Canada-China Relations Committee on Feb. 5th, 2024

[Cleo Paskal]

I'm happy to take it, but Professor Horton, do you want to?

[The Chair, Liberal, Ken Hardie]

Go ahead, Ms. Horton.

[Deanna Horton]

Thanks very much.

I think ASEAN is really critical. The reason is that when you're looking at how trade patterns are evolving, a lot of countries are adding additional manufacturing capacity in ASEAN. A lot of companies have a “China plus one” strategy, and ASEAN is benefiting from that. RCEP is the largest trade system in the world now. We don't talk about it much in Canada. China is involved in that.

The linchpin of it all is ASEAN. In terms of future growth, given their demographics, they are going to be the future. A lot of exciting things are happening there. We're negotiating with ASEAN, and ASEAN is key to the Indo-Pacific strategy in terms of how we're going to be building up capacity there.

If we're going to be looking at ways of diversifying our interests in the Southeast Asia part of the world, obviously ASEAN is the critical partner for that.

[Cleo Paskal]

Because debate is healthy, I'm going to add a different perspective to ASEAN. It's more of a security perspective, not an economic perspective.

ASEAN is only as good as its weakest partner from a security perspective, and you have some pretty heavily compromised members of ASEAN. Cambodia has basically helped China to set up a base there.

I've had French diplomats describe it to me as the ASEAN fog: You go there, you don't quite know what's going on and you can't really see a future or a path forward. That doesn't mean not to go. It just means that if we have limited resources, maybe don't think that some grand strategy is going to come out of spending a lot of time sitting around ASEAN. I would argue the same thing with the Pacific Islands Forum.

Chinese penetration, infiltration and influence operations are so advanced across the region. I personally think it makes sense to make sure you do—as well as everything else—a ground-up assessment. Talk and listen to people on the ground, making sure that you know what's actually going on. The bureaucrats that end up getting sent to ASEAN or the PIF are not necessarily representative of either the national governments or the internal politics and dynamics that are shaping the realities of those countries.

[Marie-France Lalonde, Liberal, Orléans, ON]

Thank you very much.

Ms. Fitz-Gerald, would you like to wade in on the comments?

[Dr. Ann Fitz-Gerald]

I'll add one further point, if I may.

It's probably the middle ground between the two previous speakers. I've made my views clear on what I think is the impotent nature of the rules-based multilateralism model. Having said that, what ASEAN brings that's dissimilar to most regional and multilateral organizations is a very heavy weight placed on science, innovation and higher education. I think this is one of the reasons that drove the U.K. to having affiliate status with ASEAN as one of their biggest national security priorities in the region.

I think access on that level is important. It's important for a discussion on standards, whether it's an international dialogue on AI standards, data governance standards or others. I think access to those conversations is very important.

[The Chair, Liberal, Ken Hardie]

You have time for a very brief question, Mrs. Lalonde, if you wish.

[Marie-France Lalonde, Liberal, Orléans, ON]

Actually, I would like each of our witnesses to tell us how we could summarize this conversation from their perspective, please.

[The Chair, Liberal, Ken Hardie]

Perhaps we'll permit some time at the very end for that because you are out of time.

With that, we'll go now to Mr. Bergeron for two and a half minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Ladies, some of you have somewhat shaken our convictions with arguments that are a bit counterintuitive, such as when we say the Arctic should be our top concern in our Indo-Pacific strategy.

Most people think that all the land in the Arctic has been claimed, and that sovereignty is well established on every parcel of land in the Arctic, so no other Asian-Pacific countries can stake a claim. However, I understand that this goes well beyond the issue of claims, since we're talking about scientific research, in particular.

I'm going to put a fly in the ointment—would you say that the fact that our main ally, the greatest economic and military power in the world, doesn't recognize Canadian sovereignty over the Arctic and the fact that Canada is so incapable of defending the territory are both major challenges we will have to face?

[Deanna Horton]

Thank you very much for this excellent question.

I think Canada and the United States have agreed to disagree on some of the sovereignty issues. We seem able to collaborate and co-operate without having agreed on the actual territorial boundaries.

The U.S. is not a signatory to UNCLOS, as I understand. However, I would like to reiterate what I said earlier. The U.S. is obviously critical to the protection of the Arctic. We recognize the importance of NORAD. We are finally getting around to doing more to support NORAD, but we really need to step up in our collaboration not only with the U.S. but with the other partners I mentioned. That's because even though other countries are not going to be claiming land, they have the potential to help in the development of the Arctic.

We also have to counter.... Don't forget that Russia is also significantly interested in the Arctic for obvious reasons, as is China. It's the rest of us who will have to ensure that the Arctic is protected and developed as necessary.

[The Chair, Liberal, Ken Hardie]

We have time for a very brief answer from Ms. Paskal, if she has one for us.

[Cleo Paskal]

Thank you.

Not only is this a legal issue, it's also a law enforcement issue.

That's the big question. You can have whatever law you want, but if you can't enforce it, it's irrelevant. As mentioned, China is going after lawfare and trying to undermine international rules and regimes, which is what we saw in Scarborough Shoal.

We can't rely on just having a law to protect sovereignty. We need to be able to enforce it. In the Arctic, the U.S. icebreaker fleet is heavily degraded.

As you said, Canada really doesn't have what it needs to defend itself. Russia and China combined are much more powerful, and they will use that advantage if it's in their interest to do so.

[The Chair, Liberal, Ken Hardie]

Thank you very much.

Ms. McPherson, we'll go to you for two minutes and 30 seconds.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much.

I'll give some time to Ms. Fitz-Gerald.

I was interested when you were talking about how the Indo-Pacific strategy and our feminist international assistance policy are cogs that need to be part of a bigger foreign policy piece. I've long argued that our privileging of trade relationships to the exclusion of our diplomatic and development relationships makes trade relationships more difficult for us to maintain.

The Indo-Pacific strategy does have some things in it with regard to development and with regard to investment in FinDev. I'm wondering if it hits the mark and, if it doesn't, where we need to strengthen the foreign policy piece you were just talking about.

[Dr. Ann Fitz-Gerald]

It's a great question.

I think good strategies have clear strategic objectives that are achievable, as opposed to a laundry list of aspirational things. The Indo-Pacific strategy goes some way in comparison to others to narrow and drill down a bit more. I think there's a lot of uncertainty about the instruments that become enablers for the execution of the strategy. This is why I made the point that I feel national capacity building to promote our capability to navigate these new threat vectors in a data-driven and digitalized environment is fundamental to implementing some of the goals in the Indo-Pacific strategy.

On defence, it was recently published in Ottawa by the former chief of the defence staff himself that the Canadian Armed Forces does not have the capacity to respond to the threats the country is up against at the moment. The outcome of the defence review is very important to know how we're going to execute the defence and security aspects of the Indo-Pacific strategy.

It is a synthesis document that is very powerful in bringing economic, social and security levers together, but I think the tools of execution, such as higher education, military and defence projection and trade priorities, need to be fine-tuned a bit more.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

As I said, I would argue that having development and diplomacy be part of that is key as well.

[Dr. Ann Fitz-Gerald]

Yes, absolutely.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you, Ms. McPherson.

We have two more five-minute rounds and two two-and-a-half-minute rounds to wrap up this panel.

We'll begin with Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I have a question about our ports. Canada's largest port is the port of Vancouver, the flagship port, so to speak, of our global trade. It's also an Indo-Pacific port.

Last year, the World Bank and S&P Global Market Intelligence ranked the port of Vancouver 347th out of 348 global ports for efficiency and dead last among all major ports of its size. One of the pillars in the Indo-Pacific strategy is to expand Canada's trade in the Indo-Pacific region. How on earth are we supposed to do that if we have ports like Vancouver, which is, again, ranked 347th out of 348 global ports?

[Dr. Ann Fitz-Gerald]

I agree with you entirely, but I would also go as far as to say the ports have to be interoperable as well. If they're not technologized and data-driven, they're not interoperable, and this affects our relationship with our biggest ally.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

The Dutch ambassador came to me a number of years ago frustrated because there had been an agreement signed between the Port of Rotterdam, one of the world's leading cargo container ports, one of the gateways to northern Europe, and the Port of Vancouver. Dutch management at the Port of Rotterdam was trying to fulfill this bilateral agreement and connect with the Port of Vancouver and was so unsuccessful in trying to connect with anyone at the Port of Vancouver under this bilateral agreement that they reached out to the Dutch government to ask if it could try to rattle some chains up there to see if they could get a meeting. She reached out to a number of people, me included.

I don't know what came of that, but I thought, when I read the S&P global ranking this year, that it was no surprise we have a port that's ranked so poorly. The Port of Rotterdam would have a lot to offer the Port of Vancouver in terms of best practices, efficiencies and the like. It operates in a very complex, difficult environment and it's a top 10 or 15 port globally in volume.

I shake my head at the challenges we're facing as the government tries to roll out a pillar of the Indo-Pacific strategy and we have a port ranked almost dead last in global rankings.

[Cleo Paskal]

I highly recommend going over the Cullen commission testimony. The Port of Vancouver is known to be heavily compromised. It is considered a security risk even to the Americans by virtue of what goes through there, and it benefits malign actors for it to be a non-functioning port for clean transactions. I would—

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I've read the report, and I was shocked by the evidence of money laundering through the port and illegal drug trade. To hear that the national crime intelligence part of the Government of Canada last year estimated that $133 billion annually is being laundered through the Canadian economy, the equivalent of almost 6% of our GDP, makes me wonder: How did we get to this point where 6% of our GDP is laundered through the economy? Much of it is international money laundering, and much of it comes through ports like Vancouver. In some ways, the problem almost seems overwhelming in how we're going to deal with it.

I have a second quick question. The government just recently announced a new security policy on research. They issued two lists, a list of sensitive technology research areas and a list of named research organizations, many of them in the People's Republic of China. I'm wondering if the witnesses would comment on whether this is a good approach or if there are gaps in the approach that was recently announced.