Thank you very much, Madam Speaker,
I am pleased to be part of this debate on CETA. Having listened to the previous speaker, the member for Renfrew—Nipissing—Pembroke, I was disappointed, but not surprised, at the partisan and inaccurate sound bites with respect to the current government. However, I want to thank her for having given credit to members of the previous government and their work to build this very important trade agreement, especially the member for Abbotsford. It is always important to recognize that we are building on the work, over the long run, of members on all sides of the House.
I am going to talk about small and medium-sized businesses in my remarks for the simple reason that I was the founding owner of a business that went from a small to medium size. Although I have not been involved with that business since I entered politics in 2001, there were more than two decades during which I dedicated my efforts and my talents to developing the business. So I do understand, not just the importance of small and medium-sized businesses, but also the challenges they face.
Canada needs to increase its competitiveness and productivity, we know that. An important way to do that is to support small and medium-sized businesses. In my riding of Vancouver Quadra, we have many clusters of emerging innovation in clean tech, biotech, innovative arts and culture, and in information and communication technology. We also have the University of British Columbia, which is a world-leading cluster of innovation. So workers, owners, and their families in Vancouver Quadra and throughout the country will benefit from the opportunities that CETA will provide to small and medium-sized businesses.
Exports play a very important role in the Canadian economy, as we know, contributing to growth, productivity, and employment. Overall, the value of the export of goods and services is the equivalent of just under one-third of Canada’s GDP. Either directly or indirectly, export enterprises employ one out of every six Canadian workers. Small businesses alone make up 90% of Canadian exporters and, in 2011, were responsible for $68 billion, or 25%, of the total value of exports.
Small and medium enterprises, or SMEs, are about people. SMEs employ some 10 million Canadians, or nearly 90%, of Canada’s total private-sector workforce. Innovation, Science and Economic Development Canada released a report last year profiling SMEs and their characteristics as Canadian exporters. The report found that 10% of Canadian SMEs exported goods and services in 2011, with export sales accounting for about 4% of total company revenues. We can and need to grow that.
The report also points to superior financial performance by exporters compared with non-exporters. Specifically, exporters generated higher sales, pre-tax profit margins, and return on assets, on average, compared with non-exporters. As well, exporters are more research and development intensive than non-exporters, spending 8% of annual revenues on R and D, on average, compared with 6% for non-exporters. Exporters are also more growth oriented than non-exporters, with a higher percentage growing their sales by 20% or more per year compared with non-exporters.
SMEs clearly have a significant role to play in Canada’s future prosperity. Our government firmly believes in supporting our hard-working SMEs to succeed in this role, leading to more jobs, a strengthened middle class, and more tax dollars for our important social safety nets.
One way to support SMEs is by ensuring that there are accessible export markets abroad, with advantageous conditions within these markets for them to compete. The findings of the report I mentioned support the government’s continued commitment to advance an SME growth-in-export agenda through the establishment of new trade agreements.
Currently, Canada’s SME exporters continue to focus predominantly on the U.S. with 89% of exporters selling to the United States and 74% of the value of exports are generated from their U.S. sales.
With CETA, we will see SMEs diversify their exports and pursue opportunities in the European Union, the world’s second largest market for goods. The EU’s annual imports alone are worth more than Canada’s entire GDP. The EU is also key for global supply chains, with more Fortune 500 companies than anywhere else in the world.
This important access to supply chains is an important avenue of opportunity for the global ambitions of many Canadian people and their families. Of the EU’s more than 9,000 tariff lines, approximately 98% will be duty free for Canadian goods when CETA comes into force, with more being eliminated over time when the agreement is fully implemented.
As well there are innovations within CETA that will save companies time and money, such as the protocol on conformity assessment that will allow Canadian manufacturers and certain sectors to have their products tested and certified in Canada for sale in the EU. This kind of regulatory alignment can be particularly useful for SMEs, avoiding the need to set up testing operations outside of the country.
CETA will open up opportunities for Canadian businesses, including SMEs, in the EU’s estimated $3.3 trillion government procurement market. Once CETA enters into force, Canadian firms will be able to supply goods and select services to all levels of EU government, including the EU’s 28 member states and thousands of regional and local government entities.
CETA will also provide Canadian SMEs with a first mover advantage in the EU market over competitors from markets like the U.S. that do not have a trade agreement in place with the EU. It will allow Canadian businesses to establish their customer relationships, networks, and joint projects first.
Canadian businesses need to be aware of the benefits that CETA will bring, and we cannot assume that this is always the case. As I remember well, small businesses often lack the time and resources to inform themselves of game-changing international business development such as free trade agreements.
Plans have been developed to promote recently concluded agreements, including CETA, with SMEs specifically in mind.
Firstly, our government is undertaking proactive initiatives to reach out to Canadian businesses across the country and through our diplomatic missions within the EU market. There is a new CETA web page geared toward Canadian businesses with links to information and export opportunities in co-operation with our provincial partners as well as Export Development Canada and the Business Development Bank of Canada. Our government is launching a series of business outreach events featuring technical experts that will be reaching out to small businesses. Outreach is very important to connecting our business community with CETA`s opportunities.
Secondly, we are ensuring that our teams support international business development in Canada or abroad, so that they are fully familiar with the technical aspects of the agreement and can advise their clients about the opportunities they bring. One example for that is the work that government has done to ensure that trade commissioners can properly advise their business clients on CETA by holding training sessions.
Thirdly, following a detailed assessment, the government will work with specialized industry associations in priority sectors for a focused, hands-on approach to helping potential exporters.
CETA is an agreement with progressive countries, many of which have strong, or even stronger than Canadian, environment and labour conditions. The inclusion of strong labour and environmental side-agreements is very important to Canadians and to our government. As well, CETA’s benefits to the Canadian business community are very important to our government. So this range of opportunities, which the EU in its market of more than 500 million consumers offer, is critical for our country’s jobs and the economy.
What a positive initiative this is, and how appreciative I am that our government’s former trade minister managed to take this stalled agreement, work with her partners in the EU and bring the agreement to a close. Our families, our workers rely on good export jobs.
This is good for Vancouver Quadra, for British Columbia, and for Canada. It is a landmark agreement with our European partners. It needs to be implemented as soon as it can.
Thank you, Madam Speaker.