 My name is Chelsea Luciani. I'm a Senior Manager in the Trade Policy and Negotiations branch, BC Ministry of Jobs, Economic Development and Competitiveness. We are co-hosting this webinar with the investment capital branch from the same ministry on the invitation of the Kootenai Association for Science and Technology. In today's webinar, you will learn about how tax credit programs work and about opportunities for businesses in Canada's free trade agreements and how it may apply in your particular case. We are pleased to see so many of you joining with us today. Our presenters today are Matthew Brown, Director of Tax Credit Programs from the Investment Capital Branch and Gana Trots, Manager, Trade Policy and Negotiations Branch. We're also joined by Regan Khan, a fellow senior manager from the Trade Policy and Negotiations branch. So before we get started, I'd like to go over a few items so that you know how to participate in today's event. The webinar will last for approximately an hour and 30 minutes. We will have two presentations, about 30 to 40 minutes each. And you will have the opportunity to submit questions with any presenters by typing your questions into the questions pane of the control panel. So you should see a boxer where you can type in your questions and at the end of it, I will read out the questions. You may send in your questions at any time during the presentation and as I said, I will collect these at the end for a Q&A session. During the webinar, we're going to have a couple of poll questions so that we can focus the content and what is most of interest to you. At the end of the presentation, you will also receive a recording of presentation today in a follow-up email. And I just want to draw your attention to a couple of handouts that we've put in the presentation pane. So if you go down to where it says handouts and three, there are a couple of handouts there that you can download for your own background information and reference. Now I'd like to turn it over to Matthew Brown, director of tax credit programs in the investment capital branch. Matthew, the floor is yours. Thank you. Thank you, Chelsea. And thank you for inviting me to deliver the presentation on the provinces venture capital tax credit program, which is the means by which the province stimulates investment in BC small businesses and specifically in the manufacturing and processing sectors. And so thank you. So whether you were one of us every day, you're a service from a company that started out as a business and you recognize all of these logos on Uber and Airbnb and the companies whose apps you download onto your smartphone and your iPad. And what all of these companies have a pervasive and large as small venture capital backed companies. And in their early years, an investor or a group of investors liked what the founders were doing in these companies and decided to back the company by taking an equity stake in the business. And so taking an equity stake in a new startup business is venture capital investment. And that's the topic that I'm speaking about today, the provinces program of providing a tax credit to investors that will stimulate investment in new young startup businesses, specifically in the technology sectors. Some of you may be familiar with venture capital and others may be not so much so I'll just talk a little bit about venture capital and its characteristics. Next slide. Well, I suppose that the bonds being safer options and venture capital is at the risky end of the spectrum. It's characterized by being volatile and high risk. And the characteristics that make venture capital high risk is that it is investment in new companies. Very often they have no tangible assets, they have no revenue, and they are, they have no products that they're developing new innovative untried and untested technologies that hopefully for the company in a few years time. They can commercialize that technology so that they're, they're high risk propositions, they're at the risky end of that investment spectrum. And so for an investor, what the attractiveness of venture capital companies are is that along with high risk comes the opportunity for high return. And investors in venture capital companies are not looking for stock price appreciation that you might get if you're looking for investing in say a mutual fund or stocks on the Toronto Stock Exchange. A venture capital investor is looking for explosive growth with the company having something called an exit event, which is either a merger and acquisition, or an initial public offering. And so typically what a venture investor is looking for is something like 10 times return on investment at a minimum, but probably more so looking for 30 to 50 times the return on their initial investment. So there's a high failure rate with venture capital bat companies that many are developing a technology, which is untried. It has yet to be commercialized. And so there's a high failure rate. And so if an investor is investing in the spread of venture capital companies, they will be looking for a high return from the one company that develops that breakout technology that will cover the investment costs of investing in say the seven or eight other venture capital companies. Next slide please Chelsea. But the graph we have in front of us now is a typical growth graph for a venture backed company. Some companies may have a growth phase of say two to three years, particularly those companies that are developing apps. This graph is a five year timeframe, which would be typical five to seven years for a company developing information technology, and say developing a medical device or developing some pharmacology or or a drug. And so what you see is the and the green wavy line are the net earnings and so in the very early years of the company, it's burning through cash it has raised investment from investors in its early stage and it's burning through that cash. And if it survives after two or three years, it may break through that break even point and having commercialized its product or its technology may start earning some revenue. The very first investors would be the founder owners and family members as well, followed by angel investors. So typically these would be high net worth individuals they may have been successful executives in other venture backed companies so they've been through the process and know how to grow a company for being a small company to get to that stage where they have a an exit event, an initial public offering or a merger and acquisition. And, and so what these people do they're critical to developing venture companies because not only do they bring money and invest in the company but they bring their experience and their expertise and their contacts as well and so they are active in mentoring these companies. So in the initial years they, there would be the investment from the founders, founder owners and their family, then followed by angel investors, and then followed by institutional investors. The provinces tax credit program is aimed at the very early stage, we are aimed at providing a tax credit to help offset the risk of investing in what is otherwise a very risky proposition so the tax credit program is aimed at the seed stage and the early investment stage. Next, please. And so the means by which the province stimulates investment in these risky businesses is providing a 30% tax credit to the investors. And the, the investment the tax credit doesn't go to the business, it goes to the investors who are risking the, their own money to purchase an equity stake in the business. And, and it's purposes to offsets, not all of the risk, but some of the risks of making that investment. Not every company is eligible to receive to be registered in the program and to raise tax credit supported money. And so there are a couple of criteria really and I'll get into more detail and talk about the specific criteria and the next few few slides. But for a business to be able to raise tax credit supported money, it has to be, first of all, registered in the program and it has to be registration criteria and submit an application to us to, to be considered for registration. We have to then do something called issue an equity authorization so this is the right for the business to then go out and raise equity investment and we do this every year so every business that is registered in the program and wants to raise money in the next 12 months has to apply and we would issue an equity authorization if it was in compliance with the program's requirement so it's the right for the company to go out and raise investment from investors, and it can be any amount of money it could be say $10,000 or it could be several $5 million, $7 million. It really it depends on first of all two things, how much of the tax credit budget the program has left when the company applies for the equity authorization and what they plan to do if the company has got a plan for the next year to raise cash and invest it say in purchasing plant and equipment and the amount of plant and equipment is a million dollars then it's reasonable that we would give an equity authorization around a million dollars. And the final thing that the business must do is issue shares for cash. So the program is based on issuing equity shares or preferred shares or or something called a convertible right which is a basically it's a contract for the company to receive cash from an investor for which the investor will be issued shares at some time in the future. So this concept of issuing equity shares for cash is important because a loan converted into cash or sweat equity would not qualify for the tax credit it has to be shares issued from Treasury for cash that is invested in the business. Next slide please. So I'll talk a little bit about how to actually claim the tax credits. This is sometimes overlooked when people to discuss programs and how does it actually work. Well, the way it works is that the registered company in the program and it goes out and raises investment. It claims the tax credit on behalf of the investors. We have a online system that is triple password protected. And the company once it has raised investment it will go to the website and it will input the details of the investment to claim the tax credit and so it will be things like the investor's name, the amount of the investment, the number of shares purchase the date of the investment, and so on. We have to do some due diligence and and it might not not just be for one investor it could be for a dozen investors it could be 50 or so investors so the company after this one would go to the website, enter the details and claim the tax credit on behalf of the half of the investors. Once that has happened, we have to do some due diligence on our end to make sure that the company and the investors are in compliance for instance if there's an investor that is resident outside of British Columbia, and they are not filing a BC income tax return for instance they would not qualify for the tax credit. So we have to do some due diligence on our end. The end result though is that we release a tax credit certificate and it's a PDF document that gets loaded to our website. The investment company gets a system generated email telling it to go to the website and retrieve the tax credit certificates. So it's a physical document is a PDF document containing the tax credit information who the investor invested in the amount of the investment and the amount of the tax credit. The thing that the investor claims the tax credit is that once the company is distributed the certificate to the investor, the investor will claim the tax credit when they file their tax return. So we have just finished the bulk of our work in processing a couple of thousand tax credit certificates for investors for the for the 29 calendar year, and investors have been filing their tax returns with the CRA and including the details of the tax credit certificate information in their tax returns. And for the individual investor if they have no BC income taxes owing the CRA will cut a refund check for 30% of the amount of the investment. Next slide please. Some features of the the tax credit. First of all, the registrants, the companies themselves, they have to be corporations. And so, if a company has an abbreviated incorporated limited corp after its name. It can be registered in the tax credit program cooperative associations are also incorporated entities, so they can also be registered in the probe. So for the features of the of the tax credit itself an individual and a corporate investor. If they are filing a BC income tax return are eligible for the tax credit so if they've made the investment, and they are filing a BC income tax return in the year in which they make the investment, they will be eligible for the tax credit. For the individual investor that investor is a title to a credit up to $120,000, which means that they can make an investment up to $400,000, which with a 30% tax credit, they can get a 120,000 credit. And for corporations, they are treated differently. The amount of investment that a corporation can a corporate investor can make is unlimited. And, but with a corporation, they have to have taxes owing so they they will get a non refundable tax credit. They can make an unlimited amount of investment and can receive an unlimited amount of tax credit, but they will be, they will get a non refundable tax credit so they have to have BC income taxes owing against which to offset the credit. Another feature of the credit is that there's a four year carry forward. So an investor can make an investment in year one. And if they don't use all that portion of the tax credit when they file their tax return, they can carry forward unused portions of the credit for the next four years. We've just finished the 29 tax credit season and so if an investor made an investment in 2019 and didn't use all of their credit up in 2019, they could carry forward unused portions of the credit in each year from 2019 through to 2023, which is five years. So it's the year of investment plus a four year carry forward. Next slide. There are eligibility criteria that I mentioned previously that not every business is eligible for registration in the program. Registrants have to meet eligibility criteria. They have to be incorporated entities registered to operate in BC that means registered with the BC registrar of companies. The business must have no more than 100 employees at the time of registration. It must have a permanent place of business in BC. It must pay 75% of wages and salaries to employees who report to work in BC. It must have 80% of its assets in BC, and it must have raised already a minimum of $25,000 of equity capital before it comes to the program for registration. And this amount of money is not eligible for the tax credit. So what we want to see is that the owners have invested or found an investor who is invested and made a stake in the business before it comes to the program. And the final criteria is the business must be substantially engaged in one or more of an eligible business activity, which are on the next slide. There are eight business activities. So these are the business activities that a business that wants to be registered in the program must be involved in. It can be one of these or several of them. So the first one is manufacturing and processing. And that will be defined as a company that takes input raw materials and turns the raw materials into a finished product. So manufacturing and processing. And we include things like wineries and brewers in that category. So we have, there's been a quite a number of wineries and brewers in the past few years because of the popularity of craft brewing. For instance, so we have quite a number of registrants that are wineries and brewers and they fit under the manufacturing and processing category. Then this research and development of proprietary technology. This could be for the life sciences companies or companies developing information technology. It has to have some ownership right of the technology and to be able to exploit the technology and commercialize it. A company that is doing R&D on a contract basis wouldn't qualify the company actually has to be doing R&D and be able to exploit the technology. Once it's developed. The third category is destination tourism. So this would include something like a tourist ski lodge or a fishing lodge something like that would fit under the tourism category. So we do have a definition of tourism. It is a business where more than 50% of the revenue comes from tourists and a tourist will be someone who resides more than 40 kilometers away from the business. The fourth category is interactive digital media. So this one would be for companies that would be developing games for instance it was it was created back in 2000. In Vancouver's burgeoning gaming community was was happening so interactive digital media for games but also there are many life sciences companies that are now developing interactive digital products as well. So gaming life sciences would fit under that category. So we have a clean technology category. This would be companies doing R&D and clean technology or manufacturing and processing of a clean technology product. The next one is something called advanced commercialization. This is the companies that are using all the products or the services of other companies. This is only available for companies that are located outside of Metro Vancouver or the Capital Regional District. So if you go online and you're shopping for something online and you go away and then when you go back to your computer you see some ads for something similar to what you were looking for. So there's a product shopping habits and it's then pitched an ad at you based on what you've been viewing and what you've been buying. So that would be an example of advanced commercialization. The next one is community diversification. Again, this one is for companies outside of Metro Vancouver and outside of the Victoria area. And it's for companies that are involved in a business that is diversifying the local economy and so it could be any of the above also include service businesses as well. And then finally scale up. It's focus for companies that have been in the program for two years. They've already raised money in the program and they developed a product and they're now ready to commercialize it and they need to raise funds for their marketing activities. And so those are the the eight categories that a business must be in. And the way that we assess whether a business is in one of these categories is that in our regulation there is a formula. And the business must have more than 50% of its assets plus its expenses engaged in one or more of these qualifying activities. Next slide please. Just as there are some approved qualifying activities there are some prohibited activities so in our regulation there are a number of activities that are prohibited and they include financial services so anything such as banking or lending or services trading securities are in the financial services category and would be prohibited retail stores gift stores are also prohibited real estate development resource extraction is another prohibited activity so businesses that are involved in exploration and extraction in, for example, oil and gas or mining or forestry are prohibited and food and beverage services are also a prohibited activity. Next slide please. There are two ways for an investor to make an investment in the venture capital company. And these are these are the two methods there are numerous acronyms in our legislation, one is called the eligible business corporation and the other is called the venture capital corporation. The business corporation is the direct investment model where the business sells shares directly to investors. The venture capital corporation model is the pulled funds method where a group of investors can get together, pull their funds, form a corporation called venture capital corporation, and then they can go out and seek other investors, and the venture capital corporation will invest the proceeds in one or many small businesses. And those small businesses also have to meet the qualifying criteria that I've gone through in the previous couple of slides so the same qualifying activities and the same registration requirements applied to companies that venture capital corporations would invest in. This is the direct investment model so this is the example of a an investor purchasing shares directly from a registrant in this case it's the eligible business corporation. And so the investor purchases the shares. The company claims the tax credit on behalf of the investor. There is a requirement that the investor hold their shares for a five year period. There's this concept in venture capital of patient capital, it takes time for a business to develop its technology, and bring its technology or its product to to market and so there's this requirement that the investor has to hold their their shares for a five year period. If they dispose of the shares within five years, then the investor is at risk of having to repay back all or a portion of the tax credit. Another feature of eligible business corporations is that they can raise up to $10 million under the program. They can raise any amount of money outside of the program but within the tax credit program. This is our capture 10 million. Next. This is the example of the capital corporation. And this is the pooled investment model, where investors would purchase shares from a venture capital corporation, the VCC itself will then take the proceeds and invest in one or many small businesses and so it's, it's a way of spreading the risk of making investments in more than one small business. Unlike an investor in an eligible business corporation that must hold their shares for five years. There's no such requirement for a VCC investor, they can dispose of the shares. As soon as they've made the investment in fact. The VCC has to hold the investment for five years so the VCC the onus is on the VCC making an investment in a small business and holding that investment for the five year period. And as with eligible business corporations that can raise up to 10 million a VCC can invest up to 10 million in a single small business. We have some ongoing compliance requirements as well so not only do we, we register the businesses and issue equity authorizations, allowing the business to go out and raise investment and process tax credit certificates. But there's also a requirement that we attempt to ensure that the province is getting value for money for the tax credits that have been issued to the investors. And so they say there's a compliance part of our branch that looks at the businesses to ensure that the business is in the qualifying activity for the five year period, and that investors hope continue to hold their shares for the five year period. And if a business wants to leave the program in under five years or an investor wants to dispose of the shares within the five year period, we manage that process and so we can if a company does have an exit event, a merger and acquisition or an IPO, we can tell it what its liability is. So if a company is approached and it's going to be acquired, we can tell the company what its tax credit liability is and they can include that amount in their negotiations around the price per share, because that will then tell the investors. If they are disposing of the shares, how much they have to repay back to the province. The, the main route by which we ensure compliance is through an annual return so each business that is registered in our program has to submit a return to us for the five year period and the return would be a copy of the financial statements and a copy of the securities register that we can look at to ensure that investors continue to hold their shares for the five year period. And just by, before I get to the final slide, just a couple of stats on the program for the 2019 period well let's go to 2018 first so in 2018, we had about 215 businesses raised about $106 million worth of equity in the program. In 2019, it was a little better and 230 businesses raised over $150 million worth of equity in the program, which is about $35 million of tax credits that we issued and as far as the number of individual tax credits, it's something like two and a half thousand individual tax credits certificates being processed that go to investors and who have in previous months attached to their tax returns and filed their tax returns with the CRA and maybe some of them are still in the process of filing their tax returns and filing their tax credit certificates. So the final slide is, is what are we doing now. And what we have ongoing at the moment is, we know that our program is well known and it's well understood in the lower mainland and to a lesser extent in the capital region, where there are significant tech clusters around the Kelowna area, where there's also a tech cluster, but we're not well known, we don't think in other areas of the province so we've started this outreach exercise that got underway before COVID-19 started, and it involved us going out to the regions to the smaller towns and talking about the program and seeing if there were companies, maybe manufacturing and processing companies, companies doing R&D or clean tech or new media that might benefit for being registered in the program and might be contemplating raising equity investment over the next couple of years. So we started this outreach exercise and this webinar is part of the outreach exercise to try and talk about the program and explain the program, answer questions and to identify if there are companies that are interested in being registered in the program. Of course with COVID-19 now our travel restrictions are on hold and so we're now just doing the webinar component of the outreach, but when travel restrictions are lifted we hope to be hitting the road and be visiting town, cities around the province and meeting with potential registrants and investors to see if there's any interest in the tax credit program. And the final slide is contact information and so if any members in the audience know of a business or have a business that might be interested in knowing more about the program, here is the program's contact information. We have a toll-free number, we have a generic email address where people can send questions and we have a portfolio manager who is on duty each week answering questions and speaking to potential registrants and potential investors about the program. And so anyone is welcome to pick up the phone or send an email with a question about how the program operates and how a company can get registered in the tax credit program. Back to you Chelsea. Great, thank you so much Matthew. So as I said earlier we're going to hold the questions until the end of the session so I'm just going to pass it over to Ganna now to talk about free trade agreements. Okay, thank you Chelsea. So the branch I work in represents BC interests in free trade agreement negotiations and trade disputes and affecting BC and we also work close and we also work to increase the businesses awareness of the opportunities in free trade agreements. So the things I plan to discuss today will be of interest to you if you are currently exporting or interested in exporting goods and services to other Canadian provinces or to other countries, but it also applies to you if you import goods and services. I know we have a diverse audience today from skincare and tea producers to consultants and high tech companies and we'll aim to make it relevant to all of you. Before I move to the presentation itself. I'd like to say that we recognize the current global challenges in the international trade and supply chain that you currently experience. And I'm not here to suggest that leveraging the opportunities in free trade agreements is as simple and will help you to overcome these challenges, but the free trade agreements might help you to diversify your current markets and your current suppliers. Next slide please. So today I will go over a little about our ministry. What free trade agreements do Canada's domestic and international free trade agreements. I will also cover the opportunities that free trade agreements present for BC businesses and communities. And I will also show you some useful tools and resources at the end. So some of this content will be technical and a bit dense, but the good thing is that we will have time for questions later on. And if you only take one thing away today, I hope that it will be that, you know, if you have questions or concerns you can contact me, my branch or any of the offices and resources that I will share at the end of the presentation. And if we can't help you, we'll know who to put you in touch with for further assistance. So the Ministry of Jobs, Economic Development and Competitiveness aims to make life more affordable for British Columbians by building a strong, sustainable and innovative economy that works for everyone. There are many ways to foster the economic growth and free trade agreements, leveraging the opportunities that they offer is one of them. So through free trade agreements, BC goods and services can become more competitive and we can also revitalize traditional industries and establish new ones. We can also foster trade, diversification and create new jobs. We understand that free trade agreements can be long, complex and technical and we're here to help you to navigate their web. So in the past year, as Matthew's team, we've been traveling and delivering seminars throughout BC. This year we are mostly doing remote infosessions, but we continue to make sure that the economic benefits of free trade agreements are widespread, well understood and leveraged by BC companies. So first off, moving to the next slide, let's talk about free trade agreements and what they do. So free trade agreements or FTAs in simple terms is an agreement between two or more countries to facilitate trade and eliminate trade bearers. Trade bearers can be tariff bearers like duties paid on the product and non tariff bearers, for example, standard that has been put in place that is not based on science and is meant to keep experts out. The free trade agreements, they create more predictable and transparent conditions for businesses that operate in foreign countries. Of course, free trade agreements provide BC and Canadian businesses with preferential access to a wider range of experts and international investment opportunities, both in established but also in emerging markets. As such, it is important to know how these agreements are structured and function in each market in order to determine how your company's goods and services can benefit from them. You do not need to go into every detail of an FTA and there are also no identical FTAs. However, there are typical areas that they cover such as goods. And one of the most tangible things that FTA does is tariff reduction or tariff elimination on goods services as well. FTAs set out the rules regarding the treatment of foreign service suppliers. Another common area is investment, which protects investors from discriminatory or arbitrary treatment in their host country. And also FTAs cover government procurement by providing greater access to FTAs, partners, government, procuring services. So the scope of FTAs is of course larger than that. It covers also labor, environment, electronic commerce, dispute settlement and other areas, but goods, services, investment and government procurement, they form the backbone of a trade agreement. I will go through all these four areas in more detail later on in my presentation. So moving to the next slide, you might have noticed that in the current state of trade there is an increased protectionism and trade tensions that might create sometimes uncertainty in trade. The good news is that Canada has been busy with securing preferential access for Canadian goods and services throughout a network of free trade agreements. And this map shows you where in the world Canada free trade agreements have been implemented, like light blue, for example, the United States, the European Union, Australia, where the free trade agreements, sorry, where the free trade negotiations were concluded, like dark blue, such as Malaysia, or where the exploratory discussions and negotiations on the potential free trade agreements are still ongoing. These are marked in green and these are China, India, Turkey, Brazil and many others. So Canada is the only G7 country with the preferential FTA access to the world's two largest economies, the European Union and the United States. And in fact, we are the only country with preferential access to all G7 countries. So I will pause here and I will launch our first polling question. So the question that you are going to see on the screen now reads, which of these countries does Canada not have a separate free trade agreement with? And the options are the UK, South Korea, Ukraine and Honduras. So you have a couple of moments to select the appropriate response and then to click submit. It looks like now we have 30, 40% that have voted. Please go on and submit the responses and I will close the poll in a few moments. Okay. So we are now closing the poll. Those of you who have not responded, you have an opportunity to see the answers. So as you can see, it looks like the majority has actually there is no majority, both 30% have responded that Ukraine and Honduras do not have a separate free trade agreement with Canada. And then 22% of you have responded that it is actually the UK, which is the right answer. The United Kingdom does not have a separate free trade agreement with Canada yet. The UK left the European Union on January 31 this year, and it is now in the transition period until this December 31, 2020, but Canada has agreed to the terms of the Canada EU trade agreement. So CETA, Canada European Union Economic Trade Agreement still works, still applies to the United Kingdom during their transition period from the European Union. And if no trade agreement is negotiated between Canada and the UK during the transition period, the trade with the UK will be on the UK Global Tariff and WTO terms, which are quite a bit less preferential than the terms under the Canada EU trade agreement. And Canada has a separate free trade agreement with Honduras since 2014, with the South Korea since 2015, and with Ukraine since 2017. So now let's get back to the presentation. We might be having some difficulties with the change in the slides. Okay, I will move on to the next slide and hopefully Chelsea can try and move on with the poll. So whether it is NAFTA or KUSMA, the free trade agreement with Europe or South Korea, we now have 14 free trade agreements that cover 51 countries. And you can see that Canada is party to bilateral free trade agreements, but it also party to multilateral free trade agreements. And sometimes free trade agreements, they overlap. For example, Canada is in free trade agreement with Mexico through NAFTA, soon to be replaced by KUSMA, and also through CPTVP, which is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The good news is that free trade agreements do not cancel each other, and you can choose under which free trade agreement you want to claim preferential terms of trade. Canada also has two domestic free trade agreements, which are the Canadian free trade agreement and New West Partnership trade agreement. So before I continue, let's stop here for the second polling question. It will make the remainder of the presentation even more relevant to you. So hopefully it works. I'm launching the second polling question, and the question is, in trade with what countries and regions are you most interested in? And you have multiple choice, answers, Canadian provinces, US and Mexico, Europe and Asia-Pacific. So it looks like 50% of you have responded. I'll wait for a couple of more moments before closing the poll. So please go on and submit your responses. Okay, I think that's it. And I'll be closing the poll and sharing the results with you. So 44% are more interested in trade with Asia-Pacific countries. And then it is split between Canadian provinces and territories and US and Mexico, 22% each, and a little bit less of interest for the European Union, 11%. So let's move on to the good question. The good thing is that I will cover all of these areas, all of these regions in today's presentation. So let's move on to the next slide. And before we start with the international free trade agreements, I wanted to briefly stop on two Canadian domestic ones. So I hope that you can see the slides on the screen now. So the Canadian free trade agreement, which is abbreviated to CFTA, replaced the agreement on internal trade in 2017. And it includes all provinces, territories and federal government. The CFTA covers most of the service economy, which accounts for 70% of Canada's GDP. The Canadian free trade agreement enhances the flow of goods and services, investment and labour mobility. It eliminates technical barriers to trade and greatly expands procurement coverage and also promotes regulatory cooperation with Canada. So often, as you know, regulatory differences between provinces can make it more difficult and costly for companies to trade, to invest and open businesses in more than one province or territory. And under the CFTA, the government is currently negotiating several mutual recognition agreements. For example, the construction codes in order to streamline and to reduce barriers to trade between provinces. Another free trade agreement, the domestic one, is New West Partnership Trade Agreement. And this is the agreement between BC, Alberta, Saskatchewan and Manitoba. This agreement builds upon the trade investment labour mobility agreement, which is called TILMA. And initially it was between BC and Alberta. Saskatchewan was the first to join and then recently Manitoba did and also Ontario expressed interest to join. New West Partnership Trade Agreement has been fully implemented in 2013 and it became the largest inter-provincial free trade zone. So among other things, it offers streamlined business registration. Oh, here we go. The slides are back. It offers the streamlined business registration and you can register in one province and tick boxes for the other provinces in this agreement. And you are ready to go. So the good thing if we have some issues or difficulties with the slides, you will have the presentations afterwards and recording of the webinar. There is some delay with the slides. So moving on to the U.S.-Mexico agreement known as the U.S. So KUSMA is expected to enter into force on July 1st this year and it will replace NAFTA on its entry into force. KUSMA largely expands and modernizes the NAFTA while protecting key elements of the NAFTA that are important to BC. And it also expected to provide certain three. So on the side note, no free trade agreement will provide complete protection from unfair U.S. measures. No guarantee complete certainty or predictability. But I also wanted to highlight that the current border closure between Canada and the U.S. is not impacting the essential travel and trade and commerce and tracking trade and air freight services. They continue between Canada and U.S. without interruption. So moving to the next slide, as I mentioned, KUSMA largely extends and modernizes the original NAFTA. And in this table, you can see what key provisions were preserved and where the modernizations and changes happened. So maintained key errors include, but of course, this is not an extensive list. NAFTA's elimination of virtually all tariffs, services access is also maintained. Dispute settlement mechanism, temporary entry, access to government procurements through GPA. Canada's supply management has also been preserved. So some of the modernizations concern environment and labor chapters as well as the digital trade. Other key changes include stricter rules of origin on auto and parts, incremental market access to diary, poultry and ag market. Also phasing out investor state dispute settlement between Canada and the U.S. Another important change was handcrafted indigenous textile and apparel goods. For the first time in Canada's FTAs, I now will be eligible for duty-free treatment if they meet the requirements. So moving to the next slide, and I'll probably will not spend as much time on this one as there is less interest. But Canada European Union Comprehensive Economic and Trade Agreement, known as CETA, is actually an important one, since the European Union is the world's largest single market and largest integrated economy. It is the market of approximately 500 million consumers, and it accounts for over $18 trillion in GDP. And to put this into perspective, the European Union is almost the same size of the economy as the United States in terms of the GDP, but it is more than 25% bigger in terms of population. So think about that. CETA has been provisionally enforced as of September 2017. It is enforced provisionally because of today, because as of today, only 14 out of 28 European Union member states have ratified it. Here you should not be confused by the word provisionally. In fact, most of the agreement, namely provisions dealing with the goods and services, and this is about 95%, the agreement they were and are in full effect. So the customs duties, they were lowered right away because customs is the responsibility at the European Union level and not at the member level states. Only a couple of areas will be implemented once the agreement is fully ratified, and those are the dispute settlement mechanism and then the market access for portfolio investments. So with the CETA Canada is now the only G7 country with preferential access to the world's two largest economies as I've already mentioned, the US and the European Union. And we actually have a competitive advantage over the US exporters to the European Union market since the United States, they do not have a deal with the European Union. So BC goods and experts to the European Union have grown from 1.6 billion in 2014 to 2.1 billion Canadian dollars in 2019, making this European Union as BC's largest trade partner. And while it is difficult to determine the precise impact of this FTA on trade levels, the trade, the trend in the U bound experts from BC is definitely a positive one. So moving to the comprehensive and progressive agreement for Trans-Pacific Partnership, which is CPTPP, this is Canada's most recently implemented free trade agreement. It is free trade agreement between Canada and 10 other countries in the Asia Pacific region and currently enforced for seven countries that you can see involved on this slide, Canada, Australia, Japan, Mexico, New Zealand, Singapore and Vietnam. You may recall that it was originally called the Trans-Pacific Partnership and that the US was part of that agreement before withdrawing under President Trump. So once the US withdrew, the remaining countries made some changes and salvaged the agreement and renamed it to the CPTPP. So in those markets BC actually has a competitive advantage right now as well because US, they do not have an FTA with countries like Japan, for example. However, we know that this window will not last forever and US and Japan have reached the first stage trade agreement. It's not a full trade agreement yet, but it will focus largely on agriculture and digital trade. And it might also give the US companies similar to same tariff preferences as BC and Canadian companies enjoy now. So once fully implemented, the CPTPP will provide a preferential access and since other countries in the region have expressed interest in joining. Next slide. Let's turn to Canada's Korea free trade agreement abbreviated to CKFTA which entered into force in 2015 and was Canada's first free trade agreement in the Asia Pacific. So this was an important deal for putting you and other Canadian businesses on a level playing field with many of your international companies. Before the trade deal, BC and Canadian companies were at a disadvantage because the European Union and the US had deals. So with the population of 50 million and a GDP of 1.5 trillion USD dollars, South Korea is a large market with ample opportunities actually. And it also has a growing middle class and BC and Canadian goods and services are in a good reputation there. And South Korea is also a great gateway to emerging and fast growing markets in Asia. And it also has a strong cultural and business ties with Canada. So studies have also shown that Canada Korea free trade agreement might increase goods exports from BC and Canada to South Korea by 32%. And Canada and BC have already experienced a notable export growth in several key sectors such as coal, ores, wood pulp and some food preparations. So what all these free trade agreements have to offer you? And moving to the next slide, we can see that entering a free trade agreement, entering the market that has a free trade agreement with FTA, it ensures actually greater certainty, stability and transparency for quasi all areas of businesses. And it is important to consider whether and how this opportunity is applied to you. So now let's have a look at the opportunities for goods. And the main opportunity for goods sectors in trade agreements is of course, trade reduction and elimination. For example, before the CPTPP, before it entered into force for Canada and Vietnam, BC blueberries going from BC to Vietnam had to pay a duty of 15%. And now with the CPTPP, the duty is zero. So countries without an FTA with Vietnam, they are still paying 15%. This makes BC blueberries a lot more competitive in Vietnam. However, some products may be free of tariffs, but others may not be. And the tariffs may also be eliminated over a period of time. And knowing what the tariffs that apply to your product in your specific market is essential. So there are also non-tariff barriers, reduction and elimination that is provided by free trade agreements. And for example, the duplicate testing or some similar procedures that need just to be done in one country. Improved rules of origin. This is the recognition that in today's world, most things are not made using product coming from just one country. And rules of origin help to determine where the good is originating, where it is produced actually. And rules of origin allow a product to be considered from one country if it meets a certain percentage of domestic content. So if this is met, then you can claim the tariff preference as a Canadian good. And rules of origin, they differ from one agreement to another. So it is important to know how they apply to your specific product in a specific market. And we say that preferential treatment has to be claimed because the customs official, they will not assume that you get the preferential tariff treatment if you are unsure about whether your product qualifies for preferential treatment. But you can seek the advanced ruling from the customs officials in the market that you want to export your product to. And whether it is a tariff classification or origin, an advanced ruling is a binding ruling provided by the customs administration. And they help to expedite the customs clearance and provide greater certainty and stability and predictability regarding the treatment of a product. And finally, also a quick note on exceptions and countries do maintain some exceptions in trade agreements. So it is important to check to see if your goods fall under one of the exceptions. For example, an exception for Canada is the supply management. So moving to the next slide, if you have a quick look at this table, you will see the overall tariff elimination for trade agreements. First is the KUSMA, then Canada-Korea Free Trade Agreement, Free Trade Agreement with the European Union, and then the CPTPP. We've also put out some information to show you the tariff elimination for specific sectors. So for KUSMA, the elimination of almost all tariff on Canadian goods is maintained. For Canada-Korea Free Trade Agreement, tariffs on 95% of Canadian goods are now reduced to zero. For CETA, it's now 98% of tariffs are reduced and it will be 99% over time. For CPTPP, when it will be fully implemented, 99% of tariff lines will be duty free. So now I wanted to show you one tool called a tariff finder. So the Canada tariff finder is a user-friendly tool for figuring out what sort of tariff to your product. You can search a code if you know it or through a keyword search. So I know there is a local, so on this page to your product. And yeah, if we are moving a bit lower, so you can see that the current tariff under most favoured nation is 90.6 euro per hectoliter. That means that this tariff applies to the cider that enters from a country that Austria has no preferential trade agreement with. However, in our case, Canada has preferential tariff with Austria through. You can see, since 2017, the tariff has been reduced to zero. So the tariff finder allows you to check the tariffs in other markets and or import. And so now let's move to the open. We see now has a market access for suppliers of the FTA country access comments on the number of and have a local presence in the market as a condition for doing business. Also, Kusma, CKFTA, CETA and the CPTPP all use what is called a negative list approach. That means that I am exception. There is also a temporary entry and it allows certain categories of providers and investors to enter into the FTA market temporarily. This may be to work for a set duration or to see their investment firsthand or to get the feel for the local business environment and the duration that is covered. The visa countries may want to protect their more sensitive sectors as healthcare or education services. So moving to the next slide and I think we have a couple of slides that are left. So the opportunities for investors, the opportunities for investment, they are quite similar to those that have mentioned for services. So they protect minimum standard of treatment for how investors, then their home investors. There is also protection for investment and there are rules on expropriation and compensation. Inverse this can also benefit from a facilitated business center that I've mentioned before. And of course there are some exceptions as as usual. So moving to another pillar to the government procurement. The government procurement, well the government buys things and including goods services and also construction and actually governments buy quite a lot of things. And just one of the examples, the European Union procurement market is estimated to be worth 3.3 trillion dollars a year. It can be done contracts to supply the goods and services there. So a typical pattern is that FTA often provides greater access to FTA's partners procurement. However, there are two things to keep in mind coverage. So the free trade agreements, they specify by which departments, agencies and levels of government is covered. So which departments, agencies and levels of government that run procurement that are covered by the FTA's and over in order to be captured in a specific trade agreements because we want to ensure that our national free trade agreements. And as I've mentioned, our thresholds and coverage here in Canada. So moving to the next slide and probably I'll just mention briefly that despite being a challenge now the COVID-19 offers certain opportunities. We know that you might have noticed that many countries such as the US, China, India and the European Union even before and COVID crisis is making them even more so. And now also over 100 countries have put in place temporary import and export restrictions including several restrictions on agri-food products. These restrictions are expected to be trade compliant and lowered over time. But they might present a potential trade or competitiveness challenges due to subsidies. So entering in free trade agreements and removing barriers to trade domestically and internationally is more important than ever. And FTAs contain rules that apply even in emergencies. And the good news is that Canada is committed to supporting Canadian and BC exporters and the free flow of goods across its borders. And it's actually made a number of joint statements in this regard with WTO, with CPTPP partners and with J20 countries. So BC also works to begin restarting the economy through a gradual and faced approach. And the BC government implements a number of measures to provide tax relief and funding for businesses and service providers, including the economic stimulus when the pandemic is over. So of course, the existence of an FTA should not be one factor to consider when you identify an appropriate target market. And we are moving to the next slide. When you identify an appropriate market for your goods and services. For example, it's important to ensure that there is a demand for your product or for your service in a target market that involves actually research and analysis of your market potential and solid market entry strategy. And if you are not yet in touch with the expert advisors from the expert navigator program, I strongly encourage you to use their free support and ongoing guidance that they provide to businesses to grow outside of BC. And another useful support service is BC's trade and investment representatives offices that BC has in many countries, including in the US, Asia Pacific and Europe. And their role is to assist BC companies to expert their goods and services by providing the local market knowledge and intelligence and also identifying your key contacts in the market. And so in the last slide, I wanted to share with you some resources and the contact details of our branch and the international team to support you and we can help answer any questions that you might have. And we are also interested to hear about any barriers that you encounter in Canadian or international markets. And we will seek to address them and we can also advocate with the federal government that they be addressed. And we can also put you in touch with the people you need to get your goods and services to the market. So opportunities and free trade and we hope that you'll be there too. Thank you. Okay, thank you so much and apologies everybody for the technical difficulties we will be sending out the presentation so you'll be able to see those slides that were missed. So moving on to questions the first question is from Matthew, it's can stocks bought under the BC venture capital program be put into a personal TFSA. Yes, the simple answer is yes they can shout. They can be transferred into a TFSA there are also other places that shares bought and for which a tax credit has been received can also be transferred so to an RSP or spousal RSP as well so yes. Great. Thank you Matthew. The next question is also for Matthew. May business be set up initially to take advantage of venture capital tax credits or is this for existing businesses only. There's no requirement as to when the business has to be set up that it's not an issue can be an old and established business or business that was newly incorporated two days ago. Great. Thank you. And next question this one is for Ghana. So this person is really keen to understand what opportunities can be explored for import and export from Canada to India, which can benefit consumers and businesses in both countries. Thank you. So from what I can say about the current trade agreements between Canada and India, there were negotiations that began in 2010, and the last round was held in 2017. It is rapidly expanding economy offers of course tremendous opportunities for Canadian companies in several sectors such as transportation infrastructure life science and clean energy technology and some more traditional sectors such as infrastructure and natural resources. But so far the discussions on on the negotiations they were still ongoing as of 2017. And if you are interested in specific opportunities and if you are a BC registered business with your office in BC, I encourage you either to reach out to your expert navigator advisor. Or to the trade readiness and services branch, if you're based in Victoria or Vancouver, and they will help you out to find more specific opportunities that your that will suit your business model and that will be of benefit to both countries. Thank you, Ghana. Next question is from Matthew. Is it possible to crowdsource investors to obtain the tax credit? Yes, we have had registrants who use crowdfunding websites. We require on all registrants to be in compliance with the securities commission. So the onus is on the registrant to make sure that whatever they do as the method of raising investment is in compliance with the securities commission. We have had crowdfunded registrants in the program. And yes, it can be used. Great. Thank you Matthew. Question for Ghana. Do you have a life sciences one pager. Thank you for the question. I will check we actually produce them quite regularly if we do not have one at hand. We will make sure that we produce one and we'll share it with you. Let me just see if there are any more questions. Alright, I believe we've gone through all the questions we have a couple minutes remaining if anybody would like to type an additional question. If not, you know, feel free to reach out to us anytime like it doesn't have to be today can be a couple weeks from now a couple months from now you have our contact information and we're always around. Let's give it a couple minutes to see if any more questions come in. I have seen no more questions so I think we'll close off for today. So thank you very much everybody for joining us. Thank you Matthew and thank you Donna for those presentations. You know, we really are happy that you're able to be here today today with us we were happy that everybody is able to join and participate. And like I said if you've got questions about any of the trade agreements about you know the different programs that we've talked about about other countries we haven't covered. You know please don't hesitate to reach out if we know the answer we'll give it to you if we don't we will certainly find find out. Thank you very much everybody. Thank you.