moved that Bill C-41, an act to amend the Canadian Commercial Corporation Act, be read the second time and referred to a committee.
Mr. Speaker, I am pleased to speak to the legislative changes that the Government of Canada is proposing to the act governing the Canadian Commercial Corporation.
Before I address the legislation directly, I would like to make mention of the extraordinary events that took place in Doha, Qatar last week. United in our resolve, WTO partners agreed to start a process that will lead to an effective integrated rules based trading system and greater market access for citizens, not just of Canada but of all member countries.
The only presence of the development theme in the ministerial declaration bodes well for wealth creation, not only in terms of growth but also in terms of equity. As the House knows, the Canadian government believes that contributing to greater equity in the world provides stability for long term and lasting peace. Moreover, the launch of the new round of negotiations at the World Trade Organization is good news for Canada, for our farmers and for agriculture producing countries around the world.
Agriculture touches a country's economic development, social development and food security as well. A stable, predictable market environment is important for a developed country like Canada, but even more important for those less developed countries looking to access international markets and provide economic well-being for their citizens.
Finally, I would like to make special mention of the lead role that Canada played and will continue to play on the issues of investment, competition, transparency in government procurement and trade facilitation.
As a government, we cannot only open new markets to our exporters. We must also provide the tools and support our exporters need to fully participate in these new markets. We must therefore continue to evaluate and improve tools, such as the Canadian Commercial Corporation, to ensure that they are competitive and responsive to world markets and the changing global environment.
Since its creation in 1946, CCC has acquired a unique expertise in the sale of Canadian goods and services to the public sector of foreign countries. It is well-known for its capacity to meet the needs of the defence and aerospace sectors of foreign governments, in particular the U.S. Department of Defense, its most important client.
However, the Canadian Commercial Corporation has become much more than a contractor in the area of defence. In the last few years, CCC has acquired significant capacities in other areas.
At the present time, 30% of its activity deals with areas like information and communication technologies, environmental services, transport and consumer goods. This being said, there are great opportunities to help Canadian exporters to have access to a much larger portion of international public markets outside the defence area.
The international public sector market is huge and could exceed $5 billion U.S. a year. It offers huge opportunities to Canadian exporters, especially small and medium size business. It is also a specialized market, where success depends on experience, reputation and credibility.
This market is also characterized by the lengthy and complex contract negotiations, and payment schedules are often extended, to the point where many small businesses find themselves unable to meet payment terms.
That being said, this market cannot be ignored by Canada, simply because it has specialized needs. More than 45% of our GDP and a third of jobs in Canada depend on our success on international markets. We must seize all opportunities to explore and develop new markets. One of the main targets of Canada must be the international public markets sector, which offers huge possibilities to our exporters, including our small and medium size businesses.
The Canadian Commercial Corporation has the unique capacity to make Canadians access to international public markets and to target them. It has the contacts and the qualifications needed by Canadian exporters to conduct their commercial activity on international markets. Those contacts and qualifications give our exporters an important advantage in finding new contracts, respecting their criteria and obtain contracts in this competitive and specialized market. It is a good commercial activity, which leads to very good jobs and the creation of wealth across Canada.
The Canadian Commercial Corporation is focusing on three specific types of support for Canadian exporters: customized export sales and contracting services, a government-backed guarantee of contract performance for Canadian suppliers of foreign buyers, and finally, access to commercial financing for Canadian companies in need of working capital to finance exports before shipping.
Over the years, Canadians have come to expect from the government and public sector corporations not only unique services, but also efficient and cost effective services. They want these organizations to be self-sufficient, have a commercial approach and be ready to take advantage of new business opportunities, in a way that is relevant in today's business environment.
Bill C-41 is meant to update the act and provide for necessary changes to the corporation's governance and operating procedures, so that the corporation can serve the needs of Canadian exporters in a commercially responsible way and assist Canadian exporters to exploit the significant opportunities that exist in the huge public procurement market.
Bill C-41 proposes three changes. First, it creates separate job descriptions for the offices of chair and president of the corporation, bringing CCC's governance structure in line with treasury board guidelines. This is also consistent with modern corporate management practices.
Second, it allows the corporation to charge a fee for service that will balance the cost of providing the services with the value to client. The fee structures will be fair and will balance the price of service and the value received by clients.
Third, it expands CCC's borrowing authority which will strengthen the corporation's capacity to service large scale international contracts and make timely progress payments to Canadian suppliers.
It is true that from time to time the Canadian Commercial Corporation can face liquidity problems when its largest customer experiences delays in processing payments. This happened just recently when the United States department of defense payments were delayed because of the events of September 11. In the past this has meant that some payments to Canadian suppliers have been delayed. One solution has always been to borrow from the Government of Canada. However, with this legislation the corporation will be able to borrow from commercial lenders as well. This will decrease the corporation's reliance on the federal treasury and will improve its capacity to meet the cash flow needs of Canadian suppliers working on large scale international projects.
Overall, these amendments will strengthen the Canadian Commercial Corporation's capacity to deliver the specialized services that contribute to the success of thousands of Canadian companies in export markets and that have helped produce high quality employment for Canadians throughout the country.
Canadians recognize that trade is a necessary ingredient for economic growth and Canada's continued prosperity and social well-being.
With our economic success so tied to trade, Canada's continued prosperity depends on our exporters accessing an open world economy. Canada's engagement with the world through trade and investment contributes to our competitiveness and employment and helps create wealth. This enhances the ability of the Government of Canada to reinvest in education and innovation, in our universal health care system and of course in our youth.
Trade puts money in the pockets of Canadians who teach in our schools, work in our factories and run our hospitals. As well, Canadian consumers and producers can obtain a broader choice of cheaper and better goods and services through trade.
To put it simply, trade translates into better and higher paying jobs and increased opportunity and prosperity for all Canadians. It is in light of all this that we must ensure that our exporters are equipped to compete in world markets and that the tools we provide to them are effective and efficient.
Over the years, the Canadian Commercial Corporation has proven the value of these services that are unique and customized for Canada and its customers in the export community. It has helped thousands of Canadian companies sell goods and services for more than $30 billion to government buyers abroad. Just in the last year, it had record sales totalling $1.3 billion for Canadian suppliers, 70% of which were small and medium businesses.
We know it is possible to raise the level of activity on international procurement, with an estimated value of $5 billion a year, and we know that other Canadian companies are interested. That is why I urge the House to support Bill C-41.