Canada-China Relations Committee on Dec. 6th, 2022

[Rob Oliphant, Liberal, Don Valley West, ON]

Mr. Burton, you said that in testimony to this committee just 20 minutes ago.

[Dr. Charles Burton]

No. I haven't said that any candidates lost their seat. We don't know why people go to the polling station or why they put the X on the candidate that they do.

However, what I was involved in was the disinformation about Kenny Chiu on WeChat and attempting to trace the source of this disinformation that slandered Mr. Chiu and mischaracterized his private member's bill. We were unable to do so, and we referred this matter to—

[Rob Oliphant, Liberal, Don Valley West, ON]

Would it surprise you, Mr. Burton, that there were hundreds of negative Twitter comments about me by many people in the last campaign, but I still won?

[Dr. Charles Burton]

I think that the issue of election interference by the Chinese Communist Party is a well-established policy of the United Front Work Department's operations throughout the world, coordinated through the embassy and consulates.

This is nothing particularly new or distinctive to Canada, but it's certainly something that we should stop. If there are agents who have engaged in illegal activities, such as the funding of candidates, or if there are diplomats who are coordinating this activity, I think they should be returned to Beijing.

[Rob Oliphant, Liberal, Don Valley West, ON]

If there are any signs of influence, absolutely, they should be investigated, and anyone should be prosecuted. I would agree.

I'll leave that at this point. I want to move on now.

[Dr. Charles Burton]

The procedure and House affairs committee will be investigating this matter. I'll be giving evidence to that committee.

[Rob Oliphant, Liberal, Don Valley West, ON]

I'll look forward to it.

We're hearing a range of views tonight, from a radical decoupling of our economy from the Chinese economy through to wary, restricted engagement with heavy government influence and an informed corporate social responsibility model. I think that is the range of activity we've heard tonight.

I want to give you each a chance to comment on that.

Mr. Burton, you seem to be advocating, based on ideology, a radical decoupling.

Ms. McCuaig-Johnston, you seem to be advocating a restricted, wary engagement, with government engagement and involvement.

Monsieur Breau, you seem to be advocating an intelligent, business-minded engagement in which businesses, investment bureaus and pension funds would be mitigating the risk if they invested intelligently and with good corporate social responsibility.

Am I getting the three of you correct? I ask because we're trying to find a model.

Maybe I'll begin with Mr. Breau.

[Carl Breau]

Very quickly, I hold that position and I agree with the position that you introduced.

I think that there's a lot of noise in the signal between Canada and China, and I wish that some of the contribution I'm bringing here....

I'm not a politician and I don't follow this topic from a political point of view. I just run businesses. As a Canadian, I carry Canadian values in everything that we do, and I'm very proud of that. I think the fact that I'm testifying here very candidly is also testimony to that. I'm doing that from China, by the way.

I agree with that position, which is one of saying no matter what we do here, let's stick to best practices, let's stick to facts, let's get the information and let's ask the questions, and if we don't have the questions, we move out, but not after we've asked the question and seen the answer.

[Rob Oliphant, Liberal, Don Valley West, ON]

Thank you.

I'm going to move to Ms. McCuaig-Johnston.

[Margaret McCuaig-Johnston]

Mr. Chair, I would say that yes, the member has me well pegged.

I have a cautious approach to business in China. It comes from five years of research that I did on Canadian technology company joint ventures in China. I found that instead of sharing the joint venture 50%-50% or 51%-49%, it was 90%-10% or 80%-20% in favour of the Chinese majority joint venture holder, when it was 100% Canadian technology that was being made. Then over time, the Chinese partner eased the Canadian partner out of their own joint venture.

I've seen a lot of this. I've seen more than three dozen cases like this, which were documented in a document at the China Institute, which published it.

I'm cautious on business issues. I don't take at face value what a supplier to a supplier to a supplier would say about whether there's forced labour in their factory. I'm skeptical.

I believe there's a government role on important things like human rights and being aligned with our partners as well.

[Rob Oliphant, Liberal, Don Valley West, ON]

I think that is probably my time.

[The Chair, Liberal, Ken Hardie]

Mr. Burton, we'll give you half a minute to answer the question as well.

[Dr. Charles Burton]

I agree with Margaret's assessment. I think it's the most realistic.

In terms of decoupling, it is more likely to come from the Chinese side than our side, given the way things are developing in China with regard to Mr. Xi's approach to the market economy. It looks like they'll be closing off to a lot of Canadian business in the future, but in the meantime I think the measures that Margaret is suggesting are excellent.

[The Chair, Liberal, Ken Hardie]

Thank you very much.

Mr. Bergeron, it's over to you for two and a half minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

Ms. McCuaig‑Johnston, you co-wrote an article that came out back in April. In it, you say that it’s time to start divesting from China to avoid being complicit in the atrocities the Chinese government is perpetrating on its own people, to avoid the emerging risks involved with Chinese investments, and to avoid being held hostage by these investments in years to come.

Are you referring to Canadian investment and pension funds, or are you talking about Chinese investments?

[Margaret McCuaig-Johnston]

Mr. Chair, I was referring, in this case, to pension funds. I co-authored the op-ed with Phil Kretzmar of the Jewish community. The Jewish community understands genocide and it is very much behind trying to get our public pension funds and university funds out of investments in China. It's pension funds that I was referring to.

We will always trade with China. It needs our products and we need its products. Our trade, in fact, even during the horror crisis with the Michaels, was still going up, but in terms of our pension funds, I think we need to be cautious.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you.

I’m going to stay on the same topic. The last time the committee met, we heard from representatives of the Uyghur Rights Advocacy Project. As you did a few moments ago, they pointed to the fact that Norwegian pension funds had Russian investments. Once the west imposed a sanctions regime, those assets were frozen and lost most of their value after the start of the war in Ukraine. Norwegian investors lost thousands, even millions, of dollars.

Don’t we run a similar risk by investing in China? After all, the question is not whether China will invade Taiwan, but when.

[Margaret McCuaig-Johnston]

Mr. Chair, this is something that deeply concerns me, because I feel that we are so invested in China through our pension funds that it would be a drag on our ability to create positive public policy in a time of a blockade of Taiwan.

We should be able to operate as a government without the private sector or the public pension sector putting up big red flags and saying not to touch their investments in China. They can see very clearly what might possibly happen and they should be particularly cautious now and be looking at how they can divert their investments from China to other countries in the region in a way that is consistent with our Indo-Pacific strategy.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Bergeron.

We'll now go to Ms. McPherson for two and a half minutes or less.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much.

Again, thank you to the witnesses for being with us today and sharing your expertise.

One of the comments you made earlier, Ms. McCuaig-Johnston, was around the incentivization of human rights. You talked about how people who run funds and run the CPP are currently incentivized for profit. Their performance is evaluated on that particular framework.

What would incentivization of human rights look like? How would that look? How would we incorporate incentivization for human rights into this work?

[Margaret McCuaig-Johnston]

This would have to be done by the pension boards themselves in setting the standards for how their managers are remunerated. We know that they value good corporate governance and ESG, but we're not seeing it in the behaviours. We need to start to see it in pension funds reducing and actually getting out of their investments in big companies like Alibaba, Tencent and Neusoft, which are clearly genocide companies. We should not be in those. I'd like to see a day when we're not in any of those directly and we have a public policy to not invest in these broader roll-up trust funds.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

That's great. Thank you.

One thing that I think we have to consider here, if we're talking about legislation, is that even though this is the Canada-China committee, legislation would not just apply to China. This legislation would be in place for forced labour in supply chains around the world.

With regard to that entities list that you've brought forward, would we have an opportunity to work with like-minded countries, with allies, to develop that list? Could we build on lists that have already been developed by other countries? Is that something you could see as a reasonable expectation?

[Margaret McCuaig-Johnston]

I think that's a real opportunity. For example, Canada is the host of most of the mining companies, and we should be taking leadership and ensuring that there's no forced labour in any of the mining companies that are registered in Canada. That should be straightforward. It should be part of this legislation that you're considering.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

Finally—

[The Chair, Liberal, Ken Hardie]

I'm sorry, Ms. McPherson; you are well out of time.