Diversifying into the European market: Practical considerations

WENDY WAGNER: All right. I think we'll get started now, at least with introductions. Welcome, everyone, to the first in our diversification series of webinars. This one is on Diversifying to the European market. My name is Wendy Wagner. I'm a partner and head of Gowling WLG's international trade group in Canada. And I'm going to be your moderator today.

Just before I introduce my esteemed panelist, I just want to give you a few housekeeping notes. Today's session will be recorded, and the recording will be shared after the event. We will be taking questions that will be answered at the end of the panel discussion, and you can pop those questions into the chat. And at the end of the session, to improve on our future sessions, it would be great to have your feedback. We're going to ask you to respond to a survey, and that's going to be accessible via a QR code that will display at the end of the session.

So yeah, I just want to move on to introduce our panelists. We have Morgan Larhant. He's currently head of the French regional economic service for Canada at the French Embassy. And from 2017 to 2021, Morgan was in the French Ministry for finance as deputy director of budget, overseeing the budget of various ministerial departments. And in this capacity, he sat on the boards of many government-owned entities, such as the French Development Agency, French National Forest Office, Agency for Services and Payments and Agency for French Education Abroad. Prior to this, Morgan was a member of the staff of the French Minister for European Affairs and held various positions in the French diplomatic network, including French representative to the UN in New York City and French representative to the EU in Brussels. So thank you, Morgan.

We also have Barbara Carmona Venancio. She is the chief representative officer at Caixabank S.A representative office in Canada and has held that position since 2018. She is responsible for developing and implementing the bank's strategy in Canada, with a specific focus on bank-to-bank relationships, project finance, and corporate banking. Barbara has over 20 years of experience in the banking sector in senior executive roles and has cultivated extensive expertise in financial management, strategic planning, and corporate banking. Prior to this role, Barbara served as chief representative officer of Caixabank in the UK for over six years. And she also spent before that 12 years in senior positions within the bank's retail and corporate banking divisions in Spain. Barbara was a board member of the Spanish Chamber of Commerce in the UK from 2012 to 2018 and is currently vice president and founder of the Spanish Chamber of Commerce in Canada. Thanks, Barbara.

We also have Pierre Pyun. He is the vice president, government and industry affairs at Bombardier, and he was appointed to this role in 2011. He is responsible for government affairs for Bombardier in Canada and also internationally, and his team also manages industrial affairs for the company. Mr. Pyun is a lawyer by training and has significant background in international trade, having served with the Canadian federal government from 1998 to 2011. And prior to joining Bombardier, Mr. Pyun managed sector practices and developed and implemented global commercial strategies for the Canadian government in Ottawa. He also worked at Canadian diplomatic posts in China from 2001 to 2009, including as senior trade commissioner at the Canadian embassy in Beijing. Thank you, Pierre, for being part of the session.

And finally, last but not least, Dr. Lars-Geritt Luessman is a partner with Gowling WLG in Europe, and he is the head of the Frankfurt office. Lars has more than 20 years of experience in advising German and international investors, corporates, and financial institutions in all manner of corporate and capital market law. He focuses on M&A and capital market transactions, in particular public takeovers, and another focus of his work is legal and strategic advice to executive and supervisory boards of listed companies.

We want to just begin by discussing a little bit about the overall framework for trade and investment in Europe. As many on the call will know already, Europe is a natural market for Canadian companies to target expansion. It's a large single market with many linguistic, cultural, and historical ties to Canada. And importantly, we do have the Canada-EU trade and investment relationship being underpinned by one of the most advanced trade agreements in the world. And that's the Canada-European Union Comprehensive Economic and Trade Agreement, otherwise known as CETA, which provisionally entered into force in 2017.

Most of the provisions of the CETA agreement are in force, with the exception of the investment protection chapter and related dispute settlement. And as a result of that, since 2017, the CETA agreement has eliminated duties or tariffs on 99% of goods that are traded between the two territories, and it also secures market access to services markets like transportation, insurance, and communications. And of all Canada's trade agreements, it actually has the deepest commitments in the area of government procurement as well.

Since the agreement went into effect, goods trade between the two countries has increased approximately 30%, going both ways, and services has also increased significantly, with 19% higher services trade coming from the EU into Canada and 15% greater market penetration in services for Canada. Further advancements are being made to CETA all the time to enhance goods and services, trade and investment as well. As one example, in October of last year, the parties reached the first ever mutual recognition agreement for professional qualifications, and that was in for architects.

There are a lot of other components of the agreement that facilitate cross-border economic activity, including, as an example, temporary entry for business persons into either territory. And the one thing that's interesting about CETA and its use is that it's not just for the largest companies. There's been a lot of activity for small and medium sized businesses as well, and they are sharing in the growth and investment opportunities.

So, Morgan, I'll turn to you first, from your perspective, give us a sense of how you think CETA is creating a receptive environment for Canadian companies in Europe.

MORGAN LARHANT: Thank you, Wendy. I think you have already outlined quite a few good reasons for this. As you started CETA agreement, first and foremost, was about abolishing the tariff. And it did so by eliminating at least 98%, 99% of tariff on Canadian exports. But as you mentioned as well, and that's the C of the CETA, it's a comprehensive treaty, and therefore it covers much broader elements. I want to mention maybe four of them here.

One is that it does provide access, eliminating not only the tariff, but also other discriminatory barriers to a market of 500 million inhabitants. We hear a lot currently in Canada about having a single market and not 13 different markets. Well, that's the case in the EU. And so once you enter in the EU with a merchandise, you are insurance of being able to also access other markets. Second,

It simplifies procedures. And I think it's really important, especially for SMEs, that can find on the website, access to market, all the information they need about how to fill the custom form, what is the tariff applicable, and all the information necessary, paving the way for the exports.

The third thing you also alluded to it is that it's a dynamic market, meaning that of course it enters into force in 2017, provisionally, but it keeps adapting. And so whenever there is an issue raised by an exporter or whenever there is a change in regulation-- well, there are a lot of committees in which both Canadian and European expert seats in which they discuss about this. And here again, when we look at what's happening with the US, this type of institutional framework does provide stability and visibility on for the exporters.

And last but not least, of course, it's much broader than simply the trade of goods and services. It also paved the way for a real strategic partnership. And I just want to quickly mention in a couple of days, we will start the PDAC meeting in Toronto-- it's about mining. Well, the CETA agreement was the basis for launching a strategic partnership between the EU and the Canada on this topic.

So CETA does create this environment. As you mentioned, the results have been good, but as you pointed it, and that's the reason why I'm very happy to attend this seminar, in the past two years, we have seen a stabilization of the flow of goods. The utilization rate of the preference has been stable, not increasing anymore. So there is much more we can do. And that's a good opportunity to discuss about it today.

WENDY WAGNER: Thanks. Barbara, from your perspective at the Chamber, what have you seen in terms of CETA and its contribution to the economic activity between the territories?

BARBARA CARMONA VENANCIO: Thank you, Wendy. Look, I think the best way to describe the success is that we have seen trade flows increasing significantly between Canada and Spain both ways. So the trade has increased 50% between the two countries in 2023, and Canada is exporting roughly $3 billion to Spain in different products like iron, medicaments, cereals, aircraft to rockets, petroleum, of course. And I think that's the a real fact.

We can say sometimes these trade agreements doesn't seem to be practical for the small, medium-sized companies, so they don't believe that they can have an impact. But the reality is that they help, and this is a clear example. And also one important thing that Morgan said is that this is evolving, and we are seeing improvements happening under the CETA agreement. And one clear example is the public procurement, that both Canadian companies and Spanish companies can participate in the government procurements of different projects from the municipal, provincial, and federal level. So I think it's great because that opens a huge market for Canadian companies.

WENDY WAGNER: Yeah, it's a notable difference between a lot of the other agreements that Canada has in terms of trade, and CETA for sure, and does make a huge difference in terms of opportunities. Pierre, I know Bombardier can't be really classified as a small and medium-sized business, but it has had really notable success in Europe. So from your perspective, what's been attractive or what's worked about the European market?

PIERRE PYUN: Thank you, Wendy. First of all, thank you very much to you and your colleagues for inviting me to participate in the webinar and share my perspectives and the perspectives of Bombardier. So I think, as you pointed out, Bombardier has had a long-standing relationship and presence in Europe. When we had our train business, actually, our train division was headquartered in Germany, and at that time, we had over 30 production and engineering sites in Europe, manufacturing trains and train systems. We don't have our train business anymore. Currently, we're focused on aerospace, and in particular, business aviation. But within that, we are growing our services business-- maintenance, repair, and overhaul-- and we're growing our defense business as well. So supplying providing our aircraft platforms for defense applications. Europe remains extremely important for the company. So we have a multifaceted, I would say, relationship and presence in Europe. We sell into Europe, we import from Europe, we engage in R&D collaboration, and we invest as well.

So if you take Europe as a region, it is the second-largest market for business aviation in the world, so we have an installed fleet of over 600 aircraft. We are growing our services business, as I mentioned, so we have invested in Europe. I think it's important to be close to our customers. So we have a major maintenance, repair, and overhaul facility in London at Biggin Hill airport. We also have a major facility in Berlin for services of our fleet of aircraft in operation in the region. We have a major parts distribution center in Frankfurt. A couple of years ago, we opened up a new maintenance center in Paris as well at Le Bourget Airport. So we have a growing services presence to support our customers in Europe.

But also, I mentioned, we are importing from Europe. So every year we spend around over $1 billion, actually, on goods and services from Europe-based suppliers. Some of the countries are, I would say, we have a concentration of suppliers, the major suppliers to Bombardier-- so the UK, France, Germany, but other countries as well, like Spain, Italy, and so on and so forth. So it's a major, I would say, supplier of aerospace components and systems to us.

We're also engaged in R&D collaboration with Europe. So I'll give you an example. We're currently working on a new aerodynamic design for our aircraft-- it's a blended wing-body configuration. And we have a project that we call the ecojet. So the new aerodynamic design is one of the features of that technology demonstrator program that is currently flying-- it's a UAV flying-- but will be testing other technologies as well. More electrical systems, like electrical engines, hybrid engines, so different systems to reduce the environmental footprint of our next generation of aircraft. So it's a technology demonstrator to mature and test new technologies, and we have partners in Europe-- Germany, UK, we have some system suppliers, Spain as well, and other countries. So I think the R&D relationship is important, and I think also offers a lot of potential to do more.

You may have heard or some of the people in the audience may have heard about the Horizon program in Europe-- it's a huge R&D program, it's a $140 billion in the next few years. And Canada is an associate country to the EU for Horizon, so there are ways for Canadian firms to participate in that. So I would say, maybe to summarize and maybe just to add a bit on defense, because I think the geopolitical developments have made it so that defense is a growing sector for us and the DR. And I'm going back to the point that Morgan made, I think the opportunities for strategic partnerships in Europe.

I'll give you one example, we have a very strong relationship with Saab in Sweden, and they have a product for airborne early warning called the GlobalEye, but it's based on our aircraft made in Canada global platform. And they installed special systems on board, we provided modification services. And they're selling the aircraft and promoting the aircraft around the world. So they've supplied five to the UAE, and the Swedish government has ordered three as well. We are working on a signal intelligence aircraft program called Pegasus in Germany. We have two local partners. And so the Lufthansa Technic for those aircraft, it's for three highly, I would say high technology content aircraft. So that project is on the go, but it's going to open the door to not only the German market, but I think opportunities around the world with this platform as well.

So the opportunity for strategic partnerships I think should not be neglected as well. I mean, there are challenges, a lot of regulations in Europe. I think to Morgan's point, a lot of common standards as well, but certainly, the environment-- protecting the environment is a big priority for Europe. So there are a lot of regulations around environmental standards. I mean, REACH for instance, is an example, the use of chemicals. So requirements and standards around that. So that's something to keep in mind also. And again, going back to strategic partnerships I think as a stepping stone for third markets outside of Europe as well, because Europe, in many different sectors certainly aerospace is a case in point. They do sit at the top of global value chains. And I think they are opportunities, whether you're a big firm or a smaller firm, to connect into those global value chains, led from Europe that will give you access not only to the European market but also to the global market.

WENDY WAGNER: That's really helpful. I think one of the things that stood out for me in terms of what you said, Pierre, was the concept of being close to your customers as well and how valuable that can be. And I know, Lars, you see Canadian and other foreign companies entering the German market and accessing the EU market via Germany. And from your perspective, how accessible is Germany or other European countries from a business and legal perspective for foreign companies that are entering?

LARS-GERITT LUESSMAN: Yeah, thank you Wendy. And firstly, thank you for the kind introduction at the beginning. And to you all, I will try to talk about Europe, but given that I'm a German lawyer, I have to take all this, what I'm saying, with a grain of salt. It may be limited to Germany a little bit. But having said that, this is a common market. We've heard this. CETA enables easy access, and no matter which country you choose, it provides a gateway to the European common market, which Morgan and Pierre have already described. And so Europe, as such, is accessible.

I would like to make three points, actually. From a business perspective, we've heard it's a large market with highly skilled workforce. It's home. Europe is home to global industry leaders, still it offers a lot of investment incentives, and it's a huge market with a wealthy population. So it is an attractive place. And all those regulations that Pierre mentioned that might be considered obstacles, of course, also offer a secure, safe, and stable environment for business. And that's what makes, I think, Europe attractive and easily accessible from a business point of view.

Of course, my second point is, I mean, there's a legal and regulatory landscape, as you all know, which tends to be seen a little bit bureaucratic from an outside perspective. I think important is the most recent development that the European Commission has published an initiative to significantly reduce bureaucracy in Europe, in particular, by cutting down ESG reporting rules for small and medium-sized enterprises. So providing for a significant to facilitate doing business in Europe much more than it used to.

So maybe I want to highlight a few things. Key areas that you would have to look at when doing business in Europe is data protection, GDPR, you all know that. Of course, the environment tax and maybe in particular, and our North American friends always look at this with a little bit of criticism-- employment regulation.

Levels of protection for employees differ a bit amongst European countries, but there is a relatively high level of employee protection. You have to be aware of employee codetermination rules through works council and on board level. If your venture in Europe is large enough, particularly in Germany, then there's protection against dismissal. There's an irreversible right to return for employees. And then there's social security laws that you have to be aware of.

And then thirdly-- so this is just the framework you have to be aware of. And then thirdly, of course, there are, I'd say, obstacles or there's at least an investment control for certain industries which you have heard of under the acronym of FDI. But this only applies to critical industries, infrastructure, defense, or specific rules, for example, for industries such as the financial services sector.

WENDY WAGNER: That's great. Yeah, I'm chuckling because our employment lawyers, when they're giving seminars especially to American companies, we'd always have the Canadian employment lawyer start. And the Americans would gasp and be shocked at our rules, and then he'd end and he'd say, but wait until you hear about Europe. You think that was bad? Wait until you hear about Europe. So yeah, it is definitely a different regime, but I think not as dramatically different for Canadian companies as it would be for US companies. So definitely we have some experience with some of those laws for sure.

LARS-GERITT LUESSMAN: Definitely true. And it provides a safe and secure environment. So basically, if you know what you're doing, you can deal with it. And we're used to cope.

WENDY WAGNER: Yeah, two sides to the coin, right? I mean, you've talked a lot, Lars, about regulation and about some of the obstacles for market entry. And, I mean, it is daunting to enter a new market, there's no question about it, and particularly one that is as large and sophisticated and regulated as Europe. So I just wanted to get your perspective, Barbara, where do Canadian companies who want to enter the European market start? How do you learn about the market opportunities? How do you access some of those resources that would be helpful? What's a good starting point?

BARBARA CARMONA VENANCIO: Well, wearing the hat of the Spanish Chamber of Commerce, of course, I have to say that you can start having relationship with the chambers of commerce of the countries that you are targeting to reach is a great starting point, because at the end of the day, it's good to have that market analysis done for you, and chambers can be helpful with that. Also, the trade commissioner services of those countries. In Canada, you have the presence of several European Chamber of Commerce, and the embassies and trade commissioners of different European countries. So this office is of great help. Apart from the market analysis, it's very good to do networking and connect with the right partners in the country that you want to go.

Also, I would say that it's important to start having a lawyer that can go with you along the way to face all the new challenges. An accountant and a financial partner. That's something very basic that you need to start with. And Canada, in particular-- for example, in Spain-- Canadian government has eight network of offices across the country, apart from Madrid. The Canadian embassy, there is, for example, a presence of the Quebec government in Barcelona. Also Alberta is establishing another office in Barcelona to help Canadian companies to invest in Spain, and the way around, of course, to attract Spanish businesses to come into Canada. So it's a great place to start because they will put in place contacts and that market analysis, that is very, very important. So I will say that is a great starting point to enhance the networking opportunities, do that market analysis, and get the support of the government in order to do that networking that is also necessary.

WENDY WAGNER: That's great. Thank you. Morgan, do you have any comments on the resources that would be accessible to a company that's looking to expand into Europe?

MORGAN LARHANT: Yeah, and I think the main message here is that there's probably too many resources, and the issue of having not enough. And then the question for the people, for the person carrying a project is how to navigate through these various resources. I think there are also a huge difference between the type of project-- either you want to export to the EU or your thinking about establishing in the EU. When you're thinking about the exports, and I will discuss about the French case, as I mentioned earlier, the first thing is to go online. There is a website called Access to Markets, and you will find all the necessary information about the tariff, the proceeding, and the type of goods that are allowed, et cetera.

France also established here in Ottawa, an expert, which is based in Global Affairs, and who is precisely intended to answer all the questions-- both technical or broader question-- that the exporter might have. So we'll share maybe his contacts for people interested. And then if you are planning of establishing in Europe, I think the embassy-- you're also wearing my hat-- is the good first point of contact, because it will give you another view of the different sectors, of the opportunities.

And also, it will put you in contact with relevant actors if you intend to go a little bit further with your project. And then, if that's the case, we have a crown corporation, which is called business France, which is capable of offering company to take over or land in which to establish a Greenfield project, et cetera. And to accompany you in your project when it comes to the visa, the funding, et cetera. So you see many different options, and what's important to understand to navigate through this is who does what.

WENDY WAGNER: Yeah, that's great. And Morgan, when you are speaking to companies about market entry in that way, where's the starting point? Is it really-- and Barbara, I think you mentioned this as well-- is it market analysis? Is that really where you're--

BARBARA CARMONA VENANCIO: Yes.

WENDY WAGNER: That's your homework, your first piece of homework. And then from there, you're trying to figure out the context of how you actually get in. Who will be your customers? Walk us through that, if you can, a bit.

BARBARA CARMONA VENANCIO: So on my side, or maybe Morgan can start. Morgan?

WENDY WAGNER: Yeah, go ahead, Barbara.

BARBARA CARMONA VENANCIO: Do you take the lead? Oh, OK. I really believe that it depends. As Morgan explained, if you are going to export a product or if you are going to establish a presence, because in the case that you want to establish a presence, you need to do that market analysis in order to know exactly where is the best place in Europe to set up the company. And for example, if you are choosing a country, where in that country will be the best place? According to your activity, where the hub of that sector is located, where is cheaper or better, and to have a physical presence and reach to the right employees and the right clients. So I think that market analysis is very important when you are establishing a business and the market that you want to attract in terms of logistics. And if you are going to sell into the North of Germany, maybe you don't establish in the South of Spain. I don't know. It's an example.

So it's very important, that analysis. Then when it comes to exporting activities, it's a completely different thing. So you need to know if that product or services that you want to export really has a market in that country and analyze who are the competitors, the main products there that compete with your product. And that's why an office invest in Spain or invest in France or the trade commissioners of those offices can help you with that market analysis to say, OK, this is your product, and these are your competitors or the potential clients, et cetera. So that's the very first point where you need to start because you maybe your product doesn't have a good place in Spain, but it may have it in France or the way around. So that's, for me, the starting point. I don't know if Morgan can add on that.

MORGAN LARHANT: No, I think, definitely choose France over Spain. No, I'm just kidding. [LAUGHTER] But, as Barbara really eloquently explained, there's no, and that's the main message, there is no one-size-fits-all solution. Every experience is unique, and that's precisely why you need to do this homework before going into this adventure. I have in my mind many illustration of company, like Premier Tech, which is a company from Quebec. Riviere-du-Loup, focusing on one part of France, other company like Sergei, spreading their services throughout France. There are companies that decide to go into joint venture. I'm thinking, for instance, of Enbridge, whether they have an offshore wind project, or other decide to start from scratch. McCain, last year, to provide supply, the French market decided to scale up their investment in the northern part of France.

I don't know if people are familiar with a company called Ballard, which do hydrogen cell. Well, their way of going into the French market was through an IP agreement with Hydrogen de France. And sometimes, actually, you can cover the French market-- we don't advocate for this-- from abroad. I know, for instance, Linamar, the company, which is commercializing farming equipment from Germany on the French market. Pension funds-- very often, we didn't mention too much of the financial sector, but cover for the portfolio investment, the French market and continental Europe in general, are mostly from the London-based office. So there are many, many options.

But what I want to stress is that what we have seen in the past three or four years is clearly an increase interest of Canadian companies in Europe in general, but in France in particular, FDI in France double in the space of five years. And now, France is the 11th largest stock of FDI abroad, and we have more than 200 companies employing more than 30,000 people. So the message here is if you go in France in European Journal, but you won't be alone. And as I mentioned before, you will be accompanied in your project.

BARBARA CARMONA VENANCIO: Yes, Wendy, one more thing. Apart from the market analysis, it's very important finding the right local partners because there are many examples of companies that have success thanks to having the right local partner in the country. And that's why it's so important to connect through the embassy or the trade commissioners to those main players in the sectors that you need.

Another way to do that is to attend to trade shows of the sector that you are playing in. For example, Morgan mentioned that this week here in Canada, next week is PDAC, the mining sector. But there are other great trade shows like SIAL for the food and beverage sector or the P3 conference for the infrastructure sector.

So in those places, you can feature your business and showcase your products, and you may find also good connections there. So that's something that we promote a lot from the Chamber of Commerce. And we also can help coordinating commercial missions to the countries, thanks to the network of Chamber of Commerce, that they are in the different countries. And one chamber here can connect with the chambers there, find and do specific agenda for the company to meet the right people.

WENDY WAGNER: That was amazing. Pierre, from the perspective of one company, Bombardier, what have you found useful in terms of accessing European markets of the types of things that Morgan and Barbara have reviewed with US or other things?

PIERRE PYUN: For sure. I mean, I'm going to double down on just the amount of resources available. And I would say, even for a large company in some parts of Europe, in a way, we were very much like a smaller business because we're very thin on the ground. I'm thinking about we've been exploring recently some opportunities in the Balkan region, Eastern Europe as well. In countries like Slovakia, we don't have any people located there, and our market knowledge is not very, very deep.

So we do get access to the resources that we've been talking about. I used to be at the Global Affairs Canada for 13 years on the trade side, and Europe is a big priority for Global Affairs Canada. So there's a tremendous level of resources available at various embassies and consulates in Europe. So we are tapping into those resources because we need-- for some of the markets that we don't know very well-- we need market information, we need contact information. They do a lot of troubleshooting as well. So when we run into some issues and we need some help to connect with the local governments or clarify some issues, the trade commissioner service can be very helpful.

Of course, there are other resources available. I mean, we're based and we're headquartered in Quebec, in Montreal, we have major operations in Quebec, but also in Ontario. So we also have access, given the basis that we have in those provinces, to the Quebec provincial and Ontario provincial resources and offices that they have abroad. Barbara mentioned, I'm mindful that it's not maybe for the whole audience that you're going to be going to have access to the same resources, but Barbara mentioned Alberta having offices in Spain. Ontario has, I think, three offices in Europe. Quebec has, if my count is correct, I think they have eight offices in Europe.

So even for us, when you have a footprint in those provinces, and we do have access to those resources, it's extra resources that can be put to contribution. Of course, EDC for export financing. I think BDC, we don't have access to BDC programs because we're a large company, but they do focus on SME expansion plans, supporting those plans. You have the Canadian commercial corporation as well in defense and infrastructure projects.

So it is actually quite revealing for us. They have MOUs in place with various governments in Europe, and you can tap into those MOUs government-to-government procurement projects. So I think for SMEs, that's a source as well of potential support. And then what my colleagues have mentioned also, the foreign embassies here, the chambers of commerce, I think there's a lot of resources that Canadian firms can leverage and tap into, for sure.

WENDY WAGNER: Great. One of the things you mentioned was EDC, which of course provides export support financing and export credit as well. And Barbara, like wearing your other hat, your banking hat, what about financing and access to capital? I mean, if you're going to expand, there are a lot of resources available, but there's also going to be financial implications and a need for capital as well. So from that perspective, what's available? What's out there?

BARBARA CARMONA VENANCIO: Yes, I mean, it's very important to plan along the way when you are exporting, going to export, or going to use your presence abroad to think about this because you may face the difficulty then of not being able to cover a business because you don't have the right tools in place, right? So it's very important to establish a banking relationship with a European bank. I will say that from the start.

You have to have, of course, your Canadian bank supporting your business. And as well, I will recommend to connect with the European bank if you are establishing a presence there, for the local needs. Spain has Canada. You really need to have, for example, a bank account in the country to do a lot of things. So that's a very good recommendation, and you can use your local bank here to establish those connections. If you have a good relationship, I don't know, with RBC, for example, ask your banker, please, can you connect me with a very good bank, whenever you want. And they may have that possibility to facilitate that introductory meeting to start the conversation with the foreign bank.

So very important to have that strong banking relationship wherever you go, and then talk with the bank about trade finance tools to support your export and import activity. In certain cases, you will need to set up letter of credit to be able to sell and secure that you are going to receive the money back. So it's very important to explore the different tools in trade finance, currency risk management, you need to cover from the fluctuations between the Canadian dollar and the euro, or any other foreign currency. Also to establish potentially working capital solutions to be able to pay the suppliers or collect funds from your clients. And so on. I mean, there are many things that can be explored.

Also, to mention that you may find certain lines available to get funding from different governments. For example, in Spain, there is a line available for Spanish companies that are selling to foreign companies. So the Canadian company can benefit from financing that machinery that is maybe buying. So there are tools that the local governments may have available that you need to explore through these agencies that we were mentioning before.

Also, as a very good point of peer regarding Export Development Canada, that they also have support for Canadian exporters going abroad. So all those tools are available there. And the way to explore them is connecting with the right financial partner. There are some limitations that, for example, certain banks, they don't have the network to go to every single country. So that's why you need to establish more relationships there.

WENDY WAGNER: It's really interesting. One of the things you mentioned, Barbara, I mean, what we've been focusing on in the session is selling your product or service into Europe. But, I mean, we're also in an environment where companies are examining their supply chains and what might they need from Europe, especially if we're in an environment where tariffs become a factor. And of course, then on that side, there's the same support for European companies to potentially sell into Canada and an ability to access a different supply chain network. So yeah, I think it's really important to not forget that end of the spectrum, because our companies who manufacture here need things in order to do that. And that might be a more natural partner as time goes by. So great.

BARBARA CARMONA VENANCIO: I'll give you, if you want an example on that. For example, we have helped a Canadian company that needed to receive a letter of credit from a different country. And the local bank here couldn't confirm that risk because they didn't have the line in place for that bank in a foreign country-- not Spain, a more exotic country. And Caixabank provide a solution because we had the connectivity with that bank in that other country. So we assume that risk from that bank, and we provided the confirmation to the Canadian bank. And in that way, the Canadian company benefit to get what they wanted and confirmed by a different bank, not the Canadian bank. So sometimes there are solutions that we can set up in place. And that's why it's very important to have the right partners. You can continue with your Canadian bank, but at the end of the day, you can have a network of banks that can help you in the differential restrictions that you are going to be playing-- for import, export or establishing a presence.

WENDY WAGNER: Yeah, and on those different models, Lars, to circle back to you from that business structure perspective, what are some of the options for Canadian companies that want to set up shop in Europe? And what are some of the common ways that this is achieved, and what is involved in that from a legal perspective?

LARS-GERITT LUESSMAN: We've heard already some examples on how to do this from Morgan and Pierre. I think it's the two steps. First step is the decision how you want to enter the market, be it by the establishment of a new subsidiary or office, or you want to make an acquisition. And then the question is whether this is private or public, of course, which is then decisive for the legal environment and set of rules that apply, or whether you intend to enter by way of a strategic partnership. What we've heard earlier today as well, and entering into a joint venture also. So this is like the first decision that you might have to take from a legal perspective.

And then the second decision is the legal form itself. And what I'm talking about now is, of course, very say German-centric. But I think the set or the mindset applies to all countries in Europe. It's whether you set up a simple operation or a simple branch office, which is basically an extension of your company set up at home with no legal entity around it, no liability umbrella, nothing, or whether you want to act through an independent, legally independent subsidiary, which is then, of course, fully owned or partly owned by you and your joint venture partner.

And there, you can then choose commonly between the concept of a limited liability company-- in Germany, is the GmbH, which is the most commonly used. It provides for a liability umbrella, but at the same time, provides very strong shareholder rights, which makes this easy to steer in terms of internal corporate governance for your group of companies. Alternatives would be in Germany, like a stock corporation if you intend to have a bigger business. That's for larger businesses but very complex corporate governance rules. But then, of course, also with a perspective of listing. Or, in a smaller context, you can also think of partnership concepts. But then again, you have complex tax rules to look at. So I think basically the main decision is how to access, to summarize. And then, is it a mere branch office, which might be a good starting point, or an own legal structure?

WENDY WAGNER: Great, thanks. So we have only a few minutes left. I can't believe how fast our hour has gone, but what I wanted to do, I think, in our last couple of minutes, is just go around to each of you, and not as much so you Lars, because everything we do is usually subject to legal privilege. So you won't be able to talk about it. But from the rest of you, we have talked about some examples of Canadian companies successfully entering the market and what that looks like. But I just want to give you an opportunity to note any others or, Pierre, in your case, why don't you start, just in terms of what Bombardier has found to be a particularly successful strategy or something that you'd really-- you don't want people to leave the call without knowing this is something you've found success with. So I'll start with you, Pierre.

PIERRE PYUN: Well, absolutely. I think maybe one area I'd like to stress. So the grounds are shifting a lot. And when you look at a growing part of our business, the defense sector, we've been active in this space for many, many years. However, in recent years, we've become much more proactive and investing more resources given, unfortunately, the geopolitical environment that we live in. And you look at Europe, last year, they released the European strategy for defense and a stronger defense industrial base and reducing reliance on US equipment, for instance. We're seeing a lot of initiatives at the country level also. And I think for Canada, it's an opportunity to connect with some of the major players. I'm going back to the point around global value chains, and some are led from Europe. And for Canada, including SMEs. I think they are ways to connect to those global value chains. I mentioned our partnership with Saab. There are other examples as well. There are companies like Indra in Spain, Leonardo in Italy. There are aerospace leaders, Airbus in France, for sure. They're all leaders in the aerospace sector. And again, kind of leading some of the parts of the aerospace ecosystem on system integration. And not only it's a way to get inside some of those markets, but again, to tap into global opportunities as well. And many of those companies have a strong presence in Canada, so it may be easier for SMEs to connect with their Canadian subsidiaries to engage with the company headquarters in Europe.

One last point is, and I think that's when sometimes the goal support is needed. It is true that you have common standards, but you have local standards as well in Europe. It makes the market very predictable. You have rule of law, but sometimes it's very complex, even for a large organization to navigate through the various regulations. For us in aerospace, a lot of the aerospace trade is also regulated through technical arrangements between Transport Canada and YASA or the UK Civil Aviation Authority. So it's very important to engage with those authorities and to understand those rules and be compliant, certainly in Europe.

So the predictability of the market-- there's a flip side to that. It could be a complex market environment, regulatory environment to navigate. Maybe one last point for EDC-- I'm not sure how they call those facilities nowadays, but they have a number of what they used to call whole facilities in place. So over and above export financing, EDC provides financing to large contract givers. They provide financing to those organizations and some in Europe with the moral obligation to, when they are opportunities, pull the Canadian supply chain. So I think it would encourage SMEs, EDC can help you also for business development and connect with some of those organizations that are providing financing too. So it's not really export financing, but opening the door for Canadian suppliers to connect with those firms and their global value chains.

WENDY WAGNER: Great, yeah. Morgan, anything you want to add on success stories?

MORGAN LARHANT: Well, I have mentioned a few. I think what's important is whether your journey is a 100-mile journey or a one-mile journey, it needs to go through a first step, and you need to overcome the sometimes intellectual barrier because you don't know the market. There are risks associated to it, and you need to overcome this barrier and just try it.

And what strikes me when I look at the figures in France is that most of the projects we have, year after years, are actually company that tried and then expand. I mentioned Sergei, Sergei is a main provider annually of new projects. And so what we tried to do, and usually say, is it's for France and for French speakers [SPEAKING FRENCH] And so when you try it, usually you get convinced and you are developed throughout Europe. So I hope we'll hear from some of the people who attended this meeting.

WENDY WAGNER: Great. Any final words from you, Barbara?

BARBARA CARMONA VENANCIO: Yes, regarding the cases of success, I can mention also one that is very interesting-- is Lallemand, a Montreal-based company. In the industry sector, they are specialized in the production of yeast, bacteria, and related products. They have a presence in more than 40 countries, and specifically in Europe, very strong presence. They have the European head office in Barcelona, and they have been very successful in industries like there oenology, for winemaking, baking, animal nutrition. And they have production plants across Europe, in several countries in Italy, Poland, Portugal, Denmark, United Kingdom. Research centers and commercial offices across Europe. It's impressive.

And there are many examples of those. A small companies, for example, on the technology and artificial intelligence, that they are also going to Barcelona. We are seeing a lot of those, and reaching to us, as I said, to establish the local banking relationship. That's very important.

And also we see other sectors such as infrastructure and energy. We see companies such as Enerkem, that has established a joint venture with Repsol in Spain to develop a waste-to-energy plant in Tarragona, and so on. We can be here telling stories about many, many companies. But what I wanted to say to ramp up is, as I said before, the market research is important to have the right local partners. And you can start from a Chamber of Commerce of the representation of your government in that country.

I can give you a personal experience that I had when I came to Canada to open the business for the bank. One of the first meetings that I had was with the Ontario government, with the Ontario investment office and also with Toronto Global, and they helped me a lot. The first thing they did for me was a bit of market research to tell me, look, these are the main companies that you need to meet. And they facilitated some contacts for me. And that was the very first step. And then after that, everything came very easy.

So I recommend to use that in the countries where you go, especially the Canadian government is really helpful. So if in the country that you are going, you see that there is a representation of Ontario or Quebec or Alberta, go to see them. They will help for sure. And of course, the countries-- Spain, France, Germany-- all of those countries have also great services in place to support investment. So I recommend to start there.

WENDY WAGNER: It's excellent. Thank you so much. We're going to wrap it up. Thank you to all the panelists, that was an excellent session. Just want to remind everyone to respond to the survey. It's going to be on the screen and also linked in the chat. And a recording of the session will be coming, and we will be holding another session in the series, probably the third week of March. And that'll be for the Middle Eastern market.

So thank you so much, everyone, for attending and special thanks to our panelists. You were all really, really wonderful. Have a good day everyone.

BARBARA CARMONA VENANCIO: Thank you.