Canada-China Relations Committee on Nov. 27th, 2023

[The Chair, Liberal, Ken Hardie]

Thank you.

That brings us to the end of our second panel.

I would like to thank Mr. Shortliffe, Ms. Estabrooks, Major-General Smith and Brigadier-General Oberwarth.

Did I just give you a promotion?

[BGen Cayle Oberwarth]

I'll take any promotion you're willing to give, Mr. Chair, but no, “brigadier-general” is just fine. Thank you.

[The Chair, Liberal, Ken Hardie]

All right.

Thank you all for your attendance today. We appreciate your testimony.

We will now pause while we get our next panel ready to go.

[The Chair, Liberal, Ken Hardie]

I will call our meeting back to order.

I would like to thank everybody for being here.

We have representatives now on our third panel.

From the Department of Natural Resources, we have Frank Des Rosiers, assistant deputy minister, strategic policy and innovation; and Andrew Ghattas, senior director, critical minerals centre of excellence.

From the Department of Fisheries and Oceans, we have Mr. Darcy DeMarsico, director general, blue economy policy; Jennifer Buie, director general, fisheries resource management; and Brent Napier, director, enforcement policy and programs.

From the Department of the Environment, we have Sandra McCardell, assistant deputy minister, international affairs branch; Lana Edwards, acting director general, bilateral affairs and trade directorate; and Kelly Torck, director general, biodiversity policy and partnerships.

Each department will have five minutes.

We will begin with Mr. Des Rosiers for five minutes or less.

[Frank Des Rosiers, Assistant Deputy Minister, Strategic Policy and Innovation, Department of Natural Resources]

Thank you, Mr. Chair.

Thanks to the committee for the opportunity to speak on today's subject, Canada's Indo-Pacific strategy. As was mentioned, I am accompanied by Andrew Ghattas, executive director, lands and minerals sector.

The Indo-Pacific region is certainly strategic for Canada, and this is an excellent opportunity for us to provide some information. We have key partners in the region, including Japan, South Korea, and other major actors.

I thought I would start by sharing, perhaps, a bit of data to situate us in terms of the sheer importance of the Indo-Pacific region, starting with some trade and investment data in the region.

Looking at the most recent datasets, from 2022, Canadian energy and natural resources exports to the region totalled $44 billion. It's not a trivial figure. It accounted for 55% of Canada's total exports to that region. It accounted for 10% of the overall Canadian energy and natural resources exports, second only to the United States.

Looking at the last five years, exports to the region are up 40%, and looking at the future, 2022 to 2030, according to the Asian Development Bank, the region is expected to consume in the order of 40% of global energy.

Given the geopolitical context and the climate goals, Canada is ideally positioned to be a reliable supplier of choice for both clean energy and minerals to that region. When you think of critical minerals and batteries, hydrogen and ammonia, nuclear, forestry, oil and gas, and clean tech, there's a lot that Canada can offer in that region.

This means that under Canada's Indo-Pacific strategy, the Department of Natural Resources has been given the task of representing Canada's interests in the areas of trade, investment, science, technology and innovation. As a result of the resources deployed, there will be staff present in Tokyo and Seoul to look after Canada's government and trade interests.

Minister Wilkinson led a trade mission in that region, in Japan, in January of this year. He was accompanied by 20 natural resources firms and indigenous business leaders, who were present throughout this mission, which turned out to be very well received indeed by both commercial entities in Japan and senior government officials and ministers. Having an early engagement from indigenous leaders there was certainly something that was noted very positively by our colleagues in Japan. The minister went back to Japan in April to attend a G7 ministers' meeting on climate, energy and the environment. Again, lots of discussions took place on the margins in terms of the business opportunities there.

In terms of models of co-operation in the region, allow me to mention two. In May of this year, NRCan and ISED concluded an MOU with South Korea for co-operation in critical minerals, clean energy and energy security. In September of this year, just a short two months ago, a senior cabinet minister, Minister Nishimura, came from Japan. He's the Minister of Economy, Trade and Industry, or METI. He came with a very senior-level delegation of business leaders to focus in particular on the unleashing of the memorandum of co-operation on battery supply chains. I'm sure you've been tracking some of those investments that follow suit.

I understand the committee expressed some interest in critical minerals, so allow me to say a few words on that topic. As many of you will know as esteemed parliamentarians, Canada launched its critical minerals strategy back in December 2022, not quite a year ago. A $3.8-billion envelope was set aside to look at the full value chain development in the area of extraction, processing, manufacturing and end use.

We've been working with our partners and allies, in particular, to advance some R and D efforts, notably South Korea, Japan, the U.S. and the EU, along with others, and also to pursue ESG standards to make sure we have broad adoption of those not only in Canada but also globally. We've also shown leadership at the International Energy Agency, the IEA, and have been working in other global forums, such as the G7.

Allow me to close, Mr. Chair, by showcasing some recent investments that took place in this space, which demonstrate the very real commercial opportunities that we have as a country. Lucky Goldstar, LGES, from South Korea, along with Stellantis, made their large-scale investments for a battery plant in Canada; it's a $5-billion investment. POSCO, also from South Korea, and GM have invested $500 million for a cathode materials plant in Quebec. Rio Tinto, from Australia, made another $500-million investment in Sorel-Tracy, Quebec. E-One Moli Energy made a $1-billion investment in a battery R and D facility in British Columbia. The LNG Canada phase one facility in British Columbia is the largest private sector investment in Canada's history—a $40-billion project—and it includes Mitsubishi and KOGAS, along with other foreign investors.

Discussions are under way with many other groups for other such investments. Again, it showcases that the opportunities are many.

Thank you, Chair.

[The Chair, Liberal, Ken Hardie]

Thank you very much, sir.

We'll now go to the Department of Fisheries and Oceans, with Ms. DeMarsico.

[Darcy DeMarsico, Director General, Blue Economy Policy, Department of Fisheries and Oceans]

Good afternoon, Chair and committee members.

The Indo-Pacific area represents an important market for Canadian fish and seafood, with exports totalling nearly $2 billion in 2022. While the majority of Canada's seafood exports to the region go to China—$1.29 billion—Canada is party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free trade agreement with several countries in the region, and Canadian exporters have an interest in expanding access to major economies in the region, such as Japan, South Korea and Singapore, as well as growing markets like Indonesia, Vietnam and Thailand.

The Indo-Pacific region also includes nearly two-thirds of the world's oceans, and is home to more than half of the world's fishing fleets, which compete for increasingly scarce marine resources. When security, biodiversity loss and climate challenges overlap, they aggravate and amplify each other.

With that in mind, Canada’s Indo-Pacific strategy established a new shared ocean fund, investing $84.3 million over five years to combat illegal, unregulated and unreported fishing and improve the health of marine ecosystems in the Indo-Pacific. IUU fishing is a broad term that covers a wide variety of fishing activity. This is a major contributor to declining fish stocks and marine habitat destruction and may be associated with organized crime. Building on Canada’s existing efforts to promote healthy and sustainably managed oceans, both internationally and in this region, this fund will advance efforts to strengthen and enforce the rules-based order to better regulate fisheries and fishing activity, protect fish stocks and advance ecosystem conservation.

To accomplish this, DFO is taking a three-pronged approach to enhance governance, enforcement and partnerships.

The shared ocean fund supports enhanced multilateral engagement at regional fisheries management organizations where the Department of Fisheries and Oceans negotiates legally-binding and science-based measures for the sustainable management of high seas fisheries, and to counter illegal, unreported and unregulated fishing.

In August 2023, Canada successfully championed adoption of a full harvest strategy for North Pacific albacore tuna, to keep fish stocks healthy. At the annual meetings of three pacific regional fisheries management organizations, Canada also led the development and adoption of measures to protect sharks.

This work is further reinforced through the Food and Agriculture Organization and the Agreement on Port State Measures, which prevents vessels engaged in illegal, unreported and unregulated fishing from using other countries' ports to land their catches, therefore keeping these fishing products out of national and international markets. Through the shared ocean fund, Canada will seek opportunities to advance implementation of that agreement, through training and capacity building in developing and high-risk states.

Canada is active in several international forums to achieve complementary outcomes that address challenges impacting the state of global fish stocks and ocean resources. For example, Canada's implementation of international agreements, such as the Convention on International Trade in Endangered Species of Flora and Fauna, is an important part of our global effort to ensure trade does not undermine the sustainability of aquatic species.

Canada was also an early ratifier of the World Trade Organization Agreement on Fisheries Subsidies achieved in 2022 and continues to be actively engaged in negotiations.

Building on decades-long efforts to combat illegal fishing and protect Canadian interests in the North Pacific, in July 2023, Canada led its first dedicated high-seas vessel patrol and fisheries enforcement mission, in collaboration with the U.S. and Japan, to combat IUU fishing in the North Pacific. Additional aerial surveillance patrols were conducted in the region throughout 2023. DFO’s officers documented 58 fisheries violations, including the detection of 3,000 illegally harvested shark fins, during foreign vessel boardings and aerial surveillance missions.

In October 2023, Canada began a new initiative with the Philippines, via an MOU, which provides their maritime authorities with access to our dark vessel detection space-based surveillance platform, using satellites to track illegal fishing vessels and support maritime security efforts within their sovereign waters. DVD has been deployed since 2021, when Canada first launched efforts to remotely monitor distant water fleets that surround the Galapagos Islands.

DFO works with our international partners to develop and strengthen the fisheries management and compliance measures that regulate high-seas fishing activity and combat illegal fishing with a robust monitoring, control and surveillance presence. For example, in September 2023, the Prime Minister announced a $6.5-million contribution to the joint analytical cell, an organization designed to harness complementary information-gathering and analytical capabilities, fisheries intelligence tools and databases, and international partnerships to fight against IUU fishing and associated crimes.

[The Chair, Liberal, Ken Hardie]

Ms. DeMarsico, I'm afraid we've come to the end of your five minutes, but I think we may get you to come to the FOPO committee at some point, because you've been talking about what we've been talking about.

We'll now go to the Department of the Environment.

Ms. McCardell, you have five minutes.

[Sandra McCardell, Assistant Deputy Minister, International Affairs Branch, Department of the Environment]

Thank you very much, Mr. Chair.

The Indo-Pacific region is essential to Canada's global efforts to address the triple threats of climate change, nature loss and pollution. Home to both China and India, this region accounts for half the world's population, half the world's carbon emissions and many of the world's most biodiverse countries.

The Indo-Pacific strategy, under its objective of building a sustainable and green future, provides a framework for Canada to advance its environmental priorities within a region critical to the future health of the planet and, by extension, of Canada. Given the global nature of these challenges, engagement with the countries of this region, both bilaterally and in multilateral forums, is essential.

Canada has made important progress in implementing pillar four of the Indo-Pacific strategy through climate finance, support for energy transition, co-operation on biodiversity and prevention of plastic pollution with the countries of this region.

We recognize the need to support developing countries in their mitigation and adaptation strategies to respond to climate change. Canada has committed $5.3 billion to international climate finance. Within these contributions and through multilateral funds and bilateral programming, significant financial support has been directed to the developing countries of the Indo-Pacific region to assist them in reducing their emissions and in adapting to the devastating impacts of climate change.

Clearly, meeting global climate goals will require successful energy transitions, and Canada has developed close partnerships with many of the states of the Indo-Pacific to advance key multilateral initiatives.

As a founding member of the Powering Past Coal Alliance, Canada has encouraged states in the region to commit to the phase-out of unabated coal. Thus far, the Marshall Islands, New Zealand, Singapore and Vanuatu, as well as subnational levels in Australia, South Korea, Japan, the Philippines and Taiwan, have all joined the PPCA.

We're also partnering with New Zealand and South Korea under the global carbon pricing challenge to accelerate global climate action and decarbonization. As more countries adopt pricing solutions, the effectiveness increases, driving innovation and reducing emissions.

In addition, Canada participates in the Just Energy Transition Partnerships, an innovative funding model to support countries' transition away from coal, in both Indonesia and Vietnam. These multinational efforts are mobilizing tens of billions of public and private dollars for infrastructure investment, policy reform, and inclusive, sustainable jobs.

As the link between climate change and nature has become ever clearer, Canada has responded to the need for international action. Home to the secretariat of the Convention on Biodiversity, Canada was the host country for COP15 under China's presidency last year. That conference resulted in the Kunming-Montreal global biodiversity framework, and in August, Canada pledged $200 million to the global biodiversity framework fund, making it the first country to do so. Going forward, this fund will assist eligible countries in the region in halting and reversing biodiversity loss. Canada recently launched a nature champions network and is inviting countries in the region to work with Canada to promote the goals of this biodiversity framework.

To address plastic pollution, Canada has worked alongside a number of Indo-Pacific countries, including Australia, the Cook Islands, Micronesia, Japan, the Maldives and many others, in a high-ambition coalition to support the development of a new legally binding global instrument on plastic pollution, and we will continue to do so in the lead-up to the fourth UN-led negotiation, to be held in Ottawa next April. In addition, Canada is working with Indonesia, Vietnam, Pakistan and Cambodia through national plastic action partnerships to support these countries in meeting their goals to end plastic pollution. Under the ocean plastics charter, launched under Canada's G7 presidency in 2018, Canada is also working with small island developing states, as well as international and regional companies, to prevent waste from being released into the environment.

To anchor this wide range of collaboration on environmental issues, Canada holds annual environmental dialogues with Australia, Japan and Korea and co-chairs the China council for international co-operation on environment and development. Environmental co-operation is also codified in our free trade agreements, including the CPTPP, and we're pursuing commitments on environment as part of our trade negotiations with Indonesia and with the Association of Southeast Asian Nations, ASEAN.

We use our membership in the G7, G20 and APEC as multilateral opportunities to promote shared environmental goals with key Indo-Pacific countries, including Japan, China, India, Indonesia and Korea.

In closing, Canada's ongoing work with the Indo-Pacific region on the triple threat to the global environment provides a strong basis for Canada and the world as envisaged in the strategy. The work done by Canada also continues to provide a substantive channel of engagement in support of the broader bilateral relationship with the countries in this region.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you, Ms. McCardell.

We'll go into our two rounds of questioning. I'll hold everybody pretty close to time, though, so that we can get the full two rounds in.

We will begin with you, Mr. Seeback, for six minutes or less.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you, Mr. Chair.

Clean energy is mentioned four times in the Indo-Pacific strategy. It talks about, at least at one point, “a reliable supplier of clean energy”. It also talks about the movement “from unabated coal power generation to clean energy”.

I'd like to know whether or not the Government of Canada considers LNG to be clean energy within the context of the Indo-Pacific strategy, because we haven't necessarily received a clear answer on that yet today.

[Frank Des Rosiers]

Thank you, Mr. Chair, for that question.

We don't have a set definition or formula for what clean energy is defined as, but certainly the government has been very candid and forward in terms of what we aspire to be.

In the case of LNG, the goal is very simple. It's to aim to adopt the most advanced technologies to have the lowest carbon intensity possible in those emissions. I'm proud to report that both for LNG Canada and for the other projects that are being actively considered—Woodfibre and Cedar LNG— we're very much looking at it to be this way and to be truly world leaders in this domain.

I would close by noting that in talking to customers in Korea and Japan in particular, they do appreciate Canada's positioning there, and as we can see now, the marketplace is moving more towards such products, which clearly respond well to market needs.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I understand that there are lots of countries that want Canadian LNG. They would include Japan, South Korea and Taiwan, for example, but are you saying to me that in the Indo-Pacific strategy that's been developed by the government there's actually no definition of what clean energy is, which means that we don't know if LNG is included in that?

I know that we're going to export LNG, but when the strategy talks about Canada being “a reliable supplier of clean energy”, we don't have any definition of what clean energy actually means. Is that what we're saying?

[Frank Des Rosiers]

Well, the Indo-Pacific strategy touches on very many issues—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I know. I just want to know if we have a definition of clean energy that the government has enunciated with respect to the Indo-Pacific strategy. If there isn't one, that's fine too.

[Frank Des Rosiers]

I doubt very much that every single term laid out in the Indo-Pacific strategy has a definition on it, from defence or cultural industries to environment or fisheries and so forth, but we have certainly laid out in the very clearest terms what we are aspiring to do as a country with regard to our energy policies—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Okay, I don't want to know.... I know there are probably lots of terms that aren't defined. I'm not asking about those terms. I'm just asking about this one particular term so that we can understand what we mean when we talk about being a “supplier of clean energy” and all these other things. When we say that, we don't have a definition of clean energy. If we don't have one, that's fine, but I want to know if we've defined it or if the government understands what it means.

[Frank Des Rosiers]

Again, I would repeat, Mr. Chair, our intention is to position Canada to be a leader in terms of low-carbon energy supplies, and the market response, whether it's on hydrogen, LNG or other products, has been remarkably strong.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I guess I'm going to take that to mean that it hasn't been defined.

With respect to LNG, we know that Japan has asked for it. We know South Korea has asked for it. We know, for example, that Taiwan has asked for it. We also know that China would be interested. We also know that a lot of LNG is being directed from the Gulf of Mexico to Europe. Has the government made a calculation of what the demand for LNG is in the Indo-Pacific and how much of that Canada could supply?

[Frank Des Rosiers]

We have not published market studies per se. We leave that to organizations such as the IEA, which has done extensive studies in terms of market trends in this area.

What we do know is that, as the member has very correctly pointed out, the demand is quite strong, as many of those countries in Asia are looking to move away from coal, either for power generation or for steel-making and other such products. The demand has been strong, stronger than ever, especially now that, further to Russia's attack on Ukraine, the demand in Europe has also spiked. As one can appreciate, while the capacity that we're deploying now, which will be, as you know, operational soon—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Do we know what that capacity is? Do we know how much we can deploy and how much of the need that will meet? Do we know what that is?

[Frank Des Rosiers]

LNG Canada will have a capacity of 14 million tonnes. It's prepping for full operations by 2025. We have other projects, as you know, in the wings, so Canada will be a meaningful supplier of LNG.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

We don't know what the actual numbers are—how much Canada could supply and how much the Indo-Pacific would need. No one in the Government of Canada has done that calculation, to your knowledge.

[Frank Des Rosiers]

Again, these kinds of studies are being pursued, published and updated regularly by organizations like the IEA and private sector organizations, so they're readily available. Canada will never be able, on its own, to supply the entirety of it—that we know. That's why countries like the United States, Australia, the Middle East and others are increasing their supply to the region.

However, again, Canada will be well positioned to be a meaningful contributor.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I have 15 seconds.

Russia is dumping crab in the Japanese and Korean markets. What is Canada's position on that within the Department of Fisheries and Oceans? Are we doing anything to try to stop that?