Trade deals are not enough: Growth in Canadian Economy will be driven by a Change in Corporation Culture and not more Trade Deals.

Andrea Mandel-Campbell is a conservative. In 2011, she ran for the Ontario Progressive Conservative’s and lost. While, I don’t agree with Andrea Mandel-Campbell’s politics, she wrote a very good book years ago called “Why Mexicans Don’t Drink Molson: Rescuing Canadian Business from the Suds of Global Obscurity”. It is a book I recommend to anyone who wonders why Canadian Corporations have such a hard time succeeding oversees.

In her book, she makes a series of simple arguments and each argument is backed up with an example. However, this book can be summed up into a series of simple thoughts: Canadian Businesses tend not to expand beyond Canada and when they do expand they depend too much on the American Market. Instead of looking to places like Western Europe, Scandinavia, China, Japan, India or the Middle East, most Canadian Businesses focus on Michigan, California, New York or Washington State.

It is easy to understand why that is. Canada and the US share a common legal system, common history, common language – save some Francophone areas like Quebec and Acadia – and an easily exchangeable currency. However, this dependency does lead to a number of issues. Simplest being, Canadian businesses do not have the necessary skills to take advantage of any of the new trade deals that the Harper Government has sought.

Think about this: Given that Canadian Businesses do not spend a lot of time in China, they would expect that they could develop client relationships in China just as they do in North America. Or put differently, many Canadian businesses will not spend years in a market, like China, without the possibilities of making sales. However, this tendency is problematic. As a recent article in the New Zealand Herald noted:

“In the West, including New Zealand, a relatively sound and sophisticated legal system, which is typically contract-based, allows business deals to happen without the need to seek personal connections or relationships.

Business is typically approached on the firm level, within a contractual framework, and relationships are gradually shaped as the business deal proceeds.

In contrast, the consideration of human relationships is so ingrained in Chinese culture that it has become a key component of business practices in China. Historically, both Confucian and Taoist teachings have emphasised the high-contextual humanness and human relationships – for more than 2000 years. The impact of such strong belief has been evident in the Chinese way of doing business.” (Engaging with China: do we understand business relationships?, by Henry Shi, Arran Boote and Charles Tang, New Zealand Herald, November 13, 2013) While this might be a revelation to most, in 2007, Andrea Mandel-Campbell noted this tendency in her book.

This lack of foreign business development knowledge is not surprising. Canadian Businesses and Provincial Governments don’t value Global Experience or Foreign Credentials. As such, they lack the knowledge or language skills to deal in foreign nations. Think of how many small Canadian firms in Montreal and Toronto that don’t look to South American or Europe to develop new business? Or think of Cogeco Cable. They are a major diversified communications company that trades on the TSX, and they have dabbled in Cable, Radio and Telephone Services for years. However, what was most interesting was the reaction to the company’s purchases in Portugal versus the company’s purchases in the States. In 2006, Cogeco bought a Portuguese Cable Operator. At the time, Bay St. was aghast: why would a Canadian Company go into Europe? Yet, few critical words were said in 2012, when Cogeco sold its Portuguese unit and purchased an American Company. The contrast in my opinion is simple: Canadian Business likes dealing in the US and nowhere else. With that being said, it is not a surprise that Canadian Businesses don’t take advantage of the global language or professional skills available in Toronto, Calgary, Montreal, Halifax or Vancouver.

Consequently, trade deals are not enough, but there is a solution. In 1978, Dubai built the Dubai World Trade Centre (DWTC) to become more international. That complex housed exhibition halls, a convention centre and residential apartments. It was big, empty and in the middle of nowhere. Yet, that building had some important tools. It has translation services and currency exchanges. It provided a number of homes in a safe environment – something which was novel in the Middle East in 1978. At the time, Dubai – unlike Lebanon, Iran or Iraq – was a safe harbour where the government paid for an institution to encourage businesses to grow.

We can do the same. The Harper’s Government attempt to turn diplomats into sales people is doomed to fail. For Diplomats, by their very nature, are not good at promoting individual businesses or knowing what they need. The Federal Government, for example, could help through the building of “bridges”. The Federal Government could pay businesses to get their employees trained in a second, third or fourth language regardless if those employees need the training for their job. The Federal Government could organize some Team Canada Trade Deals just like Jean Chretien did in the 1990s. The Federal Government could build temporary rental offices and exhibition halls in Europe, Asia, Caribbean and South America to allow Canadian Businesses to take a leap into a foreign market. The federal government can do a lot, if it tries and strategizes. However, most important thing the federal government needs to do is start somewhere; it needs to try. And to date, the Harper Government has not done that.

Increasingly, for me that means some action is needed. As a Liberal, I believe in witnessing what is and recognizing what needs to change. I do so objectively and without prejudice. I look to help my fellow man through the creation of government policy that assists individuals and as such, helps majorities and minorities alike. In that way, we help the Other, ourselves and society. This is what it means to be a Liberal. In understanding this, I say trade deals are not good enough, if this or any government does not create the pillars or institutions for success. And today, the Harper Government is not doing that.

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