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.
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.
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.
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.
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 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 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.