CIIT Committee Report

SUPPLEMENTARY REPORT OF THE LIBERAL PARTY OF CANADA

Throughout the Committee’s study of small and medium-sized enterprises (SMEs), many witnesses provided important and informative testimony about their experiences in running a SME that is either exporting or planning to export in the foreseeable future. We also heard from expert witnesses, and industry representatives, who provided important context and background information about the current state of international trade in Canada, particularly with regard to SMEs.

Despite rhetoric from the current Government, a number of recent statistics and studies have shown a weakening trade position for Canada in the world.

The most recent Statistics Canada report on international merchandise trade, released in June 2015, showed that March and April had the two largest trade deficits in Canadian history, at $3.9 billion and $3.0 billion, respectively.

A Conference Board of Canada report from March 2015 concluded that Canada’s share of exports in Asia had fallen from 2% in 1993 to just 1% in 2013. That fall took Canada from being the 15^th largest exporter in the world to Asian markets down to 23^rd.

An important figure omitted from Committee’s final report is the large shift in the composition of Canadian goods for export in the last 20 years. In 1994, resource-based goods made up only 16% of total exports, with manufactured goods accounting for the remaining 84%. By 2014, this had shifted to resource-based goods and manufactured goods accounting for 36.2% and 63.8% respectively of the total value of Canada’s exports.

Another important statistic which was not included in the Committee’s report relates to the wages paid by Canadian manufacturing companies that export. According to a 2011 Statistics Canada study, wages paid by manufacturing companies that export were, on average, 14% higher than those paid by manufacturing companies which do not export.

Prior to the Committee’s focus on SMEs, a number of witnesses testified on the status of Canada’s Air Transport Agreements (ATAs) and Canada’s air transportation system more broadly.

A number of witnesses, including Ailish Campbell of the Canadian Council of Chief Executives and Stéphane Poirier of the Calgary International Airport, pointed to the growing wait times at security checkpoints at major international airports in Canada.

It was suggested that these increased wait times were a result of Canadian Air Transport Security Authority (CATSA) checkpoint capacity not keeping pace with the growth in the volume of air passenger traffic flowing through Canadian airports.

Daniel-Robert Gooch, from the Canadian Airports Council, presented to the Committee his organization’s submission to the Canada Transportation Act review. The report shows the Air Travellers Security Charge (ATSC), which is a fee levied on nearly all commercial air tickets purchased for flights originating in Canada, is not functioning as originally intended. While revenue from the ATSC is meant “to sustain and strengthen Canada’s air security system”, figures show that it is operating at a surplus and that this profit will increase over the next few operating years.

The Liberal Party of Canada believes strongly in the importance of international trade to Canadian workers and businesses and we acknowledge its positive impact on the broader Canadian economy.

However, Canada must face the facts of our gradually shrinking position in the global trade landscape and redouble exiting efforts in reaching new and emerging export markets, particularly in Asia and Africa.