Statement of Priorities and Accountabilities for the Canadian Commercial Corporation

July 2, 2021

Mr. Douglas Harrison
Chairperson
Board of Directors
Canadian Commercial Corporation
700–350 Albert Street
Ottawa ON K1A 0S6

Dear Mr. Harrison:

Over the past year, we have faced extraordinary challenges. Now, as we look toward an increasingly clearer horizon, we see that in order to get there, much work lies ahead. However, with every new challenge there is also an opportunity to ensure a brighter, more inclusive and sustainable future for all Canadians.

This starts with ensuring our promise to create one million jobs, including by expanding on the successes of the Women’s Entrepreneurship Strategy and the Black Entrepreneurship Program. It means working with Indigenous peoples and racialized Canadians, as well as creating supports and opportunities for the young and the old, fifth-generation or first-generation Canadians, the LGBTQ+ community and the differently abled. This brighter future means putting the fight against climate change into the core of every action we take—ensuring our decisions are in the best interest of future generations and building upon the agreements we have made to Canadians here at home and to our allies abroad. In this, it remains paramount that we support innovative Canadian businesses as they grow through exports—to lead by example and make our part of the global economy even more sustainable.

This better future will be emboldened by Canada’s leadership on the international stage and by our steadfast commitment to advancing fair, rules-based trade around the world. All of this future will be possible due to the timely and targeted investments we made into Canadians and their futures throughout the COVID-19 crisis. So, as we step forward on the road to recovery, we will know that, as our nation faced one of the greatest challenges of modern history, we rose to the occasion and overcame it, securing a brighter future for all Canadians. With that in mind, let’s work together to build back better.

On April 19, 2021, the Government of Canada set out its plan to help Canadians turn the corner on COVID-19 and start rebuilding toward a more inclusive and prosperous future. Budget 2021 provides support for a robust recovery, while also investing in Canadians for the long term. As a key pillar of Canada’s trade toolkit, the Canadian Commercial Corporation (CCC) will play an important role in our historic effort.

A return to robust exporting will be a key driver of Canada’s recovery and future growth, and it is essential that Canadian exporters have the support they need to succeed in a highly competitive global marketplace. As we prepare to meet the challenges and opportunities of a post-pandemic global economy, it is imperative that CCC have the right vision and operating model to continue providing sustainable, high-impact services for exporters who require support. CCC has an important role to play in supporting Canada’s international trade and strategic interests. We must look to enhance the corporation’s performance and sustainability, including by recalibrating priorities and refocusing on core strengths.

I am pleased to provide the following Statement of Priorities and Accountabilities. The statement builds on the comprehensive review of CCC completed in 2020 and the initial guidance provided to the board in my letter of March 22, 2021. Notably, it delivers Budget 2021’s commitment to revitalize CCC and reflects the ambitious and critical agenda outlined in my supplemental mandate letter from the Prime Minister. I look forward to engaging with the board over the coming months and, more broadly, your continued engagement as Canada’s trade team pulls together in support of our economic recovery, particularly through the new Business, Economic and Trade Recovery (BETR) Team.

Prioritize and Reinforce the Canada-U.S. Defence Production Sharing Agreement

Since the 1950s, CCC has been central to the success of the Canada-United States Defence Production Sharing Agreement (DPSA). The comprehensive review underscored the enduring importance of this bilateral framework to Canada’s national interests. The DPSA continues to help underpin the collective security of Canada and the United States by enabling us to leverage one another’s industrial and technological strengths in meeting respective defence procurement needs. Cross-border trade linked to the DPSA also offers important opportunities for firms in some of Canada’s most innovative sectors and for a variety of small and medium-sized enterprises (SMEs). The $928 million in DPSA contracts signed by CCC in 2019-2020 speak to the arrangement’s abiding value for both Canada and the United States.

Supporting Canadian sales under the DPSA remains CCC’s key mandate and must be prioritized accordingly. Budget 2021 recognized the importance of CCC’s DPSA role and has proposed an annual appropriation for CCC to administer the DPSA. These funds are to be applied to DPSA costs, ensuring that CCC can sustainably continue providing high-quality services to its DPSA partners on a no-fee basis.

It is vital that CCC not only sustain the DPSA, but actively reinforce this element of the Canada-U.S. relationship, particularly as both countries look to enhance their bilateral economic and security cooperation via the Roadmap for a Renewed U.S.-Canada Partnership. In developing CCC’s 2021-2022 to 2025-2026 Corporate Plan, I ask CCC to renew its focus on serving DPSA customers and outline actions that will further optimize and improve the performance of the DPSA business line.

As one of the U.S. Department of Defense’s largest prime contractors, CCC has unique experience working within the U.S. defence-procurement ecosystem. I ask that CCC’s 2021-2022 to 2025-2026 Corporate Plan set out a strategy to more fully leverage the corporation’s DPSA expertise and relationships in coming years, with the aim of increasing the number of Canadian firms (particularly SMEs) securing U.S. Department of Defense contracts. CCC’s efforts should look to promote Canadian capabilities that address the diverse range of U.S. procurement needs. CCC should ensure that its approach helps enable SME exporters compete for DPSA contracts.

In developing and implementing its new DPSA strategy, CCC should work closely with Global Affairs Canada and the Trade Commissioner Service; National Defence; Innovation, Science and Economic Development Canada; and Public Services and Procurement Canada. Collaboration among federal partners will be essential to realizing more fully the economic and strategic benefits of the Canada-U.S. defence-trade relationship.

Collaborate Through the Business, Economic and Trade Recovery Team

In my 2019 mandate letter, the Prime Minister asked me to work across my portfolio to ensure that all resources are working together to maximize outcomes for businesses. I am pleased to see CCC working closely with its portfolio partners through the new BETR Team to help deliver on this priority. I expect CCC to continue collaborating with BETR partners to provide Canadian companies seamless access to the full range of federal business and trade development services. This work should include coordinated communications and marketing activities, as well as building out digital capacities that make services more user-friendly.

BETR should also serve as a forum for CCC to coordinate with key partners—especially Export Development Canada and the Trade Commissioner Service—in supporting Canadian export projects in strategic sectors such as green infrastructure. I was encouraged to see CCC working closely with the Trade Commissioner Service to develop a forum to help connect Canadian infrastructure firms with growing opportunities in Asia. I trust CCC will continue engaging with BETR partners to pursue this, as well as other innovative joint export-promotion initiatives, in the months ahead.

Ensure a Risk-Conscious Approach to Opportunities for International Prime Contracting

The comprehensive review recognized the important difference CCC can make for exporters, especially in markets and sectors where government-to-government contracting is an established and fit-for-purpose procurement pathway. The review also reinforced the need for the highest degree of prudence and due diligence in deciding which transactions CCC supports. The annual value and number of contracts signed outside the DPSA is an important indicator of CCC’s impact but a strong record of success in risk management and contract execution is the leading measure of CCC’s performance. In short, CCC’s priority should always be maximizing the success rate of its contracts signed, and not necessarily the number of contracts signed, when it comes to international prime contracting activities.

In evaluating new opportunities, it is also crucial to remember that a CCC contract represents an agreement between the Government of Canada and the government of another sovereign state. The viability of CCC’s contracting model will always depend on maintaining close alignment between the corporation’s export activities and the Government of Canada’s foreign policy. When the prospects for alignment are unclear, I ask CCC’s leadership to consult with Global Affairs Canada and me, as required. Overall, I encourage CCC to continue consulting early and regularly with Global Affairs Canada to ensure that the corporation’s commercial pursuits remain consistent with the Government of Canada’s international priorities, including the promotion of human rights, peace and security, and sustainable development. With the introduction of an annual appropriation to administer the DPSA, I expect CCC will be positioned to apply the highly selective approach to new opportunities that government-to-government contracting demands.

Support Climate Priorities

Canada remains committed to mitigating the real and urgent threat of global climate change. This includes achieving net-zero emissions by Canada’s economy by 2050. Meeting this target will require action from all parts of Canadian society, including federal Crown corporations. CCC’s 2021-2022 to 2025-2026 Corporate Plan should speak specifically to the corporation’s approach for supporting this national objective. In particular, the plan should take into account any applicable climate-related disclosure/reporting requirements for Crown corporations announced in Budget 2021. The Corporate Plan should also explore the role CCC plays in contributing to global climate goals, namely by facilitating the delivery of clean technology and green infrastructure projects by Canadian firms in overseas markets.

In November 2020, the government tabled Bill C-12, An Act respecting transparency and accountability in Canada’s efforts to achieve net-zero greenhouse gas emissions by the year 2050. Section 23 of this bill would require the Minister of Finance, in cooperation with the Minister of Environment and Climate Change, to prepare an annual report respecting key measures that the federal public administration has taken to manage its financial risks and opportunities related to climate change. I ask that CCC work as needed with the Department of Finance Canada to support the drafting of this annual report.

Take a Targeted Approach and Achieve Financial Self-Sustainability for InternationalPrime Contracting Business Lines

Equally important for CCC’s international prime contracting business lines is that they operate on a financially self-sustaining basis. The corporation’s vision for achieving this should be set out in CCC’s 2021-2022 to 2025-2026 Corporate Plan, and be informed by well-grounded revenue and cost projections. CCC can support this objective by ensuring that its business development resources are being applied in a carefully targeted manner.

In that effort, I ask the board to outline how CCC will pursue diversified areas of business in a targeted fashion where government-to-government contracting is desirable and makes economic sense. With the Asia Infrastructure Forum as one example, those markets and sectors need to offer strategic and sustainable export opportunities that are well aligned with the Government of Canada’s foreign and economic policy priorities. While CCC should retain the ability to provide contracting support in a variety of contexts, business development resources should be concentrated in areas where government-to-government contracting has historically proved the best fit for buyer and seller needs, such as defence and infrastructure.

This is especially true when it comes to initiatives focused on SMEs. The comprehensive review recognized the economic impact of CCC transactions for SMEs across Canada, particularly for those in the supply chains of CCC’s larger export partners. CCC should be ensuring that CCC’s services remain accessible for those SMEs requiring CCC support and include the capacity to seamlessly refer SMEs—whether customers or not—to other government programs specifically designed to help them scale up and compete globally.

Continue to Reinforce Responsible Business Conduct Policies and Practices

As an agent of the Crown, CCC should always uphold the highest possible standards of responsible business conduct (RBC). The renewal of CCC’s RBC framework in 2019 represented a significant step in the right direction. I ask that CCC continue to build on that progress and report to me on the performance of its RBC framework to date, identifying actions taken or being considered to make the organization’s practices even stronger. I also ask that CCC provide the Deputy Minister of International Trade with an annual summary of the activity of CCC’s Human Rights Committee. While not detailing the committee’s deliberations, the summary should give the number and nature of commercial opportunities reviewed by the committee, as well as the scope of related consultations undertaken with Global Affairs Canada.

Support Diversity and Inclusive Economic Growth

The pandemic has undoubtedly shed greater light on existing and long-standing systemic barriers faced by under-represented groups in doing business. These challenges, in turn, have called for a concerted effort to ensure a more inclusive future for all Canadians.

To that end, Budget 2021 announced that federal Crown corporations will be required to implement gender and diversity reporting starting in 2022. This reflects a need to clearly understand how federal services are working—and could potentially be doing better—to serve under-represented and marginalized groups. To enhance our knowledge in this regard, I ask that CCC develop a framework for data collection, analysis and reporting on the diversity of Canadians who benefit most directly from CCC’s services. These would include the owners and employees of CCC’s exporter partners, as well as Canadians engaged in the supply chains of those firms. I also request that CCC begin to report on the diversity of the organization’s workforce in its annual reports and to fulfil any further reporting requirements that follow from the implementation of Budget 2021.

Budget 2021 also recognized that CCC is often most active in sectors where women remain under-represented in the workforce and leadership roles, such as defence, aerospace and advanced manufacturing. I urge CCC to be a supportive partner in industry or government-led initiatives aimed at increasing the participation and leadership of women in these sectors.

Continue to Optimize CCC’s Operations

To catch-up with today’s digitally driven environment—one recently exacerbated by the pandemic—I ask that CCC’s 2021-2022 to 2025-2026 Corporate Plan outline a refreshed strategy to continue the modernization of CCC’s digital presence, IT systems and contracting capabilities. The strategy should aim to digitize processes that are currently paper based; increase productivity; further streamline the customer experience; and enhance CCC’s ability to seamlessly connect Canadian exporters with other federal business services and programs, as part of the “no wrong door” experience.

In coordination with Global Affairs Canada and the Department of Finance Canada, CCC should also conduct a review of the Significant Project Instruction (SPI). The review should assess the operation of the SPI to date and provide recommendations on opportunities to improve the framework’s objectives and outcomes, without compromising the essential benefits it provides.

I understand that CCC is considering a refresh of its brand strategy as part of its organizational renewal efforts. While there may be value in revisiting aspects of CCC’s existing brand, any initiative in this area should be mindful of the name recognition that CCC has built over 75 years of operation, as well as the costs involved in promoting and successfully establishing a new public identity. Above all, rebranding should account for any potential risks of creating disruption or confusion for CCC’s export partners, particularly in the DPSA context. I ask that the strategy also highlight CCC’s complementary offerings and services as part of Canada’s trade toolkit. Any proposals to alter CCC’s brand will need to be presented to me for review and approval, as well as consultation with other partners, prior to implementation.

Develop a Dividend Policy

In accordance with Budget 2021, I ask that CCC develop a dividend policy to govern the return of unspent appropriation funds and excess capital. I ask that CCC work with Global Affairs Canada, the Department of Finance Canada and Treasury Board of Canada Secretariat as required to finalize the policy for inclusion in CCC’s 2021-2022 to 2025-2026 Corporate Plan.

Conclusion

I trust this Statement of Priorities and Accountabilities will serve as the first step in the collaborative development of CCC’s 2021-2022 to 2025-2026 Corporate Plan, and overall revitalization of the corporation’s strategic direction. Global Affairs Canada officials and I look forward to consulting with CCC in coming weeks on how we can translate the priorities outlined in this letter into concrete action and meaningful outcomes for all Canadians. It will be important to finalize CCC’s 2021-2022 to 2025-2026 Corporate Plan as soon as possible.

Again, I would like to thank the CCC team for the resilience and innovation you have shown in serving Canadian exporters throughout the COVID-19 pandemic. I know that CCC will continue to strive for the highest standards of client service, good governance and RBC, as you help Canadian companies get back on track and build toward a brighter future. I look forward to further dialogue, partnership and progress in the months ahead.

Sincerely,

The Honourable Mary Ng, P.C., M.P.