Good morning, everyone.
I call this meeting to order.
Welcome to meeting number 34 of the House of Commons Standing Committee on Industry and Technology. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Friday, April 8, 2022, the committee is meeting to study small and medium-sized enterprises and, more broadly, competitiveness.
Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022. For members in the room, I can see you if you wish to speak. For members participating in the meeting remotely, please use the “raise hand” function in the Zoom application.
For this very last meeting on our study on competitiveness in the context of small and medium-sized businesses, we're honoured and delighted to have John Pecman, who is a consultant, with us as an individual. Mr. Pecman, thanks for being here.
From the Canadian Intellectual Property Office, we have Konstantinos Georgaras, chief executive officer. Thank you for being here. We also have Iyana Goyette, deputy director of policy and legislation, and Mesmin Pierre, director general of the trademarks and industrial designs branch.
Also joining us is Yves Blanchet, research analyst, from the Institute for Research on Public Policy. He is participating in the meeting in person.
Thank you for being here, Mr. Blanchet.
From the Macdonald-Laurier Institute, we have Aaron Wudrick, director of the domestic policy program.
Thank you all for joining us today for the last meeting on this study.
We will now begin with opening remarks from Mr. Pecman for five minutes. The floor is yours, Mr. Pecman.
Thank you very much for the invitation to appear here today.
Before I begin, I think it's important to say that I'm here speaking in my personal capacity. My comments are my own and do not necessarily reflect the views of Fasken or its clients, where I currently serve as a senior business adviser, nor the Canadian Chamber of Commerce, where I was recently appointed a fellow to write an independent report on the future of competition policy.
During my career at the Competition Bureau, I received 34 and a half years of extensive hands-on experience in enforcing and administering the Competition Act. It was a privilege to serve as the commissioner of competition for a five-year term. Since leaving the bureau, I have primarily been advising business clients on the functioning of the Competition Act and the Competition Bureau.
Many of the comments today in my opening statement have been sourced from an article I wrote while commissioner, entitled “Unleash Canada's Competition Watchdog: Improving the effectiveness and ensuring the independence of Canada's Competition Bureau”. It was published in September 2018. I like to believe that this article has helped inspire some of the new competition policy reformers in Canada. The thesis of my article was that the design and administration of competition policy are due for a facelift.
My understanding is that the current hearing is studying small and medium enterprises, or SMEs. A properly designed and implemented competition policy will enable this sector to more fully participate in the economy and stimulate economic growth, innovation and job creation.
Barriers, either from excessive regulation or from anti-competitive conduct in markets, harm competition and Canada's international competitiveness. The Competition Bureau, through its enforcement and advocacy remits under the Competition Act, protects and promotes a competitive and innovative marketplace and, by extension, all SMEs in Canada. A strong competition law can protect SMEs by deterring dominant companies from adopting abusive or other anti-competitive practices. SMEs also benefit from the low cost of inputs that occur in a healthy competitive economy.
This June, the government implemented amendments to the Competition Act to address concerns about market concentration, among others, while maintaining the fundamental principles underlying the act. Although not perfect, and done without consultation, these amendments provide a good start to the government's reform of competition policy.
The current commissioner of competition, Matthew Boswell, has highlighted the need for a competitive domestic economy to increase Canada's productivity and international competitiveness. I wholeheartedly agree with this proposition, and some of the key additional competition reforms that I am advocating for are as follows.
The first is the creation of an independent competitiveness council in Canada. It would advocate in favour of more competition and less regulation in markets to improve Canadian competitiveness, as recommended by the competition policy review panel in 2008.
Second is to safeguard the Competition Bureau resources and provide the bureau with a stronger voice to advocate competition by making it a truly independent law enforcement agency, similar to the Office of the Privacy Commissioner.
Third is to strengthen merger control by reforming the efficiencies exemption and by adding other pro-competitive factors to be considered in assessing the prevention or lessening of competition. These factors could include new economic activity in Canada generated from a merger, such as employment, investment, dynamic efficiencies, research and development, and exports from Canada.
Fourth is to limit further expansion of the abuse of dominance provisions at this time to test the effectiveness of recent amendments. We should continue to monitor legislation that is being proposed abroad and is aimed at dominant digital platforms in the EU, the U.S. and elsewhere. Many of these reforms introduce regulations to tame alleged market power, which may have unintended consequences, such as dampening innovation and investment in the digital sector. Digital technologies and markets evolve rapidly, requiring the Competition Bureau to make and take immediate remedial action to minimize competitive harm. I believe the bureau should be given new tools, such as streamlined injunction powers that would allow it to investigate and dispose of cases in a more expeditious manner within the existing legislative framework.
Lastly, sectoral market studies are the primary method the Competition Bureau advocates for governments and regulators to achieve greater competition. An example is identifying reforms to sectors with unnecessary restrictions on competition. There are currently no express powers in the Competition Act that allow the bureau to undertake market studies or that provide it with formal powers to compel production of information for these studies. However, as they can be burdensome to businesses, market study powers must be reserved for appropriate cases and incorporate procedural safeguards.
I look forward to taking your questions. Thank you very much.
Thank you very much for the invitation to speak with you today about SMEs.
My name is Konstantinos Georgaras. I am the interim chief executive officer of the Canadian Intellectual Property Office, a special operating agency of Innovation, Science and Economic Development Canada.
I understand that the committee is particularly interested in looking at trademark activities in Canada. I would be pleased to speak to that.
I'm also joined by the director general for the trademark and industrial designs branch, Mesmin Pierre, as well as Iyana Goyette, the policy director.
I would like to start by providing a brief overview of the clients and Canadians we serve, followed by the specific trends in trademarks and what we have done to improve services and respond to surging demand.
Overall, we receive over 112,000 applications for IP annually. Those are for patents, trademarks and industrial designs. In 2020, we received over 34,000 patent applications, almost 70,000 trademark applications and over 7,000 industrial design applications. That's the annual inflow.
Because IP lasts for several years—it's up to 20 years for patents, and trademarks are renewable indefinitely—there are over 800,000 IP rights in force in Canada. The impact is vast, and we are honoured to serve these companies and individuals.
For patents, this represents innovators who are bringing science, technology and research and development to the market to serve Canadians. For trademarks, this represents companies working to establish their brand, goodwill, product recognition and consumer confidence. IP rights provide the tools to help these creative entities get to the market with confidence. IP rights also help them monetize, collateralize, protect, trade and license their ideas.
I would like to note that this is very much an international space. Innovation is global and IP, likewise, is global. With that, over 70% of all of our IP applications come from outside of Canada, mostly from the U.S., Germany, China, the U.K. and France. Likewise, many Canadians file for IP outside of Canada, in the U.S., China, Europe and Mexico.
To better understand the our clients' challenges and opportunities, we had the opportunity to participate with Statistics Canada on the IP awareness and use survey that was released just last year. That survey interviewed 16,000 companies. I would like to highlight a couple of positive outcomes, as well as some challenges.
We found that 58% of companies were familiar with IP, and that 18% held at least one form of IP....
I'm sorry. Do we have a technology issue?
As I was mentioning, this survey of 16,000 Canadian companies revealed that 58% of companies were familiar with IP, and 18% held at least one form of IP. Similar to other surveys, we confirmed that IP ownership is more present in high-growth firms and those that innovate and export.
What is particularly interesting about this survey is that we asked companies directly how their use of IP contributed to their business. Almost 60% of all firms recognized at least one contribution of IP. This included increased business value, increased revenue, expanded markets, increased business collaboration and increased employment. These are the companies themselves telling us that the use of IP has led to direct benefits.
We also asked what challenges companies had in terms of seeking IP. While 86% of respondents did not experience difficulties in filing, 14% did indicate some challenges, two in particular. One was with regard to complexity of the process and the other was with regard to the time to acquire IP rights. We're conducting a deeper dive into the survey results and developing approaches to address these two areas specifically, as we've been doing for a number of years.
With regard to complexity, seeking IP rights, of course, is a complex process, but we are using the results of this survey to identify differences across regions, technology areas and with respect to under-represented groups. We're using this to help target our IP awareness programs that provide information to help people understand and use IP. We work in close collaboration with many partners across Canada.
Specifically with regard to the challenge of time to acquire IP, as the overall demand for IP and pace of innovation continues to rise, the timely delivery of quality IP rights is critical for success. Specifically in the area of trademarks, a number of factors have converged to bolster this demand. First of all, there's been continuous growth for trademarks over the past decade. In 2012 there were approximately 50,000 trademark applications. I mentioned that in 2020 it was up to 70,000. In fact, during the pandemic that has increased even more. In the last fiscal year, we had 80,000 trademark applications. That represents about a 60% growth in the last decade.
Another very important factor here is that Canada joined an international treaty for trademarks called the Madrid protocol, which allows companies to file in many countries simultaneously. This has led to a robust international demand. In fact, in 2020, which was the first full year Canada was a member of this international treaty, the Madrid protocol, fully 27% of our applications came through that treaty. Canada ranked fourth in the world for Madrid applications.
In terms of surging demand, we know that trademarks historically have been linked to GDP, but we found that during the pandemic, when we early on expected that there would be a reduction in trademark applications, we in fact witnessed a difference and a delinking of that trend over time. Applications remained resilient in Canada despite the economic slowdown early on in the pandemic.
The final point that is leading to a surge in demand is the change in the composition of applications. This was highlighted during the pandemic. We have done work with the World Intellectual Property Organization, the United Nations body responsible for IP. We released a report a few weeks ago that tried to identify why IP continued to surge during the pandemic. What it found was that such areas as online retail, cloud computing and consumer electronics surged. That speaks to how the economy adjusted during the pandemic. Likewise, there was a noticeable increase in pharmaceuticals and medical supplies. That demand spiked very early on in the pandemic.
What that has led to in Canada is that for the first time in recent memory, we are facing a growing inventory and turnaround time for our trademarks.
In response, we have engaged with many IP experts in the community, both domestically and internationally, on a way forward, and in early 2021 we launched a recovery plan aimed at reducing backlogs and turnaround times in trademark examination. Our plan consisted of a series of measures to improve timelines, including increasing capacity and adopting new technologies, and we launched a new service in April of this year consisting of automated pre-assessment of trademark applications.
With that, just over the last few months, we've noticed a considerable change in our ability to tackle the backlog. If we had not taken action last year, our backlog would have surpassed 187,000 applications, but what we found with our work was that our backlog peaked at 160,000 in July and last month there was a decrease, so we're on a good path currently. We have a long way to go in terms of addressing our backlog and getting back to pre-surge timelines and inventory.
I'll stop there, Chair. Thank you.
Thank you, Mr. Chair, and good morning. Thank you for the invitation.
I am here to talk about a public policy device that has existed in Quebec for a number of years and that I have been researching. It is called mutual training organizations. Mutual training organizations are used to support small and medium-sized businesses in the development of their employees' skills and to address the labour shortage. I published my research with the help of the Institute for Public Policy Research, which is represented here.
As you know, the labour shortage is affecting every industry in Canada. It is across Canada, affecting every business, regardless of size, and it is going to be with us for a long time, given the current demographic context.
Workforce training is one way to support businesses and address this labour shortage because it not only helps attract labour to small and medium-sized businesses, but also helps retain it. It also helps make these small and medium-sized businesses more efficient and more productive. So businesses can produce more, and do so with fewer employees in some cases. That is what usually happens when those skills are developed. Studies have shown that for years.
However, there is a big downside for small and medium-sized businesses. Relatively speaking, they invest much less in training than large companies because they don't have the revenue, knowledge or staff to develop training in their workplace. This is why it is important to have mechanisms to support them, such as the training mutuals that exist in Quebec. This is why they were set up.
In Quebec, by virtue of a law passed in the 1990s, a number of institutions have contributed to the establishment of an entire institutional system of workforce training. So that system has been in place in Quebec for 25 years. Institutions are contributing in several sectors of activity to promote workforce and skills development and, now, to address the labour shortage.
This system includes training mutuals, which were created in the 2000s and have been enshrined in Quebec legislation since 2008. Therefore, they are a permanent feature. Their objective is to identify and address the workforce challenges faced by SMEs. Currently, in 2022, businesses are facing skills deficits and a labour shortage. With the pandemic we have experienced and the current demographics, these issues will continue.
In a nutshell, here is how training mutuals work. First, there has to be interest among small and medium-sized businesses. Second, mutuals are generally broken down by economic sector. In other words, small and medium-sized businesses in a given sector of activity must first express their interest in a training mutual to Quebec departments and institutions, such as the ministère du Travail, de l'Emploi et de la Solidarité sociale—the Quebec department of labour, employment and social solidarity. If their interest is sufficient, funding is provided to start a training mutual in their sector of activity.
A director is then hired for this new training mutual. That director is responsible for meeting with the leaders of the small and medium-sized businesses in the targeted industry to encourage their participation, to determine their training needs, and to find programs that already exist or create new ones to meet those needs. They must also mobilize industry resources, which may come from a variety of organizations, so that training can be delivered at the lowest possible cost.
The idea is to get companies to participate in training. The principle of mutual training organizations is to enable a number of small and medium-sized businesses to combine their resources to provide each other with training at a lower cost, to lower the costs of training through their collaboration.
That is the effect of a mutual, as seen in mutual insurance companies. Coming together lowers training costs, which are often the biggest barrier preventing small and medium-sized businesses from developing the skills of their staff.
Therefore, training mutuals are a parapublic intermediary between the small and medium-sized businesses that want training and the training programs that exists or that they want to develop. They promote access to training, especially for employees who are in great need of it, such as those with little education. This training helps them find a job or get promoted within their company. It is a way to promote integration into small and medium-sized businesses and job retention.
So mutuals pool the resources of small and medium-sized businesses—whether it is their knowledge, funding, material or organizational resources, or training rooms—to lower the costs of training. The goal is to persuade these companies to participate in training activities.
I carried out a study on the trajectory of four training mutuals in Quebec from 2008 to 2017 to find out how this was going. One was in the construction industry, one was in graphic communications, one was focused on the needs of attendants in senior residences, and one was addressing the needs of child care providers working with children aged five and under. From this study, I learned that it takes winning conditions for training mutuals to succeed. Not all of them achieve the long-term goal of becoming financially self-sufficient. Their success is tied to efficiency factors.
First, mutuals must identify training needs well because they cannot meet them all. They must target them well and focus on the most important or relevant ones.
Next, mutuals must clearly define what they are trying to achieve. This needs to be very well organized and thought out so that they can focus and avoid spreading themselves too thin by trying to do everything in one business area, which would be impossible.
In addition, they must avoid competition with other organizations. There are a variety of private sector or educational organizations that provide training in multiple industries. The idea is not to compete with them, but rather to work with them in a complementary way. That enables mutual training organizations to find their rightful place, as each has its place.
Good morning, and thank you very much to the committee for the invitation to appear on behalf of the Macdonald-Laurier Institute.
For those of you who aren't familiar with us, we're a public policy think tank based in Ottawa. I think we're the only full-service public policy think tank based in the nation's capital.
We were of course very pleased to see this committee seized with issues of such great economic importance. It's a very broad topic, so it's pick and choose what you want to talk about in your five minutes. I'm going to provide a bit of a perspective on SMEs for the committee to chew on that some might find a little bit unorthodox, but given that part of the study involves productivity, I think it's an important consideration.
We can probably start with the fact that this study focuses specifically on SMEs rather than businesses generally. We have to ask the question: Why is this? I think we all know the answer, and as practising politicians you will be acutely aware that small and medium-sized businesses carry a special and positive reputational weight in the world of politics. They are personal and they are local. The contrast between the relatable owner of a small business who lives in your community—and no doubt many of you know many of these individuals personally—and what we might call distant, faceless corporations could not be more stark. The latter half of this equation, I would suggest, is very problematic when shaping policy. If small and medium-sized businesses have a halo upon them, larger businesses bear the burden of being the villains in this theatre.
This leads, unfortunately, to policies that can tilt the playing field toward the little guy against the big guy. Now, why is this a problem? I would suggest it's a problem because most of the evidence suggests that if we're actually concerned about things like productivity, higher wages, equal gender opportunity or even unionization rates, the reality is larger businesses severely outperform smaller businesses by a considerable margin.
Just to take one example, wages, there was a recent study that shows that large firms, which are defined as firms with more than 500 employees, tend to pay workers on average 44% more than small firms. Productivity, of course, is another issue of importance to this study. In many industries larger businesses can leverage scale, research and development, network effects and better global competition by virtue of their size. That is to say, there are some significant advantages to larger businesses that small and medium-sized businesses simply do not have.
The other challenge with small businesses that's difficult to accept is the reality that the vast majority of them either do not succeed beyond a few years or grow to a very limited size. Now, there's of course nothing wrong with this. Not every business can succeed and not all of them need to become Goliaths; but it does illustrate the difficulty of putting an overemphasis on SMEs if we're looking to them to be a major driver of productivity growth.
Another issue that this study focuses on is competition. I think John Pecman highlighted a lot of this with his remarks, and I agree with much of what he said. I think anti-competitive conduct is rightly something that policy-makers need to be seized with. I think there's a consensus across the political spectrum that anti-competitive conduct and behaviour is bad for Canadians, but note that this is actually a size-neutral statement. It is not that being big makes you anti-competitive; it is the behaviour. Both large and small businesses can act in anti-competitive ways. I think some competition policy needs to remain focused on behaviour rather than on size specifically, and in fact I think this is a useful way to frame policy-making around business generally. Rather than large versus small, I think a more useful framing might actually be old versus new, since there's quite a lot of evidence that newer businesses tend to be more dynamic, more growth-oriented and more innovative than older ones, so when shaping policy, this might be a useful way to look at it.
I know I have a short amount of time. The last thing I'll mention is a study that Macdonald-Laurier participated in, a ranking called the subnational innovation competitiveness index, which came out in June of this year. This study ranked all 92 jurisdictions in Canada, the United States and Mexico on the innovativeness of their economies. There's lots of good news in this for Canada. We rank very highly in terms of our skilled workforce and our immigration system. We have a highly educated population and good linguistic ability.
Some of the downsides, though, that probably deserve some focus from policy-makers include the number of patents. Patents are much lower in number in Canadian jurisdictions than in the United States. Gross value added per worker in manufacturing is lower here. Perhaps most alarming is the economy-wide business birth rate. Entrepreneurship has a weak pulse in Canada, according to this survey, so it's something we should certainly be concerned with.
Thank you to all the witnesses for being here.
My first questions are for Mr. Wudrick.
With your background, I'm sure you're well aware of the different red tape reduction measures in place at the federal level. Through reporting obligations via the Red Tape Reduction Act, the 2021 annual report showed that the regulatory burden on businesses increased in 2020 from 2019 by 4,606 new regulations.
Being a former small business owner, I know that trying to keep up with new regulations and establishing compliance plans can be incredibly costly and time-consuming. Do you believe that increasing the regulatory burden makes it more difficult for small and medium-sized businesses to operate and makes them less competitive, compared to other jurisdictions?
In another article you wrote, you referenced what Canadians are looking for from their government. You said that they “prefer that whatever governments are put in charge of, they fulfill those responsibilities reliably and competently”. You also said, “It really should not be controversial to suggest that any organization that is not doing a very good job fulfilling its current duties should probably pause before adding to its to-do list.”
In my constituency office of Kelowna—Lake Country, I've been inundated, as I'm sure many MPs have, with constituents reaching out due to delays at virtually every federal department office. It is creating a lot of burden, especially for small and medium-sized businesses, whether they are trying to resolve CRA issues or worker visas or whether's it's employees who need a passport renewal to go to a conference. There are all kinds of different scenarios that affect small and medium-sized businesses.
If the government is looking to add to some of their mandates and their work plans, whether it be to the CRTC or health programs or many other things, is now the time to be doing this, while departments are already not providing some of the basic services that Canadians expect from their tax dollars?
Thank you for the question.
In my opening statement, I commended the government for taking some baby steps towards strengthening competition laws. I firmly believe more needs to be done, particularly given that its competition laws are a huge macroeconomic policy lever to deal with increased productivity and competitiveness, and that lever has been neglected, in my view,.
There are areas of the legislation that need an upgrade to deal with the digital economy. In my view, our merger controls review process has some antiquated provisions dealing with efficiencies that need to be looked at and revised in order for there to be more robust competition in Canada.
With regard to market study powers, the fact that the bureau doesn't have them means that the bureau doesn't have an in-depth study of industry sectors where there may be huge competition issues and where it could make recommendations to remove regulations that could be problematic or give other advice to governments to make them much more competitive. These tools are used in other jurisdictions, whether it is in the EU, the U.S. or Australia, and they have informed legislative change. In Canada, unfortunately, market studies that advocate are done on a voluntary basis. The bureau had some resource constraints that take away from its enforcement function. I think more attention needs to be placed on that.
Last, a competitiveness council, as I suggested, would ensure that there is some oversight in making sure that Canada has regulations and policies that promote productivity and competitiveness, very much like the United States has this Competition Council that reports directly to the White House and to the President. Something akin to that, I think, would be helpful to Canada. In the context of small businesses, clearly more competitive markets and a better marketplace referee to call fouls more efficiently will help the small and medium-sized businesses as well.
The federal government has already introduced the Canada training benefit for Canadian workers. There is also the Future Skills Centre, whose goal is to promote training. It works with the federal government through the Department of Employment and Social Development.
These organizations could do that promotion with the provinces, to set up institutions across Canada, somewhat along the lines of the Quebec model, but without the other provinces having to repatriate powers as Quebec has done. The federal government could give the rest of Canada the powers to set up a model modelled on the program we have in Quebec, which each province could adapt in its own way.
This model must be developed in conjunction with businesses and unions across the territory or country. They must take responsibility and become leaders. The federal government can help them and provide the funding to help them get started, but then it's up to businesses to show interest.
Both businesses and the workforce will come out ahead. It is a win-win situation. If the federal government launches a national strategy, the initiative will benefit everyone.
Thank you to all the witnesses.
I'm going to start with you, Mr. Pecman. With regard to continuing discussions with the United States, what is your overall assessment? I think that in many respects Canadian consumers are treated like a colony by many of the large manufacturers and corporations.
I'll give you a good example: Toyota. During their abysmal performance on the recall for deficient brake pedals, we broke the story that it was actually software. They insisted that it was a physical thing and insisted that it was the mat. That led to accidents and serious problems.
In the U.S., their citizens actually got better service. They got their vehicles picked up if they wanted that and, for example, in the state of California, they got replacement vehicles and a massive investment for R and D as part of the settlement. Over here, we didn't get any of those things.
Can you give us some insight? When competition issues related to public safety and other matters are identified, do you think Canadians get treated the same way as our American counterparts? This applies especially to the automotive areas. We're integrated, in that we actually have the same emission standards and the same standards for quality and for roads as well. It's interesting that when it comes to warranties, recalls and so forth, we're not treated the same.
Thank you for that question, Mr. Masse.
In terms of the treatment of consumers in Canada vis-à-vis the U.S., obviously rules and regulations in the U.S. are different from those in Canada, particularly in dealing with consumer protection and antitrust situations. The antitrust laws in the U.S. are very severe, with severe penalties, including very active private class action mechanisms that allow companies and consumers to advocate before the courts and obtain damages for conduct by companies.
In Canada, it's nascent in some of the areas. Class action is available to consumers when you're dealing with cartel criminal conduct, such as price-fixing and bid rigging. On the other types of conduct, such as abuse of dominance and other market-type restraints, the Competition Tribunal is allowing access, but there are no damages provisions, so that kind of mutes the effectiveness of that tribunal. It does help free up some of the conduct to make it more competitive, but the consumer redress piece is left behind.
I think you really do have to look at the jurisdiction's consumer redress features. There I think we're behind the U.S. In terms of our legislation for competition and consumer protection, we're close. Again, we need to make some tweaks to align ourselves with the U.S. on the merger side, for example. I mentioned the efficiencies process.
In terms of consumer protection, with the recent amendments, the potential administrative monetary penalties that can be imposed on companies have increased. Again, that will just draw their attention. I don't think companies intentionally intend to discriminate between the two markets, but their attention is focused on where their costs are higher and where there's more liability. As Canada is a smaller market, I don't think it draws their immediate attention. Large markets like the U.S. and Europe are where they pay attention, and they'll get to Canada, and that's what we've seen often when you're dealing with international issues.
Again, it seems to be a very narrow, sectoral issue that I would commend to the Competition Bureau to study through a market study, followed by recommendations, as opposed to a more high-level approach.
We've dealt with credit card issues in the past at the bureau. As you may know, an order was imposed on Interac for debit cards and debit fees which imposed very low rates, and that was a result of the good work that was done by the Competition Bureau. If there is some anti-competitive behaviour behind those high rates, again, that would be something the bureau would take on with its enforcement mandate.
I would suggest that it might be worthy of a market study, and recommendations could be given to the government to change rules, with Finance Canada or whomever, to allow for a more competitive market, which could perhaps lower fees for small businesses.
It's not just the domestic issue. Unfortunately, credit card rates, fees, are high for merchants around the world, but I'm sure that a study could help with some ideas, because it's not clear what the answer is. Following one of our cases dealing with credit card rates at the Competition Tribunal, they said that maybe this is an area for regulation, because market forces just don't work properly.
Thank you very much for the question.
Why is the system so complex? What we are providing here are intellectual property rights, and these rights define the boundaries of an invention, an idea. It also gives the applicants a tool that they could then use to trade with, to license and to protect in the marketplace. There are lots of complex issues around having that IP right well defined, and it must adhere to domestic laws as well as treaties that we're part of. As a legal instrument, it is complex.
As I mentioned, what we are doing is providing very focused awareness and education material to applicants, as well as to potential applicants, to help them understand the value of IP and whether or not they need it, and also how to navigate the system. Our job here is to provide that information to help SMEs go through the process.
Larger companies, of course, are well versed in IP, and complexity is less of an issue.