CIIT Committee Meeting

     I call this meeting to order. This is meeting number 13 of the House of Commons Standing Committee on International Trade.

    Pursuant to an order under Standing Order 108(2), the committee is meeting on its study of the government's response to the COVID-19 pandemic. Today's meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website.

    To ensure an orderly meeting, I would like to outline a few rules to follow. Interpretation in this video conference will work very much as in a regular committee meeting. Before speaking, please wait until I recognize you by name. When you are ready to speak, you can click on the microphone icon to activate your mike. When speaking, please speak slowly and clearly. When you are not speaking, your mike should be on mute.

    Should any technical challenges arise—for example, in relation to interpretation or a problem with your audio—please advise me immediately. The technical team will work to resolve them. Please note that we may need to suspend during these times, as we need to ensure that all members are able to participate fully.

    Happy new year to all of the committee members. It's great to see you all looking well and healthy. Hopefully your families are well and we're going to have a successful 2021 one way or another.

    I'd like to welcome our witnesses now. From the Canada West Foundation, we have Carlo Dade, director of the trade and investment centre. From the Toronto Region Board of Trade, we have Jan De Silva, president and chief executive officer, and Leigh Smout, president, World Trade Centre Toronto. From York University we have Rhonda Lenton, president and vice-chancellor.

    Welcome to you all. We're very happy to have you with us today and we appreciate your time.

    We'd like to start with Carlo Dade, for Canada West Foundation.

    You need to unmute yourself, Mr. Dade.

    The next generation, the one- and two-year-olds, will all learn the words, “You're on mute”, before they learn “mom” and “dad”.

    Thank you, Madam Chair.

    Good afternoon, members of the committee.

    I am pleased to be here again to discuss this topic of critical importance to Canada, and particularly to the west—international trade in the era of COVID-19.

     Saying that this topic is important to the west in particular is not an understatement. We in the west are less than a third of Canada's population, yet we account for over 35% of the country's exports, a ratio not matched by any other region of the country. Therefore, the subject at hand has been subject to a great deal of attention, thought and research here at the Canada West Foundation.

    I'd like to share two items that emerge from this research that tie to your study: What will post-COVID trade look like and what should Canada do to prepare; and on what trade agreements should the country focus? I'll also add some comments about the trade relationship with our second-largest trading partner, which is fundamentally important to the subject.

    Our written testimony, of which you have a copy, also goes in depth on other subjects of your study, such as the trade commissioner service and the larger issue of support to exporters. Our trade economist, as has become a habit at Canada West, has provided a great deal of facts, figures, numbers and charts to aid in your study.

    With that, let's jump into the first question: How will trade change and what should we be doing?

    Trade, if you think about it, is essentially the movement of four factors of production: ideas, money, people and goods. The largest or the factor on which we spend most time is the movement of goods, and this is an area where Canada has serious problems. It is also an area that is not going to change post-COVID, and by not change I mean, yes, you will have reshoring and other attributes, but the fundamental aspect of moving goods from point A to point B is not going to change. This is an area where we have real problems in Canada.

    In 2019, the World Economic Forum's ranking of perception of quality of trade and reliability of trade infrastructure saw Canada drop 22 places, from a high in 2008-09 during the Asia-Pacific gateway days to 32nd in the globe. Our customers have been telling us that we have a serious problem, yet you'd be hard pressed to see this reflected in the actions we've been taking. If we're going to export our way into COVID recovery and earn the money that we need to move on, we're going to have to address this issue.

    While our competitors such as the U.K. and Australia have developed robust systems, institutions and frameworks to collect data, turn it into information and transparently use that data to make long-term project pipelines that link all the supply and production chains in the country, you see almost none of this in Canada.

    The one area where we have made investments, the national trade corridors fund, was underfunded to begin with and has yet to be recapitalized. This isn't an encouraging signal for countries that are wondering if Canada can be a reliable source of exports and customers that can help us fund our way into COVID recovery, yet there's hope.

    The government has set the stage for making competitiveness of trade corridors a national priority. The council of ministers of transportation, co-chaired by Alberta's Ric McIver, is working on solutions. At CWF, we're leading a national coalition, including the Business Council of Canada, the Canadian Chamber of Commerce, the Construction Association, Western Roadbuilders, Canpotex and others to take six years of research to put forward concrete policy recommendations for government.

    Therefore, the stage is set on the trade infrastructure file and I would urge attention to this. If you can't move goods or if customers don't believe you can move goods, you're not going to be able to take advantage of the trade opening and the market opportunities we have. That's fundamental to everything.

    On the second question, which trade agreements should we focus on, the answer is fairly straightforward. It's to focus on the agreements that we already have.

    First, this means focusing on the new North American agreement. We're going to have tons of issues dealing with the U.S. administration. This was known throughout the negotiations. We're going to have to focus time, effort and resources on working with or fighting with the Americans on these issues.

    The second priority would be looking at expanding the CPTTP agreement.

    Look, we were very lucky to get one progressive trade agreement in Asia. Getting another agreement is going to be a bridge too far. If “progressive” is really the focus, we should put our efforts into trying to expand the one progressive agreement that exists. Additionally, going the bilateral route—doing things such as looking at a trade agreement with Indonesia—is suboptimal and potentially harmful for Canadian business.

    There's a reason businesses don't use trade agreements. They're complex. There are too many rules. You have one set of rules that work only for one market. You have to change your production techniques to fit that market, and then you have another set of rules and another set of requirements for yet another market. An agreement such as the CPTPP allows you to build supply and production chains across a large group of countries, cuts the cost and reduces the risk.

    Think of the small Canadian exporter who wants to export to Asia. Under the CPTPP, this company has one set of rules that it can use for six economies. It has the ability to sign one distribution agreement with one company in Singapore that can access all six markets. If you go the Indonesia route, they would have to sign an agreement with different production rules for each economy and distribution agreements for each country, and you have a mess. Really, the multilateral route is the way to go.

     An exception will have to be made for the U.K.—obviously, given the size of trade—but I would note that the U.K. trade is mostly in services. We only trade one commodity—73% of our exports to the U.K. are just one commodity—and it really doesn't benefit from a trade agreement, I would argue.

    Finally, here is a note on our second-largest trading partner. Trade with China has been growing 12% a year. It has grown when we've had good relations with the country and when relations have been on the rocks. Again, that's overall growth.

    The issue is that day in, day out, Canadian businesses and Canadian consumers are making decisions that result in this trade increase. This results in facts on the ground that we have to manage. The government doesn't trade. Political parties don't trade. The private sector trades, and that trade is creating issues that have to be managed whether we want to deal with them or not. Not engaging China to manage this trade does nothing to help Canada, does nothing to advance our interests and will not get our hostages back sooner.

    We really have to face this. If you're thinking about countries that are growing, post-COVID—countries that are already on the rebound, you're talking about China, so this will become more of an issue.

     Again, look at our competitors. Australia and New Zealand are confronting China on political issues, yet they have just signed a new agreement with China. The EU is also confronting and fighting China on issues on a daily basis, yet it has just signed a trade agreement. The U.S., which is almost in a hot war with China, just stabbed us in the back—shot us in the back—when it signed its phase one trade agreement with China.

    You may remember that during the NAFTA negotiations, the Americans told us not to even dare think about negotiating with China, but what were they doing? They were negotiating an agreement that basically threw Canadian farmers under the bus. We're really going to have to think, then, about balancing our interests: the political and the economic with China, and the political and the economic interests with the United States.

    You know, this is not a new problem. The Diefenbaker government managed to protect Canadian interests by breaking a U.S. embargo on grain sales to China while at the same time standing shoulder to shoulder with the U.S. in fighting the Cold War. This is something our allies continue to do, but which we've forgotten to do.

    With that I'll end. Actually, for the first time ever in front of the committee I'm going to end early. I would note that I'm happy to talk about the TCS, about KXL or about buy America or any of the other issues that are current.

    Thank you very much.

    Thank you, Mr. Dade.

    We go on to Jan De Silva, president and chief executive officer of the Toronto Board of Trade.

    Welcome. It's nice to see you back at committee again.

     It's nice to see you. Thanks so much.

     Thank you to the committee for inviting us to speak on Canada’s international trade during and after COVID. As mentioned, I'm president and CEO of the Toronto Region Board of Trade. Joining me today is my colleague Leigh Smout, president of the World Trade Centre Toronto, the board’s trade services arm.

    Our focus in our discussion with you today is on the work we are doing to activate Canadian businesses to take advantage of the trade opportunities that have been created. The Toronto Region Board of Trade represents more than 13,500 businesses in the Toronto region, 75% of which are small and medium-sized enterprises.

    First, on behalf of our members, I want to thank you for your strong and responsive efforts during these incredibly challenging times. Your actions have kept hundreds of thousands of businesses afloat across the country.

     At the board, we focus on solutions to help businesses thrive and grow. Pre-COVID, our World Trade Centre had a five-year track record of proven programs that have helped more than 1,200 Canadian SMEs go global. Since the pandemic, we've pivoted existing programs and launched a new program to help businesses adapt to the conditions of COVID.

    I'm going to turn the mike over to Leigh to share some more.

    Thank you, Jan.

    As the board’s trade services arm, we focus on programs and supports that help businesses scale up and access growth markets. While we develop and launch these programs in Toronto, we also work with partner chambers and world trade centres and economic development agencies and so on across Canada to make sure that these programs are delivered nationally.

    We’ve created the award-winning trade accelerator program, which has helped more than 1,200 Canadian businesses become trade-ready, with proprietary export plans. Through more than 21 World Trade Centre-run business missions, we have connected hundreds of these companies to targeted customers in international markets, delivering great commercial results.

    When the pandemic struck, shuttering store fronts, halting international travel and disrupting supply chains, we like others moved our programs online. Doing so included taking our trade missions virtual. Just since that time, more than 200 businesses have participated in our virtual trade accelerator programs across Canada, and more than 120 have joined virtual missions.

    Moving our programs online also helped us to see that many of the SMEs we are trying to help are really, truly, lagging behind in their digital capabilities. This led us to create the recovery activation program to help businesses understand where and how to go digital. To date, more than 900 Ontario businesses have joined this program to learn how to digitize their front, middle and back offices. Let me share just a few examples of our program's impact.

    Signarama from Peterborough applauds the recovery activation program for providing the practical tools and mentorship needed to address the COVID challenges to their operations. Signifi Solutions from Mississauga credits our trade accelerator program for developing their export plan and activating international contact in growth markets for their cloud-enabled vending systems. Finally, there is Greenlid from Toronto, which joined 26 other companies for a clean-tech mission to Mexico and credited the program for the opportunity to meet with qualified buyers to develop the market for their compostable kitchen greenhouse.

    I'll go back to you, Jan.

     As a country, our businesses are in the position to benefit from the federal government's commitment to diversifying trade.

     I certainly agree with the comments by Mr. Dade about the need for engagement with target markets and solidifying our movement of goods capacity within the country. However, I want to echo the fact that your efforts have given us access to 1.5 billion potential customers, through 14 free trade agreements covering 51 countries. The imperative now is to get Canadian businesses to take action on those.

    At a time when access to local, in-person customers is hampered by the pandemic, digital access to global customers is not. Exporting will not be a panacea to the economic challenges our businesses have withstood, but it's certainly a mighty tool. We encourage the federal government to double down on trade and on equipping our businesses to export and to be digitally ready, for digital readiness is the new price of admission for business survival and trade during the pandemic and beyond.

    Companies need support to get through this challenging time, not only in the form of cash infusions, which are providing temporary relief, but also in the form of national access to the recovery activation and trade accelerator programs outlined by Leigh. These programs are making our businesses resilient through COVID, and positioning them to access growth markets, which will also position them to scale up in recovery.

    In closing, thank you again for your investments and partnerships with us. Together we're the helping hand that many businesses need in this difficult period.

    Thank you both very much.

    I want to welcome Rhonda Lenton from York University.

     It's great to see you.

     It's great to see you as well.

    Madam Chair, distinguished members, thank you for the opportunity to be here today to speak with you about the university sector in the context of international trade.

     I could speak with you about what universities are doing in terms of research, including research on the movement of goods, and what we're doing in terms of supporting innovation, start-ups and scale-up. However, I wanted to come to talk to you today about the importance of increasing supports for international education as a means of strengthening Canada's economy in a post-pandemic context.

    International education has grown significantly in the last 10 years, and it has the potential to be one of the top Canadian exports, if this level of growth continues. Currently, international students contribute more than $21 billion to the Canadian economy every year.

     To begin, I feel I should note that while I am here as a representative of York University, it's fair to say that the challenges and opportunities I will speak about are relevant for the broader Canadian university sector. As a point of reference, York University is consistently in the top three to five Canadian institutions for international education and is home to more than 8,500 of Canada’s 200,000-plus international undergraduate and graduate students.

    International education supports multiple goals and gaps in Canada’s foreign policy, including helping to fulfill the need for skilled immigration, counteracting the effects of an aging society on our economy and advancing diplomacy. In addition, international students are a crucial part of Canada’s research, innovation and entrepreneurship ecosystem. International graduate students in particular contribute to the backbone of our research enterprise.

    Also, of course, international graduates and researchers who decide to return to their home countries provide important business and research networks for the future and become lifelong ambassadors for Canada and Canadian values.

     In the face of the COVID-19 pandemic, Canadian universities have experienced significant declines in international student enrolment. After five years of experiencing, on average, 10% growth in international student enrolment, international enrolment was down 2% across Canada this year. Fifty-one Canadian universities experienced a decline in the number of international students as compared with last year. Of these, 26 saw a decline of more than 10% and 14 saw a decline of more than 20%.

    We recognize and appreciate the many ways in which the federal government has supported international education since the beginning of the pandemic, including making policy changes that allowed online study for international students, granting border exemptions that enabled students to come to Canada, providing comprehensive support packages and making significant investments in research funding.

    We also appreciate the federal government’s recognition of international education as an essential pillar of Canada’s long-term competitiveness, its commitment to supporting international education through the release of the 2019 international education strategy and its corresponding efforts to diversify the education sector, boost Canada’s innovation capacity, promote global ties and foster a vibrant Canadian economy.

    Despite these efforts, however, York and other Canadian universities continue to face significant recruitment and retention challenges. I would like to highlight four areas for attention.

     Regarding permit processing times, wait times have averaged as long as 35 to 44 weeks for key international markets, and visa processing continues to be the least competitive aspect of Canada’s international education brand.

    There's a need for a more sophisticated, data-driven market intelligence and a comprehensive marketing strategy to position Canada as a preferred destination for international students. Our marketing is currently being conducted piecemeal at the institutional, provincial and national levels, but we need a coordinated national approach to maximize impact and reach.

     We also have an overreliance on key markets. We currently rely heavily on the core international markets for the majority of our international recruitment. We must diversify our market development approach to ensure that Canada has a stronger presence in regions that are likely to become more competitive in the coming years, such as the ASEAN countries, Colombia, Senegal and Morocco.

     Finally, the disjointed and heavily bureaucratic system of governance for international education is an issue. Many different bodies manage the various elements of the international education process, including three federal ministries, 13 provincial and territorial ministries, and several institutions, among others. Our educational strategies and activities are not aligned, resulting in students receiving mixed messages.

    I have a request. In order to overcome these challenges and continue to attract and support international students, Canadian universities urgently need an agile, streamlined and coordinated approach to educational oversight in Canada.

    We would urge the federal government to create a national agency that acts as a sector-specific trade organization to align the mandates of the various federal ministries and agencies involved in international education; to coordinate Canada's international education approach; to ensure that visa processing is handled in an expeditious manner; to create talent-luring programs to enhance Canada’s competitive advantage and make it a more attractive destination for international students; to collect and distribute data-driven market intelligence; and to promote Canada as a leading destination for higher education.

    This last is a particularly urgent need, as we currently have a short window of opportunity before the new political administration in the U.S. amends its immigration policies to make America a more attractive destination for international students.

    The proposed agency needs also to develop relationships with priority markets. In particular, we would recommend the completion of a trade agreement with the ASEAN countries.

    One excellent model for the type of national body I have described is the Australian Trade and Investment Commission, the international trade promotion and investment attraction agency responsible for aligning Australia’s import, export, investment, tourism and education strategies. Its mandate includes generating market information and insights, promoting Australian capability and facilitating connections through its extensive global network.

    The goals of international education strategy and trade are interconnected. Both focus on attracting new talent to the country, boosting our innovation capacity, promoting global ties and fostering a vibrant Canadian economy.

    Increasing federal support for international education will help make Canada a more attractive destination for international students and provide Canadian universities with the foundation they need to remain competitive in the global economy throughout the pandemic recovery period and beyond.

    Thank you for the opportunity to appear before the committee today. I look forward to any questions you may have.

    Thank you very much, Ms. Lenton. We're pleased to have you with us.

    We'll go on to committee members.

    Mr. Hoback, take six minutes, please.

    Thank you, Chair. It's great to see everybody here in January in the new year 2021.

    I want to start off with Mr. Dade.

    Mr. Dade, last year, from talking to a lot of different people around the world, we were starting to see alliances formed from country to country regarding trade to make sure that they had supplies, whether PPE or core elements to go into some of their manufacturing. There was a rejigging and talk of rejigging to get rid of the reliance on one country as a sole supplier of certain componentry and things such as that.

    How do you see that happening now? Do you see this as a structural change, or is it just talk and a fad?

    You're absolutely right in the analysis of what's happening. We saw similar movements with past pandemics. There is, for instance—something we don't discuss—a North American pandemic agreement, yet the measures we've taken in the past in such agreements really, in the light of performance in the current pandemic, don't appear to have been too effective.

    Have we finally learned the lesson? Are we taking this seriously? Are we going to go back to the first round of agreements we did to try to make them work?

    On that note, I would caution the committee that our relations with the U.S. and ideas for a North American supply and production chain for critical pandemic response materials is in the first instance obvious and necessary, but in the second requires caution. Donald Trump wasn't the first president to threaten pandemic supplies to Canada. If you go back to Gerald Ford, you may remember that with swine flu, Gerald Ford threatened the same thing.

    As we look to these agreements, we need to make sure that we cover our backs, that we have a plan B. Economies such as Taiwan's and Korea's are good sources.

     That's a good point.

    In those conversations—and this goes on to our university students—what I'm hearing is that a lot of countries are relooking at their university and foreign student programs and saying, “Why are we training all of these foreign students, giving away our research and my research and development dollars—our tax dollars—and then letting them go home?” Why aren't we attracting these students and not only attracting them but trying to keep them here in Canada so that they develop that research, use that research and take it to commercialization here in Canada, instead of its going back to somewhere in Asia or somewhere else around the world?

    Do you think we need to rethink our university policies, Ms. Lenton, in regard to that and maybe tie them in more closely to our immigration policies to make sure that we don't go about training our competitors?

    I would suggest doing something nuanced rather than doing a wholesale re-evaluation. When students go back—

    I was speaking to Ms. Lenton, Mr. Dade.

    I'm sorry.

    That's okay. I was interested in hearing what answer you may have.

    I think it's incredibly important to always remember what a significant source for immigration our international students are. Our three-year work permit after graduation has been very popular. It's been an incredibly attractive feature of our higher education policy, and a great number of these students stay. These are students who have stronger English, students who have relevant university credentials and who often have work placement experience by the time they graduate, so they are a tremendous source.

    Even though there are students who go back home, those students act as our ambassadors and they help us establish networks of innovation and networks of research across the world. I think if we've learned anything from the pandemic, it's just exactly how small the world is and how important it is for us to build and establish those kinds of international collaborations through which we are working together on these major global issues.

    Fair enough. I think we require some study for sure and some relooking at that. I think we need to find a new way of doing this and of taking advantage of those types of things.

    Thank you, Mr. Hoback. I'm sorry but your six minutes is up. I was stretching it out for you to give you your maximum minutes there.

    We go now to Mr. Sarai.

    Thank you, Madam Chair.

    Thank you to all the speakers. It's always insightful to get insight on the ground and find out what's going on.

    My question is for Ms. Lenton from York. Students are not only important to the universities they attend but are also an important part of their community's economy. You've already mentioned specifically how international students affect the economy, but small and medium-sized businesses rely on students for their businesses or as employees, especially in smaller communities. They have most likely seen a dramatic impact in this area.

    What have been your university's experience and challenges with COVID-19 and how do you see the way you operate changing post-pandemic? Going forward, what might some of the implications for local economies be as a result of possibly not having as many students attending university in person, at least for the next little while?

    I want to say that it's been incredibly important that we transitioned all of our programming predominantly to online so that we have been able to actually ensure that our students are able to continue in their programs.

    The decision by students to attend university was hugely aided by the federal program to provide financial support for students. For a university like York, for example, where two-thirds of the students work part time to put themselves through school, the fact that the program was rolled out ended up increasing the number of students that we have. We're 4% over our contract targets, and this is incredibly important because our local businesses rely on the future talent that we are bringing forward—and in fact, we're developing programming very much in step with emerging needs. We're also developing new programming that's dealing with the fact that AI and automation are impacting about 50% of all jobs. We really have to be providing the new future talent that is needed.

    It would have been incredibly challenging if we had seen significant decline. It comes back again to the international students, because domestically, I think we've done quite well with what has been done by the federal government. It's finding ways to make sure that we continue to attract that international student base, because in some areas especially they are an incredibly important source of students and future employees.

    Further to that, we have a lot of international students here in Surrey and many go to Simon Fraser or other colleges, such as Kwantlen Polytech and other post-graduate programs out here, but my concern is that a lot of them seem to be getting into programs that perhaps are not really what they want to be doing or what they will be doing. I like your idea of getting some sort of an agency to guide them so that they make career choices or study in a field that will be needed in Canada and they will actually get jobs in their sector.

    What's the quickest way to do that, other than by having a very large overbody? What would be the best way to get these students to apply and be in programs that are actually needed for the workplace here? How can universities play that role?

     I want to say that we are already playing that role and, to some extent, we're playing that role because the students want additional information about what the emerging career paths are. They are very market savvy in terms of wanting to ensure not only that they get an education and get those transferable skills but also that they know how those are going to connect. A very important piece of that has been an expansion in the rollout of experiential education and work-integrated learning.

    This is one of the best ways to directly align the kinds of programs that students are choosing and the way those actually relate to their career interests. Supports, both provincially and federally, through work-integrated learning programs have been incredibly important in terms of our ability to actually expand that.

    Thank you.

    This is for the Toronto Region Board of Trade. You have seen a lot of changes in the last 10 months that have accelerated change in how businesses conduct business. Some that have come to the forefront, such as home deliveries by grocers and online shopping, have accelerated plans that were in place to change things in five years, down to changing them within months. They've had to cope with that.

    How have the board and its members been responding to this accelerated change resulting from the COVID pandemic?

     I'm going to let Leigh take that because Leigh runs our recovery activation program, which was developed in May for specifically the conditions you're discussing.

    In answer to the member's question, we've had a very interesting experience working with businesses of every size in Toronto. Small and medium-sized businesses have struggled in all the ways you can imagine. You mentioned streetside shopping and so on, and to that end, there have been a lot of programs put in place to help them build their e-commerce software and to build sites on which they can sell.

    The challenge is not just for those main street organizations, not just for the local professional services and the store that you can walk to. They're also for small manufacturers, some of the companies that are maybe not so visible. They've not sitting there on the main street, but they're often in neighbourhoods, industrial neighbourhoods and so on. They were losing supply chains, as Mr. Dade mentioned earlier. Supply chains are disrupted. They suddenly had a workforce, some of which had to be in-shop to manage their process while others were able to work from home, including their sales teams and so on. They need new sales programs because they're used to going to trade shows, and suddenly they can't go to trade shows to sell anymore. Any future sales program that was going to take them through a longer recovery was really disrupted.

    We've been able to—

    Thank you very much, Mr. Sarai.

    I try to keep everybody in line here as much as I can.

    Thank you very much for that.

    Mr. Savard-Tremblay.

    Thank you, Madam Chair.

    Thank you to all of the witnesses for their presentations.

    I am pleased to be with you on this first committee meeting of the year.

    I would like to ask you for a clarification, Ms. Lenton. In fact, a lot of questions will no doubt be directed to you since you have touched on the subject of education, which is a priority for all of us. This can be a very sensitive issue.

    You said that a business-like agency could oversee education. Could you please explain what you meant by “commercial-type agency”?

    What I want to say is that in some countries—and I gave Australia as the example—there is one agency that actually coordinates the national approach to education. Right now in Canada, we have three different federal ministries that in one way or another deal with higher education, and that means that sometimes students can get different messages about what's attractive about coming into the country but then the visa application takes many, many weeks.

    When you have one agency, a national agency, there's a greater opportunity to have alignment of the same message but also to think about how the education strategy aligns with strategies on things such as tourism, goods and services, and so forth. It's that concept of having one federal agency that would far better allow coordination not only at a federal level but also with all of the provincial ministries.

    I understand that one might wish there was a federal agency, but what would it mean in practice if there was a commercial-type agency?

    Of course, the challenges can be vast and education has a certain role to play when it comes to business issues. However, if a commercial-type agency were to oversee the education system, wouldn't this open a potentially dangerous door to the commodification of education?

     I think it's very important when we look at how this has been working in a country such as Australia. It's true that it is the international trade promotion and investment attraction agency, but the goal of the agency is to align Australia's import and export, investment, tourism and education strategies.

     I think this is part of the challenge of what we are facing in Canada—the alignment of those strategies—but even to have just one agency that would focus on bringing together all of the aspects about higher education that are now in three different federal ministries, just even that, if we were to have a more focused national strategy on higher education within one area, rather than having to coordinate different aspects of higher education in these three different ministries, even that would be a significant improvement. It would really position Canada more competitively compared with these other countries.

     Madam Chair, time permitting, I wouldn't mind responding as well.

    Prior to moving back to Toronto, I was running Ivey Business School's Asia campus out of Hong Kong. I can echo what Rhonda is saying. Our biggest competition for Canada was not the U.S. The U.S. was on a different level in terms of how Asian students were looking at university opportunities. Our competition was the U.K. and Australia.

    The focus Rhonda has outlined was very much the Australian model, very much the U.K. model, about how you brand Canadian universities as a destination for talent development, how you make sure that you have the visa processes simplified and aligned and how you think about opportunities for extended work visas or paths to citizenship.

    I would encourage us to use the U.K. and Australia as our competition. Those really are jurisdictions that offer much better harmonization of effort, of branding and of support for students coming in.

    Thank you very much, Ms. De Silva.

    We will go on to Mr. Blaikie.

    Thank you very much.

    One of the questions I'd like to probe, because I feel that this is a theme that has come up not just today but generally in my time here on the trade committee, is that it sounds to me like we're often hearing from different organizations that Canada has gotten out ahead in terms of its market access on paper, of its ability to actually exploit the opportunities that are in trade agreements, and that we stand out—against our western competitors anyway—in terms of our government having a real strategy for what we want to produce and how we want that to benefit Canadians.

    I know that's a very general topic, but I think Mr. Dade touched on it a bit in his own remarks, and I've heard it peppered in elsewhere. I wonder if folks just want to speak very directly to this question. We know that Canada is now party to many agreements. Some of you will know the NDP has had its critique of those agreements over the years, to put it mildly, but it does seem that Canada is way out ahead in terms of market access on paper than what we're able to exploit, in the best sense of that word.

    I wonder if any of our witnesses would like to speak to that theme.

    We'll start with Mr. Dade because it was in his opening remarks and then hear from Ms. De Silva after that.

     I thank the member for Elmwood—Transcona for that question.

    I would actually counter that, for Canada, on paper we do have a long list of agreements, but our ability to actually have agreements that work with business, that reduce the cost for businesses and the ability of businesses to get there, is not as good as those of our competitors. I would point to the work we did at Canada West—it's in the briefing material you have—on the problems we have with our export support services for business.

    The issue there, like trade agreements, is that we have so many, but they're separate and they're disparate. It's confusing for businesses, especially businesses that are trading in the U.S. and haven't traditionally used trade services, to figure out from this long list of services who does what—EDC, BDC, TCS. We have some real fundamental problems in terms of rationalization and organization here in Canada. The paper I just referenced looks at the American experience in bringing rationality and coherence to their disparate trade services to enhance the ability of American firms abroad.

    We lack a strategy, especially for Asia and for booming markets in Asia. We do not have a white paper on trade strategy. We do not have a white paper for Asia, for China. One of my colleagues on the panel was mentioning Australia. One of the reasons why Australia has had better performance is that they've managed to have government policy and have clear objectives set through white papers. There are problems with that, but I think this is a real problem, and on the overall strategy level, it has been a major issue. I do not think that Canada is performing as well as it can.

    Our absence from the Regional Comprehensive Economic Partnership is another indication of a problem. Our problem in getting into the trans-Pacific partnership, later the CPTPP, was an indication of another problem that did real damage to Canadian trade aspirations in Asia.

    Thank you.

    Ms. De Silva.

     My focus would be simply that I think we have incredible market access. As I alluded to, I spent 15 years living in Asia, running Canadian businesses there and then the Ivey Business School. When I was coming back into this role, the board of trade was doing a study on our SMEs and trade. I can tell you from living in Asia that the challenge is not market access. The challenge is that our companies need more support in terms of activating trade.

    I think Australia is an excellent example. They didn't have the U.S. next door. Their next door is Asia, and that's why they had no choice but to focus. Some of the smaller European counties are far more active in trade than we are, because they just simply didn't have big enough markets. They had to go global, and they have done it with a concerted strategy.

    The work we've done through Leigh's organization, the trade accelerator program, is an effort that's proven to be very successful to bring EDC, BDC, the trade commissioner service and the private sector to the table to help small and medium-sized enterprises get practical tools for exporting.

    While I fully acknowledge that there's more we can be doing within Canada to help companies scale and grow—for instance, the dreaded interprovincial trade barriers, which mean our small companies have to go global to scale instead of scaling in Canada—the reality is that the work the World Trade Centre is doing is proving to be effective. It's really helping businesses understand what it's going to take to trade, and then connecting them to the right growth markets for them, rather than having them simply pivoting south and thinking that the U.S. is where they should grow.

    Leigh, I don't know if you have anything you want to add to that.

    I would add that while we have all of these wonderful trade agreements in place, the ability for companies to understand them is challenging. To Mr. Dade's and Jan's points, we bring together groups, the groups that understand this, so that companies can get to it.

    I would also say that there are opportunities in things like our agreement with the EU—CETA. Everybody understands that we've dropped tariffs on maybe 98% or 99% of goods now. What they don't necessarily understand is the opportunity to bid on infrastructure projects of every level across all of those government contracts, which are all in one place on one website. I think a lot of education and a lot of training are still needed in order to get SMEs up to the level of some of our larger companies in terms of trade.

    Thank you very much.

    We'll go on to Mrs. Gray for five minutes.

    Thank you, Madam Chair, and thank you to all of the witnesses for being here today.

    I have a couple of questions for the Canada West Foundation. In your testimony, you mentioned that the current government is in talks right now to create a trade agreement with Indonesia, and I think the word you used for that was “suboptimal”. Can you go into some detail as to why you had those thoughts and what the rationale is?

     Sure.

    Very briefly, the one-on-one bilateral agreement sets up rules on things including origin, phytosanitary measures and other arrangements that work only for that market. As a business, if you have a supply and production chain that, say, goes into other countries—Japan, Singapore or Australia—and you want to use goods and services from a wider array of economies to make you more competitive as a business, you run into problems with having to retool things to work just with Indonesia. That creates yet another set of rules, and yet another set of bureaucracy and paperwork.

    The strategy that we're seeing other countries pursue is to move to regional agreements, whereby that cost of compliance is then spread out amongst several economies. We have a progressive trade agreement, which I know is important to the country, to this government and to many members of committee—I think all members of committee—and the ability to do that on an individual bilateral basis will also be more challenging. For all of these reasons, we have a very good high-level agreement. That agreement is attractive to countries because it has Japan, Canada and other markets. My point is that when you have the option to increase a large-scale multilateral progressive agreement, that's where you should be putting your resources. A bilateral agreement may give tariff benefits to one or two major companies, but for smaller businesses, SMEs that we want to grow, I would argue that expanding the trans-Pacific partnership agreement is the way to go.

    I forgot to note that the U.K. Parliament is now holding hearings about their joining the CPTPP, so that's the type of agreement we want to focus on.

    That's great. Thank you.

    That sort of leads into the next question I have. In your earlier testimony you mentioned focusing on trade agreements that we currently have, and I want to ask you about non-tariff barriers and how those fit in. We hear from a lot of different industries about how those are some of the barriers they're seeing. Those could be a number of different things, depending on what the sector is. I'm wondering if you could speak to those, if that ties in with your comments.

    Modern trade agreements have moved from reducing tariffs, which are already generally fairly low—the World Trade Organization rounds have done great work there—to focusing on those issues. I think the new trade agreements we see are working very diligently to address these issues. We just put out 90 pages on the Canada-China relationship, focused on non-tariff barrier issues in agriculture, so we and others are doing a lot of thinking about how to resolve those issues.

    I would note though, that a non-tariff barrier can be in the eye of the beholder. What is protecting health and safety or social concerns on one side can often be viewed as protectionist on the other. It's a thorny issue and has persisted and been a problem for that very reason, but there is progress being made. There is international best practice and, fortunately, work on that is being done in Canada.

    Thank you.

    On that same topic, if you were to break it down to maybe one, two or three very specific top issues or top ways that existing trade agreements could be focused on, what would that very concise list include?

    Please give us a brief answer, Mr. Dade.

    I'll give you one: On the procedures taken with the Americans in the U.S.-China phase one agreement, there are stricter requirements, yes or no, no fudging in terms of compliance with non-tariff barrier issues. We've done an exhaustive look at the U.S.-China phase one agreement. I would recommend skimming the part of the paper on that to get some insights there.

    Thank you, Mr. Dade.

    We go now to Mr. Sheehan.

     Thank you very much.

    Thank you very much for this very important information that we're receiving today. There's a lot for us to think about. It's very good testimony.

    I'm going to start with President Lenton. I really liked your approach in what you were saying about the international students. In 2019, we leapfrogged both England and China and moved into third as the top destination for international students, with America and Australia in one or two. It's quite amazing. Half of the 642,000 students choose Ontario, and I recognize the work that York does.

     In Sault Ste. Marie, we have Algoma University and Sault College, which have quite a few international students. I've been working with them, and I'm also working with other universities and colleges across northern Ontario as they adapt, because within the context of what's happening, we have provincial stay-at-home orders, etc. We're very hopeful that as of September we'll be able to get back to more students being here, but until such time, with the health plans the provinces require from international students, we have to ensure everyone is safe.

    How are you using IT to reach those students and keep them engaged to make sure that we still remain in the top three destinations, as we recently enjoyed in 2019?

    Thank you so much, Madam Chair.

    I'll answer the member in this way. I want to say, first of all, that each student's circumstances are quite unique, and within each country there are different kinds of issues that students face, even some going down to access to high-speed Internet. The universities have very quickly pivoted. Only a very small number of courses actually have an in-person component right now—in arts and in certain labs. We knew that we were going to have to ensure that our students—by far the majority—were able to continue their programs. We have faced a number of issues. In fact, at York, we even did an entire laptop rollout program whereby we purchased thousands of laptops and made those laptops available to students who didn't have access to the technology.

    There also have been various issues around content in different countries, and we have to negotiate all of that, but what was imperative was ensuring that we made sure students could continue in their programs and that we were going to pivot to a digital reality. Even when in-person comes back, we will still be maintaining huge components of that digital reality.

    We're also doing a great deal in the experiential education digital reality. We had all of our students in Lassonde engineering and the Schulich school of business, for example, partner with the City of Toronto and a ShopHERE program, where they work side-by-side with small and medium-sized businesses to help them convert their whole goods and services into a digital reality.

    These are just a couple of the examples of what we have been doing to ensure we can continue high-quality delivery, make that commitment to the talent we'll need for the future and negotiate the different issues that our students have, depending on the countries they're in, such as how lectures have to be offered to ensure the students have that in-person experience, even if it's a virtual in-person experience.

    Thank you.

    My next question is for the board of trade. Through the regional relief and recovery fund, we recently announced $50 million for the digital main street program, which I know you were a part of, along with some other folks in the Toronto area. It was done across Ontario.

     How is that working for your clients? Are there any kinds of cross-pollination opportunities with the new virtual trade missions to try to get our SMEs more involved in trade? I'll start with Mr. Smout first, and then hear from Ms. De Silva too.

    Thank you very much, Member Sheehan.

    We are very integrated with the digital main street program. As you mentioned, it was funded across the province. Ours is a smaller portion of it from a funding point of view, but it's probably as critically important. As I was speaking about earlier, it's not just about retail and main street. It's actually focusing on a lot of manufacturing and so on.

     As for what we found out from a lot of those companies, we start with a digital needs assessment and have more than 900 companies through that. The result has been that 70% of them are in either the explorer or the novice level of looking at digitizing their business and are very much in need of help. Only about 10% really would be considered leaders. That's against international benchmarks that we've worked up with partners, such as Foresters.

    We have been very focused on practical programming and bringing in those organizations and doing intensive training, working with experts in the private sector. For instance, companies can work with a lawyer from BLG about regulation, as opposed to the local one or the one they might have been able to use. There's a lot of support that we're providing there.

     Thank you very much.

    We go now to Mr. Savard-Tremblay for two and a half minutes.

    Thank you.

    My question is for you, Mr. Dade. You spoke to us earlier about the multiplication of agreements and the expansion of existing agreements. We know that, unfortunately, these negotiations often turn into vaudeville, where parliamentarians, provinces and stakeholders have no voice and must ultimately stamp existing agreements.

    I'm going to touch on another aspect, that of the rediscovery of local purchasing since the pandemic began, and the need to offer some form of support to our companies and give them a certain priority in the awarding of public contracts. Quebec, for example, in the agreement with Europe, fought to keep a share of public contracts that could be awarded with Canadian content. It could even require the assembly of certain vehicles to be done in Quebec.

    If we multiply the agreements, could this create problematic overlapping regulations? For example, in the case of rules of origin percentages and local content percentages, if a country signs multiple agreements, it could make these percentages difficult to combine.

    Thank you for your question.

    I will answer in English so that all committee members understand.

     Yes, that rationalization of different rules amongst agreements is done through the legal scrubs and through processes at Foreign Affairs and the trade commission. It's also the work of export promotion agencies and export support agencies to help work with businesses on nationalizing those and coming up with the best advantage. I look on it as a glass half full. There are opportunities to search for the best solution and the best set of rules that fit businesses and give more opportunities to businesses.

    I would quickly caution about the local buying requirements and rules. We are preparing to fight with the Americans over buy America. By international comparisons, I wouldn't say Canada has a bad reputation, but the data indicates that we are not one of the best performers in making government procurement available. We fall under the OECD average for per cent of government procurement made available under the World Trade Organization government procurement agreement. It took Canadian provinces 20 years—two decades—to sign on to the WTO government procurement agreement. None of this stands us in good stead internationally.

    I would point to Saskatchewan, though, as an example of a province that I think is going about this right. Priority Saskatchewan is working with businesses in Saskatchewan to give them business assistance and training, strengthening their ability to bid for contracts so that businesses in Saskatchewan can bid for local contracts and compete against firms from larger jurisdictions that are better resourced.

    The way to go about this is not through government regulation but through capacity building and strengthening of businesses to allow them to compete not only at home but also abroad.

    Thank you, Mr. Dade.

    Mr. Blaikie, you have two minutes.

    Just pursuing the earlier question, it seems to me that Canada stands out as being a country that does significantly less industrial planning domestically than a lot of our competitors do. We talk a lot about international trade, and I would say sometimes we even have a dogmatic emphasis on free trade agreements, yet we hear that Canadian business is often unready to exploit the touted advantages of the agreements we sign. To what extent is that a product of not really having an industrial strategy as a country?

    We also take a kind of laissez-faire approach to our domestic economy as an article of faith, but it seems to me not to work very well when we talk about what we want to accomplish on the international stage, how we want to support companies to succeed on the international stage, and how we want to translate that into value-added jobs in Canada. We've also seen, over the last 25 to 30 years, a loss of a lot of value-added production. We're out signing international trade agreements. There's been GDP growth, to be sure, and a lot of Canadian businesses have thrived, but we've lost a lot of value-added work. We don't have industrial strategies domestically. We're signing agreements that open up our markets as much as they provide us market access, yet we don't seem ready to seize those opportunities.

    Does anybody care to speak to the relationship between industrial planning at home and having a cohesive international trade agenda?

     I'm happy to provide a few points of context.

    As Leigh mentioned in his remarks, we work with major cities across Canada for our programming. We also, closer to home, work with the 34 municipalities that are the Toronto-Waterloo corridor. We view this as a large economic zone. If you think of economic zones in other parts of the world, if you look to Australia or look to markets in Asia, there's much more attention on what the conditions are for success for those economic zones. Look at the movement of goods strategy, employment land use, deployment of technology—all of those things require attention to support our local economy but also support the development of companies in supply chains, for example, that have the potential to not only service locally but also have the capacity to go global.

    Right now I would point to the very live emerging case study of Ford and GM signalling that southern Ontario has the potential to become a global EV, electric vehicle, centre. There is $1.8 billion of funding by Ford, matched by $600 million of government funding. The impact is not just those workers in the Ford factory in Oakville. It's all the supply chains in southern Ontario and all the talent coming out of our universities that will need to be equipped to work in that environment.

    I would simply say that it's not one or the other. I think things need to be happening in parallel. I would say that the markets that are more economically competitive than ours have found a way to get their arms around thinking of our economy not as a city or a place but as an integrated set of activities in a geography that needs to have competitiveness considerations to eliminate pain points.

     Thank you very much.

    I'm sorry, Mr. Blaikie, but we've run out of time.

    Mr. Aboultaif.

    Thank you, Chair.

    I know I have a short time, but I have a question for Mr. Dade. The Keystone pipeline was cancelled and Line 5 is scheduled to shut down by May. In the short time I have here, probably a couple of minutes, how do you read this overall, because when it comes to the oil and gas industry and the future of trade, a big chunk of all trade with the U.S. is in oil and gas.

    Thank you for that question. Before I dive in, for Mr. Blaikie, I'm happy to talk with you off-line about the issue you raised. It's a major subject among us pinheads, so I'm happy to talk to you in depth off-line about that.

    On Keystone, there are a couple of points. One is that the direction on Keystone was clear. We knew seven months ago what was going to happen, yet we chose not to listen and we chose not to pay attention. We sought out voices that told us what we wanted to hear, not what we needed to hear.

    The first thing for the wiser committee is thinking about how much the U.S. has changed from under Obama to under Trump. I don't think the analysts who are working on this have evolved with the U.S. Racial reconciliation as a central issue, even in economics and trade, with the new interior secretary in the States, yet of all the analysts you have coming in to talk to you, how many are prepared to talk about the new reality in the States?

    On Keystone, the Biden administration has signalled that the U.S. is serious about the transition away from fossil fuels. It's not quitting cold turkey; it's a gradual transition. With Keystone they've cut the rate of growth of imports of Canadian oil. They've done the same thing to themselves by cutting new leases on federal lands. It's to begin an orderly transition. They are very clear about this.

    We have to realize that if this is the direction the U.S. has gone, and we do not have votes in Congress to change them, we are going to have to adapt to the new opportunities that they're putting out with EVs, clean tech and carbon capture. We have to respond to the new opportunities and, at the same time, we have to make sure that this transition does not first hit the Canadian oil patch. As the U.S. slowly looks to cut, we have to make sure that the current movement of oil and goods to the U.S. remains the same. I do not believe that Americans are ready to quit oil cold turkey. They are ready to start transitioning, and we have to be prepared and adapt to that. This could mean decades of continued oil from the oil sands, but the days of rapid growth, booms and busts, I think, are over, and we have to adapt to this reality.

    GM announced today or yesterday that they're no longer going to be making gas vehicles. The reality is there. We have opportunities to profit from the shift in the U.S. We have to pivot and begin to look at that, while we maintain our current production to the U.S. as they move away.

    Thank you.

    Thank you very much, Mr. Aboultaif.

    Ms. Bendayan, you have one minute.

    Thank you, Madam Chair.

    I'll ask just one quick question before we wrap up this session. I will address it to Mr. Leigh Smout, who, I believe, was at the Toronto Global Forum, chairing a panel I was on. As chair, he wasn't able to intervene on the subject we were discussing.

    We had discussed the rise of protectionist tendencies in the world and our concern as Canadians for the protection of free trade. I wonder, Mr. Smout, if you would like to comment here today on where you see global trends moving and how you feel Canada can continue to push for open borders and free trade.

    Thank you so much Member Bendayan. It's very nice to see you again.

    I think it probably goes without saying that we are strong advocates of free trade, of opening borders, of allowing businesses to move products, of reducing non-tariff barriers and so on. I think the opportunity is to join with like-minded organizations to work together. It has to be all about collaboration.

     I was on a call today with the ICC, the International Chamber of Commerce out of the U.K., about green programming or trying to run with COP26. I think the opportunity for us in Canada is to engage with like-minded folks. Our market is far too small for us to think that protectionism is going to support us in any way. We have to be open to outside markets, and for that, we have to reduce protectionism here and we have to advocate for it to be reduced elsewhere.

     Thank you very much to you and all of our witnesses. It was very valuable information as we move forward into 2021. I wish you all luck.

    Committee members, we have to leave this call and tap into another ID number and so on for the committee business, so I'll ask everybody to leave and re-sign in with the other connection.

     Madam Chair, I would like to know one thing.

    Yes, Mr. Savard-Tremblay.

    Is there a pause in between or do we need to reconnect immediately?

    The concern is that it's going to take a few minutes. It's different from how we've done it before. I guess everybody could take a two-minute break, but get signed in first so that we're all going to be there.

    Thank you. See you all in a minute.

    [Proceedings continue in camera]