International Trade Committee on Nov. 7th, 2023

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

I understand the process we're undertaking here, but obviously the Ukrainian Parliament has, I suppose, a parallel process.

Could you describe to the committee what that parallel process is...or a similar process or a process?

[Bruce Christie]

They have, as I mentioned, a similar process as does Canada. The main difference is that, in theory, their process is more streamlined because they have only one chamber in their Parliament, as opposed to Canada's having two. They have further flexibility in terms of the number of readings and debates that can take place in their Parliament. Also, if the President of Ukraine determines that this is an urgent legislation for consideration by cabinet, then there are additional flexibilities to fast-track or streamline the process.

Again, I'm not really up to date on what Ukraine's plans are to ratify their legislation. It would be a question that I believe this committee should ask when you meet with Ukraine's ambassador to Canada.

[The Vice-Chair, Conservative, Kyle Seeback]

That's your time, Mr. Sheehan.

We'll now turn to Mr. Savard-Tremblay for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I would like to go back to a question I asked the minister earlier. The question was about the existing mechanisms for transparency, anti-corruption, and responsible business conduct, which are included in chapter 15 of the agreement. The minister was basically telling me that Canadian laws apply to Canadian businesses abroad.

Is it fair to say that, there is nothing in the agreement to monitor the conduct of businesses?

[Bruce Christie]

Yes, there are core obligations and transparency provisions.

I'll ask my colleague Mr. Foster to address the question more specifically.

[Dean Foster, Director, Trade Negotiations – Africa, Americas, Europe, India, Middle East, Department of Foreign Affairs, Trade and Development]

If I understand your question correctly, there is indeed a special dispute settlement provision concerning anti-corruption. It's located inside the dispute settlement chapter. It's outside of the anti-corruption chapter itself to allow for the discussion and resolution of disputes. The chapter does indeed build on our more broad multilateral obligations on anti-corruption, for example, under the UN convention on anti-corruption.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In reading this chapter, we understand that companies are encouraged to adopt internationally recognized guidelines and principles on responsible business conduct and corporate social responsibility. However, these are only voluntary codes that apply in this area.

[Dean Foster]

There are indeed minimum core standards with respect to anti-corruption located inside the chapter. Those could be discussed in committee or be subject to a dispute. This chapter is but one of the many ways in which Canada is engaged with Ukraine in supporting Ukraine's anti-corruption and transparency reforms.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Has it been shown, through data, studies or research, that voluntary measures work?

[The Vice-Chair, Conservative, Kyle Seeback]

You have 10 seconds. Good luck.

[Voices]

Oh, oh!

[Dean Foster]

We don't have a specific study on this particular chapter. Indeed, there is a great array of available literature on Ukraine's anti-corruption reforms. We could circulate that after the meeting.

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you very much.

We'll now move on to Mr. Cannings for two and a half minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

As I was saying at the start of my comments in the previous hour, we have some concerns here about the timelines around this.

Mr. Christie, you mentioned that this trade deal is signed, and it's too late for us to change anything in it. In some sense, I wonder what we're doing here, but that's another story. We should have had opportunities to have real discussions among parliamentarians before the negotiations started so that we could get an idea of what your department's objectives were and what your priorities were.

In the winter of 2020, the PowerPoint said, you carried out meetings with stakeholders and had consultations, but that wasn't done with parliamentarians until after the negotiations started. As I say, there's a policy that says it should happen well before that.

I'm just wondering, first of all, what your policies and directives are on this. Second of all, if there's any time left, what did you hear from your consultations with stakeholders?

[Bruce Christie]

Thank you for your questions.

Just to clarify my previous comment, I was responding to a question on whether we could sit down with Ukraine at this juncture and negotiate new provisions to the agreement. Since the agreement is signed, our leaders have told us that this text is now ready for ratification. I was not suggesting that this committee could not propose amendments to anything they see in the legislation. It is certainly within your purview to do that.

In terms of our engagement with stakeholders, we did follow our usual process before we launched our modernized negotiations. As Minister Ng indicated, after we had the original agreement come into force in 2017, at the time we were trying to negotiate services and investment provisions in separate chapters in the original agreement. At the time, Ukraine was not able to meet Canada's standards to do so, and we agreed to include a clause that would require parties to expand the agreement within two years, which we've done.

I believe that, in 2022, officials from my team came and appeared before this committee on two occasions. Then, prior to launching our modernization negotiations, we did meet on a few occasions with the provinces and territories, both in meetings designated to discuss the benefits of this agreement and their interest in this agreement and how we would modernize it. We also—

[The Vice-Chair, Conservative, Kyle Seeback]

I'm sorry to interrupt, but we're now almost 40 seconds over. We're going to have to move on to the next round.

Mr. Baldinelli, you have five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Chair.

I'd like to thank the witnesses for being with us this afternoon.

I just want to build on some comments that you made earlier, Mr. Christie, when it came to the inclusion of the carbon tax. What we see is that it's included in this free trade agreement, but we can't find it in any other free trade agreement, be it CUSMA, the CPTPP or CETA, for example.

The idea for its inclusion must have been from a government mandate to have these provisions put in. We're looking at article 13.10, which deals specifically with climate change. Specifically, not only does paragraph 8(h) talk about the carbon tax and “carbon leakage”, but, earlier, paragraph 8(d) talks about the “rapid transition from unabated coal power to clean energy sources”.

If we're going to put in a provision such as 8(h), would you not think that the government would then talk about provisions and put in discussions about energy sources and energy security, so that both nations can work to assist Ukraine to move to the clean energy sources it has? Was it the mandate of the government that it did not want to see that included in this agreement?

[Bruce Christie]

Thank you for your question.

The new provisions in the environment chapter do recognize the importance of mutually supported trade and climate change policies and the importance that one doesn't.... Climate change or trade and investment promotion measures can't impact on a party's ability to also promote their climate measures, and that would be ultimately to achieve green growth objectives.

We are able to have, after the agreement is implemented—and we review the implementation of the agreement on an annual basis—a discussion on energy sources and energy security. They aren't addressed specifically. These are co-operation-based provisions in the agreement. They're not subject to dispute settlement, but the door is open to discuss any other issue related to environment protection that isn't currently specified in the agreement.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

There's nothing that precludes, for example, another government from asking for or including chapters to address this type of provision being included.

[Bruce Christie]

A party could recommend including new provisions across the agreement or new chapters, but both parties would have to agree before that was established.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Christie.

Also during your testimony, in response to a question from my colleague, you indicated that no study of the impact of a carbon tax on Ukraine's reconstruction efforts had been factored in or taken place. Again, I go back to reading that two-page briefing note that was provided to us just yesterday. It mentioned that Global Affairs Canada in its March 2023 initial environmental assessment concluded that modernization is “unlikely to result in significant negative environmental impacts”.

If that was the case prior to this agreement coming into force, why would the inclusion of a carbon tax and carbon leakage even be required in this agreement if Global Affairs was already telling the government they're unlikely to result in significant negative environmental impacts?

[Dean Foster]

I'll just build on previous comments that the chapter does not require the imposition of a carbon tax in Ukraine. It is very largely co-operation based and based on principles for building on co-operation in this area.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

It's aspirational in a sense.

[Dean Foster]

It's aspirational, yes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

If that's the case, would it not be aspirational enough to include provisions that deal with energy security or the assistance that Ukraine is going to need in its reconstruction efforts? If we're going to have aspirational aspects included in this agreement, I think those are some aspects that could have been included, and I think it's a huge missed opportunity on behalf of the Government of Canada.

How much time do I still have left?