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News Story
Is Canadian business complacent, clueless or just plain lazy?
By Roman Zakaluzny, Ottawa Business Journal Staff
Wed, May 2, 2007 2:00 PM EST

Author Andrea Mandel-Campbell. (Darren Brown, OBJ)

Canadian companies have missed the boat to become multinational players, according to a new book by a former Ottawa business writer.

Andrea Mandel-Campbell, a Latin America correspondent for various news outlets including the Financial Times of London, covered emerging markets in the newly-liberalized economies of Chile, Argentina and Mexico around the time that Canada signed the North American Free Trade Agreement with the United States and Mexico.

"I was expecting to see some Canadian participation," she recalled. "I figured, I'll go down, have this great foreign experience, and go back to Canada.

"But there just wasn't a lot to cover."

So little was going on in fact, even after a much-trumpeted "Team Canada" trade mission to Chile in 1997, she wrote a book about what didn't happen but should have.

"Was everyone asleep?" she asked. "At the time, Mexico was the way China was today."

The Carleton journalism graduate and former Ottawa Sun staffer penned Why Mexicans Don't Drink Molson, published this year.

While the title suggests it's purely about the beer industry, Ms. Mandel-Campbell said she doesn't even like beer. Molson's failure to sell a premium beer to the world is simply a good example of a multitude of Canadian companies who've followed on the same path.

As globalization ramped up in the 1990s, Canadian firms were on the cusp of expansion: Chinese, Latin American and Russian companies needed investment and were for sale for cheap. Instead, the Canucks retreated to the sidelines, and many were overtaken by multinationals from smaller, less developed countries. And now Mexican Corona is the most popular import beer, while Molsons is co-owned by U.S.-based Coors.

Pick a sector: mining, forestry, banking, car parts, pharmaceuticals, hydro-electric power – Canadians, Ms. Mandel-Campbell and the experts she consulted agree, had the potential to become players in all of them. Slowly but surely, however, they were outmanoevered in every sphere. Sharks at home, Canadians become lapdogs abroad, she wrote.

"They don't make any effort. They wait, like in the old days when women expected to be approached by men. Things have changed. Even women don't go for that anymore," is how one European businessman described the way Canadians behave at trade shows. "We can tolerate that kind of attitude from the U.S., but not from an average-sized country like Canada. You are bound to lose."

The reason? Ample natural resources and a willing, safe and secure market for most of them south of the border, she wrote. Canadians were never forced to become ambitious. Malaise set in, which some chalked up to a lingering colonial mindset while others, just to laziness.

Only a fifth of small businesses, said Ms. Mandel-Campbell, even bother to export, she said. Exports are "extra gravy" if companies can swing it, but few try.

The former Ottawa resident said the Canadian mentality is evident in Ottawa's private sector too.

"One thing that really struck me about Ottawa when I look at the high tech sector – the Mitels, the Newbridges – they were all formed by foreigners," she said. "(And) Nortel is a spinoff of AT&T, and has American management.

"They are all people who saw the opportunity here in Canada, saw what we could do, and I think Canadians should wake up instead of waiting for someone to show us a vision and give us jobs," she added, or else Ottawa will simply become a "cheap repository for high-tech products."

"The world should be our oyster," a Calgary venture capitalist told her. "Until now, it's just been easier to do nothing, live off our natural resources, work 9 to 5 and go to the cottage."

"It's a tough pill to swallow," she said. "But Canadians really needed to know this. It's kind of like an alcoholic: you can't fix it until you admit you have a problem." Her book, she said, is the intervention.

Although he hasn't gone through a 12-step process, Barry Gander, executive vice-president of the Canadian Advanced Technology Alliance (CATA), said his association is working on something that will help.

The group's been consulting with Sinclair Stevens, a Mulroney-era cabinet minister, on how to increase Canada's global competitiveness.

Both agreed with many of Ms. Mandel-Campbell's arguments.

"What I find in the business world is there's been a strange lack of awareness," said Mr. Stevens. "People think selling to the United States is the easy market."

Canada shouldn't forget its other affiliations, he said. And forget large firms: it's time to concentrate on the small- and medium-sized enterprises.

"The United Nations has 150 countries, 53 are in the group called the Commonwealth," he said.

"It's the largest bloc of aligned countries in the world," added Mr. Gander, adding that CATA has been working on this proposal for more than four years.

Their attraction to the Commonwealth is its uniformity: English-speaking, using common law and with similar business practices, the commonalities are favourable, they said.

"If you do a contract between here and India, generally, they know what the terms are," Mr. Stevens said, as opposed to China, where English is at best, a second language.

It's 15-per-cent cheaper to do business with the Commonwealth than other nations, he pointed out. He and CATA want Canada to act as a broker between the Commonwealth and the U.S., a middleman of sorts that pockets the difference.

"We could be the gateway, we could be the bridge," he said.

"People love to talk about China," he continued. "China's small compared to the Commonwealth."

But the time for Canada as gateway has passed, said Ms. Mandel-Campbell.

She called CATA's and Mr. Stevens' theory an old idea, past its best-before date.

"We were supposed to be the gateway to North America," she said. "Europe was supposed to go through us. That never happened."

Canada really got sidestepped, she said, when the U.S. brought tariffs down on Canadian softwood lumber. Americans never felt the sting of low supplies, though, because European and Russian companies filled the void. Despite an agreement reached earlier this year, Canadian companies have been unable to displace the new guys on the block.

Some gateway, said Ms. Mandel-Campbell.

A free-marketeer, Ms. Mandel-Campbell said Canadian companies need to become as competitive abroad as they are at home, take more risks, and stop being complacent, because Canada can't take the U.S. for granted very much longer. Canada should also look towards branding itself, she added, because the world needs an image to define it.

"I don't think my book will change the old boy's club or challenge the Canadian way of doing things," she told the OBJ, adding, however, that she wrote it with the intention of making required reading lists at high schools and universities.

She may get that wish: the dean at the University of Toronto's Rotman School of Management suggested recently her book will be mandatory.


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