Good afternoon, everyone.
We're continuing our study of the government's support for international trade of small and medium-sized businesses.
Today we have three presenters: Chamber of Commerce of Metropolitan Montreal, ventureLAB and Women's Enterprise Organizations of Canada.
We try to keep presentations to five minutes. Five minutes or less would be appreciated so that we can have good dialogue with the MPs. The same goes for the MPs, to keep it under five minutes.
Without further ado, perhaps we will start off with the Chamber of Commerce of Metropolitan Montreal and Guy Jobin.
Go ahead, sir. You have the floor.
Good afternoon, everyone. Thank you for having me here today.
My name is Guy Jobin, and I am the vice-president of Business Services with the Chamber of Commerce of Metropolitan Montreal.
The Chamber of Commerce of Metropolitan Montreal is the voice of the business community. Representing over 7,000 members, it offers activities and services to accelerate the development of SMEs here and abroad. It organizes over 200 activities a year, including some 40 international trade activities that are truly dedicated to SMEs to help them to penetrate international markets.
Among the services offered, we have the trade accelerator program, or TAP, which is also available across Canada. The program exists to help SMEs that export little, or nothing at all, to develop an export plan. We organize cohorts of up to 20 businesses. Over a period of six to eight weeks, people receive professional coaching and training on how to design their export plan, and then design it. At the end, after eight weeks, they will all have an export plan adapted to their business. We currently have four cohorts a year under this program, and we expect to have 12 in Quebec next year.
We also organize 20 training workshops on the ABCs of international trade. These are short three-hour training workshops designed to help entrepreneurs to understand certain subjects, including letters of credit and incoterms. These workshops are divided into small groups of 20 people maximum. So there is good interaction between trainers and participants.
We also offer 12 seminars on business opportunities. These seminars began about 18 years ago, when 80% to 83% of Quebec exports were focused on American markets. We thought that businesses should diversify, and we decided to present one market a month to entrepreneurs. I would say that these seminars operate on the same principle almost all the time. They last three hours. In the first two hours, we provide information on the market, business potential and how to do business in a market. Then, in the second part, Quebec businesses already on that market come to talk about their experience, successes and failures. It works very well and draws an average of 40 to 50 participants per session. We just had one on Japan. We really gave all the information about that country, that is, about business opportunities, and we then had a group of businesses with us. People like knowing a little more and having the perspective of a business that has had first-hand experience.
Lastly, we organize about a 10 trade missions a year to markets in the United States, and elsewhere as well. We have just returned from France, where we attended the Paris Fintech Forum with the Finance Montréal cluster. We also went to Singapore and are returning to Japan for the second time this year on the topic of artificial intelligence.
That's a summary of everything the Chamber of Commerce of Metropolitan Montreal does in international trade. We work extensively with partners such as Global Affairs Canada, Export and Development Canada, clusters and other organizations. We work together to offer these activities.
Good afternoon, ladies and gentlemen. Thank you for the invitation to speak with you today.
My name is Melissa Chee, and I am the president and CEO of ventureLAB. I have over 20 years of experience in large Canadian-founded multinationals, and have also scaled a technology company that shipped 50 million units to global customers, eventually exiting on the public exchange.
As for ventureLAB, it is a leading technology hub located in York Region, Canada's densest tech cluster, with more than 4,300 tech companies, including 400 global multinational firms.
At ventureLAB, we help companies build and scale their businesses to be globally competitive tech titans through our programming and advisory focused on four essential pillars to enterprises that are built to scale globally: capital, technology, customers and talent. We serve an area that is home to nearly 1.8 million residents, with our largest service area in York Region, which is the fastest-growing large municipality in Ontario.
Since 2011, we've helped more than 2,000 SMEs launch and scale, including more than 100 companies that have raised over $100 million through our capital investment program, a program funded with the support of NRC IRAP, which has enabled these companies to attract investment, create jobs and expand to global markets. Many of the companies we support have leveraged government programs, such as the trade commissioner service, IRAP and FedDev.
We operate a 50,000 square foot innovation hub in Markham, which is home to more than 45 tech companies and innovation partners, employing more than 300 people who come to work each day. Each year, we support 400 tech companies to scale their businesses to create jobs and attract investment and customers. We don't pick winners; the marketplace decides what is commercially viable and what is not. Our role is to ensure that innovative founders with market viable ideas have access to top-quality networks, advice and support to avoid predictable pitfalls and take the right decision at the right time as it relates to capital, technology, customer and talent acquisition.
To that end, l want to share two examples and ideas that are related to how Canadian SMEs can become globally competitive companies that are building transformative solutions.
First, the company ForaHealthyMe is creating virtual care solutions focused on improving patient access to care and remote health care delivery, and has leveraged government programs such as IRAP, FedDev and the Canadian technology accelerator in Philadelphia.
ForaHealthyMe has scaled to global markets, including the U.S., Germany, China and the Netherlands, and while ForaHealthyMe has partnered with community-based health care organizations locally in Ontario, broad adoption in Canada remains a challenge, as heavy regulations make it difficult for emerging Canadian-founded companies like this to get their products into local health care providers.
Another example is Hyperion Sensors. Hyperion has developed a groundbreaking industrial IoT sensing solution to monitor high-voltage power lines and equipment. The company's smart transformer solution uses fibre optics to provide utilities with real-time detection and monitoring of power grid equipment, which can result in decreased downtime for consumers and increased operational efficiencies for the utility.
As Hyperion was ramping up its product development, the company experienced challenges in gaining support from Canadian utilities, resulting in a partnership with U.S. energy giant Ameren and the University of Missouri, which provided a valuable first customer reference and product validation.
As a result of Hyperion's success in the U.S., the company was recently selected by Alectra Utilities, which is one of Canada's largest utilities, to provide its solution to monitor underground power cables.
This is a great example of how first adopters are critical to the success of Canadian SMEs that want to go global.
l'd like to offer two ideas that we believe can address some of these challenges.
The first is the adoption of made-in-Canada technologies and solutions by government organizations and agencies. We want the Government of Canada to be the first purchaser of innovative and globally competitive technologies and solutions created by qualified Canadian SMEs, to give these companies a strong commercialization edge and valuable first customer reference as they go global.
Quota requirements for qualified Canadian-made solutions in government organizations would give Canadian SMEs the ability to accelerate expansion to overseas markets, and increase the likelihood of raising capital, either through private equity sources or strategic partnerships. Therefore, Canadian SMEs would be capitalized to invest in local talent and infrastructure.
The second idea is to ensure that made-in-Canada solutions are considered for every procurement, such that globally focused, qualified Canadian companies are listed as suppliers and vendors of record.
Adopting made-in-Canada solutions will increase Canadian SMEs' success in global markets and create a sustainable pipeline of build-to-scale, globally competitive and focused enterprises right here in Canada.
l'd be happy to answer any of your questions and share any background about our work.
Thank you very much for your time.
Thank you so much, and thank you for this opportunity.
Women's Enterprise Organizations of Canada, often known as WEOC, is a national association of government-funded support organizations that work to help women to start and expand their businesses.
Currently we're all across Canada and each of our member organizations supports clients and advisory and training services. Here in the west we also provide loans. Those loans are not, sadly, available in the east. This is unfortunate because the efficacy of the combination of in-house lending and advisory services really has proven to be far more effective than one over the other.
Although increased globalization has made it easier for small business to enter the export arena, female business owners have been less likely to export. While women-owned enterprises represent almost 16% of all SMEs, they are a much smaller percentage of businesses that do export.
Women-owned businesses tend to be in the health, information, arts and retail sectors as opposed to the more exportable products and services coming out of manufacturing, technical services and wholesale trade.
Some of the non-propensity to export comes simply from the fact that many women do not see their products or services having export potential. They are not at the point where they're ready to take the risk to move forward or feel they have the competencies or skills to compete on a larger scale.
However, as we all know, women-owned SMEs are a potential growth for export, given the current disparity in numbers. More and more G7 and G20 countries are recognizing the importance of this under-resourced and under-serviced segment as more and more women are entering manufacturing, agri-food, food value-added in this arena, and that's becoming of much greater trade interest.
In the main, our member organizations work to ensure that client businesses are viable, robust, that the numbers make sense, and the enterprises, whether start-up, expansion or purchase, have a reasonable expectation of survival. Also, where loans are made, they ensure they have a good chance of being repaid, obviously.
For the past eight or nine years there has been an emphasis on building export capacity in our clients, where products or services have even the slightest expectation of exportability. This is due to government's increased interest in export and our own evolution as support organizations recognizing the importance of growth through extended markets, and partly also through the growing recognition of the supplier diversity in the U.S., and more recently in Canada, as good business practice and not just corporate social responsibility.
For those who don't know, supplier diversity is the recognized benefit to companies and government agencies of the diversification of the supply stream to include women and minorities and other under-served segments of the business community.
In the U.S., procurement departments have been mandated to find diverse suppliers, which has given rise to business fairs and trade opportunities specifically targeting supplier diversity. For women, the major business fair in June, put on by the Women's Business Enterprise National Council, known as the WBENC, boasts over 4,000 attendees each year, at least 15% of whom are procurement specialists from major corporations and government bodies. WEOC, in conjunction with BWIT, this year, are going to bring over 100 women from across Canada to WBENC to display their services and their products.
Along with our core services of advice and training, our biggest contribution to this is coaching and capacity building, along with accompaniment to trade missions, particularly important for new exporters, and connectivity to other women export communities and resources.
We encourage our clients to attend WBENC. They often scrape together the resources to be able to send our staff to help connect buyers and other stakeholders there. Often the advantages of these excursions, even more than making initial contacts to potentially larger markets, is to interact with those entrepreneurs in the U.S. who might be secondary or tertiary markets, to incrementally grow capacity until larger clients can be served.
Government does a great deal to support SMEs in export global opportunities for associations: CanExport, of course, the trade commissioner service, and in our case BWIT, the Business Women in International Trade, which is part of GAC. BWIT ensures that Canadian businesswomen can explore international opportunities. It works with trade commissioner services to develop trade missions, and partners with us in building capacity in individual women.
What could government do more of? We have static budgets, but increased mandates, so I would say funding or project dollars specifically for internal supports—for export, export advisers, hand-holders, coaches—as well as some mechanism by which we could get direct funding for trade mission preparation and accompaniment for our clients. This is really important in our role as trusted advisers. We've often sold the idea of a trade mission, and we need to be on hand to help develop that capacity, coach for success, broker with other resources and make important connections for our clients. We are the grassroots organizations that plant the seeds that grow the companies that increase our trade profile.
Thank you very much for your attention.
Absolutely. I'll answer your first two questions first.
Regarding ForaHealthyMe, I think for many years the founder and the company tried to navigate the Ontario-based health care system; however, because of different and pretty strict procurement rules in terms of the types of companies that the hospitals are allowed and able to work with, the overall infrastructure made it very difficult for companies. This is just one example.
This particular founder, who is representative of many of our companies, found more success in terms of going overseas, getting that first customer reference and then coming back home. He's now starting to see the validation. That's a bit of clarification of the story of ForaHealthyMe.
Regarding the second example, he tried for a number of years.... As Hyperion was trying to ramp up their product validation in Ontario, he talked to some of the local utilities, did demonstrations, had many conversations, explored partnerships. The first real interest came from a U.S.-based company, Ameren, the energy giant in Missouri. He's another example.
We chose those two examples to hopefully illustrate why we think we can do more here in Canada.
I'll use a good example of a Canadian success story, a global multinational, that I think is what we should be aspiring to do.
It's a company called ATI Technologies, which was a graphics company founded in Toronto in the late 1980s. It grew in scale to the size of and rivals Intel. They started off with a small office of 20 people in Markham, and they exited 25 years later. They were acquired by AMD, which is a global U.S. multinational.
The story there is that company continues to employ 2,500 people in Markham. That's a great economic impact for our country.
Those are the types of companies we would like to see and do more of.
To answer your third question around what could be done, from my own professional experience, both having been a founder and having scaled and exited, I think one of the things is that we have a massive opportunity with the trade agreements we have secured. We have a lot of very interesting, very compelling overseas investors and capital, and there's an opportunity to attract that capital into Canada.
However, with some of the trade agreements, I think there is an onus on protecting Canadian IP. When that capital comes into Canada, I think there should be some sort of—I don't know—mandate or an agreement that says if there's a foreign investor coming in to invest in a Canadian-based company, then you need to keep that company here: Grow it, and scale it and create jobs here.
That doesn't mean you don't want that company to be globally competitive. However, with that particular example that I gave you of ATI, which became AMD, 25% of their global workforce is still in Canada. They are a U.S. company now. They're publicly listed. They were acquired for $5.4 billion in 2006. That still means creating real technology in Canada.
Those are some solutions that I would like to offer.
Obviously, I would like to thank all the witnesses who came to testify today. It was very interesting.
My next question is for Mr. Jobin, who is in Montreal.
I was very impressed with your testimony. You really seem to be up on the different services and offer them yourself in your organization, whether it is TAP, business co-operatives, training on export plans or international markets or seminars. Frankly, Mr. Jobin, I want to congratulate you for your work.
We're all having trouble. Your members must surely be aware of the services our government offers. Are the services offered by our department to small businesses and to promote export providing enough help to small businesses to export more?
We know that the percentage of exports is currently only 12%. We would like to be able to increase it. As you know, we have just concluded 14 agreements with 51 countries, which give us the opportunity to do business with 1.5 billion clients, representing 62% of the global economy.
How can we help you more, Mr. Jobin?
We, as individual members and WEOC, our organization, have entered projects into the competition for dollars under the women's entrepreneurship strategy, which I'm sure you're aware of, into which the government has put $1.7 billion, I think, for the development of women's enterprises. We're very grateful for that.
Right across the country, each of our organizations, as well as WEOC as the umbrella organization, have developed project proposals that are in the arena of trade support, additional peer mentorship opportunities, training advisory services, increased lending, and a whole slew of interventions that we have found, in our own organizations in the 20 or 25 years that we've been around, have been very effective and which we have not had the full resources we needed to completely develop. We're in waiting mode to see what the outcomes of some of these projects are. They're highly competitive and oversubscribed, so we're hoping that our organizations, which have a proven track record and certainly a great deal of deep experience in this area, will have the opportunity to develop additional supports to actually meet that requirement to double the number of women in enterprises, because it is certainly an under-resourced sector.
I would also add that the work we're doing as WEOC, the umbrella organization, could be very helpful in this area as well, because whereas for many of the mainstream organizations, such as Community Futures and others, there is a national membership, a national association, to help provide the glue to pull them together to share best practices, etc., our women's enterprise organization is a volunteer organization with essentially no funding to do that.
I would ask that if any of you who have any influence at all in this are could put your names on a list and give us a boost in this area, we would be more than grateful because we are definitely the tools to make this happen.
Thank you so much for appearing here today.
A lot of the work we do here at the trade committee is about looking at the components of trade agreements, and trying to understand how that language is interpreted by your businesses and working people on the ground, in a lot of different sectors. You mentioned the federal strategy, which I think is a very important piece. We have to go back to the beginning of the negotiation of these deals, include you in the room and talk about the unique needs you have, in order to be able to service the very large percentage of SMEs—I think someone mentioned 98%—in Quebec. That is not unique to Quebec. It's across all of the provinces.
The opportunity in trade in the future is in SMEs. I'd like to ask you how you think the government could better share the details of trade agreements with you, to understand and interpret them, and to include you in that process from the beginning, so that your needs are being addressed when they're at the negotiating table. I would ask that of all three of you. Could you expand your thoughts on that?
Maybe we could start with Ms. Chee.
That's a great question. I know from the 2,000 SMEs we've worked with, part of it is that entrepreneurs by nature aren't going to go to a government website. Even in my own experience of scaling my company, I didn't know anything about the trade agreements.
There needs to be an in-person community to advocate and share. This is one of the things we do in ventureLAB, because we have this innovation hub. We have partners such as NRC IRAP, the province, the university and other ecosystem partners that allow our community of both resident and virtual entrepreneurs—we see over 500 a year—to get the information in real time. We often have federal MPs and provincial MLAs come in and do round tables with the companies themselves to share and exchange information.
In terms of the details themselves, I'll say, again, that from my own experience, as well as that of the hundreds of companies we have worked with, entrepreneurs are born global. They will follow the customers. If they have a true value proposition, they will go wherever the market is. If they have a competitive product, they will go where the market leads them.
In my case, with the first iteration of our product, we sold upwards of 50 million chips. Our customers were in Korea. They were global manufacturers, TV manufacturers. They were in Japan. They were in China. The trade aspect of whether we sold there versus in Canada was more that it would have been so much easier to build the product here as a commercialization effort and then as we expanded to those global markets, having no...whether those markets are the right ones to go after.... Entrepreneurs will go where the market demand for their products is.
Thank you, Kyle. I appreciate it.
York Region is a thriving community. As I said, it's a community of 1.2 million and growing. There are more than 600,000 jobs created. It is the jewel, I think, in the Ontario ecosystem as part of a larger innovation ecosystem. We have companies that are global multinationals, such as AMD, IBM's headquarters and Global Software Lab. We also have all of these thriving SMEs and start-ups.
One of the things that is quite unique to York Region, particularly centred around Markham, is that Markham is I think the most diverse city in Canada; it is I think over 78% foreign-born in terms of the community. In terms of what that allows us to do, it's the world at our feet inside our community. All of these diverse cultures and all of these diverse methods of thinking get layered into the businesses that are scaling in the community.
Another unique attribute, I think, in terms of the entrepreneurs who are growing and scaling is that they actually came from a lot of these global multinationals. They are very seasoned entrepreneurs who already have done this, so they have a much higher probability of success. One of the two I referenced actually did come out of ATI.
I think there's a real thriving kind of community, and government programs like the supercluster, FedDev and the other opportunities that we are a part of in our ecosystem allow us to cross the country to share our learning.
That wraps up questioning from the MPs, and that wraps up the presentations from witnesses. We had eight good meetings. We had over 30 witnesses from right across the country from different sectors and different groups and chambers of commerce. We had some very good witnesses and presentations.
Just to let the witnesses with us today know, when we finish our report—it will take us a few weeks to pull it together—your recommendations will be in there along with many others, including some of the actions we can push forward for the government to help small and medium-sized businesses across this country.
Thank you for joining us today. We will issue a report, in which you will find some good submissions from other organizations that presented to us.
Thank you. You did a great job.
The meeting is adjourned.