Why Mexicans Don't Drink Molson. Andrea Mandel-Campbell

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СКАЧАТЬ tepid and at times amateurish approach has left many perplexed and even irked by Canadians’ stubborn insistence on being the wallflowers of international business. “At home they are as efficient as Americans, but when they go abroad and are doing international business, they are shy, withdrawn and inward looking,” says Boris Rousseff, who as executive director of the Canada Europe Round Table for Business has worked for two decades trying to better familiarize Canadian companies with Europe.

      But while some foreigners interpret this indolent attitude as laziness or even arrogance, others insist it is a mask to deflect the colonial mindset that still pervades Canadian thinking and colours the nation’s ambitions. Weaned on the British Empire and then overshadowed by the United States, Canada has spent most of its young existence trying to convince a vast and disparate Dominion that it too has a manifest destiny. Still ill at ease in the makeshift union and too preoccupied with its own reflection, the country seems to lose its conviction when it strays too far from home. “We are timid about nationality, and [therefore] we are timid about trade,” says Michael Novak of SNC –Lavalin, the country’s only global engineering and construction firm.

      Many people involved in international business pin at least part of the blame on an overweening government that has often been the only common connection in the country’s bid to become more than an expression of geography. Like an overprotective parent, the state has nurtured dependence and sheltered business from risk, often throwing up obstacles that discourage companies from spreading their wings, either by weighing them down with burdensome regulation or by protecting them from competition.

      When companies do fly the coop — often at government urging — their path has been paved with government funding to pay for everything from plane tickets to hotels. In many cases the money was ostensibly a loan, but both parent and child knew it did not have to be repaid. In recent years, the federal government has become stricter with the purse strings, but behavioural patterns and expectations, ingrained over decades — sometimes centuries— remain largely unchanged.

      At Ontario Exports, the export promotion arm of the provincial government, potential exporters are shepherded across the border on trade missions to Buffalo. While on these exotic trips, companies expect the government to find contacts, set up meetings for them and even pick up the tab. “We call it handholding,” said one official, recalling a junket to the southern United States to attend a trade fair. A month later, the provincial official received an angry call from an American distributor who had been trying to contact two Canadian companies that attended the fair. Frustrated after they did not return his repeated calls and emails, the American phoned the provincial government and asked: “Are you guys serious about doing business or not?”

       COASTING TO IRRELE VANCE

      “Not so much,” seems to be the answer. And why should Canada be concerned? It has done fairly well by mining tried-and-true veins of wealth and opportunity. By cutting down trees, pumping oil and assembling cars, the country has attained one of the highest standards of living in the world. Do we really need to be jumping on planes, eating strange food and scarfing down Imodium pills to drum up more business?

      According to Thierry Vandal, the chief executive of Hydro-Québec, we don’t. In the 1990s, the government-owned utility made an aggressive push into Asia, Africa and Latin America, but despite its domestic know-how, the costly venture floundered and its newly minted international division was disbanded. Luckily, the utility, which boasts the largest installed capacity of hydroelectric power in the world, has enough work in Quebec to keep it busy for the next fifteen years. “You don’t chase the hard stuff if there’s easy stuff. You pick low-lying fruit first,” says Vandal. “We don’t need to be chasing international at this stage. That’ll come in maybe twenty or thirty years.”

      Vandal says he’s “not convinced” that putting off foreign forays by a few decades will put Hydro-Québec at a disadvantage to global rivals like Germany’s E.ON and Gaz de France, whose tentacles already stretch around the globe. Maybe. But what if he’s wrong? As of 2005, Quebec had become a net importer of energy. What if the utility’s copious projects were suddenly put on hold, let’s say by environmental concerns or opposition by Aboriginal groups, in much the same way as its Great Whale project on James Bay was stalled in the 1980s? And don’t forget that Hydro-Québec is the most indebted company in Canada, with $32.5 billion in long-term debt.¹⁹

      Would the state-run utility know how to operate in an international context? Its less than stellar performance outside of Quebec would indicate that, at the very least, it would be at a disadvantage in a global market that is not only getting more and more competitive but is dominated by countries and companies that conduct business in a vastly different way from Canada and the United States. With just fifty companies in Canada accounting for half the country’s exports²⁰ and little in the way of foreign investment, one could argue that the great majority of Canadian companies are in the same boat.

      Joseph E. Martin, an executive in residence at the University of Toronto’s Rotman School of Management, likens the situation to the historic 1972 hockey series that pitted Canada against the Soviet Union. The Canadians, who fancied themselves the best players in the world, were surprised to find that their blunt force and power could be so easily deflected by the discipline and dexterity of the Russians. What was expected to be an easy win turned into a hair-raising comeuppance for the Canadians, who only barely squeaked to victory with a last-minute goal. “We have a wrong sense of what is going on [in the world] because we have never tested ourselves against the rest,” says Martin. “You need to be out there testing yourself and competing. Otherwise, you won’t know how good the other guys are.”

      We are already starting to find out. In the United States, Canada’s share of imports has been steadily declining from 19 per cent in 1999 to 17.2 per cent in 2005 as exports from China flood into the American market. In contrast, China’s share of U.S. merchandise trade has skyrocketed from 3 per cent in 1990 to 14.6 per cent in 2005. Already the second-largest exporter to the United States after edging out Mexico, China even temporarily pushed Canada out of top spot in July 2005.* It is only a matter of time, say observers, before Canada is permanently unseated as America’s biggest trade partner.

      China’s rising prominence in the United States is perhaps the most tangible indication of its emergence as a global powerhouse and its pivotal role in the ongoing revolution sweeping the global economy. The World Bank estimates that by 2050 the developing world will represent 40 per cent of global gdp, up from 18 per cent.²¹ Goldman Sachs, the U.S. investment bank, predicts the future membership of the G8 will be almost unrecognizable from the current line-up: Brazil, Russia, India and China will eclipse all other major industrial countries in size, with the exception of the United States and Japan.²²

      In this new scenario, the United States will no longer be the global behemoth that it has been. As David Emerson, Canada’s then minister of industry, noted in 2005: “It’s slowly dawning on most of us that something we took for granted for decades — the global dominance of the United States — is under threat.”²³ That does not bode well for Canada. Between 1993 and 2004, the vast majority of new export growth — more than 92 per cent— went to the U.S. market.²⁴ At the same time, if it weren’t for energy and cars, Canada’s enviable trade surplus with the United States would quickly evaporate.†

      As the United States seeks greater trade ties with the rest of the world— it now has free-trade agreements with at least seventeen countries — and more competitors gain the field, Canada, a small, trade-dependent country with scant on-the-ground experience, will have little alternative but to bone up on Mandarin and maybe start returning some of those unanswered phone calls. “At some point we will have no choice but to go out. There is a huge chunk of the world we know nothing about,” says Prem Benimadhu, a research director with the Conference Board of Canada. “The growth will be in Asia, and they have a different way of СКАЧАТЬ