The Globe and Mail recently sat down with Trade Minister Ed Fast to discuss what tools and opportunities are available to Canadian small and medium sized businesses, and why they should consider exporting.JASON REED/Reuters
Over the last few years the Canadian government has made a concerted effort to break down trade barriers in order to provide Canadian businesses opportunities to work in foreign markets. New partnerships with countries like South Korea, China and the European Union have made it easier than ever for Canadian companies to trade abroad. In spite of these efforts, however, few Canadian small and medium enterprises (SMEs) are trading beyond North America's borders.
The Globe and Mail recently sat down with Trade Minister Ed Fast to discuss what tools and opportunities are available to Canadian small and medium sized businesses, and why they should consider exporting.
Why are SMEs such an important part of the Canadian economy?
Small and medium enterprises employ more than 7.5 million Canadians, which is about 70 per cent of the total private sector labour force. There are about a million SMEs in Canada, about 40,000 actually export, and of that 40,000 only about 10,000 export beyond North America.
Why do so few export beyond North America?
Canadian SMEs tend to be a very cautious group, they tend to be risk averse, and it takes a little bit of nudging to get them to start to consider exports. I think the second part is that most SMEs that have the capacity to export but aren't exporting are likely unaware of the significant number of tools that the government of Canada has made available to them, so that their foray into export markets will be a success.
What are some of those tools?
Over the last eight years, the government has had a singular focus on negotiating trade and investment agreements around the world, essentially opening up new doors and opportunities in some of the most promising markets around the world.
Export Development Canada, the Canadian Commercial Corporation, Business Development Canada, and the trade missions that we lead around the world provide our SMEs with a non-intimidating way of experiencing and testing the ground in a new market.
What opportunities and resources do those trade missions provide?
When other ministers and I lead trade missions abroad (business owners) get to meet with key stakeholders and prospective partners in those new markets. In most emerging markets around the world, the way to dramatically improve your prospects of success is to find a trusted partner. They can also provide on the ground intelligence about the legal, regulatory and business environment.
What advice would you provide an entrepreneur who is considering exporting? How should they get started?
The first thing I would do is refer them to the trade commissioner service, we've got about 150 offices with about 1,000 trade professionals around the world but we've also got a domestic network of trade commissioners in many of our major urban centres, and that would be the starting point.
Some of the most significant emerging markets in the world also have representation in Canada through trade organizations such as the Canada India Business Council, the Canada China Business Council and the Asia Pacific Foundation, there are also numerous country-specific chambers of commerce where they provide an environment where Canadian companies and familiarize themselves with those new markets, and pick the brains of people who have already done business in those new markets.
In 2008, Canadians saw the effects of the recession hitting Europe, the U.S. and other foreign markets much harder than we were hit here at home. Why should they move into those markets now?
Most business people that I know tend to be medium to long-term planners, they generally look beyond the immediate cycles and look at long-term growth prospects.
Thirty or 40 or 50 years ago you could survive by just looking at your home market. Today we live in a globalized marketplace where more and more barriers are being removed, and there are such enormous opportunities beyond North America for Canadian SMEs. We are not asking Canadian businesses to take undue risks, what we are saying is that before you make a decision engage with our key export agencies, identify the host of tools that we've made available to you, and make an informed choice. We have an interest in their success, so we ask them to take that next step and look at what the government of Canada has to offer in terms of support and tools.
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