CCC’s Annual Public Meeting Transcript

March 6, 2019

Ms. Angie Tinor: Good morning and welcome to the Canadian Commercial Corporation’s Annual Public Meeting.

My name is Angie Tinor, and I am CCC’s Assistant Vice President of Corporate Services, and I will be the moderator for today’s event.

Annual Public Meetings give crown corporations like CCC the opportunity to share information about the work we do with Canadians and to solicit input and feedback.

Today’s meeting will cover CCC’s 2017-2018 fiscal year, which ended on March 31st, 2018. I am delighted to have with me today two of our board members. Mr. Douglas Harrison, Chair of CCC’s board of directors and M. Martin Gagné, Chair of the Operations Committee of the board of directors.

Also with us, Mr. Martin Zablocki, president and CEO of CCC. Mister Harrison will comment on our governance and the results of the reporting period from the viewpoint of the Board of Directors.

Mr. Zablocki will provide a corporate overview of CCC and highlight achievements during the reporting period. He will also outline CCC’s strategic direction for the future. M. Gagné will provide an update from the operations committee that reports to the Board of Directors.

A brief question and answer period will follow the presentations. You can submit a question online. And we will also answer questions submitted in advance of today’s event.

Now, just a few housekeeping items to take care of before we begin. Today’s event is bilingual and simultaneous interpretation is available in French and English. Simply select your language of choice by clicking the gear or settings icon at the top of the video.

If you would like to submit a question, you can do so either in French or English at any given time during the webcast. You may see me passing paper copies of the questions we receive so we can answer them by one of our presenters here today.

If at any given time during the webcast you are having technical difficulties, please refresh your browser or click on the button at the top of the screen.

Shortly after today’s event, we will make our recordings available online should you wish to review any of today’s presentations.

Now that we’ve taken care of those details I would like to pass the floor to our Chair of CCC’s Board of Directors Mr. Douglas Harrison to officially kick off this event.

Mr. Douglas Harrison: Angie thank you for that kind introduction and good morning everyone, welcome to our Annual Public Meeting and thank you very much for joining us today.

As Angie mentioned I’m Doug Harrison. I’m Chair of the Board of Directors of CCC, and it’s my pleasure to be with you today. I was honoured to be appointed by the Minister for International Trade Diversification to this important role in February of 2018.

This is my first Annual Public Meeting for CCC, and I’m delighted to be here today with you. I look forward to talking about what we have been accomplishing and how we continue to deliver significant value for Canada.

We’re pleased to be holding this meeting by webcast again so that people from all parts of the country can join us today. And I’m even more pleased that we have high numbers that have turned out. Thank you for joining us.

As Chair, I would first like to thank the Honourable Jim Carr, Minister of International Trade Diversification. He’s an important partner with our organization and has been critical to our success. We appreciate his support.

I also want to take this opportunity to thank all of my Board member colleagues for their leadership and guidance throughout the year. During that time, we went through a renewal process and welcomed several new members to the board.

We have all worked diligently to position CCC for pivotal changes going forward, and we’re very fortunate to have such a highly engaged and capable board, and I very much appreciate all of their support.

Together we are focused on implementing a new strategy to lead CCC into the future. It is results-based and will deliver even greater value for Canada. We will help more exporters to sell to more foreign markets. This will help in turn to create more jobs for Canadians and greater economic value.

Our board is responsible for the stewardship of CCC, and we have a robust governance structure in place. We provide oversight and strategic guidance to the corporations’ senior management team and ensure CCC’s long-term strategic focus is aligned with the broader government agenda conveyed by the Minister of International Trade Diversification.

Our Board is composed of 3 committees: the Audit Committee, the Governance and Human Resource Committee and the Operations Committee.

My colleague, Martin Gagné, is joining me here today to provide more detail on the Operations Committee that he chairs.

The board remains highly confident in CCC, and its continued ability to effectively and efficiently fulfil its mandate. I am proud of CCC’s accomplishments to date and the successes that were achieved over the last reporting period. CCC is uniquely positioned to continue supporting Canadian exporters both large and small across diverse industry sectors to help facilitate their sales to foreign governments.

Our new comprehensive strategy will take us even further as we broaden that mandate. We will deliver broader support for Canadian industry across various business lines.

We have an enhanced focus on geographic regions, and we will continue to increase our support for Canadian SMEs.

We will remain the government of Canada’s key partner when it comes to sourcing. In fact, CCC is instrumental in supporting the government in this regard. When disaster relief and emergency response as needed and CCC is ready and able to get the job done.

Going forward, all of our work remains focused on delivering value to Canada through increased exports in greater job creation.

I speak for all the board members when I say that we are confident that CCC’s renewed strategy is building on the success and momentum of the past year and will continue to grow Canadian export business.

Successful implementation of the strategy will require investments in CCC, its people, processes, and systems.

These investments will enable CCC to deliver even greater value for Canada by remaining a critical, essential partner for exporters for years to come.

As we implement this new strategy, the board of directors will ensure that the corporation continues to observe and demand the highest ethical business practices in all of its activities.

In this regard, I am pleased to note the corporations continued focus on responsible business conduct. CCC is already positioned as best in class with respect to anti-bribery in anti-corruption and CCC is committed to going even further in its commitment to responsible business conduct through its ongoing effort to implement an enhanced approach to human rights assessments, to guide the corporation as it makes export decisions.

As I conclude, I want to thank and congratulate everyone who contributed to CCC’s successful year in 2017-2018.

I’d also like to again thank my colleagues on the board of directors for their commitment dedication and assistance throughout the year.

I would particularly like to recognize and thank Steven Sorocky for acting as CCC’s Interim Chair over the last two years prior to my appointment.

Thank you also to CCC’s staff and senior management team. It’s been through your notable commitment and hard work that CCC has achieved success over the last period. I wanted to point out how much I’ve enjoyed getting to know all of you throughout the last year and again sincerely appreciate all your dedication to the organization.

I’d also like to take this opportunity to thank Marty for his tremendous contributions over the year and to the government of Canada as well as CCC.

Marty was appointed the CEO of the corporation in 2014, and his term will be ending this April. He has served in a number of positions within CCC over that time. His vision, focus, and solid determination drove CCC’s success and perhaps most importantly laid the groundwork for our future. Thank you, Marty, for your contributions throughout the year as well as throughout your career with the organization, and we wish you well.

As a final thought, I’m confident that the next year will be an exciting one and transformative one for CCC as we continue to expand our reach into even more markets and focus on priority sectors, we will serve even more Canadian exporters.

I speak for all of us on the board when I say that we look forward to continuing to work with Canada’s Minister of International Trade Diversification the honourable Jim Carr and his office to guide CCC’s future.

When we help Canadian exporters succeed we bring more of Canada to the world, and this includes our values and ethics.

Let me now introduce our CEO, Martin Zablocki, he will tell you more about CCC and our significant results over 2017-2018. Marty thank you.

Mr. Martin Zablocki: Thank you Doug, welcome everybody it is truly an honour for me to be here with you as president and CEO of the Canadian Commercial Corporation and I wish to thank Doug Harrison and Martin Gagné and everyone here for having invited me here to share with you our views on the part of the board.

What I’d like to do today, is take you through a brief overview for those of you who are

online who aren’t familiar with our organization yet and point out how we are capable of assisting Canadian companies exporting abroad. We’ll take a glimpse of the incredible results that we achieve for 2017-2018 and then bridge into a discussion of our future.

So if we just move into the first slide here you can see that CCC, founded in 1946 is really an integral part of the trade portfolio in the government of Canada there are in fact three significant organizations that work in close harmony to help Canadian exporters in that domain.

Ourselves as the government-to-government contracting arm of the government also we work very closely with global affairs Canada and particularly their trade commissioner service who are in numerous cities throughout the world looking to promote Canadian company opportunities. And, finally EDC our export credit agency who work very much with us in terms of financing and insurance work to try to help Canadian companies find secure opportunities abroad.

All of us report up to the Minister of International Trade Diversification and into parliament, and it’s a relationship that’s been working extremely well. It’s one that we do not take for granted, and it really is what we call the whole of government approach to doing business abroad.

So the way that our organization works is rather unique. We like to say that we’re sort of Canada’s best-kept secret. Many companies know that they can try to sell their goods or services to governments abroad directly but we offer a unique option whereby those governments or those Canadian companies can use CCC as an intermediary to sell their goods or services to that organization and in effect what happens is we enter into a contract with a foreign government to sell those goods or services and at the same time, enter a contract back in Canada with the Canadian exporter to deliver on that foreign contract.

By doing this, we provide instant credibility for the Canadian company that may be doing business abroad. The government is procuring from Canada knows that the government of Canada has the full faith of that contract behind them and that they know that the Canadian company they’re dealing with is credible and able to deliver on the terms and conditions of that contract.

In terms of our value proposition and why we exist it really is all founded upon risk mitigation and providing a competitive advantage for Canadian companies.

For Canadian exporters, we like to say that there’s enhanced market knowledge that’s available through CCC and our experience in foreign markets again having been created way back in 1946.

We have very transparent ethical business processes, including trace certification, Doug mentioned earlier, that we are already renowned for having world-class anti-bribery and anti-corruption capabilities and we like to pass that advantage on to Canadian exporters looking to operate abroad.

We can negotiate a more favourable contract, and payment terms, typically than the Canadian exporter can negotiate on their own with a foreign buyer.

It’s a more level playing field. We talk about things like trying to get better jurisdiction in terms of a legal dispute or perhaps more favourable terms in terms of payment and advance payments and things of that nature. We try to wave things like performance bonding.

All of those types of terms and conditions may not be available where companies are looking to negotiate directly themselves.

Of course we also reduce payment risk because the contract is on equal footing between two governments and we also in the same vein help resolve issues that can arise on a contract because again two governments are working in harmony to make sure that an issue is resolved to everybody’s satisfaction rather than having to take a legal approach which can be combative and not very effective in many regards.

For the foreign government looking to buy from a Canadian company if they go through CCC, first and foremost they have a government of Canada guarantee by virtue of CCC being the prime contractor that the government of Canada will put the full faith and resources of the government behind making sure that that contract is delivered on time and on budget.

We have again as I mentioned, ascertained that all of the Canadian exporters were dealing with are credible and capable. We have a number of people at CCC in our risk shop who do a lot of work on due diligence making sure that every Canadian exporter we work with is capable and well suited to deliver on the goods and services that we’re contracting for.

And finally, as Doug also mentioned we have, we have a strong approach to responsible business conduct and many governments around the world are looking to stamp out bribery and corruption in their markets. They know that some of the tender processes that are out there can be rife with that sort of thing and using CCC, and our approach helps to mitigate those risks.

When we talk about our business lines and our strategic approach, it’s a fresh start for us.

We’re really looking to embark on a new strategy that gets us out of our traditional markets that have been very very successful particularly in the infrastructure and defence world, and we’re turning the corner to also introduce some new sectors that are more meaningful in terms of opportunity for us right now.

We know for example that the cleantech sector in Canada is incredibly rich with unique products and services that would be marketable in very many parts of the world.

We’ve seen how the infrastructure market across the world is in the order of thirty-three trillion dollars, and CCC can help Canadian infrastructure companies get access to that market.

In aerospace you’ll see in a minute we’ve already seen some incredible early growth in this new strategy in our pipeline around the aerospace sector.

Information and communication technologies – things like smart cities Canada has a number of companies well versed in that area and of course what we won’t abandon our defence sector that’s a sector that’s very important to Canada.

We do incredible work in that sector have for many years, and we’re looking to do more work with them in a responsible way throughout many markets around the globe.

We also have some additional business priorities that I should mention that are unique in CCC’s Rolodex.

We have the Defence Production Sharing Agreement, which has been a bilateral relationship between Canada and the U. S. since 1956.

In that relationship, we provide procurement work on behalf of the government of the United States in order to get access to that market for Canadian exporters and to maintain a true north American defence industrial base which is usually important to our two nations as the closest of allies.

We also do sourcing for the government of Canada for disaster relief and any type of urgent need. We are renowned for our ability to do things quickly and responsibly, and we’re looking to do more and more in that area knowing how important it is to Canada and our broader trade environment.

We have relationships in Cuba that go back to 1989 and in fact in the reporting year 2017-2018 we reached a milestone of one billion dollars cumulatively for exports into Cuba, predominantly in the agriculture and tourism sectors but also for sectors such as transportation have been meaningful to us there.  

And finally, we run ten trade offices on behalf of global affairs Canada in China looking to help Canadian companies bridge into that market.

That’s our business focus; we also have a regional focus. We’ve set up a business development team now to have people on the ground in Asia, in the Middle East and in South America. We also service the Caribbean and Central America from Ottawa and Africa and Europe and of course the United States through our defence production sharing agreement program that I mentioned moments ago.

In terms of 2017- 2018, we had an incredible year at CCC. We have signed 1.3 billion dollars in our value of contracts signed, and for those of you who know government to government contracting and who have tried to pursue contracts in the procurement world, you’ll know that there’s a very long gestation period to the types of contracts that were able to sign and negotiate.  So things can get lumpy, we don’t have a really smooth income stream, but we like to look at things over a period time and see how they are trending in this regard for value of contracts signed. The number we would we attain last year is 150 million more than the average for the five year period. In addition, you’ll see that we delivered 2.4 billion dollars in commercial trading transactions.

Really for many of you, you’ll associate that as revenues. It’s the amount of goods or services that were delivered out of CCC or progress made on our larger contracts.

What I’d like to flag there, is notwithstanding that significant number CCC incurred zero contractor mediation costs. It speaks very highly to our robust risk management practices at the organization and it’s a real testament to the staff who oversee all of that important work to make sure their contracts don’t go off-side and to make sure that we continue to build confidence in foreign markets around the world that Canada really can deliver on its goods and services.

We have 120 hardworking, dedicated employees at CCC, and we’re looking for that number to grow more and more as our diversification strategy takes hold. You’ll see that we’ve done business with 182 Canadian exporters contracting with the organization last year but also 33 per cent of those were small medium enterprises.

So that’s a significant portion and something that we’re looking to make grow even more so in our new strategy.

I should also mention, in the small-medium enterprise world all of the contracts that we do with larger Canadian companies we look to optimize Canadian content and we encourage those larger companies to use Canadian small, medium enterprises in their supply chains and I’m happy to report that over 1300 Canadian small medium enterprises achieved work through CCC’s larger programs in 2017-2018.

We have 96 Canadian exporters who provide goods and services under the U. S. defence production sharing agreement that I mentioned earlier and perhaps most importantly we created or sustained some 11,900 jobs in Canada through that work that the organization achieved in 2017- 2018.

I would like to mention as well you know as an organization we have a long history of generating surpluses. We had very sizeable surpluses if you go back 2 or 3 years because of the ebbs and flows in our work and especially among our larger contracts.

In 2017-2018 we did see a slowdown in some of our contracts in terms of a delivery time frame that have subsequently picked up but never the less that did cause the ebbing and flowing to result in a deficit in 2017-2018 of some 5.3 million against profits of over 16 million in the previous years.

So these things ebb and flow, but it is something that the organization is certainly focused on and doing quite well to turn around in the current year.

And now I’d like to talk a little bit about our future. We really have seen a significant change in the organization in terms of skill sets and in terms of strategy.

We really want to get out and offer our goods and services that we have at CCC, our capabilities as a procurement arm to many sectors in Canada. And we’ve seen through initiatives that we had undertaken studies that we had done in concert with private sector individuals that there are significant markets available as I mentioned earlier.

Whether that’s cleantech, information communication technologies, infrastructure, aerospace etc.… we know that that’s not the end for us we know that we will look at other sectors like the health sector, transportation, and that continually refresh the diversification strategy to help as many Canadian companies as we can.

We’re looking at our new strategy through 3 pillars growing through diversification much along the lines I just mentioned, creating new market opportunities and that really is about more Canadian companies working with CCC and increasing our Rolodex of clients and a particular focus on small medium enterprise.

We know that they are hugely important to the Canadian economy we know that their real focus for the broader government agenda and we want to play a meaningful role in that. And so our organization is seized with looking at ways that we can modify and identify innovative ways to help small-medium enterprise achieve more and more business internationally.

Finally, we look at being a trusted partner in international trade which is largely through credible business delivery but also through anti-bribery and corruption practices that are world class and our new steps forward in terms of human rights assessments to make sure that we’re doing things as a responsible organization of the highest ethical values and practices. And so those are the three pillars that we’re looking at achieving in the future as we go forward.

If you take a quick look at how we’re doing in that regard already as fresh and as new as this strategy is if you look at the pipeline you see before you some 16 billion dollars in opportunities around the world.

And you’ll see that infrastructure and aerospace dominate already the pipeline that we have in terms of infrastructure and aerospace opportunities. And if you look at the pie chart on the right, you’ll see also that when we look at the regions around the world, we’re very well diversified looking at opportunities in markets through all of these all of these new sectors.

And so we’re looking for that pipeline to grow more and more with meaningful projects and for very optimistic of what these early results are already showing the direction that we’re on with the board and the management team and the CCC staff.

And so what I’d like to do is just close with a couple of examples here we have here a picture of a project in Saint Kitts and Nevis where CCC is working with the Canadian engineering and construction firm JV driver to deliver a new pier for cruise ships that is a highly needed asset for that country in terms of its tourism industry.

You’ll see in the picture on the right-hand side the existing pier with one ship docked beside it. And then we’ve drawn in the pier that we’re currently building with two larger cruise ships that is well under construction.

I can tell you I have the pleasure of visiting that site very recently and the work that’s being done there is incredible and will make a very important contribution to Saint Kitts future from an economic standpoint.

Another example of the types of work that we do around the world. In Bangladesh, we’ve had a long-standing relationship with them to provide potash for their agricultural industry. It has really changed the game for Bangladesh in terms of food production.

Very important for countries such as Bangladesh with a very large population. We’re hugely proud of the work we’ve been able to do that to help that organization move forward and that country move forward with its achievements and goals in terms of agricultural.

So as I close I’d just like to note our broad support of course for Canada trade diversification priorities. I should also note that CCC has made some significant changes in our leadership and staff to make sure they were able to deliver on these results.

We have for example at the vice president level brought in Michelle Taylor as our Vice President Legal, General Counsel, and Corporate Secretary recently as well as Ian McLeod to become our Vice President, Business Development. Both of them have significant backgrounds in their areas of responsibility, and do incredible work for the corporation and will be a large part of our successes for the future.

Of course, I’d also like to thank our board of directors, Doug, and his leadership as Chair, of course, Martin as the operations committee chair and all the board members.

We have a very rich and engaged board, with very diverse backgrounds, and we’re hugely proud of the direction and help that they give us and setting our vision and executing on our vision.

Of course, I have to thank the full CCC management team because they are an instrumental part of the leadership group. But really above all else, I’d like to thank the CCC staff for their dedication and professionalism. I’ve had the pleasure of 11 years at CCC with that group, and the team we have right now is second to none.

So with that, I think I turn it back to you Angie.

Ms. Angie Tinor: Thank you Mr. Zablocki for providing us a look back at our results during the reporting period and a look forward through CCC’s strategic direction for the future.

Now, M. Martin Gagné, I would like to give the floor so that you might explain to us further the activities of the operations committee.

Mr. Martin Gagné: Thank you for the presentation. I have been a member of the board since 2013, and I am president of the Operations Committee. I’ve been the chair of this committee since January 2014.

As the chair mentioned, the Board provides leadership and guidance to the corporation’s management team.

It ensures that CCC’s long-term strategic direction aligns with the broader government agenda conveyed by the Minister of International Trade Diversification.

As part of our governance, the Operations Committee oversees the corporation’s business activities, and it monitors its operations and operating processes; specifically, the committee makes recommendations to the Board of Directors for project approval.

It also reviews ongoing risk profiles of projects, and it approves proposed new business lines and services. We work to support the direction set out by CCC’s board of directors while aligning with the priorities of the government of Canada with regard to a progressive and inclusive evolution.

In support of these efforts, the Operations Committee has played a key role in ensuring that CCC’s projects have appropriate risk profiles and that they align with the Government of Canada’s trade priorities.

The board through the operations committee will continue to work with CCC’s management to ensure that the new diversification strategy delivers the results we want and brings new opportunities into the business development pipeline.

I’m confident that this strategy and are renewed approach will result in a greater number of Canadian exporters served in more sectors and more markets than ever before.

Thank you very much.

Ms. Angie Tinor: Thank you, M. Gagné.

We are now ready to answer your questions received in advance of today’s event.

The first question we received is from the Canadian Cleantech Alliance.

The question is: How can we leverage the CCC network so that Canadian clean tech entrepreneurs can access a valuable business intelligence and identify the concrete opportunities?

Markets of application for cleantech are as follows: public markets, utilities, municipalities small cities, wastewater, waste management, transport, agriculture, green building, clean resources, oil and gas, forestry, mining, petrochemicals and more.

Mr. Zablocki, would you like to answer this question?

Mr. Martin Zablocki: Thank you very much, Angie. And thank you very much for the question. You know the cleantech sector as mentioned earlier is a very prominent sector for us in our new strategy around diversification.

We are building a lot of excitement in that sector and the reason that it’s in our in our minds as a prominent business area is because we do believe that our government-to-government contracting approach plays so well for that sector to help it bridge risk in markets abroad.

And so what I would suggest for of the individual or individuals who pose that question is first and foremost we have a sector lead for cleantech his name is Rob James he’s a director in our business development group.

Rob is hugely responsible and capable in that arena. He’s worked in the cleantech sector for many years and is a wealth of opportunity and knowledge for cleantech companies looking to expand abroad.

And I would also encourage you to get in contact with Rob who can also bridge you to some of our regional directors who are able to identify where opportunities may exist for your particular cleantech company product or solution.

So thank you very much for the questions we’re eager and anxious to help however we can and certainly welcome you to contact the organization, and we’ll put you in touch with Rob and others.

Ms. Angie Tinor: Thank you, Mr Zablocki.

Our second question will be put in French. It comes from an independent farmer. My question is this. Does the CCC have offices in Cameroon?

Mr. Martin Zablocki: Thank you for that question. What I can say is that at present we do not have offices in Cameroon, but we do have an individual director Don Olsen who is responsible for this region.

He works from Ottawa but he is very well aware of what’s going on in that region, and he can certainly assist you with any issue any question you might have pertaining to the Cameroon to Africa to the continent in general so I would encourage you to get in touch with Mr Olson or the CCC division.

Ms. Angie Tinor: Thank you Mr Zablocki.

The third question is from someone who works in tourism.

And the question is: What are your expectations for the Cuban market.

Mr. Martin Zablocki: Well as I mentioned earlier in our presentation were blessed to have a very long relationship with Cuba we’ve seen that relationship flourish over many years, and again we reached a milestone of 1 billion dollars of business in Cuba in 2017-2018, so our view of that market is very promising.  

We do see that there continues to be growth in the business that we’re doing there. We’ve taken on, in fact, quite a few new small medium enterprises who help support the agriculture or tourism sectors in Cuba.  

We see those sectors growing. We know in our discussions with the Cuban leadership that they are hugely focused on agriculture and tourism as their future, and therefore we think our skills in Canada are well aligned, and the company’s particularly small and medium enterprises who really comprise virtually all of our enterprises doing business in Cuba are well aligned to continue supporting that market well into the future.

Ms. Angie Tinor: Thank you, Mr Zablocki.

As we have no further questions. I would like to thank you all for participating in our Annual Public Meeting today.

You are invited to send any additional feedback or questions to us by email at communications@ccc.ca. I would like to encourage anyone who’s interested in learning more about CCC, in visiting our website and to read our annual reports.

I thank you for your participation today for your questions I would encourage anyone who is interested in learning more about us or less questions to visit our website and to send your questions to us by email at communications@ccc.ca.

This concludes the Canadian Commercial Corporation’s Annual Public Meeting. On behalf of CCC, everyone here with me today, thank you for joining us. We appreciate your interest in CCC and in the important work we do to help Canadian exporters. Thank-you.

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