International Trade Committee on Feb. 26th, 2026

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order.

Welcome to our witnesses and to our committee members.

This is meeting number 25 of the Standing Committee on International Trade.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 12, the committee is going to start its study on recent developments in Canada's trade relations with China and with Qatar.

Before we get into hearing from our witnesses, I want to turn the floor over to Mr. Savard-Tremblay for a moment.

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

I actually didn't specifically ask to speak, Madam Chair.

[The Chair, Liberal, Judy Sgro]

I want to acknowledge and say that it was unfortunate to hear about the incident in which you were attacked in Brussels, if you want to give a bit of information to the committee on that experience.

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

I've recounted the events and stages of what happened. I'm doing fine and I wasn't hurt.

I want to thank you, Madam Chair. The chair of the other committee on which I sit also started the meeting by saying a word about this.

I also want to thank all my colleagues who supported me and sent me very sincere messages. I think it shocked and troubled a lot of people to see that this kind of thing was possible. I'm a big guy, six feet two inches tall. I don't even dare imagine what a young woman or someone who doesn't have my frame must experience in this kind of a city where insecurity is constantly growing.

I hope that this example will serve others. Let's always be extremely careful.

You should also know that, specifically as it concerns members of Parliament, we have reported this incident to the Sergeant-at-Arms, of course, and I hope that the safety of members who are travelling can be improved.

[The Chair, Liberal, Judy Sgro]

Thank you very much for sharing that information with us. We're very glad to see you back here in Canada, where we hope it's safer. I don't know about that some days, but we're glad that you're back and you're safe and everything is all right.

Continuing on, then, we have with us today, from the Canada China Business Council, Bijan Ahmadi, the executive director and chief operating officer, by video conference. From StrategicEffects, we have Michael Kovrig, executive director, who is well known and respected by all of us, not just here in Parliament but throughout Canada.

We're very happy to have you here with us, Mr. Kovrig.

We will open the floor with Mr. Ahmadi for remarks for up to five minutes, please.

[Bijan Ahmadi, Executive Director and Chief Operating Officer, Canada China Business Council]

Thank you for the invitation to appear before the committee today.

Since 1978, the Canada China Business Council, CCBC, has served as the leading voice of the Canadian business community on China, working to advance practical solutions that support responsible commercial engagement and advance Canada's national economic interests. We represent more than 300 member companies from different sectors across Canada. Our membership includes major Canadian corporations and small and medium-sized enterprises that are actively engaged in trade and investment with China.

China is Canada's second-largest trading partner, with bilateral merchandise and services trade of around $130 billion. The economic impact of the relationship is substantial. Trade and investment with China supports over 400,000 Canadian jobs nationwide.

China is also a major source of foreign direct investment into Canada. FDI stock in Canada from China and Hong Kong reached approximately $65 billion in 2024. Investment and trade ties with China support economic activity in many different sectors across Canada, including oil and gas, mining, finance, forestry, agri-food, consumer products, manufacturing and tourism, among other sectors. Education ties are equally important and contribute significantly in terms of economic value and people-to-people ties.

In recent months, and particularly since Prime Minister Carney's visit to China in January, we have seen constructive progress in the bilateral economic relationship. High-level engagements by the federal government that began around the summer of last year have led to tangible and positive outcomes.

During the Prime Minister's recent visit to China, the two governments agreed to a package of solutions to address some of the irritants and tariff escalations that severely impacted bilateral trade, particularly with our agri-food workers and producers across the country. Through these agreements, starting March 1, China will lower tariffs on Canadian canola seed to a combined rate of approximately 15% from the current rate of 84%. China will also remove its 25% anti-discrimination tariffs on Canadian canola meal, lobsters, peas and crabs. In addition, China has dropped its ban on Canadian beef and is expected to accelerate restoring access to Canadian pet food. The Canadian government also agreed to a limited quota system that will allow 49,000 Chinese electric vehicles to enter the Canadian market, with a focus on bringing affordable EVs to Canada and opening up opportunities for joint investment by Chinese automakers in the Canadian EV supply chain.

The new Canada-China economic and trade co-operation road map, which was signed during the Prime Minister's visit, and the reconvening of dialogue mechanisms such as the economic and financial strategic dialogue, financial working group, ministerial dialogue on energy and joint agriculture committee provide important mechanisms for ongoing engagement to address current challenges and explore opportunities to further expand mutually beneficial economic co-operation. The Canadian business community has responded positively to Ottawa's efforts to recalibrate bilateral ties.

In CCBC's latest business survey, conducted by the Rotman Institute for International Business at the University of Toronto, 82% of surveyed Canadian firms indicated that the government's renewed approach to China would have a positive impact on their business outlook. A third of the surveyed firms reported that they are preparing to expand their business with China.

Looking ahead, I would offer four brief recommendations.

The first is to actively use the re-established bilateral mechanisms to address trade barriers and improve market access for Canadian businesses. To provide two examples, access for pet food and tariffs on Canadian pork are still challenges that we need to work on.

The second is to provide clarity and predictability in investment policy. There are opportunities to responsibly attract capital into both conventional renewable energy projects and to manufacturing and agri-food. Clarity on sectors open to investment, national security guardrails and an efficient review process are essential.

The third is to support Canadian business development efforts in China. China is one of the most competitive markets in the world. Canadian companies succeed there because of quality, reliability and brand strength. Further investment toward enhanced export promotion, trade missions and sector-specific support can help more Canadian firms compete effectively.

The fourth is to facilitate travel, education and business exchanges. Canadian companies frequently raise concerns about visa-processing timelines for Chinese partners, customers or prospective clients travelling to Canada. If we want to fully capitalize on renewed momentum in bilateral engagement, Canada will need to look at improving the efficiency of our visa processes.

In closing, the Canada-China economic relationship is complex, but it's also consequential. A pragmatic, disciplined and well-structured engagement strategy is not about ignoring differences. It is about advancing Canadian prosperity and national interest in a changing global environment. At a time when Canada is seeking to diversify its trade and double its non-U.S. exports within the next decade, China's scale and growth trajectory remain highly relevant.

Thank you. I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Ahmadi.

We'll go on to Mr. Kovrig, please, for up to five minutes.

[Michael Kovrig, Executive Director, StrategicEffects (GNSE)]

Thank you very much, ma'am.

It's an honour to speak to the committee.

In January, Prime Minister Mark Carney visited China and restored leader-level political relations and diplomatic dialogue mechanisms. If that were all his trip achieved, I would have considered it entirely successful. However, the visit went beyond that by reviving strategic partnership language and making agreements to reduce trade barriers and explore further trade and investment opportunities.

As a short-term tactic, this was an expedient way of buying economic breathing room while Canada adjusts to a more challenging geopolitical environment. The important question now is what the government does next.

Over time, normalizing relations without accountability and seeking relief from renewed coercion through bilateral deals risks confirming to the Chinese Communist Party that democracies will yield to pressure and accommodate power. If such acquiescence continues, Canada risks setting an example that weakens the very alliances and coalitions that Mr. Carney himself called for in his speech in Davos, and it risks his efforts to modernize and strengthen those very coalitions.

It's crucial to recognize that the CCP's objectives include dividing and weakening the west and making China the pre-eminent global power. General Secretary Xi Jinping himself has articulated a geo-economic strategy to seize the commanding heights of advanced technology and manufacturing and increase other countries' dependence on China while minimizing China's reliance on others. That is not a free trade agenda; it's aggressive mercantilism that's ultimately harmful to Canada's interests.

Consequently, the narrow monetary benefits from increasing economic relations with China must be weighed against the asymmetric costs of protecting Canadian society and democracy from foreign influence and interference and the risks of helping the CCP achieve long-term goals that threaten Canadian and allied sovereignty, prosperity and national security. I think Canadians will find that once the full costs are calculated, far fewer trade and investment agreements with China would pass a net benefit test.

Let me provide some specific examples of why turning to China to hedge against America-first policies is ultimately risky.

Trading with China without structural discipline risks relegating Canada to a second-class role as a supplier of commodities and to dependence on Beijing for the critical technologies of the 21st century.

On trade, first, opportunities to sell more commodities are limited. China is running enormous trade surpluses and investing heavily in self-sufficiency in energy, food and advanced technologies. Its imports are stagnant, and its growth is slowing.

Second, in exchange for market access, the party state will demand more political and economic concessions.

Third, replacing lost manufacturing exports to the U.S. with commodity exports to China while importing more from Chinese manufacturers makes Canada more vulnerable to external shocks, not less. The trajectory is neither true diversification nor resilience, but rather the erosion of Canada's remaining industrial depth.

Fourth, increasing agri-food sales beyond past peaks would deepen dependence and increase Beijing's leverage. They are highly concentrated trade agreements in politically influential sectors and risk ceding more leverage to Beijing unless offset by increased exports to more reliable partners.

On investment, first, in terms of attracting direct investment, even if Ottawa can incentivize Chinese manufacturers of electric vehicles and other technologies to produce in Canada, they're likely to use highly automated final assembly plants with limited employment opportunities. While U.S. investment typically comes with market access, that's rarely going to be the case with Chinese firms. They're also hoping to access the U.S. market, so we should expect them to move slowly while awaiting greater clarity on American policies.

Second, the CCP will likely restrict Chinese companies from transferring sensitive technology and process knowledge. Other aspects of China's industrial model, such as low wages, clustering at scale and massive state support and incentives, can't be duplicated in Canada. Adopting Chinese technology would also embed these sectors in Chinese supply chains, technical standards, ideology and political economy pathologies that the CCP is already wielding for geopolitical influence.

Third, the hope that this will stimulate domestic firms to innovate and increase productivity is misplaced. Instead, Canadian firms and their suppliers would compete against much larger companies, backed by a one-party state that enables them to absorb huge losses, survive for years without profits and subsidize capturing market share until competitors are forced to exit. It could leave Canada further deindustrialized and dependent on exports.

Ultimately, China can offer some tactical, sector-specific opportunities, but these should be caveated by Canada's structural trade deficit with China, Beijing's record of weaponizing interdependence and the strategic risk of deepening concentrated reliance on aggressive big powers rather than true diversification with trusted partners.

In conclusion, I would advise Parliament and all Canadians to scrutinize the implementation and repercussions of these and any other new agreements with China. I would advise the government to move cautiously and transparently. Otherwise, Canada risks falling further into a trap of asymmetric dependence in which the CCP offers inducements, builds Canadian constituencies, expects political deference in return and readily resorts to coercion to ensure compliance. That's not a deal Canada should take. Ephemeral stability purchased through accommodation today invites more coercion tomorrow.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much. We appreciate your comments.

We will now open the floor for questions.

Mr. Chambers, go ahead for six minutes, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

Mr. Kovrig, it's my honour today to welcome you to the committee. I know the chair welcomed you, but I thank you for appearing.

I want to let you know that I was elected in 2021, and one of the first issues constituents brought to me during your detention was your case. They wanted to make sure it was publicized and that people knew what you were going through. I want to say thank you. I appreciate your sobering comments and the perspective you'll share with us here today.

I don't want to put words in your mouth, so I'll just ask you to comment. Do you believe the CCP has a global agenda?

[Michael Kovrig]

Yes. I've studied the Chinese Communist Party, Chinese politics and Chinese foreign policy for a couple of decades, including, of course, working as a diplomat, then with the International Crisis Group. There is no question that they have long-term strategies, some of which are published. We don't require access to classified government information to reach fairly clear conclusions.

To simplify, I would say that they have at least three broad objectives.

First of all, it's to make China the dominant power in East Asia—to achieve pre-eminence there and in the western Pacific.

The second is to eventually become the pre-eminent power in the international system. It's to acquire the power to reshape the international order and, ideally, purge it of liberal international norms and rules in order to make it more amenable to an authoritarian, one-party state and China's own interests.

That is an agenda it is then serving through a mercantilist economic strategy. The concern, particularly for this committee, is what China's objectives are vis-à-vis the Canadian economy and western economies, and what the geopolitical implications of this are. Ultimately, China wants to dominate global manufacturing and high technology and to relegate other countries—particularly Canada, Australia, Argentina and Brazil, for example—to supplying it with the raw materials it needs for its industrial might. The party sees manufacturing capacity and advanced technology as the keys to state power. It is seeking power as a means of preserving its rule and, ultimately, extending its influence across the world.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you. That's very comprehensive.

As you describe this global agenda, many Canadians would consider some of those concepts to be adversarial or at least not within Canada's national interest. Is this a fair observation?

[Michael Kovrig]

Yes, that's correct.

I would say that there are, first of all, actions that China takes that are directly antithetical to Canadian interests. Many of those have been catalogued in the media and in government reports over the last several years.

One needs to step back and ask why the party state is doing these things. Why the transnational repression? Why foreign interference? Why efforts to alter the effects of elections, even if they weren't ultimately successful? Why the extensive espionage? Why the repeated coercion through economic means, hostage taking and other things?

It's because the Chinese Communist Party is trying to condition Canada's behaviour to defer to Beijing's preferences and to establish a new hierarchy of power in which Canada is not simply a helper of the United States. It's because China views the United States in fundamentally adversarial terms.

It wants to break up western alliances. It wants to drive wedges between western countries and ultimately deal with us individually through a dynamic in which it is by far the larger and more powerful party. It ultimately wants to subvert and influence Canadian politics and society so that Canada doesn't do anything that is displeasing to the Chinese Communist Party.

More broadly, it wants to knock America off its position as the most powerful country in the world and supplant it as the central state in world affairs, not necessarily to take on all the burdens and responsibilities of hegemony but certainly to take a significant amount of the power. It does not want to be constrained by the United States or by any other coalition of countries. It wants to weaken the west.

This week, for example, the German Federal Chancellor, Friedrich Merz, is in Beijing. China wants to supplant Germany as the industrial powerhouse of the world. It wants to master all of those high technologies, and it wants to use those supply chains and access to its market to condition behaviour that serves its interests.

By weakening Europe, by breaking up Europe, by driving wedges between Europe and the United States and between other allies—for example, between Japan, Australia and others—it wants to divide and conquer. It's not necessarily territorial conquest as we're seeing with Russia, but It is certainly an increase in its own influence to reshape the world according to its own image and views.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

I have only about 30 seconds left, so this will have to be a quick answer.

Do you think there's a risk that Parliament or the executive branch and the government is being naive about those ultimate objectives of China when they're making what seem to be nominal, small concessions or deals in the short term?

[Michael Kovrig]

It's less naïveté than the incentives of democratic politics, which drive the government to find quick wins—for example, to achieve relief for particular sectors such as canola—and ultimately to deliver quick economic benefits and let someone else in the future worry about the long-term strategic implications.

It requires changing incentives. I don't think it's a lack of understanding but rather the pressure to focus on short-term objectives and not worry about long-term outcomes. That is a great risk for Canada.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, sir.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Fonseca, go ahead for six minutes, please.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Madam Chair.

First, to Mr. Kovrig, we can see how this committee always brings in excellent expert witnesses. We've just heard some testimony from Mr. Kovrig, and we're hearing from Mr. Ahmadi.

To Mr. Kovrig, on behalf of this committee and Canadians, we thank you for your service, for your commitment and everything that you've done for our country of Canada. Like my colleague Adam Chambers, I received many calls and emails from my constituents when you were going through your ordeal. We saw so much courage and resilience in you that helped our nation. Thank you for that.

Mr. Ahmadi, I have a question.

There was a dinner at which, according to one report, “Prime Minister Carney emphasized that Canada and China are entering a ‘new era’ and a ‘new chapter’ in their bilateral relationship. He described this phase as one grounded in engagement that is realistic, respectful, and ambitious, underscoring the importance of building a partnership that reflects current global realities.”

Do you believe that this is an accurate statement?

What would you say to those people or countries who believe that we should not be dealing with China?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Ahmadi, looking at the agri-food sector, how can Canada strengthen food security co-operation while protecting our domestic producers?

[Bijan Ahmadi]

The agreements that were reached during this trip, I believe, did a fair job. There is still a lot that needs to be done. However, these were good agreements, with the first positive steps toward resolving at least some of the challenges that were created by the tariffs and countertariffs, especially during the previous federal government.

Again, some tariffs have been reduced, but there is a time limit. For example, in the current agreements that we've reached, the tariffs that have been reduced or eliminated are only going until the end of 2026. A good thing about what was achieved is that we've now established and restored some of those dialogue mechanisms.

JETC, the joint economic and trade commission, was established even before this visit. We also have the economic and financial strategic dialogue back on the table, as well as the joint agriculture committee, so that both governments can discuss and resolve existing challenges and talk about ways to expand collaboration, whether in the agri-food sector or other sectors that are important for our bilateral relationship. In this way, we can restore market access and expand opportunities for Canadian businesses and exporters.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Kovrig, in your remarks, you mentioned “tactical, sector-specific opportunities”. How should Canada operationalize this strategic realism, and how can we do it tactically?

[Michael Kovrig]

There's a framework I would start with. For the Chinese Communist Party, economic outcomes are geopolitical outcomes on a path to revising the international power hierarchy and to gain political and strategic advantages over Canada.

Where individual firms are looking to profit, maximize and seek opportunities, the role the government and civil society need to play is to really impose a net benefit test on any kind of significant investment or new trade deal. This requires calculating asymmetric costs and benefits, because the benefits are going to be concentrated in a few companies, communities and shareholders, but if to manage those benefits Canada then has to spend more on national defence, on security agencies and on preventing foreign espionage and influence, that's diffused across all taxpayers. This, first of all, needs to be part of the calculation.

Second, there are a number of different mechanisms to assess it. I'm not suggesting that there should be total decoupling or no trade with China. Trade with China can continue in non-sensitive sectors that don't touch on, for example, military technology, dual-use technologies, national security and other things. The improvements that ISED has made over the last several years in the investment-screening processes, for example, are a critical part of that. Canada needs to make sure that it has adequate outbound investment screening, as well as inbound investment screening.

The other key litmus test is not so much whether there is trade but the proportion of trade at the sectoral level. The top-line number is, of course, not that large. Canada is not that dependent on trade or investment with China. It's the second largest, but it's only around 4%. What matters is that certain sectors are particularly dependent. As we've seen multiple times now, the Chinese Communist Party will weaponize that interdependence for coercive purposes to change Canadian policy. Canada then loses sovereignty, political decision-making and autonomy.

We need to establish a ceiling for a particular sector, let's say canola, pork or seafood: What's the most that we are willing to sell to one buyer, particularly a large buyer with hostile foreign policies? Then, how do we manage to offset that by seeking other trade partners?

The role of the government would be to look at that given sector and incentivize more balancing trade with other and more trusted partners so that, if the Chinese Communist Party chooses to use that and close its market, Canada can shrug it off, survive and move on. In that way, we can maximize the potential economic benefits of trade with the national security and sovereignty concerns that we have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, please go ahead.

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

Thank you, Madam Chair.

I'd like to thank all the witnesses for their presentations and their presence.

Mr. Kovrig, I think your presentation is clear on the fact that an agreement is good, but there still have to be strict conditions. You actually said as much in a recent interview. On Pamela Wallin's podcast, you said that diplomatic dialogue was desirable, but that we still had to be careful not to let everything in.

In your answers to previous questions, you were able to expand on your thoughts about the areas and sectors. In your introduction, you talked about high technology. Then you said that critical minerals, energy infrastructure, artificial intelligence and defence supply chains were all things that involve a risk.

In that same interview, you also said that dialogue with China could not simply be treated as a neutral dialogue, a technocratic dialogue, and that silence on sensitive issues would often be interpreted as agreement, as if we were turning a blind eye to those issues. I'm thinking, for example, of the massive violation of human rights, including forced labour. I introduced Bill C‑251 to counter this phenomenon and emulate the American model, which works. During the second hour, we'll hear from a representative of the Uyghurs, and we can talk about this again.

Is Canada too silent and lacking proactivity on these issues?

[Michael Kovrig]

Thank you very much for the question. I'll answer in English, as I'm more used to talking about these kinds of matters in English.

It's a very important question.

First of all, one key parameter is that Canada's foreign policy regarding human rights needs to focus on understanding that it's not simply an opportunity for political virtue signalling. It's not a nice-to-have.

The way the party state treats political prisoners—for example, Canadian citizens who are detained in China, ethnic minorities, citizens of Hong Kong and the Taiwanese—and the way it engages in exceedingly repressive tactics and, in many cases, human rights-violating policies against them is a preview of how that regime will treat any other country or population over which it acquires influence. We've seen that through its efforts to coerce, by fear and intimidation, Canadian citizens on our soil and, for example, people who have emigrated from Hong Kong.

We're not simply looking to speak out. The purpose of speaking out is to prevent the abuses and call attention to them. Ultimately, what our policies often need to focus on is specific cases and specific outcomes that we are looking to change. The volume is less important than how exactly it is achieved, and a crucial element is coordination with other like-minded governments, ideally as many governments as possible.

Continue to hold the line on norms in international fora on multilateral documents through the UN Human Rights Committee and the UN Human Rights Council, for example, when China is continuing to try to erode those liberal norms. Also, focus on specific cases of detainees or particularly egregious cases in which it's actually possible to measure success. Otherwise, these often end up being just hortatory statements.

The Prime Minister and the current government are correct that quite often, the most can be accomplished not through public statements but through diplomatic channels. I would not underrate the role of quiet diplomacy, but the problem comes when the government trades silence for concessions and benefits from China, because the Chinese Communist Party will continually try to buy our silence. It will offer economic benefits in return for silence on what China does on Tibet, Xinjiang, Taiwan and, ultimately, a whole range of other issues, and that creates a slippery slope.

That is dangerous, but it's not so much the volume as it is the coordination and strategic use of statements to call out unacceptable behaviour and urge changes in that behaviour.