaw]

I do not. We could come back to you with that.