Building a Canada That Wins: We need to start now to ensure a prosperous future
Chair of the Board of Directors
Canadian Chamber of Commerce
The Canadian Chamber of Commerce has connected businesses of all sizes, sectors, and regions of the country to advocate for public policies that will foster a strong and competitive economic environment. It has a network of over 450 chambers of commerce and boards of trade, representing 200,000 businesses.
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1- Canada needs to support its SMEs not just to survive, but thrive and scale up.
2- Although Canada is a small country in terms of its population, it can export its technology and expertise, provided it has access to larger international markets.
3- While climate change and environmental regulations are essential, the government needs to make them as simple and consistent as possible for businesses.
In a world of increasing uncertainty, the Canadian government needs to create a stable, consistent and encouraging business environment in order to incentivize innovation, scale-up and investment.
Canada’s 2018 B7 meeting, hosted by the Chamber, will have SMEs as one of its main topics of focus. Why have you highlighted this as a key topic?
Some of the big businesses of today were small business yesterday. Companies like Bombardier, Linamar or Couche-Tard were once small businesses. We have been especially gifted in Canada to grow a number of SMEs into large world-class companies. The best countries are those that have an agile landscape of SMEs and foster their growth in domestic and international markets.
One of the 3 key topics in the B7 will be about scaling up small business. SMEs account for 60-70% of jobs in and across the OECD, and contribute a significant portion of the national GDP. The Canadian Chamber of Commerce has long advocated for a better venture capital ecosystem to support start-ups. This has been a topic at the B7 summits in Turkey and in China as well. So, it is not just a Canadian issue; scaling up start-ups is a challenge across the world.
Obviously, in a large market like the United States, financial ecosystems and pool of risk capital are bigger; access to risk capital is more limited in Canada and financial participants are more conservative. Although we do have organizations that are working on venture capital and private equity, we need to certainly further improve access to capital across the country. Some participants in the Canadian economy, like First Nations and Indigenous populations, have little access to business capital, and better opportunities for them are essential to ensure timely development and Canadian prosperity.
Moreover, it is not just about financing or capital; it is about know-how. For instance, an entrepreneur who is a scientist also needs to be able to manage his finances, marketing, sales and strategy in order to scale up.
As a final point, the tax system is also crucial. The Chamber has put a lot of emphasis on restructuring the tax system to allow our small businesses to be competitive.
How important is reducing barriers to international trade for Canada’s future economy?
In terms of the North American Free Trade Agreement (NAFTA), while the negotiations have been and are challenging, there is some progress towards a modernized NAFTA. Although the tariffs that are being imposed by the US are worrisome, we are confident that a modernized agreement will benefit the economies of all 3 countries and that such agreement can be reached. Most importantly, we believe that Canadian companies must have access to international markets due to the small size of our own market. We believe that trade agreements such as the Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are extremely good news because they open up Canada’s access to huge markets totalling up to 500 million people.
The US is fairly cognizant that Canada has signed other agreements. That helps to create a better negotiating platform, but there was a Canada before NAFTA and there will be one even if NAFTA is dismantled in the worst case. However, I am optimistic that Mexico, Canada and the US will reach an agreement that is equally good to what we currently have, if not better.
How do you think Canada should approach the energy transition and need to properly assess businesses’ environmental impacts?
The threat posed by climate change requires closer collaboration between government and the private sector. Since 2011, the Chamber of Commerce has supported pricing carbon as the most efficient way to reduce emissions, provided that the process is market driven and not bureaucratic.
Having said that, Canada is also a leader in natural resources. We have to find ways to leverage our natural resource advantage and to be able to move our resources across the country. There is a high cost associated with environmental assessment processes for companies and consultation is expensive. So it is imperative for the government to stick to a process once it is established so that companies in the natural resources sectors can count on a stable regulatory and approval process.
Lastly, innovation is transforming our traditional extractive and oil and gas sectors. For an oil and gas producer, innovating is a way to address climate change issues and maintain cost leadership. The Canadian Government is on the right track; the latest budget announced a substantial increase in funding for the National Research Council. We should not just be a leader in rich geological deposits and underground resources, but also in the production and processing and marketing of these natural resources.
As a female business and finance leader, which challenges do you identify for women in business and what advice would you give to young women at the beginning of their career today?
I was fortunate to be a leader of a finance and advisory autonomous subsidiary within an engineering group for 19 years. I had fewer challenges as engineering, not finance, was mainstream. It gave me the ability to build and to grow a business in a very efficient and objective way based on talent, skills and results. I am proud that I probably may have been only the second woman to lead an infrastructure advisory and finance structuring business of that size in Canada. In an engineering company, most people were interested in leading engineering projects, not financial mandates. So I was able to build a very diverse team; my team of VPs had gender parity and ethnic diversity. We were the first to do so in an environment – infrastructure and advisory – that has regrettably seen little or almost no progress on the gender diversity front despite the massive entry of Canadian pension fund managers and institutional players over the last 15 years. We also still see a much lower level of senior promotion for women in fields like investment banking. Why is that?
As a former C-Suite executive in the financial sector, I know how it is challenging for women and minorities to climb to the top of the ladder when finance is the core business. It is not obvious for women to be considered experts if they are around a discussion table. It often takes more than one woman to match the weight of a man’s word at the executive table. In addition, organizational bias still impacts senior level promotion within organizations.
My key advice to young women is to find, early on, not only people to advise and mentor you, but also to sponsor you. A sponsor is someone who is more advanced in his or her career and will be there to support you formally or informally during promotions or recruitment. A sponsor brings influence and poise, so that when he or she recommends a candidate, the organization will likely say, “Well, we will hire her.” Everyone needs a sponsor, but women in particular need one even more.
How do you see Canada’s position in the future global economy, considering the rise of China and India?
As a smaller country population-wise with a well-educated workforce, Canada can be more agile and grow quickly. For example, Quebec is now recognized as an AI hub due to its vibrant landscape of universities. Although Quebec has a small population, Montreal is attracting a lot of investment. With the rise of AI and computerization, a number of traditional jobs are disappearing quickly. If Canada supports and collaborates on innovation, it will make our workforce more agile and we will attract more investment. That is the top priority in the Chamber of Commerce’s “10 Ways to Build a Canada that Wins” report. Our low population is both a disadvantage and an advantage in comparison with China and India. While our population size limits our domestic market and the size of our workforce, we are not overburdened with a large population that requires dramatically high investments in infrastructure, agriculture and other services.
In fact, Canada can build strong partnerships with India and China in the future. For example, India alone produces a million engineers per year, which is as much as Canada’s entire engineering population. Canada has to be open to welcome such high-skilled immigration and integrate it into our society. We need to use our base of innovation, universities and agility to make Canada one of the best places for investment, innovation and prosperity.