Western Canada's Engagemant with Lac

Western Canadian Science Innovation Institutes

Generally Western Canada's innovation clusters have minimal interaction in the study area. For the most part the innovation clusters recognize that opportunities may exist for partnerships in Latin America, but other international relationships have higher priority. Some of the specific factors contributing to the limited nature of current interactions may include the following, based on the consultations undertaken:

• outside intellectual property is very much at risk in Latin America, where the immediate public good trumps corporate and other interests;
• uncertainty concerning scientific capabilities in Latin America and difficulties in identifying the best potential scientific interlocutors;
• the long duration required for project development in LAC;
• the lack (until recently) of rigorous regulations in areas such as environment that can drive the need for advanced solutions; and
• where innovation clusters are driven by private sector company members, there is little current activity of the companies in Latin America, perhaps in part based on the view of some member companies that "there is no money in Latin America".

One can also observe that the lack of existing relationships means there is no momentum for further interaction. And one can speculate that the degree of outreach from Latin America may be limited, in part perhaps because Canada may be somewhat in the shadow of the United States in the view from Latin America. Nonetheless, some plans for enhanced interaction are beginning to take shape. Current engagement is summarized below, by sector (i.e. aerospace, ICT, energy, ocean industries, and bio/life sciences).

Aerospace
Western Canada's aerospace industry is becoming increasingly engaged with the Brazilian company Embraer, one of the world's largest aircraft manufacturers. Embraer is seen as having high growth potential in the commercial, defense, and executive aviation target markets. In September 2007, Embraer visited Winnipeg in order to engage with a dozen Western Canadian aerospace companies. Overall, the companies were very impressed with Embraer and there is much potential for future partnership opportunities.

To date, the Composites Innovation Centre is not engaged in the Latin American market. The Centre focuses its activities on Western Canada, and to the degree that international thrusts are undertaken, the focus is on the areas of most interest to the membership, that is the United States and Europe.

The Canadian Light Source is doing nothing in the study area at this time. A delegation has visited Saskatchewan, so there is potential. Quality assurance, perhaps for composites products for Embraer by way of example, is a possible area for future collaborations.

Information Communication & Technology (ICT)
Latin America is not a priority market for TRLabs and none of TRLabs' member companies are known to have substantial activities in the study area. To date, TRLabs only engagement in the region was a fiber optic network project completed for the Government of Jamaica. Two years ago, TRLabs was approached by the Government of Jamaica to design a new fiber optics network, to replace infrastructure damaged by hurricane. The work was successfully performed, valued somewhere in the $100,000 range (order of magnitude only).

Calgary Technologies Inc. (CTI) has had virtually no engagement with the LAC region, however, several of CTI's client firms are reported to be active in the region. Several years ago CTI considered organizing a wireless mission to the region (specifically Brazil), but there was insufficient interest from CTI's client firms and the Calgary wireless industry.

Energy
The Office of Energy and Environment at the University of Regina indicated that to date no LAC country oil companies have approached the Petroleum Technology Research Centre. The International Test Centre for Carbon Dioxide Capture has limited researcher-to-researcher ties to Brazil.

The National Research Council's (NRC) Institute for Fuel Cell Innovation in Vancouver is also not very active in South America. However, the Institute is aware of Brazilian expertise in biofuels, primarily the use of sugarcane to produce ethanol (which can be a fuel for fuel cells). NRC has made a couple of preliminary visits to Brazil to explore potential relationships with Brazilian experts. However, there is no strong push from either side. Brazilian science capability in bio-fuels is well regarded.

Ocean Technologies
Relationships are not well developed between B.C. and Latin America in ocean technologies research. Aquaculture was noted as a very important industry in South America, with specific reference to Chile. Port security is another growth area. The B.C. experts view the marine science capabilities in South America as strong, notably in Chile, Brazil, and Argentina. The B.C. experts recognized the effort ACOA is making in support of Atlantic ocean technologies.

Life Sciences and Biotechnology
Manitoba's Richardson Centre for Functional Foods and Nutraceuticals is not considering Latin America at the current time. The only engagement has been an enquiry from Chile with respect to improving feed for fish farming.

The NRC Institute for Biodiagnostics in Winnipeg has several research collaborations with Brazilian entities. In particular, an MOU has just been signed with one of Brazil's federal universities, Universidad Federal de Uberlandia. Areas of focus are breast cancer and heart surgery. The Institute finds Brazilian scientific capabilities to be good and noted that the Brazilian researchers are particularly attuned to commercial potential. The Institute has undertaken only limited biodiagnostics outreach to Chile.

Genome BC currently has no activities in Latin Americas but some plans are taking shape. Genome BC finds project development in South America to be slow. Chile is an area of note and has world-class science in some niches.

Saskatchewan's Vaccine and Infectious Disease Organization has limited links to the study area in the cattle field.

The expert consulted at the NRC National Institute for Nanotechnology (NINT) in Edmonton, was not aware of any activity in the study area. The consultant was advised elsewhere that Cuba has expressed senior level interest in Alberta's nanotechnology in the health field, but the consultant was unable to confirm this with NINT.

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Private Sector

Many of the Canadian companies currently engaged in Latin America are in the mining and oil and gas sectors. The research results on active companies are illustrative but they do not fully capture the extensive number of Western Canadian suppliers active in the market. For example, the Canadian Embassy in Santiago, Chile has an internal list of over 100 Canadian companies supplying the Chilean mining industry. An example of the breadth of commercial linkages is the MOU recently signed by Saskatchewan's Agribition with a Brazilian agricultural trade show.

In the consultations a representative from Chile Invest was asked to name the top Canadian companies active in Chile. The firms listed were TransAlta, Brookfield, Hydro Quebec, Methanex, Scotiabank, Terra Remote Sensing, and Imaging Dynamics Corporation. It was also observed that there are many joint ventures wherein the Canadian participation is less visible. Table 4 highlights a small selection of Western Canadian companies that are particularly active in the LAC study area.

Table 4: Sample of Western Canadian Companies Notably Active in LAC

Manitoba	Alphair, Wardrop, Cubex, Loewen Windows
Saskatchewan	Clifton Associates, Erin Consulting, CanNorth, Bioriginal Food & Science
Alberta	TransAlta, Alta Steel, Nova Chemicals, Smart Technologies, Matrikon, Global IQ, Seminoe Communications, Hexagon Technologies, Symbiosis Genetics, Agriteam, EECOL Electric, Matrix, Challenger Energy, Stantec, Imaging Dynamics Corporation
British Columbia	Methanex, Teck Cominco, Finning, Rescan Environmental Services, Terra Remote Sensing, Fluor Daniel, Canadian Mill Gear Solutions, Lions Gate Learning Alliance, Microtek International, SyncWave Energy, Rimex, DynaMotive Energy Systems, Intervista, MDA, Sandwell, Wenco Systems

Profiles of selected Western Canadian companies active in the study area are also presented in Appendix B. While mining and oil and gas are the main areas of activity, the profiles were selected to illustrate the wider market potential.

Business Associations

The following summarizes the major Canadian business associations with interests in LAC. Additional bilateral associations can be found in Appendix D.

Canadian Association of Importers and Exporters ¹⁵ (I.E.Canada)
The Canadian Association of Importers and Exporters works with embassies in Ottawa, Washington, and around the world to keep Canadian companies informed about international trade issues and to represent Canadian company interests globally. I.E.Canada also administers The Canadian Council for the Americas (CCA) and The Brazil-Canada Chamber of Commerce (BCCC). The CCA stimulates Canadian commercial interests in the markets of Latin America and the Caribbean. The BCCC promotes stronger commercial relations between Canada and Brazil.

I.E.Canada has been active, with others, in establishing the Canada-Brazil Trade Portal (brazcan.org). The website provides users with access to profiles of the leading business and government organizations in Brazil and Canada and offers a useful list of upcoming events in Canada and Brazil.

Canadian Council of the Americas ¹⁶ (CCA)
The Council plays a critical role in enhancing the number and strength of corporate relationships between Canada and LAC. There are two CCA associations operating in Western Canada, one in Alberta and the other in British Columbia. CCA-Alberta is the pre-eminent link between Alberta-based businesses and the markets of Latin America and the Caribbean. Through a variety of informational events and networking opportunities, CCA-Alberta's mission is to forge enhanced trade between Alberta companies and countries in this region. CCA-British Columbia is the leading not-for-profit organization that facilitates business and trade between B.C. and the countries of Latin America and the Caribbean

CCA-B.C. and CCA-Alberta are separate associations that cooperate. There is also a CCA in Ontario, again with informal affiliations to the B.C. and Alberta CCA associations. CCA Alberta has maintained an active program for some time, and CCA-B.C. is attempting, through volunteer efforts, to regenerate itself. It is said that the membership of CCA-Alberta is 90% oil and gas. Mining sector companies are an important part of the membership at CCA-B.C. CCA-AB and B.C. Economic Development are both currently working on developing lists of companies active in Latin America.

A year ago, CCA International Trade Advisor Ken Frankel, testified before the Standing Committee on International Trade¹⁷. He recommended support for business facilitation programs, business partnerships and outreach, bilateral and sub-regional trade agreements, and Foreign Investment Protection Agreements and emphasized taking advantage of the potential with Brazil.

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Brazil-Canada Chamber of Commerce ¹⁸
The Brazil-Canada Chamber of Commerce is a business association whose primary objective is to foster stronger commercial relations between Canada and Brazil. The Chamber is exploring a full range of infrastructure and program investments to ensure that companies in both countries react to opportunities being created by the new wealth evident in both countries. A Brazil-Canada Trade Portal has been created and is having a significant impact. Webinars and virtual trade missions are planned.

Canadian Manufacturers and Exporters ¹⁹ (CME)
Generally speaking, CME in Western Canada encounters little pressure from their membership for support in Latin America markets and therefore currently have no targeted engagement programs with the LAC region.

Canadian Foundation for the Americas ²⁰ (FOCAL)
FOCAL is an independent policy institute, based in Ottawa, that fosters informed analysis and debate on social, political, and economic issues facing the Americas.

Western Canada's Provincial Governments

Government of Manitoba
Chile is the top priority LAC country for the Manitoba Trade and Investment unit of the Government of Manitoba. Following Chile, Manitoba is also active in pursuing trade development efforts in Brazil. Argentina, Peru, Colombia, and Venezuela are of secondary interest. Manitoba was part of the Canada delegation at the EXPOMIN mining trade show in Chile in April 2008. Manitoba had been dormant in the Latin America market until about a year ago, when the decision was taken to take a closer look at economic opportunities in Chile and Brazil. The province is working on a Latin America strategy, which once completed should better outline the Manitoba Government's intended approach to engaging in the region. Manitoba is aware of the FTA connections with Costa Rica, but has not emphasized the development of this market.

Government of Saskatchewan
The Saskatchewan Trade and Export Partnership (STEP) is pursuing agricultural prospects in LAC particularly in fertilizers, pork, grain, and special crops. A level playing field with the United States on FTAs with the LAC region is critical to the success of integrating Saskatchewan products into the region. Currently the export of agricultural equipment is limited because of high tariffs in Brazil and Argentina. Despite the challenges to exporting, three or four Saskatchewan firms will attend an upcoming agricultural equipment show in Argentina.

STEP has made a substantial effort in Latin America to develop contacts and study the market potential in order to facilitate involvement for Saskatchewan companies. STEP's top priority countries in LAC include Chile, Brazil, and Argentina. Other countries of special interest are Peru and Colombia. However, not much has been achieved in the way of results beyond the important agricultural commodity exports.

Government of Alberta
The Latin American markets of most interest to the Alberta government are Brazil, Venezuela, Argentina, and Colombia. Alberta's focus is oil and gas, particularly heavy oil. There is recognition of opportunities in agriculture, alternative energy, and environment. As reflected in the country priorities, hot areas for oil and gas are Brazil, Venezuela (conventional and heavy oil), and Colombia. Argentina has energy price caps, but some Alberta companies still do well.

In Alberta's Electronic Business Intelligence Service (EBIS) system²¹ Brazil and Colombia are the most prominent countries, with entries also for Argentina, Venezuela, and Bolivia in the current reports. All current reports in the EBIS system address the energy sector.

Government of British Columbia
The B.C. government's trade development emphasis is strongly on Asia-Pacific markets with secondary attention to North America and the European Union. Opportunities in the Latin America study area are acknowledged but no LAC countries have been identified as priority markets.

Notwithstanding the provincial government's position, there has been a steady stream of incoming missions from Latin America to B.C. In the past the provincial government trade effort focused on mining and mining services and equipment exports to Chile, Peru, and Colombia.

Historically, there was significant movement of mining companies' activities from B.C. to Latin America in the late 80s and early 90s. This was in part due to tougher environmental regulations in B.C. and in part due to a reopening of the mining sector in LAC at that time²². Another historical note of interest is the instrumental role played by B.C.'s aquaculture industry in the establishment of Chile's aquaculture industry. Engineering services for pulp and paper mill design has been of significance.

An issue of current importance with a LAC dimension, recognized by the provincial government, is the province's need for permanent skilled immigrants and temporary workers. (The same issue would be important to Alberta.)

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Municipalities

The consultations undertaken did not identify substantial interest in Latin America by municipal economic development agencies. Calgary Economic Development has contacts in place with Chilean economic development agencies and some representatives from LAC are expected at the Global Petroleum show.

Educational Institutions

This study included very limited outreach to educational institutions, with the principal interviews undertaken in Saskatchewan. In addition, the limited consultations identified significant Latin American academic programs at the University of Calgary (notably the Latin America Research Centre and the Haskayne School of Business Institute for Resource Industry and Sustainable Energy Development in Latin America), the University of British Columbia, and Simon Fraser University. Conversely, it is perhaps of note that the University of Victoria's Centre for Global Studies addresses issues throughout the world, but has no Latin America activity. The Association of Universities and Colleges of Canada maintains searchable databases providing information on Canadian University International Exchange Agreements and Canadian University Projects in International Development.²³

The University of Regina (UofR) was interviewed for this study. UofR has research collaboration agreements with businesses in other parts of the world, but none in the study area. U of R does participate in student exchanges with Chile, Colombia, and Cuba. UofR sees academic institutions in Chile as the most promising for academic research collaboration and a senior staff person from the university will visit Chile shortly. The university has done a limited amount of CIDA work in LAC, on water shortage and environment projects.

The Saskatchewan Institute for Applied Science and Technology (SIAST) provides an example of community college activities in LAC. The Latin America study area has not been a priority for SIAST's consulting services, although SIAST has undertaken some work, notably a Rural Extension Development project in Panama. SIAST does see growing interest in this region from CIDA and is anticipating opportunities arising with CIDA in Peru and Bolivia in particular. Subject areas of potential importance include impacts of resource development on Indigenous Peoples and Corporate Social Responsibility. SIAST monitors Technical Assistance opportunities at the Inter-American

Other Organizations

The research and consultations underlying this report included attention to activities of the Government of Canada, EDC, and selected multilateral development banks. Efforts focused on activities most relevant to Western Canada.

Foreign Affairs and International Trade Canada (DFAIT)
During a February 2008 speech to CCA-BC, then International Trade Minister David Emerson indicated that "To help our businesses and investors succeed in Latin American and Caribbean markets" the Government of Canada is "putting a new focus on getting more Canadian Trade Commissioners on the ground throughout the Americas".²⁴

Three key objectives that form the basis of Canada's engagement in the Americas, including the Latin America and Caribbean region, include²⁵ :

• To strengthen and promote our foundational values of freedom, democracy, human rights and rule of law.
• To build strong, sustainable economies through increased trade and investment linkages, as well as mutual commitment to expanding opportunity to all citizens.
• To meet new security challenges, as well as natural disasters and health pandemics.

Through an integrated commerce agenda, Canada hopes to build prosperity, generate economic activity, and fuel corporate social investments and commitments that will create jobs, wealth, and opportunities, both domestically and throughout the LAC region. DFAIT's top country priorities in LAC are Brazil, CARICOM, Colombia, Chile, Haiti and Peru.

DFAIT recognizes that commercial re-engagement with LAC will raise important policy considerations for Canada. Sound policy formulation and delivery will be needed to address numerous issues linked to the promotion of sustainable growth. These include energy security, sustainable environmental practices, corporate social responsibility (CSR), human capital development needs, and finding creative approaches to the issue of labour mobility.

DFAIT's Science and Technology Division has led development of the Global Innovation Strategy (GIS) that seeks to relate the Government of Canada's domestic Science and Technology Strategy with its Global Commerce Strategy in a manner that is consistent, deliberate, and results-oriented. Priority countries in LAC identified in the GIS include Brazil and Chile. Priority sectors are environmental science and technologies, natural resources and energy, health and related life sciences, and information and communication technologies.

The federal Going Global Science and Technology Program²⁶ is specifically designed to promote and enhance Canada's international science and technology efforts by supporting Canadian researchers in accessing international R&D collaborative opportunities through the development of partnerships with key players in other countries/economies. The Going Global Science and Technology Fund has been renewed for another fiscal year period (April 1, 2008 to March 31, 2009).

While DFAIT has the lead, the Government of Canada's re-engagement with LAC is a 'whole of government initiative'. A broad range of activities supporting the LAC re-engagement initiative are underway in numerous departments of the Government of Canada.

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National Research Council (NRC)
Generally speaking, NRC does not place much emphasis on Latin America. That said, NRC, as the lead federal player in developing Science and Technology (S&T) Agreements, has been active in structuring S&T agreements with Chile and Brazil. Canada's MOU with Chile is unfunded. The agreement being negotiated with Brazil is expected to be more substantial.

Canada is continuing progress towards an S&T Cooperation Agreement²⁷ with Brazil that will result in technology commercialization ventures. Brazil was chosen as a partner country for Canada's International Science and Technology Partnerships Program. This program aims to foster international partnerships and collaborative research, with an emphasis on industry-industry and university-industry partnerships. Negotiations for a Canada-Brazil Science and Technology Cooperation Agreement are well underway. The Agreement with Brazil is expected to earmark a few million dollars.

Canadian International Development Agency (CIDA)
Canada has an active program of development assistance in LAC focused in three broad sectors: governance, private sector development, and human development (health and education). Canadian development assistance to the LAC region surpassed $500 million in 2006²⁸. CIDA's areas of geographic focus in Latin America include Haiti, the Caribbean, and Bolivia/Peru. Haiti is CIDA's top priority in LAC and currently CIDA is developing an aid partnership with Brazil to better support Haiti.

CIDA's priority generally is improving government know-how in developing countries. The promotion of Corporate Social Responsibility is of prime importance to CIDA, along with education, governance, accountability, institution building, and security. CIDA is very active in governance and social reform, particularly in the Caribbean. However, Western Canadian companies are conspicuous by their absence in such contracts²⁹. CIDA partners with Canadian NGOs and private sector firms to deliver its programming. In LAC it appears that very few of the firms engaged in CIDA projects are from Western Canada.

Atlantic Canada Opportunities Agency (ACOA)
ACOA and DFAIT are discussing a number of potential initiatives to be undertaken over the upcoming six to twelve months to generate interest and participation by Atlantic companies in pursuing opportunities in the Americas.

Activities include:

• Take Advantage of Caribbean Development Bank Annual Meeting in Halifax, May 2008
• Mission to Exponaval in Chile (December 2008)
• Study on opportunities for Atlantic Canada in the Americas Region (release November 2008)
• Project in specific sectors with Post in Miami as it is the Gateway to the Americas
• Surveying Client Interest

Export Development Canada (EDC)
Latin America is an important market for EDC. Forty-four percent of EDC's energy business is done in the region³⁰. EDC has worked with more than 400 Canadian client companies on Brazil transactions. In Western Canada, EDC's activities focus largely on oil and gas and mining sectors, while agriculture and forestry are also important markets for EDC.

EDC helped Canadian companies do $7.4 billion worth of business in 2006 throughout LAC, an increase of 35% from 2005. Of the total, EDC provided nearly $2 billion in financing directly to Latin American companies for the purchase of Canadian products and services, a 155% increase over 2005. In Peru and Chile, Canada is the largest investor in their enormous mining sectors, where EDC has been heavily involved with large and small companies³¹.

In Brazil EDC has offices in Rio de Janeiro and São Paolo. An EDC office in Santiago, Chile is opening in 2008. EDC is furthermore seriously considering an office in Lima, Peru. In Brazil, for example, EDC's client portfolio includes some of the largest Brazilian corporations, including: Petrobras, CVRD, Samarco, Votorantim, Gerdau, Usiminas, and Embratel. EDC also has lines of credit with Peru, Colombia, and Uruguay³². EDC lines of credit provide access to financing for foreign buyers to facilitate the purchase of Canadian goods and services.

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Development Banks
Canada participates in the activities of multilateral development banks. The Inter-American Development Bank (IDB) is the largest multilateral lender to LAC, supporting over 300 projects for social and economic development with an average of $10 billion in financing a year³³ . Bio-fuels, sustainable energy, and climate change are currently key drivers of Bank activities³⁴. Corporate Social Responsibility (CSR) is an important issue for IDB, in particular with respect to oil companies.

The presence in Western Canada of the Private Sector Liaison Officer network (PSLO) of the World Bank and IDB is a useful tool. The PSLO network has representatives in all four Western provinces. PSLO experts work to increase the awareness and participation of private companies in development activities.

Other important multilateral development banks active in the region are the World Bank and Caribbean Development Bank (CDB). The United States is not a member of CDB, which suggests good access for Canadians with respect to North American technology. There are also important regional banks such as the Andean Development Corporation.

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