International Trade Committee on Feb. 6th, 2024

[Daryell Nowlan]

I mentioned the trade and investment growth strategy. Essentially, it is a $20-million, five-year federal-provincial agreement shared between ACOA and the four Atlantic provinces. They all sit around the table. We're all contributing financial partners.

As well, on the federal side, we have our colleagues at Global Affairs, the trade commissioner service and sector departments—depending on what sector we're working with—coming to the table to help us do those things.

We hit two main priorities, I'd say, underneath that agreement. Basically, that's trade readiness, which is helping firms that have not had any or have had very little experience in terms of exporting. We work either directly or through third parties to help deliver training, mentorship programs—

[Maninder Sidhu, Liberal, Brampton East, ON]

I have less than 45 seconds. Are there any business examples or maybe some stories you can give us?

[Daryell Nowlan]

Sure. For example, REDspace are a Nova Scotia company working in IT and media platforms. They're a part of a market export development program. Through that, they have signed two new partnership agreements. They get sales in the neighbourhood of $250,000, and they've generated a bunch more leads as a result of that.

SubC are a Newfoundland company doing custom-built underwater cameras. They participated in a similar program. As a result of that, they've identified a new distributor in Germany for their projects and services, which is an agreement in the neighbourhood of $250,000, and there are a number of new leads that will lead to new business for them.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you so much.

Madam Chair, I'm going to turn the remainder of my time over to Mr. Arya.

[The Chair, Liberal, Judy Sgro]

Mr. Arya, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

The pandemic gave us a very good wake-up call in terms of understanding how critical global supply chains are, how dependent we are on them and how they affect the everyday life of all Canadians.

We have come out pretty well, I think. Based on last year's 2022 figures, we ran a trade surplus of $4 billion against $1 billion in 2021. Our focus to divert our exports from the U.S. is showing results. It's expected to increase by 50% by 2025. In Canada-U.S. trade, we have reached a record of $1.3 trillion in trade. The trade-to-GDP ratio reached a historic high of 67.4% in 2022.

Foreign direct investments in Canada hit a record last year. The OECD ranked us third in absolute terms. Per capita we are probably number one.

However, just because things have come back to normal or even better for Canada, we should not forget the problems faced by Canadians during the pandemic due to the disruptions in the supply chain. Canadians paid a very deep price when we did not have goods in the stores. Canadian companies and businesses did not have confidence to supply their customers. With deglobalization, de-risking of supply from China, friendshoring, onshoring and nearshoring, global trading is in a very transformative process.

This fluid transition time gives us an opportunity to look at the problems that we faced during the pandemic due to supply chain disruptions. We can now take measures to mitigate the problems and issues we faced. We need to focus on the critical things we can manufacture here and on self-reliance.

I would like to ask Mr. Perron and Mr. Nowlan, in Quebec and Atlantic Canada, are they aware of any particular business sectors or major product lines that were disrupted due to supply chain disruptions during the pandemic? Are there any actions being taken by the businesses, or by the governments, whether at the federal or provincial levels, to mitigate the problems that were faced due to global supply chain disruptions?

[Sony Perron]

Maybe I can provide a brief answer to this important question.

The way the regional development agency works is mostly to support small and medium-sized businesses, so we do not necessarily touch a full sector. We work business by business in various sectors to try to improve their capacity to supply and participate.

Something we are doing intensively right now is helping with automation, building automation in enterprises to give them some flexibility—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry. I've have only, I think, 45 seconds. It's okay if you are not aware of any business sectors, business lines or product lines that were disrupted due to supply chain issues.

To the witnesses, if you have answers, and because of the time limitations—as I will not be able to discuss them with you personally—please feel free to write to the committee, so we can consider the things that the study has to look into. You can make a note of the important things the committee should focus on.

Mr. Nowlan, if possible—

[The Chair, Liberal, Judy Sgro]

I'm sorry. There are eight seconds left, and we're very tight in order to allow members the chance to ask their questions.

[Maninder Sidhu, Liberal, Brampton East, ON]

I'm sorry, Madam Chair. I know time is short, but maybe we can get something in writing in terms of business success stories from both Mr. Nowlan and the Quebec agency.

Thank you.

[The Chair, Liberal, Judy Sgro]

We'll now go to Mr. Savard-Tremblay, for six minutes, please.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Madam Chair, to correct Mr. Sidhu, I don't know if he was looking for success stories. I think Mr. Arya was looking for perhaps some hiccups there. I know Mr. Sidhu would love to highlight the success stories, but perhaps they could supply both.

[The Chair, Liberal, Judy Sgro]

Yes, both, and whatever reports you have. As members are not able to get enough information now, regardless of which side is asking, it would be nice to supply the additional reports.

Mr. Savard-Tremblay, we'll start now with your six minutes.

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

Thank you, Madam Chair.

Mr. Laplante, you said a lot about standards and touched on public policy. The Institut de recherche en économie contemporaine submitted a brief about supply chains to the transport committee in the spring of 2022.

That brief included a number of findings. For one, it stated that, on industrial policy, Canada has traditionally been a non-interventionist country. As a result, Canada is lagging behind its main trading partners and competitors.

Two years on, would you agree with that?

[Robert Laplante]

For the most part, yes.

That's not to say there haven't been positive initiatives. Unfortunately, in most areas, we still don't have specific objectives with a strategic road map that all stakeholders are on board with. I think that's the biggest impediment to successful participation in major supply chains.

All stakeholders must have a clear understanding of the issues and must be able to identify which sectors and priorities to address to maximize the competitive advantages of each industrial sector through the creative export strategy. Basically, the objectives shape the strategy, not the other way around. The strategy does not set objectives. This is particularly important in key sectors like agri-food and the various export and natural resource processing sectors.

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

In that same brief, you say that Canada has always been and remains a laughingstock when it comes to R and D spending, especially compared to the OECD or G7 averages.

You recommend enhancing fiscal and financial incentives for R and D, and implementing policies that facilitate the integration of R and D and industry 4.0 technologies both financially and logistically.

Can you tell us a little more about the impact of underinvestment in R and D on supply chains? For starters, has the situation improved since then?

[Robert Laplante]

Well, our main problem is that things are disjointed because we're doing these things, but we're not getting feedback to find out what's working. That's especially true for the emerging IT and AI research sector.

We actually just published a study showing that various governments' efforts to support research are basically voided after four or five years because we lose the intellectual property of those patents. They're resold as soon as they mature to the point of commercial viability.

We need more clearly defined operational objectives. More importantly, we need oversight to ensure the money we're investing is delivering results. We also have to be able to retain those results in our economic value chains and supply chains here in Canada and Quebec, especially in AI. That's absolutely key because we put so much effort into supporting this high-tech sector, and we excel in it, but we won't be able to maintain that position if we don't have better control over intellectual property and use it to our advantage.

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

Mr. Laplante, I understand that we have very little time left, and I have one last question for you.

In that same brief, you say you feel that Canada is dispossessed, because foreign multinationals established in Canada control most imports and exports of Canadian goods.

You say you want Quebec to stop being robbed of its potential, to source goods locally and to bring outsourced industry giants back home.

Very briefly, what do you think we can do?

[Robert Laplante]

There's no simple solution. That said, the first thing we need to do is make sure all the players have a better understanding of the situation. A mutual understanding of the issues is the first step in establishing a road map. That road map needs to take a step-by-step approach to controlling the entire supply chain. We need to give industries and other supply chain participants more room to manoeuvre.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Laplante.

Now we'll move on to Mr. Cannings for six minutes, please.

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

Thank you, all, for being here today.

I think I'll start with Mr. Nowlan.

You mentioned some of the challenges that businesses are facing because of supply chain interruptions caused by conflicts and labour shortages. I wonder if you could maybe expand on the labour shortage part. Which sectors are hit hardest by that, and what, if anything, is being done to address that?

[Daryell Nowlan]

I think you'd be hard pressed to find a sector in Canada that's not affected by labour shortages. That's the reality that we have right now, and you see that playing across all sectors.

In Atlantic Canada, certainly a large part of our export industry is around seafood and seafood products. In Atlantic Canada, some of that is quite labour-intensive or traditionally has been quite labour-intensive.

One of the main things we're doing, similar to what Mr. Perron mentioned in terms of supply chain challenges, is helping businesses invest in automation and in making systems that work faster, that work more with robots and that are more automated so they actually require fewer people. Some of those jobs are the hardest jobs to fill. They're difficult jobs, and they're difficult working environments. Therefore, having investments in automation and in new machinery is probably the best way that we can help our companies not only address the labour shortage but also ensure more high-quality, highly consistent products, which are really what are demanded in export markets right now.

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

Is there any connection...? At least where I live in British Columbia, there's a big connection between labour shortages of all sorts and housing. Is that the case in Atlantic Canada as well? If we hire someone, and they come and there's no place for them to live, is that an issue?

[Daryell Nowlan]

Of course. I think, again, that's a question that's being faced all over the country and all over the world, quite frankly. Businesses are definitely investing in housing for their workers—it's temporary in most cases and in some cases it's more permanent—especially those businesses that are attracting foreign workers. In the industry that I mentioned, there are a lot of temporary foreign workers. It's a seasonal industry, and they do have workforce housing and accommodations available. That's not to underestimate the size of the problem. It's definitely a challenge across Canada.

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

Thank you.

Monsieur Lavoie, you mentioned the labour issues as well. Is this mainly with trucking and truckers? Is that what you were referring to with regard to a labour shortage, or is it...?