Annual Public Meeting 2019/20

Hello, bonjour. Welcome to the Canadian Commercial Corporation’s Annual Public Meeting for 2019-2020.

My name is Douglas Harrison, and I am the Chair of the Board of Directors of the Canadian Commercial Corporation (CCC).

It is my pleasure to be with you today, and I want to thank you on behalf of the Board of Directors for joining us. With me today is Ernie Briard, Interim President and CEO of CCC.

Annual public meetings give Crown corporations like CCC the opportunity to share information about what we do and the value we deliver in supporting Canadian business of all sizes to grow their export business and access new markets.

Meetings like this one are also an opportunity, for CCC to highlight its results and accomplishments over the past fiscal year ended March 31, 2020.

It is also an opportunity to celebrate the successes and insights gained during the past year as we look forward to the next year.

Once again, we are presenting our meeting online so that we can reach the greatest number of Canadians from all parts of our country and also due to restrictions imposed by COVID-19.

As Chair, I would like to begin by thanking the Honourable Mary Ng, Minister of Small Business, Export Promotion, and International Trade for her ongoing support.

I was honoured when I was appointed to Chair CCC’s Board of Directors in 2018. This is my third Annual Public Meeting for CCC, and in many ways I feel this is the most important one in recent memory.

Minister Ng is, and will continue to be, an important partner and ally for our organization as we continue to deliver on our ambitious strategic plan to help even more Canadian companies of all sizes grow their export business.

I would also like to take this opportunity to thank all of our Board members for their leadership and guidance throughout the year. We are fortunate to have a very committed and talented Board, whose experience and perspectives are invaluable as we continue to help grow Canada’s trade and drive economic growth, innovation, and prosperity in all parts of our country.

CCC’s Board of Directors is composed of 3 committees, these Committees of the Board are an important corner stone of the Boards oversight of CCC, they are:
the Audit Committee, the Governance and Human Resource Committee and the Operations Committee.

The focus during the past fiscal year has been two-fold:

Implementation of CCC’s renewed corporate strategy to grow trade opportunities for Canadian exporters in support of Canada’s diverse and inclusive trade priorities. And, secondly, increasing the focus on risk management and responsible business conduct in alignment with Canada’s broader international policies, including those concerning the environment, human rights, and all aspects of socially responsible governance and ESG.

In this context, the Board has incorporated a clear and committed focus on human rights into its governance and oversight responsibilities as well as in its strategic guidance to CCC’s senior management team.

Building on last year’s emphasis on a new Risk Management Framework, we will continue to ensure that CCC continues to strengthen its already robust corporate governance structure. CCC is deeply committed to maintaining the confidence and trust of the exporters we serve, our employees, and our shareholder, the Government of Canada and of course the People of Canada. Our strengthened policies and comprehensive Responsible Business Conduct Framework are important steps in helping CCC to mitigate risks for Canadian companies when contracting with foreign governments.

As the fiscal year ends, the Board remains highly confident in the mandate, mission, and leadership of the CCC. The organization is exceptionally well positioned to continue to fulfill its mandate of supporting and growing the number of Canadian exporters from small to large, across diverse industry sectors to help facilitate their sales to foreign governments.

Ernie Briard will be covering the operational and financial highlights in a few moments. Before I turn the podium, I want to share a few of the success stories of the past year.
Through CCC’s work with British Columbia’s Coulson Aircrane, 3 helicopters and crew were deployed to Bolivia on a mission to fight the Bolivian wildfires that threatened to decimate a region of the tropical savannas close to the country’s Amazon rainforest.

Working with Montreal’s Tarragon Environmental Technologies, CCC helped deploy an innovative waste and water management system in the field with the U.S. Department of Defence.

In addition, CCC facilitated the sale of Viking Air’s Series 400 Twin Otter aircraft, including pilot training to the Government of Argentina. These planes are fitted with firefighting capabilities as well search-and- rescue and medical evacuation, making these western-Canadian-built machines the first truly enhanced multi-purpose aircraft in the Argentinian fleet.

During 2019-2020, CCC worked with 157 Canadian companies, 62 of which were small- to medium-sized enterprises. We were active in 81 countries.

We also continued our support of Global Affairs Canada, managing 10 Canadian Trade Offices in China to support the government’s trade activities in that market.

CCC is also Canada’s custodian of the Canada-U.S. Defence Production Sharing Agreement. Through the DPSA, CCC provides the U.S. Department of Defense with access to our leading innovative technologies and services offered by Canada’s defence industry. These export contracts help sustain a strong Canadian defence industry beyond that which can be supported through domestic sales alone.

From disaster relief or urgent emergency response, CCC has been on the ground across the globe to ensure that Canadian businesses get the opportunity to share their knowledge and showcase their expertise with other countries.

Going forward, our mission is clear: continue to deliver value to Canada by growing exports and creating jobs and to do so within an increasingly complex and highly competitive global marketplace. This will be especially important as CCC looks to support Canada’s economic recovery from the COVID pandemic and ensure long-term prosperity that will depend on a return to robust and diversified export growth.

We will achieve these goals through five strategic priorities:

First, ensure that our financial model is sustainable and will allow us to continue to deliver the effective and impactful support that Canadian exporters deserve.

Second, focus on a greater number of SMEs as we grow the number of Canadian businesses we support, as they expand into new and emerging markets.

Third, continue our emphasis on growth through sector diversification as a key to helping exporters of all sizes capitalize on opportunities when and where they occur. By anticipating and responding to the changing needs of Canadian companies, CCC can continue to secure new trade opportunities across diverse industry sectors and geographic markets.

Fourth, embed and promote RBC and ESG practices through all our partnerships, supporting the government’s inclusive trade agenda as well as helping Canadian exporters manage risk while successfully entering new and emerging markets.

Lastly, continue to enhance our professional capabilities to ensure that CCC is positioned to serve Canadian exporters today and in the years ahead.

The Board looks forward with a great deal of optimism. As the Corporation continues to hone its internal processes, refresh its market strategy, and embrace opportunities for continuous improvement, the impact of our work will continue to grow and resonate across this country.

As CCC has shown throughout this past fiscal year and the current one, whether challenges are economic, geopolitical, or even viral, we adapt quickly, act responsibly, and continue to keep the success of our government and Canadian partners first and foremost in our minds.

This past fiscal year will not be one any of us will soon forget. While CCC achieved many successes, the organization did not achieve its financial goals. We do not take this underperformance lightly and while some of the cause was a result of global impacts, the Board has been working closely with our executes to ensure we are better positioned in the years ahead to respond to what is an increasingly complex and challenging business environment.

I want to congratulate and thank everyone who contributed to CCC’s performance in 2019-2020, including the important government and industry partners CCC works with to help exporters succeed and grow their businesses.

On behalf of the entire Board, I would like to take this opportunity to thank CCC’s dedicated staff for their continued hard work, unwavering commitment, and resolute professionalism throughout this challenging year. By working together, you have proven our resiliency as an organization, your compassion as people, and your ability to adjust quickly to a world in which very little seems certain except the inevitability of change and uncertainty.

And thank you again to my colleagues on the Board of Directors as well as to the senior management team at CCC for their ongoing commitment, diligence, and dedication to the mission of the CCC.

I also want to take a moment to thank our outgoing President and CEO, Martin Zablocki, for his dedication and efforts on behalf of CCC. Likewise, I would like to thank Carl Marcotte, former VP of Operations and Contract Management, for his drive to bring innovative new products and services to meet the needs of small businesses. Additionally, Carl was the Interim CEO from September 2019 to July 2020.

On that note, it is my distinct pleasure to turn the podium over to Ernie Briard, the interim President and CEO of the Canadian Commercial Corporation.

Thank you, merci beaucoup.

Thank you, Doug, and hello everyone.

I am delighted to have this opportunity to provide you with an operational overview of the past fiscal year at CCC, during which I will share further details about our results and accomplishments as well as highlight some of our key strategies in going forward.

As many of you might already know, CCC is the Government of Canada’s international government-to-government contracting organization. For almost 75 years, this organization has helped Canadian exporters do business in government procurement markets that involve contracts that are complicated to negotiate and might otherwise be beyond their reach for any number of reasons.

As Doug outlined, our vision is to continue to be a trusted partner for exporters of all sizes as well as a key supporter of Canada’s progressive and inclusive trade agenda.
We achieve this vision through excellence in risk assessment and international contracting, a commitment to Responsible Business Conduct, strategic diversification, and diligent project management.

As part of our day-to-day operations, we work closely with our government partners, including the Trade Commissioner Service, and Export Development Canada. We also work directly with Canada’s Ambassadors, High Commissioners, and Canadian Forces Defence Attachés abroad.

Our priority sectors continue to be:

Aerospace, more specifically aircraft manufacturing, as well as more advanced manufacturing such as flight simulators, landing gear, and engines, and what is known as MRO — maintenance, repair, and overhaul.

Along with the sales to Argentina and Bolivia that Doug has already mentioned, CCC is supporting De Havilland Aircraft of Canada to supply Biman Bangladesh Airlines Limited with three new aircraft. With its fast-growing economy, Bangladesh represents an excellent emerging-market opportunity for Canadian exporters of all sizes.

Clean Technology is another high-profile priority sector, through which CCC promotes Canadian companies offering solutions in renewable energy, water and waste-water treatment, soil remediation, environmental engineering and consulting.

Another priority sector is the Construction and Infrastructure sector where Canadian exporters are also recognized worldwide, especially in such areas as airport construction and redevelopment, power generation, roads and bridges, and transit. We are currently supporting Aecon and the Government of Bermuda through a 274-million-dollar redevelopment of the L.F. Wade International Airport, which will include state-of-the-art energy and water efficiency technologies. This modern airport will open on December 9, and as Aaron Adderly, President of Bermuda Skyport has noted, this project will have a multigenerational impact on the future of that island nation.

This is the second major infrastructure project that CCC has worked on with Aecon Group Inc., following the successful project to build Quito’s international airport in Ecuador. CCC also worked with the Cameroon Ministry of Sport and Physical Education to rehabilitate the Stade de la Réunification in Douala, Cameroon, ensuring that the country would be ready to host the Africa Cup of Nations.

A full 18 percent of CCC contract value in 2019-2020 came from Information and
Communications Technologies, primarily through the management of several international good cause lottery corporations.

We also work diligently to support Canadian Defence exporters, many of which benefit from our custodial role of the Defence Production Sharing Agreement that Doug mentioned earlier.

In 2019-2020, CCC assisted 85 Canadian exporters to sign 928 million dollars with the U.S. Department of Defense, far exceeding our target of 675 million dollars.

This is not to say that CCC does not work outside of these priority sectors, which we do regularly when supporting the export from Canada’s agricultural and other industries.

Regardless of the sector CCC is involved in, one of the most important parts of our business model that makes us unique in our role supporting Canadian businesses, is that CCC signs contracts with other governments on behalf of the Government of Canada. What this means is that any contract CCC signs with another government, on behalf of a Canadian exporter, provides the assurance that the contract will be completed according to the terms and conditions set out in that contract.

The CCC guarantee is Canada’s guarantee, both in terms of contract integrity but also with respects to doing business the way Canadians believe it should be done: in an environmentally, socially, and ethically responsible way.

I’d like to now turn to our financial and operational results, Because CCC is an outcome-based organization, numbers are very important to us and to our stakeholders, so let me review some of the key numbers from the fiscal year of 2019-2020.

CCC was active in 81 countries supporting exporters from across various industrial sectors.

We worked with 157 customers, 40 percent of which were small- to medium-sized enterprises (known as SMEs). This is an increase of 7 percent over the previous year. In addition, approximately 1,480 Canadian SMEs formed part of the supply chains of CCC contracts, delivering significant downstream benefits.

As Doug mentioned, we are committed to increasing these SME engagement numbers in the coming year. We will do so through our dedicated SME program, which helps CCC play a critical role in developing connections between SME exporters and international buyers. Working with CCC allows smaller companies access pathways to new and emerging markets while limiting exposure to risk.

La CCC a été mené des actions dans 81 pays et a soutenu des exportateurs de divers secteurs industriels.

Nous avons travaillé avec 157 clients, dont 40 % étaient des petites et moyennes entreprises (PME), ce qui représente une augmentation de 7 % par rapport à l’année précédente. En outre, environ 1 480 PME canadiennes ont fait partie des chaînes d’approvisionnement des contrats de la CCC, ce qui a donné lieu à d’importants avantages d’aval.

Comme l’a mentionné M. Harrison, nous nous engageons à augmenter la participation de ces PME au cours de l’année à venir. Cela passera par notre programme dédié aux PME, qui permet à la CCC de jouer un rôle essentiel dans le développement de liens entre les PME exportatrices et les acheteurs internationaux. Grâce à la collaboration avec la Corporation, les petites entreprises peuvent accéder à des marchés nouveaux et émergents tout en limitant leur exposition au risque.

Coming back to the numbers:

For 2019-20, CCC signed new export contracts valued at 1.25 billion dollars. While this result fell short of our target of 1.5 billion dollars, it is indicative of the challenging global markets as well as the cyclical nature of large contracts in government procurement markets.

Importantly, we processed these contracts in far less time then ever before. Workflow adjustments in several key areas reduced the cumulative processing time by 100 days.

We also delivered 3.17 billion dollars in goods and services abroad, as we delivered on our existing contract commitments.

Overall, CCC activities across all sectors supported 13,000 Canadian jobs, many of them in fields related to advanced manufacturing, engineering, and innovation or technology.

As Doug noted, diversification was very much a focus during the past fiscal year. We accomplished this in two ways:
1. Through an increased business volume and more diversified contract portfolio in the U.S., and
2. By signing several contracts in new international markets, specifically Bolivia and Argentina, where we excelled with our Aerospace product line.
CCC’s contracting expertise also assisted the Government of Canada through a number of sourcing projects providing assistance internally for a number of Global Affairs programs.
The value of these sourcing contracts signed increased by 28 percent over the previous year, totaling over 15 million dollars.

In terms of overall financials, CCC recorded net earnings of just under 2.6 million dollars, a decrease of 1.5 million dollars from the previous year. This was primarily the result of 5.3 million dollars in lower revenues due to lower fees for service as some major projects were coming through to completion.

These numbers are somewhat disappointing, but they do reflect the global challenges that CCC and other organizations faced in the 2019-2020 fiscal year. It is unfortunate that our ability to convert opportunities into contract signings was impacted by difficult market conditions resulting in lower value of contracts signed as well as customers served.

Despite these challenges, CCC continued to enhance its internal processes, bolstering its already robust policies, and working continuously to streamline, and improve existing products and services.

And for these reasons, and others, I am very optimistic that the coming year presents several opportunities for CCC to strengthen its position within the trade portfolio. CCC is leaner, more agile, and more responsive than it has ever been. Our processing times have been shortened by 100 days and thanks to the SME Project team, we can now develop and launch products to market in ways that will help SMEs to take advantage of more international opportunities.

As I mentioned earlier, we are also well positioned to assist the Government of Canada departments and agencies in effectively and efficiently fulfilling their complex sourcing needs, which we anticipate will only become more urgent as the pandemic continues along with the global uncertainty it brings.

Through our sourcing activities, CCC supports a wide range of capacity-building programs in such areas as:
• Emergency disaster relief support
• Assisting foreign governments in their efforts to fight cross-border crimes like fraud, corruption, and human trafficking
• Supporting both domestic and international anti-terrorism efforts
• Facilitating Canada’s contributions to international scientific collaborations and other such endeavours.
This is important work that not only continues to diversify CCC’s portfolio but also helps to make the world a safer place in which Canadians can work and live.

Consequently, none of what CCC achieved in 2019-2020 could have been accomplished without a team that is committed, dedicated, and unwavering in their support of Canadian exporters and their customers around the world.

Talented employees are essential to any business, and nowhere is this more evident than when representing Canada and Canadian businesses globally. I am always deeply impressed by the integrity and resilience of a team of professionals that deliver so much under such challenging circumstances. I am proud to have a chance to work with them, and I cannot thank them enough for their hard work.

And our hard work will continue into the coming year and beyond.

We will continue to grow SME engagement across the country and assist them in optimizing their export potential. We firmly believe that SMEs are a key driver of Canada’s economic growth and will continue to do all we can to make their pathway into the international market as risk free and profitable as possible. We remain focused in our efforts to continue growing the number of SME customers served.

We will also continue to grow through diversification, creating new market opportunities across a range of industry sectors and geographic markets.

Likewise, we will continue to leverage our roles as Canada’s custodian of the DPSA and as a trusted sourcing support for Government agencies and departments. Both areas realized substantial growth in 2019-2020, and we believe that there is more growth to come as we move forward.

Moreover, we will continue to hold ourselves and others to the highest standard of responsible business conduct through our enhanced RBC Framework and our commitment to transparency, diversity, and to the best practices of environmentally and socially responsible governance.

Lastly, we will continue to become more nimble, more responsive, and more streamlined at every level of the organization. We are fully committed to continue the enhancement of our professional capabilities to ensure that we are fully aligned and responsive to the needs of Canadian exporters.

In closing, I want to thank our employees, as well as our Board of Directors, for all their work during the past year.

Through your hard work and guidance CCC is stronger, and more focused than ever.

Doug, thank you personally for your leadership of the Board and for the strategic guidance you have provided to me and to this organization throughout the past year.

This now concludes the Canadian Commercial Corporation’s Annual Public Meeting. On behalf of everyone at CCC, and particularly our Board of Directors, thank you for joining us.

Voilà qui conclut l’Assemblée publique annuelle de la Corporation commerciale canadienne. Au nom de tous les membres de la CCC et de notre Conseil d’administration, je vous remercie de vous être joints à nous.

I encourage you to learn more about CCC by visiting our website and reading our Annual Report. I also invite you to submit any questions you may have about today’s presentations, or at any other time during the year. Simply email them to [email protected].

We appreciate your interest in CCC and in the important work we do to help Canadian exporters.

Thank you again to everyone online for joining us today.