The modern internet’s beating Quebec heart

Exfo founder Germain Lamonde at the EY Canada Entrepreneur of the Year 2018 awards. Handout

This year’s Canadian entrant for the EY World Entrepreneur Of The Year award in Monaco was Germain Lamonde, who founded fibre telecommunications company Exfo in 1985, two years after the invention of the modern internet.

Exfo provides independent auditing tools for global fibre-optic service providers. It’s a true Canadian global success story, and yet, I’ll confess that I’d never heard of the Quebec City-based company until this week while attending the awards. The firm boasts a 40 per cent global market share, with 2,000 employees and a presence in over 35 countries.

As an independent provider of quality testing for the latest telecommunication technologies—including 5G—the Canadian company now sits at the epicentre of the global trade war between the United States and China. The latter country is among Exfo’s top three in revenues, and the company has a factory in Shenzhen.

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“We’ve been working now in China in excess of 27 years,” Lamonde told me. “The tensions between the two superpowers are creating a big risk.”

Those tensions took another turn this afternoon, when U.S. President Donald Trump threatened more tariffs on Chinese imports if President Xi Jinping doesn’t attend this month’s G20 meeting.

Clashes between China and the United States concern Lamonde. The Exfo founder told The Financial Times last week, “Countries are getting closed. This is adding cost and this is adding complexity,” with what he considers devastating long-term repercussions. “We are forcing China to develop these technologies.”

The entrepreneur, who grew up in rural Quebec, also had strong opinions on Canadian entrepreneurship: “We have to be thinking about markets outside the U.S., because we’ve become too dependent [on the U.S. economy].”

A member of the Council of Canadian Innovators, Lamonde strongly opposes government subsidies. He specifically called out the French video game company Ubisoft for soaking up software engineering talent in Quebec.

“When I hear that Ubisoft has 4,000 people across Quebec paid by taxpayers, it breaks my heart,” said Lamonde. “We need to create wealth. We need to own IP; we need to create businesses that are durable.”

While Lamonde came up short of taking home the top prize on Saturday—it went to Brad Keywell, co-founder of Groupon—Canadians have done well in the competition before. Two Canadians—Guy Laliberté, co-founder of Cirque du Soleil, and Murad Al-Katib, president and CEO of AGT Food and Ingredients—have taken home the global honour in the past decade.