Canada-China Relations Committee on Feb. 12th, 2024

[The Chair, Liberal, Ken Hardie]

I'd like to call the meeting to order.

Welcome to meeting number 33 of the House of Commons Special Committee on the Canada-People's Republic of China Relationship.

Pursuant to the order of reference of May 16, 2022, the committee is meeting on its study of the Canada-People's Republic of China relations, with a focus on Canada's Indo-Pacific strategy.

I would like to take a few moments, for the benefit of witnesses and members, to outline some of the steps we'll be taking tonight.

The meeting is taking place in a hybrid format. People are attending either in person or remotely using the Zoom application. For the benefit of witnesses and members, please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you're not speaking.

Interpretation is available for those on Zoom. You have the choice at the bottom of your screen of floor, English or French. Those in the room can use the earpiece and select the desired channel. I remind you that all comments should be addressed through the chair. For members in the room who wish to speak, please raise your hand. For members on Zoom, use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding. Also, remember to keep your earpiece away from the microphone if your microphone is live. That can cause feedback, which is not pleasant for our interpreters.

We have some substitutes tonight. Peter Fragiskatos will be with us a little later—about eight o'clock. In the meantime, Viviane Lapointe is sitting in for him. Virtually, we have Joyce Murray from the west coast of Canada. She is filling in for Jean Yip, who is over at Sir John A. Macdonald, the place across the street. We're still allowed to call it that, I hope. They changed the parkway. Anyway, she's over there for the lunar new year celebration, which, of course, is a pretty big deal.

With that, we will start with our first panel.

We're extremely pleased to have His Excellency Kanji Yamanouchi, Ambassador of Japan to Canada. Ambassador Yamanouchi was one who saw true value in appearing and discussing Japan's perspective on the Indo-Pacific strategy. We invited other ambassadors. They were not up to speed or not as comfortable with relationships to China and some of the other players in the Indo-Pacific, but we're very pleased to have Ambassador Yamanouchi with us today.

Your Excellency, you will have five minutes for an opening comment.

[His Excellency Kanji Yamanouchi, Ambassador of Japan to Canada]

Thank you very much, Mr. Chair.

Let me express my sincere appreciation for this valuable opportunity to address this very important committee.

In November 2022, the Canadian government announced its Indo-Pacific strategy. The Japanese government welcomed and appreciated the Indo-Pacific strategy by Canada.

Canada has, of course, three coasts, namely the Atlantic, Pacific and Arctic. However, it may be safe to say that, historically, Canada has had significantly strong ties with Europe through the Atlantic Ocean. Therefore, the formulation of this Indo-Pacific strategy by Canada was both groundbreaking and also good news. It was excellent news for Japan.

As a matter of fact, Canada and Japan share values and strategic interests. The Indo-Pacific strategy has so much to offer to the region and beyond in the harsh realities of 21st-century geopolitics.

The Indo-Pacific region is crucial to the peace and prosperity of the entire world, but the region is increasingly facing a variety of serious issues, such as challenges to the rule of law, stability, global warming, natural disasters and so on. Therefore, it is critically important to uphold a free and open international order based on the rule of law to promote trade and investments, as well as to enhance the region's resilience in an inclusive way. These are at the core of Japan's national strategy, and also Japan's vision of a free and open Indo-Pacific. We are glad Canada's Indo-Pacific strategy is also in line with this vision.

One year and two months have passed since the announcement, and the Japanese government applauds the steady progress that Canada has made in implementing its Indo-Pacific strategy. This progress has translated into actions of our joint efforts as set out in the Canada-Japan action plan for contributing to a free and open Indo-Pacific region, announced by our foreign ministers in Tokyo in October 2022.

In 2023, we saw a surge in high-level engagement between our two countries. The year started with Prime Minister Kishida's visit to Ottawa in January. This was followed by close co-operation in the G7 context. In Hiroshima, in May, the G7 leaders emphasized, among other critical issues, their determination to support a free and open Indo-Pacific and to oppose any unilateral attempts to change the status quo by force or intimidation.

In addition, a total of 15 G7 ministerial meetings were held in all corners of Japan, with the presence of Canadian ministers, including two visits by Minister Joly. Each of them contributed to the advancement of the policy coordination among the G7 and also to the realization of the Indo-Pacific strategy.

Year 2023 was also a big year for Japan-Canada co-operation on business, trade and investment. In September, Japan's Minister of Economy, Trade and Industry, Minister Nishimura visited Ottawa, accompanied by a delegation of top business executives. Minister Nishimura and I signed two memorandums of co-operation with Minister Ng, Minister Champagne and Minister Wilkinson.

One was on battery supply chains. The development of a sustainable and resilient supply chain is crucial for critical minerals and energy resources, like LNG, hydrogen and ammonia. The other one was on industrial science and technologies. These memorandums will certainly be essential parts of our partnership.

That was September. In October, team Canada visited Japan with more than 240 Canadian delegates from 160 organizations. Team Canada was headed by trade minister Mary Ng and agriculture minister Lawrence MacAulay.

Chairman, I was actually on the ground for both visits—here in Ottawa and in Osaka and Tokyo—so I can assure you that both visits were huge successes. They gave a boost not only to existing business ties but also to emerging business opportunities.

Team Canada's visit also showcased Canada's spectacular pavilion for Osaka Expo 2025, which embodies both Canada's dynamic nature and its innovative spirit. Just one month ago, Minister for Foreign Affairs Kamikawa and Minister Joly met in Montreal and reviewed the implementation of our joint action plan, which includes those developments I have just described.

All in all, I think that Canada-Japan relations are now entering a new chapter based on our joint vision of a free and open Indo-Pacific. Also, Canada's Indo-Pacific strategy is now making a difference in a very positive way.

Thank you very much.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Ambassador.

We will now start our rounds of questioning with Mr. Kmiec for six minutes or less.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Chair.

Thank you, Ambassador, for being here.

My first question is related to 2017, when the now late prime minister Shinzo Abe said that Japan could be open to joining the China-led Asian Infrastructure Investment Bank if questions surrounding its projects' environmental impacts and other issues are resolved. That's a direct quote from the late Shinzo Abe.

I notice that Japan has not joined the AIIB. What were those other issues?

[Kanji Yamanouchi]

Thank you very much for a very good question.

I was actually in Washington, D.C., in the days when the AIIB was being seriously talked about among the G7 countries.

Yes, we see the various opportunities in Asia. They need infrastructure development, so we know there is a demand. In the case of Japan, we really think the Asian Development Bank and the World Bank are making a big effort. We are also a very important part of it. Therefore, we are not a member of the AIIB.

However, from the outside, I think there are certain important elements. One is the openness of infrastructure development. The second is transparency. What kinds of projects are going on? Third, we have to think of life-cycle costs, not just once but for the long run. They have to be very economical and very efficient. Fourth, we need to see the environmental elements and human rights of the labour force making that infrastructure. The sustainability of those recipient countries is also very important.

All those elements of openness, transparency, life-cycle costs, human rights, environmental issues and sustainability need to meet the international standard. That is our view on the AIIB.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Ambassador.

My next question is about the January 2023 visit to Canada by Prime Minister Fumio Kishida.

During that time, he spoke numerous times about the need for the clean energy transition, but he also talked about Canada as a safe supply source of LNG, or liquefied natural gas. At the time, the Prime Minister of this country said there was no business case for it.

I notice there is no LNG agreement signed with the Government of Japan. Where did Japan get its sources of LNG that it needed to import?

[Kanji Yamanouchi]

Mr. Kmiec, thank you very much for a good question.

As you may know, our energy self-sufficiency rate is 13%. That means we need to import all those sources. For example, about 90% of crude oil comes from the Middle East. Also very important is natural gas, which comes from Russia, Indonesia, Malaysia and other countries, including Australia.

When it comes to LNG, I would like to express interest in LNG Canada, which is the biggest investment project in this country. It's a $40-billion project. One Japanese company is also involved, and now all preparations are under way. If everything goes well, we are expecting the first cargo of Canadian energy to come to Japan in the middle of the 2020s, so hopefully early next year.

I think LNG Canada is one of the examples of how this country can make a big difference in this energy transition.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Ambassador.

In terms of LNG, how critical is it to obtain the LNG from Canada for your energy needs?

[Kanji Yamanouchi]

According to the latest figure, 14 million tonnes will be produced in the first phase. Out of that 14 million tonnes, we expect 2.1 million tonnes will be exported to Japan. I think that is a serious number for it.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Ambassador.

Moving on to a different subject concerning Taiwan, as the People's Republic of China continues to challenge the rules-based order and sea lines of communication in the South China Sea, the Taiwan Strait and the East China Sea, I was wondering whether the Japanese government has estimated the economic impact of a potential PRC invasion of Taiwan.

[Kanji Yamanouchi]

Thank you very much for a very critical question.

Peace and stability in the Taiwan Strait are very important, not only for the security of Japan but also for stability in the international community as a whole. We've been watching very carefully. Looking back at the G7 Hiroshima leaders' meeting last year, the G7 leaders came up with the importance of the peace and stability of the strait. They issued a statement. They also issued an urge to peaceful resolution if there are any issues based upon all those negotiations and talks.

You also asked the hypothetical question. On question number one, being a diplomat I respectfully avoid answering the hypothetical questions, but I would say that this is a very serious matter. It is only natural for the government to take all possible measures, including the development of a system to respond to any contingency in order to ensure the safety and the prosperity of Japan and its people.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Mr. Kmiec.

We'll now turn to Mr. Cormier for six minutes.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you, Your Excellency.

I'm going to ask some questions in French, but I'll start in English first.

[Kanji Yamanouchi]

Okay.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you for being here with us tonight.

You probably don't know this, but in my riding of Acadie—Bathurst in New Brunswick, we have lots of fish plants. Some of those fish plants have been owned by Japanese people for many years. We have a strong relationship with the Japanese people. They came, I think, 20 to 25 years ago. They mostly bought crab and now lobster.

You talk about the trade that is very important for both countries. I want to talk more on the economic side of the Indo-Pacific strategy. In regard to trade and the strategy that we have put forward right now, how important do you think it is that we need to keep making sure that the strategy is a good one and that it will be profitable for all of the countries that will participate in this strategy? Is there something that you think we can do better, or are we on the right track regarding this strategy?

[Kanji Yamanouchi]

As I just mentioned, the Japanese government and the Canadian government have an action plan, which is based upon your Indo-Pacific strategy. It includes other elements of international trade and investment. Upon that, we've been working so hard to implement all of those action plans, including certain investments by Japanese companies to this country, because at this juncture we are in very much an historic change. We see the geopolitics and the very serious realities.

Also, the world is going for carbon-neutral by 2050. That makes Canada so significant, because you have technologies, you have natural resources and you have a big market right next to you—the power of NAFTA. For all of those reasons, together with the high quality of the Canadian labour force and the high standard, I would say that many Japanese companies are now showing interest in this country. That is one of the realizations of the Indo-Pacific strategy.

As well, I really appreciate that the Canadian government opened its trade representation in Indonesia, so that further trade and investment will be expected. We are also very proud that the Canadian ambassador to Japan, Mr. McKay, is making big differences. He's been appointed as the special envoy in the Indo-Pacific strategy. That is also helping to implement, in terms of the trade and investment, a boost for this country.

Thank you.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you.

I'm going to continue in French now, so I'll give you the time to put your hearing apparatus on.

At the outset, you talked about the importance of having a plan featuring strategies that respect the environment, especially as regards critical minerals, which we will need more and more of.

Do you think we are on the right track to meet our carbon neutrality commitments by 2050, or do you think some adjustments are needed?

[Kanji Yamanouchi]

Thank you very much.

I think this is a very critical question. Up to now, more than 140 countries have committed to becoming carbon-neutral by 2050. Each country is making serious efforts to achieve that commitment. The world is changing rapidly, and technology has been developing very rapidly. We only hope that we will make it.

When it comes to the leaders' meeting at the Hiroshima Summit, they are once again committed to achieving carbon neutrality by 2050, depending on the history, political reality, technologies and economic development level of each country. Depending on all of these things, there must be various ways to achieve carbon neutrality by 2050.

I do believe this country has enormous potential, because you have clean energy. As I just mentioned, Japan's energy self-sufficiency rate is only 13%, so we have to improve on that. In this country, you have a 190% energy self-sufficiency rate, representing an enormous ability. Also, you have a strong willingness to come up with initiatives to meet the 2050 goal of carbon neutrality. I see so many new and emerging technologies to produce new energy with hydrogen or ammonia as well as small modular reactors and so on.

I do not have a crystal ball, but I do hope this country and Japan can make it.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you.

[The Chair, Liberal, Ken Hardie]

Mr. Cormier, you're just about out of time.

I appreciate your questions.

We will now go to Mr. Bergeron for six minutes or less.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

Mr. Ambassador, thank you for being with us today. We truly appreciate it. I would also like to thank your hardworking associates.

After the publication of Canada's Indo-Pacific Strategy, we have been interested in how other countries view the Indo-Pacific region, especially the United States. We went to Washington to meet with our counterparts of the equivalent committee of the U.S. Congress to discuss their strategy for the Indo-Pacific region. Those discussions must continue.

Looking at Japan's new plan for a free and open Indo-Pacific, however, we note that its second pillar involves a new focus on co-operation by addressing the current challenges in an Indo-Pacific way, specifically by establishing equal partnership among countries.

For our information, how are we to understand the Japanese perspective on the Indo-Pacific way?

[Kanji Yamanouchi]

Thank you very much.

That is a very timely question in terms of the global affairs of the 21st century. Sometimes we hear this part of the world referred to as the “global south”, but the sizes of the populations and the per capita GDPs of these global south countries are very different. However, as long as each of them is a sovereign country, it has one vote at the United Nations. Each country has its own pride, history and culture, and we have to respect those.

When we have meetings with our friends in southeast Asian countries—ASEAN—they have a very strong idea that we are equals. We talk to each other and come up with a consensus and find a middle ground to go in the right direction. It may take some time to come up with a consensus, but at the end of the day it's the only way to achieve certain things together. No single country can do important things on its own. It needs to have friends and like-minded countries to achieve certain things.

When we say we do something in the ASEAN way or the Indo-Pacific way, we respect each country's voice.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Ambassador.

I think people have great hopes for Canada's Indo-Pacific Strategy as regards ASEAN in particular. Most of the witnesses who have spoken to us about ASEAN also had a relatively positive view, but last week one witness shared a different opinion about ASEAN. I hate to paraphrase, but he essentially said that we should not vest so much economic hope in ASEAN and that certain members were essentially branch plants of Beijing. What do you think of that statement?

[Kanji Yamanouchi]

Thank you very much.

The ASEAN countries welcome the Indo-Pacific strategy of Canada. If you see the reality of these 10 countries, population-wise, those 10 countries have more than 600 million people. That is bigger than the EU, and when it comes to the combined GDP of those 10 countries, it is more than $3 trillion. That is significant progress.

Also, just last December, the Japanese government held a special leaders' meeting of Japan and the ASEAN 10 countries for the celebration of the 50th anniversary of Japan-ASEAN co-operation. Looking back over those 50 years, starting from five or seven countries—now it's 10 countries—they've made enormous progress in terms of economic development but also in political unity and in influence over other parts of the world.

I see only the positive signs for the ASEAN 10 countries. They are like-minded. Of course, they do have their own way of expressing things, but we share a lot. You can see the Japanese companies' attitudes to those ASEAN 10 countries. They have invested a lot in expectations, in trust and also in the growth of their market.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you.