Spurred by growing uncertainty in the U.S. export market and in hopes of taking advantage of Canada’s expanding free-trade deals, Ottawa has set the stage for domestic exporters to take on the world.
Of the $1.1-billion in recently announced Trade Diversification Strategy funding, $340-million is earmarked to help small and medium-sized enterprises (SMEs) break into global sales.
Make no mistake, this matters to Canadians. It is not an exaggeration to say the success of this strategy will be a make-or-break factor in Canada’s long-term economic growth. The overall goal is a significant reduction of trade dependence on the United States. To do so, the government has set the target of increasing non-U.S. trade by 50 per cent by 2025.
So for the first time in many years, Canada’s trade-diversity plan is aimed at increasing the number of SMEs pursuing global revenue. Despite Canada’s history as an export country, only 11 per cent of SMEs are engaged in the activity, according to federal data.
In short, the stakes are high when it comes to the ability of the federal government – from cabinet ministers down to hands-on departmental officials and those in posts abroad – to deliver these measures in ways that fully live up to their promise.
This means ensuring business owners are aware of the programs and that support is administered quickly and efficiently – and with a special effort to understand the unique needs of SMEs. The government is planning a consultation exercise with business owners. This will be an important opportunity for Ottawa to truly listen and adapt.
The importance of this strategy is underlined by the fact Prime Minister Justin Trudeau has taken the unusual step of assigning it to three members of cabinet – International Trade Diversification Minister Jim Carr, Small Business and Export Promotion Minister Mary Ng and Foreign Affairs Minister Chrystia Freeland.
The Trade Commissioner Service, with 950 officers in Canada and abroad, will be expanded over time, with emphasis on helping companies take advantage of new opportunities in Europe and the Asia-Pacific region as a result of the new trade pacts, and devoting efforts to working with would-be exporters, especially SMEs. This has great potential.
In addition to inspiring more federal officials to excel as small-business specialists, the government will need to enlist the country’s SMEs in a new Canada-wide economic quest. To do so, Ottawa will have to carefully examine its program delivery. This means thinking innovatively.
If governments want businesses to succeed, they must listen to owners to better understand how commerce takes place in today’s interconnected and global world. Do old systems need to change? For example, traditional trade missions must continue, but it’s important to realize that these missions also happen in reverse, with business delegations streaming into Canada all year long. Where funding programs are available, has money been set aside to support this reverse trade effort?
Over the years, too many SMEs have missed out on support from Ottawa because they don’t meet specific requirements. Addressing this is paramount if the government is going to realize the full benefits of export diversification. The old ways of thinking won’t cut it.
Canada is a trading country with an overwhelming majority of SMEs, so the government’s new export strategy is very welcome. But it is integral to our country and our competitiveness that we get this right. Our economic future depends on it.
Jim Peterson has served in the Government of Canada as minister of international trade, secretary of state (international financial institutions) and chair of the House of Commons committee on finance.