The Saskatchewan Trade and Export Partnership (STEP) is a non-profit public-private partnership with a mandate not, like most P3s, to build infrastructure but to increase the province’s exports to existing markets and to tap into new markets by initiating sales, contracts, and projects for Saskatchewan exporters. Editor-in-chief Toby Fyfe talked to Premier Brad Wall and STEP’s President and CEO Lionel LaBelle about this innovative arrangement.
What are the drivers behind this initiative?
Premier Wall: When it comes to exports and developing trade opportunities for the province, governments need to engage exporters in a way that’s more significant than annual consultations. They need to engage them as stakeholders, as participants, as partners, and that’s what the model represents. We’re actually trying to increase public sector support, the public part of the P3 partnership.
Lionel LaBelle: I think another part of STEP’s story is its ability to leverage resources. We can demonstrate to government on a regular basis that for every dollar it invests, STEP members probably invest an additional $10. It’s not cheap to take a group of people to Hanover, Germany, as an example, to a trade show. We brought 23 companies with 55 individuals to the world’s largest agriculture equipment show in Hanover. That wasn’t simple. STEP’s overall investment was probably less than $30,000 or $40,000 not counting the people. Our members probably spent in excess of just under $1,000,000 both in terms of getting there and also in putting the equipment in a container and across the pond and all the other expenses related to that. So it’s about leveraging, I think, that’s really what’s caught people’s eye.
Premier Wall: We have some fundamental advantages going for us at this point. We are the second least dependent province on the U.S. for our export market, but even at that it’s over 60 percent, so that tells you a little about us and about the rest of the country. But we have said quite clearly that we need to diversify our export-based economy, our export markets, and, to do that, we need to be working with the industry and exporters, because they’re the first able to tell us in which markets we need to focus on in Asia and the Middle East for agriculture and manufacturing exports. So we strongly support what STEP’s doing. It’s one thing for the government to say, “Look, we’ve got to diversify away from such a dependency on the United States market.” It’s another thing for the government to determine where the diversification should occur and what markets we should be focused on. We have STEP and what a huge advantage that is to indicate to us where that diversification should occur.
What other value does STEP bring?
LaBelle: I come from the private sector and I come from a world that says, you have specific things that you’re accountable for in terms of shareholders and others. Governments tend to play the role of promoter, and the problem with being a trade promoter is that you really can’t benchmark. We view ourselves as change facilitators where we literally take new companies hand-in-hand and help them make transactions. Then, as they gain maturity in international markets, we take them to the next level in terms of sector development, marketing intelligence, competitive intelligence, even logistical intelligence. We’ve got some huge issues in Western Canada. We’re 2000 kilometres away from a seaport and it’s just not easy to sell product in downtown Bangalore unless you understand the logistical surprises that exist in doing that. We have core competencies that I know companies rely on.
What role does each partner play in STEP?
LaBelle: It’s really defined through our board of directors, with 12 elected individuals that cover our corporate membership, who all pay an annual fee to participate with us. The balance of the three seats are provincial seats; they’re occupied by the deputy ministers of Finance, Agriculture, and Enterprise and Trade which make up the strongest portfolios within the Cabinet. We also have a defined agreement with the provincial government. We have very specific deliverables to government on a regular basis. We play a role in developing briefing notes on economic development and those types of things, and how we score with a different country or a specific sector, so to speak.
Beyond that there is a real work ethic in the collaboration that takes place at different levels. Right now, Canada is in the middle of developing a free trade agreement with the European Union, so we are offering some very specific opinions on some very specific issues that we have with the EU.
Regarding governance, are three public sector members on a 15-member board enough to represent the government’s interests?
Premier Wall: Overall we are comfortable with governance because the interests of the government when it comes to export market diversification and trade increase are the same as the interests of the industry and we are very comfortable with the process right now.
I suppose the Buy American program was a specific challenge for STEP?
LaBelle: It was, but you know, I’ll revert to a situation that took place around June last year, when the Premier’s office contacted us because there was going to be a conference call to talk about this issue. The good news about STEP is that we have almost fourteen years of history and we have an in-house customer-driven database. We were able to deliver some very specific information to the Premier as to what state and municipal markets Saskatchewan companies have, and the federal strategy, and where we were having pinch points in terms of dealing with the Buy America piece. I think in fairness to politicians, they need specific data as opposed to generalizations.
Does STEP fill a void left by the federal government?
Premier Wall: The federal government, I think, is doing their job. It’s difficult. It’s such a diverse country in terms of the economic interests related to exports. What we want to sell to the world is completely different from what Newfoundland and Labrador wants to sell to the world. So I think our national government does a good job of trying to represent everybody. And each province has to step up and do its part; we see our role as complementary to the feds. On this point, with the help of the federal government and because of STEP, Saskatchewan has, for the last two years, been Canada’s largest exporter per capita. It’s a recent achievement.
Is success measured simply by the bottom line?
LaBelle: We’re very transparent. Historically we’ve had strong support from both sides of the political aisle and I think that’s important. Second, we have a vast array of benchmarks which can really define our success. I think there are 26 benchmarks that include the typical financial ones. We also have some unique ones that we drive down – things like trade leads and market intelligence reports. A couple we have are called NIMs and FIMs, which are “New in Market” and “Further in Market” analyses. So when people say to us, “What does STEP do?” we can be very specific in terms of what we do and how we deliver it. If we were a loosey-goosey organization that really had a lot of platitudes and not many deliverabl