EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 17, 1995

.0920

[English]

The Vice-Chairman (Mr. Volpe): I've been advised that one of the Reform members is on his way and would probably appreciate it if we took into consideration that his presence is felt even though he isn't physically here yet. I'm going to begin the hearings and welcome our three guests.

As you know, the first section of this hearing will deal with small business in agriculture and food processing. With us this morning we have Madam Christine Jalilvand from Montreal, Quebec, president of Namtrade International; Mr. Robert Shore from Shore Holsteins International Inc., from London, Ontario; and from Abegweit Seafoods, Mr. Garth Jenkins from Summerside, P.E.I., also known as the GST capital of the world.

Lady and gentlemen, I extend my apologies for the tardiness of the commencement of these hearings. Normally we give each of our witnesses 10 to 15 minutes to give a presentation that will instruct the committee on a particular perspective you might have on the issue. Then the committee members from both sides of the table will engage in a question-and-answer format, very frank and straightforward and all designed to educate the committee in its deliberations on an issue that is important to policy development.

So without further ado, which of you has decided to speak first?

Mr. Bob Shore.

.0925

Mr. Robert Shore (President, Shore Holsteins International Inc.): Good morning, ladies and gentlemen. It's a pleasure for me to be here in the nation's capital.

A brief history about our company: we are basically a livestock genetic exporting company. We're situated in western Ontario. Shore Holsteins International was established by my late father and his late brother back in about 1949, with a purpose to run auction sales and export cattle to the United States. They were both cattle breeders - they had their own herds - and this was sort of a sideline for them.

The business ran along until 1955 and at that time I joined the company. I became a livestock auctioneer. I did a lot of international judging.

I started a lot of travel with Mexico back in about 1967. We thought we needed to expand our markets for our genetics from locally and the United States. We were quite successful in Mexico and consequently, over the years, shipped 7,000 or 8,000 or 10,000 head of cattle to Mexico. We did the same in Italy with quite a success. Then we started in England. At one time we were the largest suppliers of breeding stock to Spain.

With all the risks in this type of business, we had to depend on getting letters of credit. Hopefully the credits were open in time to load the boats or the aircraft or however we shipped the animals. There was always the performance bond some countries made you put up, and they always seemed to find some little loophole to take part or all of your bond.

But by and large, we worked hard at it. We are a family business. Today I have a brother who's a partner, and two sons. I have a daughter who works for us and another brother who works for us. We're basically a small family business.

Livestock is the only business we do. We dedicate all our time and effort to breeding, promotion, selling and exporting of registered livestock, whether it be live animals or embryos.

The market has changed a bit over the years. As a typical example, Mexico was going really well until December 1994; you all remember when the bottom fell out of the peso. Since that time there's virtually nothing going there.

We've had EDC trade barriers because they wanted to keep the market within themselves in Europe, in France. They've put a health protocol to keep us out. On the other hand, there are always new markets opening.

We travel extensively, either myself, my sons, my daughter or my brother. We have two big shipments of cattle going this week, one to Japan and one to the Dominican Republic. We have cattle in quarantine to go to Ecuador and Brazil.

About twenty years ago, with some of our friendly competitors, we got together and formed the Canadian Livestock Exporters Association. There are some ten members scattered from the east to the west coast. We meet every two or three months. We're not a combine; we're simply there to share ideas, to help one another where we can and if we can. If there's a big problem, if we need to go to government or wherever, a group like that has a little more clout than some poor little cowboy back in Glanworth, Ontario.

It's worked very well. We have a code of ethics and anybody who does dishonest things or whatever is eliminated. So far everybody has stayed with us.

We also have a breeding herd of Holstein cattle. We produce a lot of embryos from those cattle as well as supply embryos from other breeders throughout Canada for export to quite a few of the countries.

Over the years we've shipped genetics to about sixty countries. We don't limit it to Holstein cattle, as the name of our company might indicate. We've exported five dairy breeds, seven beef breeds, three sheep breeds, three breeds of swine and seven breeds of horses to those countries. We've worked in all areas: South America, Europe, Australia, some countries in Africa, the West Indies, Mexico, etc.

.0930

As far as the federal programs are concerned, Agriculture Canada plays a big role in the livestock industry. The health certification for export is done by Agriculture Canada, and that health certificate endorsed by Agriculture Canada is very highly regarded worldwide. We're very proud of it, and we should be.

There's one thing I would like point out that has been a little bit of a problem with us. Sometimes a health certificate negotiated by an interested country or a change from an existing country that imports - those changes are made by some people just a little too far away from the field, and they agree to things that shouldn't be agreed to on a health chart. I really feel that when the head veterinarians in Ottawa do this negotiation, they should at least contact we exporters who know what are the problems of agreeing with this or that -

The Vice-Chairman (Mr. Volpe): Can you give us an example of that for those of us who are from cities and don't know anything about livestock?

Mr. Shore: An example of that would be in China. China has a very tough health certificate. They might ask, for example, that all cattle must be from a herd where there's been no bovine leukosis. Leukosis is a leukemia. It's not an active disease, but about 15% to 20% of our animals are carriers of that strain or whatever. They don't die from it, and they're not sick from it, but they test positive.

If our people agree to export cattle only from herds free of it, both clinically and from a laboratory test, we would eliminate 95% of the available animals in Canada. Sometimes I feel there are people who don't realize the ratio of some of these reactions, but we do, because we're testing cattle, horses, sheep, or whatever from many countries all the time. I think we should have more imput, or maybe some of the veterinarians at the lower county levels should, those who do the testing and see the results. I think that's an important point.

We've been involved in quite a few trade missions. Some of them have been very pleasant, some have been not too helpful, and some of them have been very good. My daughter was on one in Australia, and that got right to the grass roots of part of the industry that we're involved in, and she ended up with a lot of business through a particularly fine agent there. I, my brothers, and my sons have been on several of them, and it seems to me you're in and out. You don't meet the right people, or you go at the time of year when they're all on holidays or something.

If a trade mission's going to be put together, I think industry should have a little more say in who should be involved or what should be done on it. That's only my own observation. I'm sure in other endeavours, the trade missions may be more helpful than they've been to us.

Incoming missions can be very helpful, provided the right people are put on. If the wrong people are on, they're just on a paid holiday and nothing is accomplished. We've seen both.

Instead of spending a lot of money taking the wrong people over or bringing the wrong people here - and the United States and Europe do this - put money forward to bring over serious buyers. You don't want to get into a catch-22 situation in which everybody who makes an enquiry is a serious purchaser - they have to be screened - but that would really help the livestock industry.

CIDA has been a great help in new market development. In livestock it's very difficult to have immediate results because of the fact that animals are young, they have to continue growing, there's a nine-month gestation period, and there's another two years to find out how good they are when they get to the other country.

.0935

Again, I think it's very important for the government not to waste money. We don't have money to waste. I know that. I'm a taxpayer. I know all about it. I think there are certain programs that really would be helpful to our industry. I know government funds are limited.

Now, we're having a bit of a problem with genetic evaluation. In case you're not familiar with that, all the cattle I'm talking about exporting have pedigrees that are genetically evaluated. With the shortage of money some of these funds are in jeopardy. We at the Canadian Livestock Exporters Association are not opposed to helping pay for these, but we feel all the other exporters out there who aren't paying into this CLEA fund - and it's not expensive - should help. Then we could probably get some of these genetic evaluations on track. If we lose them, we're going to lose out to Europe, the United States, Australia and a lot of other countries, because they are our competitors.

I think there should be some legislation so that all of our industry contributes to this, not just a few of us who happen to belong to this Livestock Exporters Association.

That's about all I have to say. I hope I haven't taken too much of your time.

The Vice-Chairman (Mr. Volpe): No, actually, you're bang on at 10 minutes. Bob, thank you very much. By the way, we all have your presentation before us. Some of us had occasion to read it before you came in. It's a good supplement.

Now we will hear from Christine Jalilvand from Namtrade International.

[Translation]

Mrs. Christine Jalilvand (president, Namtrade International Inc.): Good morning. Let me begin by saying that I am not used to speak in public. However, I hope that, through my presentation, I will make you understand the passion I feel for my profession.

The brief was prepared in English because it is my language of business. However, since I am bilingual, I will probably speak both English and French during my presentation.

In fact, the sequence of witnesses is quite logical. My colleague exports live cattle, and we basically trade in sluttered??? animals and certain frozen animals parts.

I am the director of Namtrade, and international trading house which basically trades in frozen foods, such as meat and poultry. This includes chicken, turkey and other poultry products. We also trade in Canadian and Quebec pork, as well as beef and other products.

For more information, please refer to the apendices at the back of the brief.

[English]

The thing you have to know about the trading house is that we do take the full commercial risk and the financial risk of any transaction. We are not an intermediary in the casual sense of the term.

We do buy the product from our suppliers and we resell it to our customers. It's back-to-back operations most of the time. However, there is a moment in time where we are officially owners of the product. This means we have to have enough lines of credit and money available to us through our banks and through our suppliers to be able to purchase the product. So therefore we have developed a lot of competence in being able to assess the foreign risks because we are eventually the ones who might bear the consequences of the decisions we take.

There are many, many areas in which one can trade. We trade basically in frozen foodstuff because, personally, it has been the line of competence I have developed over the years. I started in the chicken industry in the United States after coming from France. I developed some good connections there. Then I came to Canada. I became a Canadian and I developed the same operation here. After working in another trading house, I eventually became manager and owner of this one.

.0940

[Translation]

International trade is essentially done by phone. That provides us with a tremendous amount of flexibility in terms of the resources we can use and resell. It also means that we are not limited to Canada for our resources.

As you can see in the appendices, many of our products come from the United States. The second largest region is of course Canada, and we even trade with China, Spain and other countries.

The ratio of Canadian versus American products depends on a number of factors, including the exchange rate of the Canadian dollar versus the American dollar and the relative competitiveness of each industry.

Let me give you a very specific example. Poultry was essentially an American preserve. For the past year and a half, because of changes in the quota allocations for poultry in Ontario and Quebec, we have had surpluses, so we have been able to export a lot of our Canadian products throughout the world.

Let me also mention that our products are staple foods. They are generally surplus products. By that I mean staple foods such as chichen thighs, pork liver and beef tripe. These are products that can be shipped in bulk and provide a good quality price ratio and proteine price ratio for the purchasins countries.

The countries that buy our products need them to eat well. We are therefore used to mass production. The profit margin is relatively small compared to other manufacturing sectors. That is why it is extremely important for us to be competitive with the rest of the world.

Our success depends on volume and not necessarily with every transaction. We therefore have very specific ideas on the type of government assistance and policies that could make us or break us.

[English]

One specific trait that is also important for us is that 90% of our transactions are concluded in U.S. dollars - except Cuba, of course, with whom we deal in Canadian dollars. That means occasionally we have foreign currencies as well; however, most of the trade is done in U.S. dollars.

That means there is a specific burden for us in terms of accounting, finance and foreign exchange to be able to track down all these different transactions. On one hand, we want to make money on the commercial transaction, and on the other hand, we don't want to lose it on the foreign exchange variations.

In that sense, and this is a general comment, the policies and the sometimes erratic nature of the Canadian dollar can be a tremendous concern for us. We have had to develop quite sophisticated in-house procedures to make sure we track our own operations very carefully.

As far as government intervention goes, I made a sort of parallel by calling it the two solitudes. Sometimes our general feedback is that on one hand we have the government officials and on the other hand we have the business community. And we don't necessarily have the feeling that you are listening to us, and vice versa. I would say this is a prime example of an exception, and I therefore appreciate the opportunity. However, in general we have the feeling that the government officials are going one way, the business community is trying another way and there are very few bridges in between.

.0945

To our mind, there are four areas in which you can help us be more competitive: the financing and insurance of the development of export operations; market intelligence; eliminating the barriers to entry to foreign markets; and the standardization of quality of inspection programs, as my colleague talked about.

One reason I bring up the financing and insurance program - I'm talking specifically about the EDC programs - is that the program has improved tremendously. A few years ago it would have been unthinkable for us to use it, because the cost of this insurance was way out of line compared with our profit margin.

It has substantially improved; however, in our opinion it is still not competitive with similar programs that exist in Europe and in Australia. The competition to Canada is the U.S., but it is also Europe and Australia in the domains we are talking about and dealing in.

We hear from our customers very directly that they do get better insurance terms and longer payment terms from people who are interested in exporting, such as the Australians or Europeans. In that sense, we are systematically put at a disadvantage. The choice is either that we don't insure and take all the risks or that we do insure and become close to being uncompetitive.

I'll give you one example that I wrote up in my paper. Poland is a market where we have been for the last five years. I think Namtrade was one of the first into poultry. Recently we investigated - it's a very large market for foodstuff - the possibility of applying a comprehensive policy of EDC into Poland. The people came back to us wanting some outside audits of all these companies. This is not something that exists right now in Poland, because, obviously, it's a new market. It doesn't have the procedures. It doesn't have the background yet to produce that type of report.

On the other hand, some of these customers are quite well-known to us. They have been in the market for a while. What happens is we rate that... A lot of our customers were rejected to start off with. One was accepted, but with such a high rate that it makes it practically impossible to deal with.

In that sense, I think EDC has to behave responsibly in terms of not losing money. On the other hand, it has to be, in my opinion, a little more creative about its procedure to assess payment terms. As well, it probably has to have long-term policies. Some markets should be target markets whereby if the exporters do not get some help in this domain, they will forever be forgotten in this market.

If we don't develop some kind of loyalty when these new countries start importing, it will be extremely difficult to go back and be able to generate the same goodwill from the importers. Another thing that may be difficult to do but probably is possible is that EDC should be able to compare its own rates with other insurance companies around the world. It should make a point of finding out what other countries are doing, because it can be an extremely negative item for us sometimes.

[Translation]

The Canadian network can be very helpful in another area, market intelligence. There are commercial attack's in all our embassies who should be able to keep us informed about the latest developments and to give us the necessary help.

I personally contacted a few of these people, by fax or by phone. In general, these individuals are extremely well-meaning and try and help us, but as far as I am concerned, they neither have the tools nor the training to do so. They don't have a very clear idea regarding whose interests they should defend, because they lack the necessary experience or training.

.0950

We made certain business deals based on certain trade counsels reports. These reports helped us find new clients, and we sometimes asked the counsels to help us better assess the financial situation and reputation of the clients. Generally speaking, we often hit dead ends, probably because trade counsels were not well versed in that area. The business community should perhaps have a greater say in terms of the role of trade counsels, so that they can be more useful to everyone.

Markets are changing and political situations are evolving rapidly. So it's obvious that they could play a different role from the one they had 20 years ago.

We participated in several trade missions. I find they are too long and not focused well enough. The trips are generally at least two-week long, sometimes even three-weeks. I travel around the globe and try to limit the length of my trips to one week, from one week end to the next, because it's very hard to be out of the country for very long. Trade missions should be limited to one or two countries at the most, and the trips should be shorter. That would be a definite advantage.

Regarding trade barriers to certain markets,

[English]

I think this is really a general policy area, so I really cannot say too many things that would be new. However, the thing I want to point out is that the exporters - not the government - are usually the first ones to find out about non-tariff barriers.

It would be nice if we could have a channel where we could immediately communicate what we perceive as real barriers to entry. It could be as my colleague said, a health certificate that is too demanding and is equivalent to stopping the entry.

There are so many things we perceive right away as real barriers that the officials may not see quite that way. In that sense, it could help if we had a direct line to somebody to talk about it - and not necessarily the Agriculture Canada inspectors who have another set of concerns that have to do with hygiene and standards.

There are several issues that are mixed in and that are not always related to the same area of concern. In terms of our program of veterinary inspection, I think it's already well known all over the world that Canada is tops in that domain. I think we have to keep being more stringent about it so that it becomes clear to all other countries that once something has been inspected by the Canadian system, it is good. It doesn't need any extra inspection on the other side.

So we have to do a bit more PR in relation to our own standards and our own enforcement of our quality. We could actually market our own techniques, in my opinion. It really becomes self-evident that, if it's accepted in Canada, it has to be accepted in Poland or in Slovakia. Sometimes we have to deal with requirements that are crazy from the other side, whereas the product is perfectly healthy here.

.0955

We don't want hand-outs from the Canadian government or anybody. What we want is that export be recognized as a tremendously important activity for Canada. In that sense, we would like help from you in developing tools to make this market immediately more efficient for us.

We should find some creative solutions, some creative help. In our own industry, for example, I mentioned a software program, which is lacking severely, and which costs a tremendous amount of money to develop, to take care of all the foreign exchange and those types of things. This industry is a very important part of Canada, but it's a rather small industry compared with other big interests. In that sense, we require a little bit of care.

There should be a streamlining of the information available in Canada. There are lots of programs; I don't deny it. The only thing is you have to go through a maze of information to be able to decipher which one you could possibly have access to. All these programs should be easily recognizable, accessible on computer modem, on a friendly basis, so that you can take advantage of what exists.

As I mentioned before, the business community should be involved as much as possible in designing and reviewing programs set up to enhance exports.

Another point I want to make is a lot of the comments of exporters cannot be substantiated with hard-copy backup evidence. I cannot bring you the rate of insurance that COFACE is giving in France or other areas. However, a lot of the feedback we get is very genuine, and in that sense the burden of proof should be made a bit easier on us so that you can take action based on what is our feedback, not necessarily on what we can actually bring to you as concrete proof.

Finally, what we need is to breed more exporters, not just cattle, and maybe in that sense we could definitely have a bigger emphasis on foreign languages in Canada and not just count on immigration to take care of that. We should make export something that is really as sophisticated as it has become, not just fly-by-night hoping, an exotic thing that doesn't mean anything for anybody. It probably would be easy to set up some simple educational programs that would breed some interest and therefore better help in that domain.

That's it.

The Vice-Chairman (Mr. Volpe): Merci beaucoup, Madame. That was certainly wide-ranging. We'll come back, as I see that we already have some people who want to ask questions, but first we'll go to Mr. Jenkins from Abegweit Seafoods Inc.

Mr. Garth Jenkins (President, Abegweit Seafoods Inc.): Thank you, Mr. Vice-Chairman.

Ladies and gentlemen, my name is Garth Jenkins and the name of the company is Abegweit Seafoods Inc. For people that are not in the know, Abegweit is the aboriginal name for Prince Edward Island.

We're in the fish business. We do $10 million in sales, so that puts us in a category of a small business. Of this $10 million, 80% of it is exported, so really we're an export-dependent company. The countries that we export to are Japan, United States, France, Norway, England, Belgium, Sweden, Germany, Mexico and Hong Kong.

The products we export are snow crab, lobster, bluefin tuna, mackerel, herring roe, herring, smelts, silversides, shark, dogfish, rock crab, spider crab, sea-urchins; anything that swims in the area where we carry on business.

.1000

As for the way we got into the Japanese market, it would be nice to say that I had a vision and that I started to sell to Japan. That's not the case. What happened was that the Japanese came to us. They were looking for bluefin tuna. They took us by the hands - we were infants in this business and didn't even know what to do with it - and showed us how to process it. We felt there was a market in Japan, so away we went and started exporting tuna.

We've done this for a number of years. There were other seafood products we were handling, which we were exporting to the United States, and they were interested in them. We entered into an agreement with them. They would put their people in our plant to train our people to produce products, Japanese style, for the Japanese market. We agreed to sell the products we produced together to these companies.

It gave the Japanese a long-term supply of some of the products they wanted. It got us onto the learning curve and into a market and a culture that, in retrospect, I knew absolutely nothing about. It was a little bit like trying to sell a product to Mars. Socially the two countries are so different, and it was very difficult for Canadians to understand the Japanese market.

We were slow learners, and it took three years to get us up to what they figured was the Japanese way and the Japanese level of quality. But together we produced a product that was accepted into that market. Now I'm really proud to say the brand of many of our products, especially the snow crab, is considered the leading brand in Japan.

We feel the biggest inhibiting factor for any Canadian company going into that Japanese market is their ignorance of the society and of what is important to these people.

The United States, which used to be our number one market, became our number two market by a long shot, because 75% of our exports are going to Japan. Really what we are is a Japanese company. We continue to try to maintain some presence in that market because we feel that diversification is one of the important parts of the business. If one market goes down, we will have another market.

We use some of the methods we learned from the Japanese to produce products going into the United States.

That bell is very disconcerting.

The Vice-Chairman (Mr. Volpe): I should have said not to let it bother you. The bell is calling all the members to the House in order for the House to begin its hearings. It'll keep ringing until they get a quorum in the House of Commons.

Mr. Jenkins: I hope they have it.

The Vice-Chairman (Mr. Volpe): Yes, they probably have one right now. But not to worry. The only other time it rings is when it calls all members for a vote. We don't anticipate a vote this morning.

We already have a Reform member here. We're going to tie his legs, put leg irons on him, so he won't move.

Go ahead, Mr. Jenkins.

Mr. Jenkins: Since free trade, our experience in the United States market is that an additional number of non-tariff barriers have been put up. In the seafood business, the barrier that has affected me and our types of companies most adversely...one of the lab members in the United States testing seafood product just decided to test the product for listeria. Listeria is a member of the bacteria family. They tested it, and as I recall, the test was in the order of one or two parts per million. In the testing world, that's trace.

.1005

So they looked up their regulations in the United States and found that for listeria the tolerance was zero. Suddenly the fat was in the fire. From that they started to test all seafood products, lobster in particular.

To give you a feel for this, in every other western country except the United States the level of listeria is 100, which is well below the acceptable health level. You never get sick from it at that level.

The Vice-Chairman (Mr. Volpe): Is that 400 parts per million?

Mr. Jenkins: Yes.

Suddenly the industry was faced with the problem of enormous amounts of lobster and snow crab and products like that being turned down and actually having to be taken back into Canada. The United States was a very important market for other companies besides us, and even more so than us, because we're dependent on the Japanese.

The industry had to come up with a method to correct this. One way you can kill listeria is with heat. Some people came up with the idea that we had to cook the lobster again. It was already cooked to get the meat out of the shell, but cooking it again would get rid of the listeria. It did get rid of the listeria. The problem was, it produced an inferior product, because basically you cooked the product twice.

In our particular instance, we solved that situation - knock on wood - because I had some sons who took after their mother; they're fairly well educated. One is a chemist. With his help we looked at it. He suggested that we just introduce an ozone into the room where you're processing this. Ozone will kill bacteria, listeria and everything else on the surface, with good housekeeping. We developed inside our company a little ozone system. It cost us about $3,000 or $4,000, but it rid us of the problem.

Then other people found out what we were doing. It was costing them hundreds of thousands of dollars - in fact, it cost one company $500,000 - to reheat the product. Actually, it didn't cost $500,000 to reheat the product, but when you reheat the product you lose weight, because you boil more of the moisture out of the product. You have to put more product in the can to come up with the minimum weights.

So the industry adapted our method, which was devised in the plant.

In the United States, I find that if they do get some complaints about dumping, or what they feel is dumping, or if they feel we're in there with low prices and stuff like that... In a case right today it's snow crab. The United States industry feels the Canadian snow crab is in there and it's undermining their market. Suddenly you're faced with all these tests and everything else on the snow crab.

Most stuff tests negative, but even if it does test negative it takes upwards of 4 to 6 weeks to get it cleared. Time itself is an inhibiting factor. Even if there's nothing wrong with the product and you don't even have a trace of something like listeria, the mere fact that you've had to go through this testing means you couldn't put that product into the market for 4 to 6 weeks afterwards.

We find that the non-tariff barriers in the States are really tied to complaints they receive from I think their own industry. I don't know whether it's 100% that way, but that's certainly the way it comes in the fish business.

.1010

Our other market besides the United States is Europe. What we have found in Europe in the past is that we sell a lot of stuff there. We find they are very meticulous with regard to paperwork and the little things. If the government inspector has used a rubber stamp to stamp the sanitary and hygiene certificates rather than an imprint stamp, that will be rejected. You have to get everything right to the letter of the law when you go to Europe.

As for Mexico, what a disaster that is. We sent a shipment of product down to Mexico. We really researched this because we felt there would be problems there. We did research through the embassy down there, the customs brokers, and everything else. We thought we had all our ducks in a line.

When our product got to the border, we found that they were out of order, because the product stopped at the border. Our biggest problem in that particular instance was finding out what was wrong and why the product wouldn't go any farther than the border.

In this particular instance, they cleared the main product, but we had some samples of lobster, salt fish, crab and high-priced products to which they said no. They couldn't clear that. We left the main part to go along. The main truck went in, but they kept the samples.

We found out later that we didn't need any certificates or anything. All we needed was a bill of lading to get the samples in, because samples are supposed to go in almost free.

But they still wouldn't release them. They wanted another $300 or $400 to go through the procedure of clearing them. We said no. We wouldn't give them any more money. I think what happened with the samples in that particular instance was that they probably ate them.

The Vice-Chairman (Mr. Volpe): Destroying the evidence, I guess.

Mr. Jenkins: I don't really know. I wasn't going to pay anybody any more money. In some countries, that's the way you have to move in business. Luckily for us, we haven't had that experience too often.

From that one experience, my feeling was that the Mexican system is not up and running in the same way as that of the Europeans, Canadians, Americans or Japanese. I wonder whether they're still struggling with this change in free trade.

My advice to any new company that wants to go into exporting is to put Mexico well down on the list. They should get their experience in other countries with which they'll have fewer problems.

I'll jump back to Europe for a minute. We're finding that the inspection system being used in Canada to ensure quality in the seafood industry is being examined by the Europeans.

It appears they use what they call a HACCP, which stands for ``hazard analysis critical control points''. They also use an ISO 9000.

In the food industry, they seem to be leaning toward the HACCP program. I think we will find in Canada that we'll probably have to adopt this HACCP program in order to continue to sell seafood in Europe. In the past, they have accepted our QMPs and their GMPs, which is developed by the Department of Fisheries and Oceans, as being on the same level as HACCP, but now I think they're questioning that.

.1015

I don't think there's any question that it is on the same level. I think they're saying, ``We want you to use our system''. So what we will have to do in our industry is to put in the HACCP system, which shouldn't be too difficult. As I say, it's very close to the system we have now.

With regard to government's role in international trade, I think the private sector sometimes expects too much from government. They feel they can go to government and go to the posts, and the posts should have all this information available and be able to give it to us quite readily. For some general information and some historical information, they can. But when it comes to up-to-date market analysis and what is going on in these markets, I think we are asking too much of our government. I don't think the government structure is capable of doing this, and I don't believe they should be doing it.

We use the information we get from the posts and from the government as background historical information, and we find our own sources of up-to-date market information.

So I think in the private sector sometimes we expect too much of our government. In Canada, mentally, we've unfortunately fallen into the rut that whenever anything goes wrong, we always run to the government to blame them and run to the government to fix it. It doesn't make any difference whether it's the government's fault or not. I think in that case we also ask too much. We have to fix this stuff ourselves.

If you're going to be in the export business, is that the ball game? You have to be out there, and you have to be competing with these other countries out there. You can't be crying all the time to your government, saying do this for us and do that for us, and then blame them if they don't do it. You have to do it yourself, basically.

On the Foreign Affairs programs, we've taken advantage of the programs. I agree with my colleagues that some of the trade missions are too long. You go to some of the trade shows and you get absolutely nothing from them. Some others you go to, you get a lot from. I don't think that's a fault. Maybe the length of the trade missions are the government's fault, but as far as going to the trade shows yourself, they'll bring you to the trade show and what you do at that trade show is basically up to you. There are other business people there, and if you don't get contacts, I don't think you should blame the government.

My own personal opinion on trade shows is this: I think the world is saturated with trade shows. You could live your whole life going to food trade shows. Every day of the week, maybe even including Christmas, you could go from trade show to trade show.

We have pulled back from trade shows because we think the customer is saturated with them and we don't think it's an effective means of getting the message and our products to these customers. We have gone more onto one-on-one, and maybe a little solo show, or something like that. It's a much more effective means.

I think the government itself has recognized this. I think the government has pulled back from these trade shows. These trade shows are expensive.

Food Ex in Japan, which we attended and had a booth in for five years, used to cost us something like $40,000 per year. It used to costs the government for their booth about $400,000 - big bucks. So they looked at it and I think pulled back from it. We've pulled back from it. I think that's a logical, common-sense approach to the thing.

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I'll say this: I've been involved in a number of advisory committees with both Foreign Affairs and DFO, and I'd like to say that other government departments should look at Foreign Affairs and see how they've approached this so-called privatization, how they've approached the idea of the private sector coming in to help them develop the programs for their department. I think the philosophy the minister and the senior officials in that department have taken has been very open and very positive.

The particular advisory committee I'm on is chaired by the private sector. People from the private sector are on all the subcommittees; there are in fact very few government people on the subcommittees. The suggestions that have come forth from the advisory committee have been acted on, and when you think about this, what we're basically doing in the private sector is saying to the senior civil servants and to that department that we don't think they're doing that good a job, that we want them to change in these different areas.

They've been very receptive to that. They've made the changes. They haven't made all the changes. They've told us why they weren't going to change it when they weren't making the changes. But the whole atmosphere, from the minister down to the senior officials, or those I've talked to...has been a very open one.

I contrast that with the Department of Fisheries and Oceans. All the advisory committees in the Department of Fisheries and Oceans are chaired by civil servants. The private sector's opinion of these advisory committees is that they're just window-dressing, that it's a way, when they get criticism from the private sector, for them to say that we have these advisory committees. The advisory committees in the Department of Fisheries and Oceans are almost worthless.

The Vice-Chairman (Mr. Volpe): I hate to interrupt you, because we're talking about how to be open to criticism.

I'm one of those who find it difficult to handle criticism from his colleagues, and I know they're going to criticize me for not going into questions and answers. So I wonder if in the questions and answers you could develop that theme a little more, especially since you're talking about government and restructuring.

I'm sure Mr. Penson, from the Reform Party, would want to ask a question in that regard.

Mr. Penson (Peace River): Thank you, and I hope we draw more out as we go.

I'd like to thank the panel, first of all. I think the food industry is very important for job creation in Canada. It has one of the highest spin-offs in terms of job creation, as you know, of any industry. Therefore, if we can export more, that means creating more jobs at home.

I do want to follow up with Mr. Jenkins, but first I have a couple of questions for Mr. Shore and Ms Jalilvand.

You have both identified problems with the Trade Commissioner Service in terms of lack of market intelligence in specific areas. Mr. Jenkins has raised this as well.

I wonder whether a basic level of market intelligence should be out there, which you should be able to access; after that, if you wanted specific intelligence, your companies might be willing to pay for it. Maybe the department could contract somebody to do it. They would have the sources to know where to find it or to get the contract intelligence, but it would be more of a pay-for-service at that point. That's my first question.

Ms Jalilvand: I would have no problem with paying for service if I think it's going to be worth it.

In that sense, my main comment was to make the commercial attachés more business oriented so that they understand where we come from. Then we can see. As the other gentleman said, I don't want other people to do my job. However, I know we are in a privileged position to hear about market restructuring or pressures from the government to impede certain processes.

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In that sense, in my opinion it's not special research that I want them to do. These people, in some of these markets, are very aware of the local importance they have. It's part of their normal social life. In that sense, they could give us a lot more feedback.

As for paying for it, I am not against it, but again, I don't want to use the government as my private researcher's fund. I recognize it's a different issue; however, the information they already get, or we could get, free of charge, is quite tremendous and could be quite beneficial for the industry. In other countries I have the impression there is more of a close-knit tie there.

Mr. Penson: Do they have more people on staff or just more specialized people in certain markets?

Ms Jalilvand: I think it's more specialized, especially in the items they want to develop. So we get a better training on the products we really can't develop from Canada.

Mr. Penson: With regard to the EDC and the area of export insurance, have any of the panel members used private insurance as an option to Export Development Corporation in terms of insurance?

Ms Jalilvand: I have marine insurance on all my shipments, of course. Private insurance is totally out of the question because of the cost, and so was EDC until very recently.

Mr. Penson: But you were telling us earlier that EDC is not competitive in export insurance compared with some of the European countries. Is that correct?

Ms Jalilvand: Yes. It has become more competitive, but it's still far. We have no choice but to use it, however.

One issue, for example, is that EDC has what they call a ``comprehensive'' policy. We cannot pick and choose which markets we want to insure. We have to insure all the markets where we would sell Canadian products. So in that sense it puts us sometimes in a tremendously negative position.

Mr. Penson: So you would like to insure a specific transaction -

Ms Jalilvand: Not transactions, specific markets.

Mr. Penson: - rather than a whole comprehensive package.

Ms Jalilvand: Yes.

Mr. Penson: In the interests of time, I'll just move on. I'd like to explore these further, but we don't have a lot of time.

This is with regard to Mr. Jenkins's mention of non-tariff barriers. We know that action happens a lot, but under GATT now that has been an area where we have moved and had some progress. My understanding is that it's not allowed with the GATT agreement, that non-tariff barriers can no longer be used.

Are there specific instances where the Government of Canada could take some country to the World Trade Organization on non-tariff barriers? My understanding is that it has to be on a country-by-country basis, that Canada would have to take it there. Wouldn't that be one way of setting some type of a precedent in telling these countries they can't get away with using non-tariff barriers?

Mr. Jenkins: Really, in the cases I talked about, I don't think they'd be taken to GATT. I think in the case of the listeria one, which is one of the biggest ones for the fish industry in the United States, it really would be bringing up the United States's level to the acceptable level of the world. Zero tolerance in anything is impossible to achieve.

Mr. Penson: But even there don't we have discussions that are supposed to be moving forward on standards on the NAFTA countries? How do you see that progressing? I understand we're sort of dragging; we're not progressing very well. Do you think that can be moved up?

Mr. Jenkins: I'm not sure how it's progressing, but I do know that Canada has been talking to the United States on this particular listeria thing. So far the United States.... I think it's a difficult thing, because you get into the food and drug department in the United States and then you get into public health safety. I think it's very difficult for them, inside their country, to move away from that.

Mr. Penson: But surely harmonization of standards has to come if we're going to have a real trading arrangement here.

Mr. Jenkins: Yes. I think we're progressing.

The Vice-Chairman (Mr. Volpe): Thank you, Mr. Penson.

Mr. Lastewka.

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Mr. Lastewka (St. Catharines): Thank you, Mr. Chairman.

I want to make sure I understood the discussion on the EDC. My understanding is that EDC costs are lower than insurance costs, as you mentioned, but not as competitive as other countries. Now we get into the subsidizing of insurance schemes, and this is where I have great difficulty. Business has told us over and over that we have to get out of business and stop subsidizing, yet when we start talking specifically, and now specifically EDC, their costs are too high. Could you just explain a little more? If their costs are too high and other countries are subsidizing, are you suggesting we should be subsidizing more?

Ms Jalilvand: Please, I don't want to say something that could have some really negative forms; however, you ask me in which way the government can enhance some programs. As Canadians, we are competing with other people trying to export their meat, from Europeans to Australians. We are competing in the same market. Our conclusion has been that insurance as a way of subsidizing exports...this is a moot question. It is probably not so black and white. However, it is definitely something that other countries have been offering as a service to their exporters.

We could also take the other view and prevent them from doing it; that's another alternative to the same side of the problem. But it's obvious we are facing certain areas where this may be a long-term barrier. You can consider it many ways. You can either try to eliminate the other side or improve your side, but somehow it is an issue that we encounter time and time again, especially with payment terms. Europeans are used to giving long terms - we are talking sixty days - whereas in North America we pay suppliers in seven to ten days, which is the norm in the industry. Being able to insure has a tremendous advantage and we have to face it time and time again. It could be an issue brought up in a WTO type of conversation, for example.

Mr. Lastewka: The good thing about this type of hearing is that we're hearing from many small and medium-sized businesses. So I'd like to pose a question to each of you. What should the role of government in trade of SMEs...should they do more of or do less of in order to make your business more prosperous and do more exports?

The Vice-Chairman (Mr. Volpe): Go ahead, Mr. Shore. You get the first crack.

Mr. Shore: I'm not complaining, and I don't mind paying for what we get, but I think we should be listened to. I'm not a street beggar. I don't want something for nothing. But if there's a legitimate problem, I would like to be able to get to the meat of it with the right people and get it resolved, whether it's a trade barrier, a health protocol or whatever.

As far as EDC is concerned, I don't find their cost too high. I found them too damned slow and they want too big a deal. In the nature of our business, a $50,000 or $100,000 deal...they want million-dollar deals. We don't have many single million-dollar deals in our small business.

The Vice-Chairman (Mr. Volpe): Mr. Jenkins, do you want to offer an opinion?

Mr. Jenkins: I think the biggest problem with small and medium-sized exporters is financial. That's the single biggest common thread through the whole thing. We are not on a level playing field when we come to other countries. In the case of Japan, when you're doing business in Japan and borrow money in Japan, you pay less than 1% interest. If the government, with industry, can put together better financial systems - and the banks - then that would be one of our biggest steps forward.

Some of the things they shouldn't do: I think they should not try to be everything to everybody. They should concentrate their efforts and develop a plan for the best chance for exports with certain countries, products and whatever else. Go with a rifle approach rather than a shotgun one.

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Ms Jalilvand: I just want to say that, in my opinion, our government is for our own self-interest. The role of government is to keep abreast of all the changes happening in all the other countries through our own information we get from outside. So we can equalize what is happening at any time either by protesting what is happening in other countries or by helping on this side. In that sense, it has a safekeeping role. It's not more of what it does; it's a little bit different from what it does.

Ms Beaumier (Brampton): Do you export a lot of beef to Europe? Let me just tell you what I'm getting at. This sounds like a trick question; it's not.

I know that some of the hormones Canada previously prohibited are now accepted here due to the NAFTA agreement with the U.S. Has this affected your European market for Canadian beef?

Mr. Shore: Are you addressing me?

Ms Beaumier: I think so.

Mr. Shore: Our company does not export beef meat, as such. We export cattle, genetics. The problem we reached in Europe is that the European Community has made very restrictive trade barriers within it to North American genetics with their health protocol.

Ms Beaumier: You were speaking of viruses, but has the acceptance of additional hormones by Canada affected it as well?

Mr. Shore: Are you speaking of milk injection? Do we get more milk?

Ms Beaumier: No, growth hormones in cattle.

Mr. Shore: That's in the beef industry, which I'm not that familiar with.

Ms Jalilvand: I think I can answer that.

Mr. Shore: You can probably answer that.

Ms Jalilvand: The Europeans have traditionally approved only a few plants for export. These were cow plants, which are not allowed to use any hormones. So that's why no steer plants were originally approved in both Canada and the U.S., as a matter of fact. It's the same problem.

It has not changed since then. The same ones that were approved are still approved, but it's nothing compared with what could really be sent out. It's very few plants, and it's a very limited market. It's a non-tariff barrier, once again.

It's only beginning to move now in the U.S.A., where they had to approve certain U.S. plants for pork that were not approved before. We actually made the first shipment to Europe a few weeks ago.

Canada is probably going to come on line any time, but it's taking a lot of pressure. It's still important.

Ms Beaumier: You were talking about Canada's expertise in the testing area. You were saying that we should put pressure on to have the testing here in Canada accepted when products are imported into different countries.

Would that not have to work both ways? How do you propose setting up Canada's -

Ms Jalilvand: One issue that's always very controversial is salmonella, for example. Here in Canada, my understanding is that any animal with signs of salmonella would not be accepted in the process. However, we do not test on a regular basis for salmonella because the testing itself is not relevant. Testing one animal does not show you that the whole lot is okay.

It's a bacterium that comes about when the hygiene process is not good enough. So we therefore eat chicken that is not constantly tested for salmonella. It is clear people have been advised that you have to cook chicken, and in North America we really have very few cases of problems.

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However, when I ship that same chicken that has been inspected by Canadian standards - and I must say Canada and U.S.A. in that domain are very similar - into any other country, and it could be Poland, or Slovakia, or Slovenia, it gets tested on the other side. And I could have a problem with a whole container where they found a trace of salmonella in one box of the product. In that sense we should be able to enforce our own standard of health.

Ms Beaumier: Okay. I understand now what you're saying.

The Vice-Chairman (Mr. Volpe): Thank you, colleagues.

I want to thank the witnesses. I know we kept you waiting for quite a while. I think some of the members around the table want to ask more questions, but I don't want to compound the problem we've already created. We have another set of witnesses coming before the committee in a few moments.

I want to thank each and every one of you on behalf of all the committee members, not only for your patience, but also for some very informative and very insightful presentations.

I made a comment to our researcher that each of our witnesses provided an insight that was completely different from anything we've heard so far. I think your presence here today has enriched at least our understanding of what might be done or should be done in the context of some of the others. So I want to thank you very much again for coming.

You're quite welcome to stay, but I'm going to ask everybody for a break as we get the next group forward. Thank you again.

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PAUSE

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[English]

The Vice-Chairman (Mr. Volpe): We'll begin the second half of the hearings.

The subject-matter this morning is market information and intelligence from the private sector. It's a very timely thing, and although it was raised by the last group that was before the committee, since we have a quorum and members from both sides of the House, we'll begin with a brief introduction.

From Info Globe we have Mr. Jeff Carruthers, Director, Government Information Services. From Prospectus Inc. we have Mr. Jan Fedorowicz, senior partner, from Ottawa, Ontario, who is accompanied by Mr. Marvin Bedward, a partner in the same company. From 11 CORINFO Research and Information we have Mr. Ron MacSpadyen, director, from North Bay, Ontario. Mr. MacSpadyen is going to be patient and be the last one to make a presentation.

Our normal process is that our witnesses have about 10 to 15 minutes for a presentation and the rest of the time is given over to questions. Since we are running a little late this morning, for which I apologize, I wonder if you could try to condense your presentation to about 10 minutes. That will then give the members around the table more time to probe your presentation through questions and answers.

As I said to the earlier group, the questions and answers are not designed to embarrass anyone. They're designed to give us a better insight into some of the knowledge you have hidden away.

Mr. Jeff Carruthers.

Mr. Jeff Carruthers (Director, Government Information Services, Info Globe): Thank you, Mr. Chairman.

This is actually a very, very timely time to be here. I'm with The Globe and Mail, which is part of Thomson, a large Canadian-owned information company. Thomson itself is looking very closely at trying to revamp the way it approaches information and is looking at the electronics side of it particularly.

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My focus today - and I'm just going to go through this written statement very quickly - is really just to highlight three things.

Our experience in the marketplace shows that companies, both large and small, really want one thing, and that's information delivered to them that is actionable.

There's so much information today that it's just getting to be overload time, and so the trick in the marketplace - and it is a real trick and like my colleagues here, we're trying to figure out how to do this in the electronic world - is to get the information to the client when they need it, not before they need it and not after they need it, and in the form in which they can use it. That's the trick.

The second thing is that the information industry in Canada is really at an infant stage. There are some big players, such as The Globe and Mail, Thomson, Southam, and Infomart.

We're only now starting to see an explosion in the little guys. If you look to the south and see what's happened in the United States, where they have a much, much more mature information industry, that explosion in the small guys happened maybe 10 years ago. That has driven a lot of things that are happening today that are making a big difference.

So things are starting to happen, and I think electronic information, Internet, and things like this are starting to make it a lot cheaper and a lot easier for people to get into this business. But in Canada, we're behind our competitors out there, both from the information industry point of view and from what I call the information culture point of view.

Canadian companies typically are not yet living the information culture. They are only now starting to realize the importance of having information in a timely, actionable fashion that's going to make a difference in the marketplace.

Whether you're talking about the domestic market competing against other companies coming in and trying to grab their market from them, or whether you're talking about, as this committee is, small and medium-sized enterprises going out into the export market, you actually have to be competitive in both markets. If you're not competitive at home, you don't have enough resources to get out there in the export market. As I say, the Canadian companies, in our experience, have not yet really bought into the information culture.

The third thing is, what is the role for the private sector and the role for government? This may be a buzz word, but I really do think it's time for a partnership. Government has information; they have analytical ability because they deliver a lot of programs. Even with cut-backs, they still continue to deliver a lot of programs and collect a lot of information. So they have things that, if it's packaged right, if it's delivered right to companies, could be very valuable. But in the form it now exists in government, it really isn't very valuable.

That's where the private sector comes in. Whether it's small companies that are just emerging, or large companies like the ones I represent, the key is to make that information accessible and let them go out and, in the term I use, make market, start creating big products, small products, electronic products, reference, good old-fashioned printed products, and everything in between, to try to start meeting the growing emerging needs for information by Canadian companies, especially by SMEs. They're the ones that need the information the most and are currently least able to truly take advantage of that.

Mr. Chairman, I'd like to highlight those three things and leave it at that. Thank you very much.

The Vice-Chairman (Mr. Volpe): That was certainly brief and to the point. Very good. I suppose that's a plug for your industry. Thanks a lot. We'll come back during the question-and-answer session.

Next we have Mr. Jan Fedorowicz and Mr. Marvin Bedward from Prospectus Inc.

Mr. Jan Fedorowicz (Senior Partner, Prospectus Inc.): I'd like to above all support and endorse everything my colleague has just said.

We are, I guess, the other end of the different spectrum. We're a smaller company, nowhere near the size and grandeur of Info Globe, but we've come to very similar conclusions about what is needed, particularly the notion of actionable packaged information. We find this extremely important to the business community.

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As our particular mandate over the last few years, we have focused on business-related information products. That's what we do: guides, fact books, handbooks of various sorts, and increasingly, electronic media, whether it's CD-ROMs, on-line databases, that kind of material.

However, that's not the only thing we do. We have discovered that for our information to be useful, relevant, and actionable, we have had to create a sort of tripod where our information products are supported by strategic consulting that provides the intellectual feedstock, if you will, to make sure the information is relevant, is actual, is fresh, is real. At the other end, we provide various services to small businesses, because that's a way of being in touch, directly in contact, with the end-users. So our strategy is a kind of tripod where our information products are supported by these other activities.

In the ten years we've been in business - just quickly; I don't want to do a commercial for our company or anything - we have tried to focus on practical approaches that help both governments and corporate clients manage information.

Information management is the key, again. I endorse the idea that we're awash in a sea of information; nobody can find their way any longer. Information has to be packaged to make it useful and accessible. Both ``useful'' and ``accessible'' are very important words. We've been experimenting with innovative approaches to that packaging, so we've been using multimedia formats.

Ten years ago, when we were still doing conventional publishing, our handbooks had charts, graphics, case studies, text, and statistics, all of that integrated. Now we're actually moving toward multimedia CD-ROMs, which do the same kind of thing.

We innovated with co-sponsored publications. We realized ten years ago that governments didn't have the kind of money and resources any longer and that you needed to pass the hat and get several different people involved - again, the notion of partnering - so that publications could be produced and could be at the right level of quality.

Information on demand is the notion that business people want what they want, when they want it. They don't want to wait. They only want what they want; they don't want any more. It's no good to give them 700 pages if all they want is the answer to one particular question. We've been working with print-on-demand technologies, with fax-back technologies, menu-driven ideas, so that people can select, and pick, and just take exactly what they want.

Of course, that means interactive information. The user has to be able to define. It's no good just saying, well, here's a whole bunch of information; pick what you want. You have to give them more help than that.

Our mission statement, then, is that we want to work on how to provide action-oriented business information to anyone, anywhere, at any time, and in any format, and the technology now allows us to do that. We've done a couple of projects in this area, and I think that has given us an insight into what this is all about.

For example, we were involved in the design of the Canada Business Service Centres. Several years ago, the minister for Industry Canada at that time asked if a single-window business service approach could be developed, and we were involved with Industry Canada in designing that.

More recently, we're been working for the Department of Foreign Affairs and have designed a knowledge base, as we call it, on anything and everything to do with doing business in Mexico. Obviously, this has come out of the North American Free Trade Agreement, and we happen to have written and published a book on doing business in Mexico that - not co-incidentally, because we planned it - appeared the week that NAFTA was announced and it was the first book of that nature available. That gave us an entrée into designing this knowledge base, and I'll talk a little bit about it later on.

At the moment, we're also doing a strategic plan for the OECD for an international centre for small and medium-sized enterprises, a global network that would try to bring together information about SMEs internationally.

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In addition, we've been doing a lot of work on regional economic development, specifically specifically in Newfoundland, and for FedNor, for Northern Ontario, where again, we have a particular perspective on what these things involve.

I'd like very quickly just to share with you what we've learned from some of these projects.

The critical thing about Canada Business Service Centres is this notion of the single window, with convenient, easy access, and access through a number of different media: fax, telephone, walk-in. Canada Business Service Centres are now located in every province. You can phone using a 1-800 number. You can walk into their offices, and they have fax-back.

There is a procedure or a process for dealing with the client. For routine enquiries, you go in one direction. For more detailed enquiries, you go in another.

Their highly trained information officers do this kind of triage at the beginning. They decide whether the client has a routine enquiry that can be answered by reference to the database, or reference to one of the faxable items. Does a client need to go to a counsellor to get more in-depth information? Does a client need to be referred to partners, federal program officers? Does the client need access to the business materials in the library?

There's a considerable degree of working with the client. It's not just ``slough them off, do anything to get rid of them''. There's a real sense in which there has to be personal contact as well. One of the things we learned is that people do like to talk to people. When they get lost in the Internet, or in the information highway, they'd like to get a traffic cop to help them get to the nearest exit.

You do have to integrate that notion of personal assistance, some kind of counselling, along with a full suite of electronic information products to back it up. This is where the CBSC vision is heading, towards integration. What I showed you is where it is right now, and this is where it's heading, where there will be access by telephone or computer. Through some kind of user-friendly software, you will be able to get outputs in a variety of different media, and this software, along with some kind of counselling, can lead you to whatever services and whatever information databases you want. It is designed so that in the first instance it is user-initiated and user-driven. However, when you get lost there are counselling facilities available that can direct you. So those two things are part of this vision.

The Mexican project I mentioned is one where we have tried to create a comprehensive database on just about anything to do with Mexico. That database involves market profiles and market summaries. I haven't been able to label them all, but there are 40-plus summaries and 40-plus profiles on various sectors - textiles, telecommunications, construction, whatever it is - looking at the Mexican market in those areas. There is a directory of trade fairs and professional conferences, industry directories, business guides, how to export, documentation, shipping procedures and customs procedures.

These are very detailed kinds of work that will help people go through the various processes involved. They also include reference materials for government programs, bibliographies, success stories, a separate family of products on business issues: what's the investment climate like, what's financing like, what's technology like in Mexico?

There are also planning tools that will actually help people develop an export plan, select a partner, evaluation their readiness to export, go through the logistics, financing - everything.

So what we have developed here is a complete and comprehensive suite of products. I think it's very important for business people to have comprehensive information. They don't necessarily want to know everything, but they want to know that when they go into a database, everything is available there that pertains to their particular problem, and they've not missed anything significant. Then they will select the little bit they want.

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It's a peculiar sort of duality in this information environment in which we live. They want the reassurance that we've looked at everything and then selected the one bit that's actually relevant to their particular needs.

So that's the Mexican knowledge base we have developed. I think it can be a model for any country, any strategic market that Canada is looking at; it's not limited to just Mexico. The structure, the framework, the software we've developed - and we have a kind of pilot demo of that software - can be used as a framework into which to pour any information about any market. It is very easy to use, and is easily accessible.

One thing we learned in putting all of this information together is that the real issue here is not a technology issue. The technology is there, it exists, it's extremely sophisticated, it will do anything we tell it to do. And it is not an information issue, because the information is out there. We believe it's a process issue. You have to design the process around the user, what the user wants and what the user is looking for, and then that process can be supported by the appropriate technology, and you can find the appropriate information. Without the process, you're going to have nothing.

We learned this - and maybe we learned it the hard way, because it's a tough slog - because we had to manage huge amounts of information about Mexico and to keep that information fresh, to keep it relevant, actionable, as my colleague said, and to make sure users were happy with it.

So we developed a process - and I won't go into the details of it - involving on the one hand an information domain, gathering research and collecting the material; a production domain, which focuses on how you're actually going to deliver it to people, what's the medium; and a business domain that says well, all of this has to somehow make economic sense. We have developed this process and have recognized the importance of it.

Our OECD project has taught us that you need international linkages. It's not good enough just to have a domestic database because, yes, from Canada you'll have a fairly comprehensive and extensive amount of information available, but you also need to connect with what's happening in all of the other countries of the world. In this case we are developing a network of national centres for small and medium-size enterprises that would be connected to an international centre, which would then feed directly into the OECD.

The objective of this whole thing is to create a network in which information about SMEs and particularly about trade - the trade and international business activities of SMEs - flows smoothly and easily around the globe, so you can find out about what's happening in other parts of the world fairly quickly, and you have, above all else, a logical place to go to find that information. Again, it's the sort of single-window concept. If you want this information, where are you going to go? Well, the OECD feels that if you establish these as credible centres for this kind of information, that's where people can start having access to it.

Finally, our work in regional economic development has taught us another lesson, and that is, trade cannot be divorced from other parts of the economic development spectrum. It all has to fit together in one seamless whole.

What we're seeing, as we look at our regional economic development activities, is that as people come in they first have to be, again, evaluated. They have to be asked what it is they want, what it is they think they need. They may have a series of quite different needs: business planning needs, advice and counsel, technology sourcing, skills development, financing. All of these things have to be right in order for a company to be effective as an international trader.

Before you can start exporting, you need to get all of this other stuff sorted out as well, and that's why we say that the trade promotional function has to be seamlessly integrated with all of these other functions. It goes back to the kinds of information products you have, the infrastructure, advocacy, regional strategic planning. There's a whole series of layers, all of which has to be thought of as a seamless whole.

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Those are some of the projects we've been involved in. Our experience has suggested that there is a natural complementarity between private and public sector information. You can't do without one or the other. You really need both of them to function together and to function together in an integrated way.

The government has access, by virtue of its public policy role, to a lot of information about rules and regulations, standards, application procedures, referrals, and generic opportunities information. It also has, by virtue of its position, an ability of leverage and to serve as a catalyst in gathering large bodies of information.

On the other hand, the information the private sector uses for what I would call the more interpretive, equalitative aspects of this whole spectrum - interpretations in advice, evaluations, consulting and training, matchmaking and partnering - are not things you'd really want the government to be doing, but you need them done. So there is a complementarity.

For example, how to export. This information the government can provide, and this information and service the private sector can provide. They can work together, and I think that would be a way of thinking about it. We have a fairly concrete proposal, if you like, or suggestion, as to how some of this might work.

Yes, there's a huge amount of private sector information, and there's a huge amount of government information in various sorts of databases out there. What we really need is a kind of access point, some kind of navigating or path-finding tool, that would allow people to get in to do a bit of self-evaluation or planning, or to use as a pathfinder and navigator.

Where can I get information about prices in Mexico City? Where can I get information about the freight forwarders that will be available for me to ship my goods to Southeast Asia? Ask those questions up here and then have your navigator take you to whoever in the private sector has that information. It's out there; you don't need to duplicate the stuff the private sector is doing.

There's a huge amount of information, but what you do need to do is somehow navigate through it, and that's why we're interested in that front-end pathfinder part of it. We always take the small business users' viewpoint. What do they see? Well, what they should see is a fairly simple tool that's menu-driven and allows them to select and interact, and whatever information comes out of that tool is available in whatever media they feel comfortable with. If they need expert help, there's expert help available.

If they're comfortable being on-line and interactive, they can use an electronic bulletin board or have stuff printed out. Or they can simply use the tool to fulfil certain orders, because they're not comfortable with being interactive and they would just like to order a report or a disc or some other publication.

Our idea is that you start from the user's perspective and you design a system to make it easy for users to get in and take advantage of. Another part of our thinking is that, apart from information, you really need export planning. You need to help people actually plan what they're doing, to develop an export plan. We see export planning as a kind of a continuous and ongoing process. I've indicated it with something of a circle here.

Here are the actual elements of your business plan. You work around that from situation analysis, market research, financial analysis, technology, suppliers, and partners, and you keep going around and around, because every time you do anything, every time you take an action, every time you take the next step, you get additional information and you have to adjust your assumptions and adjust the situation.

If we have this kind of flexible interactive model of business planning, which is differnet from the old, traditional static business plan, in our minds, you can design databases that feed into critical parts of that model and give you...for a situation analysis, maybe you have a database of basic business information. For financial analysis, what you may need is pricing and costing information. For sources of technology, we have CTN being developed, as well as other various technology databases.

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You can actually design a seamless, integrated kind of system in partnership with the private sector, because they're the ones that have all this information out here. You can design this kind of seamless system that will bring the information into the export plan when it is needed and slot it in exactly where it is needed to help guide people through that process. A large company may not need to have to do this, but to a small company that's not familiar or that may be export-ready but still hasn't got its feet wet, this kind of help, I think, could be extremely useful - to walk them through the process and get them the information they need.

To make it happen, you'd have to do some kind of a gap analysis of existing offerings and ask what's available in the areas of skills, financing, partners, opportunities, market research, and planning assistance. What kind of information does the government have? What kinds of programs and services does the government bring to the table? How about the private sector, information, and private sector services?

This is just a very simplistic, simple-minded, if you like, way of showing how you do the gap analysis. But when you identify these gaps, you then say that this is where your partnering with the private sector is going to become critical, because those are the gaps you have to fill to make that whole export planning tool work, to make the access work, and to make the information offerings to your small business community comprehensive.

If you do that kind of gap analysis, you could also say that the private sector can do some of it and the public sector can do some other part of it.

I will now summarize what I wanted to say; some of our lessons. Business wants a single access point that's convenient. Technology is not the problem; it's designing a process. We have to integrate whatever we do with what's going on internationally, and we have to integrate whatever we do in trade with other economic development initiatives. We feel that a useful thing for the government to do is to complement what's out there in existing trade support in two ways: to participate - that's to be defined - in designing a comprehensive access and export planning tool; and to work with the private sector to show key gaps in the available information. Those two things together, I think, would be useful in getting us from where we are right now to where we conceivably might want to go.

Thank you.

The Vice-Chairman (Mr. Volpe): Thank you very much.

Mr. Ron MacSpadyen from 11 CORINFO and a guest.

Mr. Ron MacSpadyen (Director, 11 CORINFO Research and Information Services): Thanks very much. Maybe I could keep this brief, because I understand you're on a schedule.

I'd like to position myself with my colleagues here. We are information brokers. We are information intermediaries. Businesses phone us toll-free, they ask us business questions, we quote them a price to answer those questions, and they decide whether or not they'd like to buy the answers.

Typical questions are on page two of our hand-out. They start with things like, ``How much bagged peat was exported to the U.S. northeast last year?''; ``What are the latest trends in tire recycling?''; ``What's the average commuter drive time for the city of Dallas, Texas?''; ``What's the share, by country, of the global wine market?''; ``What countries export latex rubber gloves?''; and so on.

This is one-stop information shopping. This is customized business information on demand. This is what people want in the SME area when they're calling us for answers for questions. I do want to just stop there, because it's a simple concept and I'm sure one you can get your heads around.

I do, though, want to highlight on page three of my brief what I think is very good about what's happening in the federal government on the information dissemination side. There are excellent products, services, and programs here that are offered. You are aware of many of them, and I know you cover them.

We'd just like to point to four specifically. The first is NAFTA Online and whoever it was that came up with that idea. We thought that was good, and it is well-used in the SME area. FaxLink is a fax-back service you're of course familiar with. It's another excellent concept. Industry Canada, because it's a pointer from your web site - that's an international trade web site - is very useful to SMEs, because it has proprietary intellectual property information. The NEBS program is something that the SMEs we work with day in and day out feel is of value.

I have six recommendations there for your consideration and review. I'd just like to talk about three, if I could, very briefly.

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The first one is that the provision of market research and competitor intelligence information should be left to the private sector. I understand that's self-serving in terms of the concept, but it's where we stand. We believe you should give serious consideration to the idea that there should be a line in the sand somewhere that essentially deals with market -

The Vice-Chairman (Mr. Volpe): Excuse me, I know we're pressed for time and I appreciate the effort you're making to get us to save it, but if you could slow down a little bit, it will help our interpreters, who have a difficult time following and translating at the same time.

Mr. Penson: On a point of order, is there anybody here who requires the interpretation?

The Vice-Chairman (Mr. Volpe): As you see, it's being broadcast simultaneously.

If you would switch from fifth to fourth gear, it would be fine.

Mr. MacSpadyen: If the group is happy with that, I'm happy to do that.

The Vice-Chairman (Mr. Volpe): Thanks.

Mr. MacSpadyen: The line in the sand is, of course, competitive information, market research. That's what the private sector should do. The role of the federal government, as we see it, is essentially to offer some fair and equitable referral service, or a network similar to what has been referred to so far.

The analogy I'd like to draw here is with the CISTI initiative in CAN/OLE, the on-line system you might be familiar with, developed by the federal government in the early 1970s. It was a bold initiative and retrospectively something that helped jump-start on-line in Canada.

Globe Information Services, among others here, benefits from the great work the federal government did for a great length of time here in Canada in terms of on-line access to information.

Of course, CISTE has re-evaluated that, and by the end of this year, of course, CAN/OLE won't be any longer, primarily because many of the services that are offered there, much of the information that's offered through CAN/OLE, is now offered in the private sector.

Similarly, I would suggest to you that much of the market research information, the competitor intelligence information, that does come to the government right now is something that's happening currently as a research opportunity in the private sector, and we're just competing there. That's not necessarily a place where I feel we should be competing.

On the second recommendation, I encourage you to consider the idea that the federal government should accelerate deployment and leverage opportunities created by information technologies, specifically, that the government should explore the development of an Internet-based information dissemination strategy that features a host of interactive tools.

I'd like to be more specific than that. I'd like to list the host of interactive tools.

First, we are looking at something that goes above and beyond what currently exists as the Internet site for any of the federal government departments.

It would include, for example, the opportunity to search the full text of NAFTA by keyword. For example, if point of origin of goods or materials was an issue to me, I could call that up, Internet-accessible to a web site, that could allow me to put in a keyword. NAFTA text relevant to that area would be made available on the screen. That would include D-memos, now included in the NAFTA on-line 1-800 service.

Real audio, that tool that should be used on the Internet, could essentially deliver much of what is delivered in terms of anything that might be audio that would interest SMEs. All kinds of information out there would fall into that category.

Audio-delivered...for example, of trade missions or trade commissioners speaking to different conventions around the world is something SMEs are very interested in. That, of course, would be real time delivered in audio format via the Internet.

E-mail links, the opportunity for me to talk from the Internet to somebody in the trade groups, would be very important, and some news groups and list services.... I just want to list two other tools I feel are important here for technical people possibly to pick up on.

Thirdly and lastly here, recommendation three is essentially that federal government policy should recognize market research and competitor intelligence as a more integral component of foreign export market penetration and that there should be some serious consideration given to the idea of an information investment incentive.

It's always interesting for me to look at what was referred to in an earlier session today, that is, for a company to spend $40,000 of their own money to arrive in a foreign market, and for us to receive a phone call back here in Canada to ask questions like, ``Who is this company I'm talking to today, and what's the distribution channel for this product in Europe?'' Those types of questions, we feel, would be homework a company should have done.

It does deal in part with the point Jeff made about the information culture for SMEs, but if the government is going to be involved in some kind of subsidy, or if there's a cost share on it, the idea that information is what is being provided, or it's a subsidy for that, for market research and intelligence to get businesses up to speed on this, is an idea I would encourage you to consider.

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It's currently happening in a project in the State of Minnesota. The project is fairly successful. It's evaluated by many different groups and is valued in a great way by what would be the equivalent of our SMEs.

Thank you for the invitation to speak.

The Vice-Chairman (Mr. Volpe): Thank you very much, Mr. MacSpadyen.

We can go immediately to questions. We have a few people who are interested in some of the technical components of your presentations. I'm sure you'll all have at it.

Mr. Mills.

Mr. Mills (Red Deer): I'd like to ask two general questions, and I don't necessarily want to direct them to one person.

It seems to me that with all of this information, with its potential and with the need for it, there is a selling effort that's required within small and medium-sized businesses. Not only does it require selling to the owner and the management of the business but it also requires selling to make those tools available at various levels of the business. That may come back to the first speaker's comments about the culture of this sort of thing. As well, we're not really up to speed and we're not really competitive in the international marketplace.

First, how do we get our hands around that sort of problem? I know in business I can get very convinced that something is great, but I know how tough it is to get it down to other levels to make it functional. That's my first point.

The second point, which I'm concerned about, is how government plays a role in this. You've suggested that government can play a pretty minor role. As for cost efficiency, I think you could provide the service much more efficiently.

I look at the NAFTA on-line and FaxLink information service and I wonder why the government needs to do that. Do you think government needs to do that? Can you do it cheaper, better, and more satisfactorily for business? That is the other aspect.

The Vice-Chairman (Mr. Volpe): Mr. Carruthers.

Mr. Carruthers: Why don't I start? I'm going to say something that will probably cause a shudder in the audience. I hope it does.

When you're marketing an information product, there are two challenges, as there are for any product. You have to find out who the people are who really need your product, and you have to be able to access them. It's up to you to sell it. It sounds pretty simple but that's the very tough part of marketing anything.

I suggest to you that government has a community out there. Every single department has a community of business people they deal with on a whole variety of issues, whether it's trade, agriculture, canola subsidies or transportation rates. They know there are people interested in a particular piece of information.

In effect, how can we find a way to give the Canadian private sector access to those people - that's an extremely important piece of knowledge - without in some way infringing privacy? That's the trick. Because if you could do that then you could basically unleash us, big and small, and you will have given us one advantage.

Second, and again this is going to sound a little strange in the current fiscal climate, the government should use our products. It should buy them. I've arrayed here a bunch of things we do. These are old-fashioned printed products. We also have CD-ROM products and on-line products. Government is a big buyer of information but government doesn't use it as much as it could.

When we're trying to convince a small businessman that if he gets this product it's going to make a difference and he knows people in the government who are doing similar things are actually buying it and think it's a good product, that says something. Perhaps some don't think it's good and don't buy it.

Those are two thoughts I had.

The Vice-Chairman (Mr. Volpe): A lot of that information is coming from those same departments that you would like to have as users. I'm missing something If you come to our customs and excise department for a lot of information that is useful for small and medium-sized businesses, the government presumably has that information already. Why would they want to get it from you?

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Mr. Carruthers: I'll give you an example. I'm not a lawyer. Any of you who are lawyers know the Government of Canada produces a whole bunch of statutes. You go to a lawyer and you find out what they buy. They go to private companies that give annotated versions of those statutes. Why? Because they've been packaged with a bunch of valuable additional information that suddenly makes those statutes come alive.

Similarly, we have on-line databases. Consider the suggestion of my colleague, Ron, about giving us a word-searchable version of NAFTA or encouraging some private sector company to do that. All of a sudden NAFTA becomes alive, because it becomes useful. Here's the challenge for us.

This is another example. I'll sell my own song here for a second. This is something called the Canadian Federal Government Handbook. It's the estimates, which usually sit about this high in blue books, collapsed into a little book, with a bunch of information on departments, spending and the key bureaucrats you need to talk to. I'm going to leave all of these for the committee.

This is something that I think a lot of people in government find very useful. If you pick up the government phone book, which is six months out of date by the time it arrives on your desk, people have moved. The private sector can probably track that a lot more easily than you ever can, and it makes government a lot more efficient at doing what it does in dealing with clients.

You're asking a good question. If our products don't make it more efficient for you to operate in government, then we're going to go out of business.

Mr. Mills: But shouldn't government just be a referral? Your very example there is exactly what's wrong with government. It can't make things workable. It makes things this big when it could be made that big and understood. It's grown that way. It's grown to become that inefficient.

Mr. Carruthers: That's why we have an opportunity. It created an opportunity for us.

Mr. Mills: Yes. So the government's role can then be just referral. Let industry do it.

Mr. Fedorowicz: The government also has a mountain of information. That information needs to be sorted, packaged and arranged, just as Mr. Carruthers said. It's the sorting and packaging that gives that raw information some kind of value. You really need some kind of a partnership between the private sector packager and the government origin of that information. You have to cut some kind of a deal.

I wanted to say two things in response to your marketing question. In addition to the marketing challenge, if you like, as Mr. Carruthers said, there's another way of marketing information: make it simple and easy to use. People will start wandering in to try it out. I think the problem so far with a lot of the information technology is it has not been easy to use; it has scared people away.

If we want to do something about creating an informatics culture in this country, we should focus our resources on making this stuff easy to understand, access and use. Even though the database array and the software and all of the technology sitting behind it is extremely sophisticated and complicated, the user should just see one simple screen. They should walk through what they need. The whole thing should be transparent to the user. They shouldn't have to see all that complexity.

People know we live in the information age. They know these tools are available. They know computers and software are out there. They're just scared to use the stuff, because it's still too complicated. I think that's another dimension to the marketing challenge.

The other point I would make in terms of a lot of these kinds of initiatives is privatization. Government can act as a catalyst. Government can kick-start a particular process, the way we did with the national railway in the 19th century. We can kick-start certain informatics things, but built into that should already be the seeds of ultimately privatizing those parts that can and should be privatized.

For example, take the Canada Business Service Centres. When we designed these, sure there was a mandate from a minister to go and do that, but embedded in that concept was the notion that this could be privatized. That can be operated by the private sector; it doesn't have to be operated by government. It's just that government has to be receptive to releasing all of that at a certain point.

Yes, we got it started. We got it going. Let it go now, because we don't have to do it any more. We set it up. Let's take some bids and tenders. Let's find out who can manage this thing and just let them do it.

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Mr. Mills: I can make a political comment here, but I won't.

The Vice-Chairman (Mr. Volpe): I'm glad you resisted the temptation, Mr. Mills. I thought I was hearing your voice there for a second.

Mr. MacSpadyen, did you want to comment on that? No?

Mr. Mills, do you have another question you'd like to ask?

Mr. Mills: No, that's fine.

Mr. Alcock (Winnipeg South): I'd like to go a little further with your shudder, actually. As for this whole question of allowing access to the mountain of information so it can be mined, you've seen the debates that have gone on in the States. There are two parts. It's changing the regulatory environment that allows access to it. The second thing is the pricing of it to the wholesaler of information, if you like.

Can you comment on the current impediments in Canada on the access side and then make some comments on the pricing of it? How should it be priced?

Mr. Carruthers: Okay, you've hit on what in both our industry and the information industry is perhaps one of the most controversial - and if it's resolved, probably the most powerful - things that could happen. I'll try to give you some examples.

Right now there is a big debate within government. I'm hoping this debate will finally end, maybe tomorrow - I doubt it - or the day after tomorrow, which may be soon enough as to whether in fact the Crown, Her Majesty, should use the crown copyright to prevent the private sector from disseminating, distributing, or marketing information that derives from the government.

It's important that we point to the good things that are happening out there. There is a web site put up by the Department of Justice, which is one of the many web sites that have sprung up over recent weeks and months, that now gives anyone in Canada access to the statutes of Canada. That web site says this is the government's information that's been collected on behalf of all Canadians. I'm not using the exact words there, but as long as you give credit, you can use it. You will not be charged a royalty. You will not be told how or how not to use it.

The debate for the longest time was that you couldn't use the statutes of Canada because those were the government's. It wasn't sure what you would do with them, and it was going to try to make money from you.

I think that's a fundamental error we've fallen into in Canada, particularly at the federal level, but also at the provincial government level.

The U.S. government gives it away. In fact, it goes out of its way to give it away. It gives it away in any form you want. Around that, hundreds and hundreds of companies have been built up, or they sprung up, as I mentioned earlier, and they basically take that information, package it, repackage it, re-repackage it, and sell the heck out of it.

As a result, you have companies in the States who are very plugged into the value of information. You have a whole industry that has now sprung up and makes a lot of money at it. We need to do the exact same thing in Canada. We need to end the debate.

The Information Highway Advisory Council basically concluded that the Canadian government should say that this is its information it holds on behalf of all Canadians, but that it would make it available and not try to make money at it. If you try to make money at it, you're going to start putting restrictions on it and get in the way.

The second thing I would say to you is that one of the big challenges the government faces is to take the information that's now available in all these different systems and perhaps translate it into a form that's much more easily usable. I don't mean put it into proprietary formats; I mean just make it available in some pretty standard formats. Then let us have at it. You will see a whole bunch of people who'll be very interested to get into that business. I'm very serious. I know the people out there who want to do this. Right now, they can't do this because there's a blockage.

The worldwide web thing has helped. All of a sudden, in spite of the process, departments have gotten into this business and started publishing information. This is in spite of the IT people saying you can't do that, and in spite of the people at Treasury Board who say it doesn't follow the right regulations about the Government of Canada logo and all this stuff. They're just doing it anyway, and I congratulate them. More of them should be doing that. They should get rid of all the process that says you can't do that unless you do it in a certain way.

So justice? Good. More of you do it.

I get emotional about this, because this is very important for our business.

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Mr. Alcock: I would like to hear from the others on this, too, but to go a step further, the format within government, the convergence, in a sense, is important.

Mr. Carruthers: Yes.

Mr. Alcock: You commented on pricing. As I understand it, in the court battles fought in the U.S. the position was taken that the people had already paid for the information -

Mr. Carruthers: Exactly.

Mr. Alcock: - and therefore, to charge for it again was inappropriate.

Mr. Carruthers: Yes, when we do all the work that goes into this there's some government information in there, but the value is packaging, commentary, and putting it together in a particular fashion. We put a lot of blood, sweat and tears into this thing, and that's what we're trying to sell.

Mr. Alcock: Some of us at this table think government has some value, too.

Mr. Carruthers: Oh, they do.

The Vice-Chairman (Mr. Volpe): Who are they, now, Mr. Alcock?

Some hon. members: Oh, oh.

Mr. Alcock: I woudln't want to make any comments on that.

Mr. Mills: You see, he can't resist.

Mr. Alcock: I'm just tired of simplistic arguments.

There is this sense of the reorganization necessary in government to get used to giving information out, and there is the question of format, but there also are some fundamental problems with confidentiality that come up around personal protection - I'm not certain I want you giving out all the information the government has about me - and also with confidentiality that intersects business strategy and business planning. Can you comment on this from that perspective?

Mr. Marvin Bedward (Partner, Prospectus Inc.): The issue is one of partnership. You're going to have to accept some of the private sector business or information providers into your tent and discuss with them what it is you want to release, what can be released and what can't.

In the process we've developed with Foreign Affairs on the Mexican knowledge base, we're an integral part of the way the information is being developed and gathered, and where it's coming from at the post and in other places. There's a collective decision as to what can be released and what can't. It's much more a question of whether you can bring people in as partners in the process. Part of the confidentiality issue gets resolved because you have a partner sensitive to the government requirements for confidentiality.

Mr. Alcock: So the value added in the dissemination is not only the government information but is also the information produced by the company.

Mr. Bedward: That's correct.

Mr. Fedorowicz: We're far from believing that government has no value added. Government will produce information as an incidental by-product of its own activities in policy and planning and strategic leadership, so it has certain kinds of information.

It will have another level of information, for example, because we have trade commissioners out in the field who gather certain amounts of intelligence and information. That information has a value, but it only has value if you can get it back quickly enough and get it to the right people. Our view is that getting a private sector partner will help you do that.

We've just seen it, for example, with the Mexican knowledge base. When NAFTA was announced, the few people on the Mexican desk were buried. They were answering phone calls all day long. They had no resources and no time to gather or collect anything. They needed help. We went in and helped them.

We designed a process where that information could be packaged, used, and made available. They had some value because they had some strategic ideas and some sense of who their users were. They could plug us into their trade commissioners and so forth. There was a value there. We added another kind of value and, together, I think we created a fairly good product. I think that's both parts.

Mr. MacSpadyen: Could I add two points?

Mr. Alcock: Your recommendation 4, too, if you would.

Mr. MacSpadyen: Recommendation 4 deals with the principles of non-exclusivity and marginal costs. Unlike Jeff, we're quite willing to deal with marginal costs. That's neither here nor there. We understand there is a cost to get information to the private sector. We're willing to deal with that.

I want to talk about one other point on something that has been mentioned, which does deal with the idea of this proprietary confidentiality area. I've always looked at that as a red herring from the federal government for the private sector's ability to deal with the federal government in this area of information dissemination.

Based on our experience, I believe most of the information industry and the federal government would agree on areas, or could agree on a great number of areas, where information is both non-proprietary and not confidential. These are areas we could move ahead in. From where we sit, this red herring of having to sort it all out before we can get to this part has only slowed down the whole process.

The private sector understands that there is certain information that is proprietary and confidential. Of course we're willing to take that off the table. It's the rest of it, 90% of it, that we're all interested in getting at. I think most people in this room would agree there's nothing in that segment of the information universe that couldn't be moved forward.

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Mr. Penson: One of the problems I see with the proposals you have made is I'd have to lay off some of my staff, because a big job we have as MPs is disseminating information. That's just in jest.

That is a problem we have. People are hungry for information, and in the form we put it out as government, it's hard for people to understand. So in terms of a more user-friendly aspect of it, I welcome what you're saying here.

There was a reference made to the OECD and sharing of information and the whole business of our trade commissioner service overseas when we have market intelligence that's really designed for Canadian businesses. How would you see that handled in terms of not letting it become public knowledge? It's a competitive world out there that we're trying to gain a market share in. How could that be handled in a way that would safeguard it for Canadian companies?

Mr. Fedorowicz: It's easy enough to put certain caveats on information, as Ron just said. The private sector wants to cooperate. It's not that we're all sharks out here who are trying to gouge each other. There is a certain sense of responsibility in how information is used.

There's been this discussion about market intelligence as if it's one kind of thing, and either the private sector has to do it or the public sector has to do it. I don't think market intelligence is one kind of thing. There is all kinds of different market intelligence. It may be very useful to me, if I'm trying to sell some product to somebody in a foreign country, to know that individual likes the colour purple. So I'll wear a purple tie. It may be trivial stuff. It may be things you'd never think about.

Trade commissioners can give you some of that information. They are plugged in. They go to events. They can give you some of that. If I were going to export to a foreign country, I wouldn't rely exclusively on that information. I'd want to have that, but then I'd also want to have my own market researching company, maybe I'd like to have some partners in the country, etc., to get a full range of things. We have to figure out how to align all of that in such a way that people can have access to a spectrum of information.

In terms of the OECD initiative, you get out of it what you put into it. If you don't want certain information to be going out, you don't send it out. It's that simple. For example, there is a rider attached to the information in our Mexican knowledge base, saying it's available in Canada to Canadian companies because it was collected at Canadian taxpayers' expense.

Mr. Penson: But what kinds of controls do you have from there?

Mr. Fedorowicz: We don't have any controls, but we're not going to take that information and start marketing it in the United States. We won't do it.

Mr. Bedward: The other issue as well is we're a fairly open country with a number of subsidiaries from foreign nationals here. They can get access to that information and disseminate it anywhere they want in the world. It's very difficult to control that, because you have to give people access to that information.

In fact a lot of the information we give out on trade is information we gather from the U.S. national trade database. That's what we're disseminating to other people in Canada.

You have to look at it for what it's worth in the sense that you cannot control the flow of information. It's probably one of the most difficult commodities to control. What you can control is the speed at which this information is disseminated to your target audience. That's the issue.

Mr. Penson: So that Canadian companies may have access to it first.

Mr. Bedward: That's correct, yes.

Mr. Carruthers: Can I just jump ahead? I think everyone would agree on what the ideal situation is, and that's somewhere out in the future, when Canadian companies, both small and large, are extremely sophisticated when it comes to knowing what they need and knowing how to get it. That's where we want to go and that's where a lot of our competitors already are today.

Basically the challenge for Canada, both government and private sector, is how do we get our companies to be that way? What is the infrastructure? I don't mean infrastructure in a government-built sense. What are all the pieces we need to put together in this country in terms of gathering information, disseminating it, repackaging it, marketing it, selling it and using it?

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We have to figure out how to build that infrastructure such that when we drop a piece of information out of a trade commissioner's office in Japan, it gets to Canadian companies. It may get to Canadian companies as fast as to foreign companies, but because those people at the other end know how to get it, what to do with it and where it's coming from, they can act on it so fast that they can take advantage of it before anyone else can. Right now we're not in that situation.

It's not so much trying to control the information and only give it out to certain people. I suggest you have to flip it around. You have to make it available to everybody instantly and work very hard to make sure Canadian companies then know how to take advantage of it faster than anyone else.

The Vice-Chairman (Mr. Volpe): Even the Canadian companies that don't want their information disseminated by the government to another Canadian company?

Mr. Carruthers: I guess this goes back to the point of non-exclusivity. In the information world everything is going to be out there. There is no way you're going to control that. No matter how hard you try, you can't do it. It's pushing in exactly the opposite direction. You have to build your process, your policies and your systems based on the fact that everyone is going to get it.

I'll give you an example. Let's say you don't want some information to go to someone else, so you only give it to a few people. You've already given those few people an advantage over everyone else. That's what's currently happening, not because anyone wants it to happen, but because that's just the way the system works.

It may not end up going to the right Canadian companies that can really take most advantage of it. There's a lot of little Canadian companies out there who have access to stuff, whether it's private sector or public sector, that could make a big difference to them. But we don't know who they are, so we have to get it to more people in a way that they can recognize it's important and then use it. That's the challenge.

Mr. Penson: And that would include those customers paying for that service.

Mr. Carruthers: Absolutely.

Mr. English (Kitchener): Mr. Alcock asked my question, but I guess that won't stop me.

Mr. Alcock: It never has before.

Mr. English: Mr. Carruthers, in your written statement the United States is put forward as a model in terms of information more generally, and you talk about the revolution that's occurred there. In terms of our focus, which is small and medium-sized business and export markets, the United States has been doing better lately, though of course their currency has dropped in a very major way vis-à-vis a lot of the world.

But there are other countries that are usually considered to have done much better - some of the European countries, for example. What do they do? What do, for example, the Dutch and the Germans do, who export and are moving fairly dramatically into Eastern Europe and even out to Asia? How do they handle this differently? Where do they get their information from?

I used to be a university professor, as did Dr. Fedorowicz, as well, and I used to always worry about students when they came in with piles and piles of books. At some point you have to stop looking at information and start writing your essay.

In listening to the presentations this morning, it seems to me that is a problem with Canadians. We do have an abundance of information. We have great access to American information in English, which is supposed to be a great advantage for us. Yet if you look at the record of the past 25 or 30 years, there are many countries that have done much better on this question than we have.

What do, for example, the Germans or the Dutch do differently from us in this respect that allows them to have market information for, in the German case particularly it seems to me, small and medium-sized business that we don't?

Mr. Carruthers: If you had a couple of days we could probably talk about that. It's a very complicated story. I'll give you my thoughts, and my colleagues, I suspect, have other thoughts that are important, too.

The Germans, for example, have traditionally had a much tighter integration of their corporate, government and quasi-government organizations, both on a people basis - individuals dealing with other individuals - and on an organizational basis. They're much tighter and they share information much more naturally within themselves.

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Canadian and American companies tend to be much more egalitarian and less structured in that way. So at least in this country, the way we traditionally have made the difference is getting at the information in a public forum. It's much more the way we do business than, say, Japan or Germany.

Maybe this is simplistic, but I would argue that we therefore need to compensate for that difference in the way we're organized - private sector, public sector - by being a lot faster and a lot smarter at being able to get, use, and take advantage of information. It makes it all the more important for us to figure out how to do that and how to do that right.

In the past, computer information, electronic information, has been a very expensive business. I would say today, tomorrow, and in the next weeks and months ahead the cost factor is going to become a lot less. Both the technology and the information is there in a much bigger fashion, so we can now take advantage of that. Maybe 10 or 20 years ago we weren't able to do that.

Those are some of my thoughts.

The Vice-Chairman (Mr. Volpe): Thank you very much.

I'm going to ask members to stay behind. We have scheduled a high-tech demonstration. Even though it sounds as though a very hot debate could develop here, I want to thank each and every one of our witnesses for a very informative - and I don't mean that as a pun - session. I know it will help shape some serious considerations for us in the context of a lot of the other presentations we have heard so far.

On behalf of the committee, I thank each and every one of you for the time and energy you've put into the presentations. Thank you.

Colleagues, we'll begin the demonstration in a few minutes. We have: Cynthia Hoekstra, from the Library of Parliament; and Ross Gordon, a database librarian, also from the Library of Parliament.

I think Mr. Carruthers is going to stay behind, as is Mr. Marvin Bedward, and a respresentative from the Canadian Institute for Scientific and Technical Information.

This is a pre-scheduled session for members of Parliament.

The meeting is adjourned.