Canada-China Relations Committee on May 27th, 2024

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thank you.

I'll turn to our friend from the Macdonald-Laurier Institute.

We've talked a lot about energy security. Mr. Oliphant made a suggestion that it would be nice if we talked more about climate change. I would suggest that the best way we can address some of the challenges of climate change is to get Canadian energy around the world. That not only deals with climate policy, but it deals with security policy and energy policy and all of those things make the world a better place.

I'm curious, though. When it comes to the Indo-Pacific, we need to get our resources to market. What can we do to ensure that we can do so quickly?

Right now, and especially over the last two years, we have seen how energy security is tied with the security of nations and closely connected to food security as well. If you could focus on energy security, how do we actually get our resources to market, whether that's in the Indo-Pacific or across the entire planet?

Answer in about 30 seconds or so, if you could.

[Dr. Jeff Kucharski]

I think infrastructure is absolutely key.

For the first time in Canada's history, we now have the infrastructure to ship crude oil to Asia. The first shipment left, like I said, last Wednesday. Hopefully, next year the first major LNG export facility will come online—LNG Canada—and that will start to export to the region. All of a sudden, Canada's energy exports to that region are going to increase substantially.

Infrastructure is key. We could use more capacity. Clearly, production is there. The resource is there. The only bottleneck right now is infrastructure.

Moving product to Asia is not difficult, and there is certainly a market and demand there.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Mr. Kurek.

We'll now go to Mr. Erskine-Smith for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I want to start with Soy Canada.

All of you in various ways have mentioned the importance of population growth for driving demand. In order to sustainably manage that growth, how important are alternative proteins?

[Brian Innes]

Thanks for the question.

What we're seeing, whether it's in North America or Europe, or in Asia, where soy is very much part of the local palate, is that there is a growing demand for plant-based protein.

To your specific question, I'm not necessarily the one equipped to articulate an answer that really gets at the premise of your question. What I would say is that we're seeing demand grow for plant-based protein and for soy, based on the premise of your question.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

One reason I asked the question is that I have a bill in Parliament—we'll be debating it on Friday and voting on it next week—around pandemic prevention and preparedness.

If you read any of the evidence around pandemic prevention and reducing pandemic risk, we have to address some of the unsustainable practices and the spillover risks around animal proteins and the increased demand for animal proteins. Obviously, your product helps to address that, at least in part.

In the course of that debate on the bill recently, a Conservative member suggested that, “Alternative protein is just a far-left dog whistle that means crickets”. That's a sitting member of Parliament. That's not a far-right conspiracy theorist.

What would you say to someone who says that alternative protein is just a far-left dog whistle that means crickets? Your product isn't a far-left dog whistle that means crickets—I don't think.

[Brian Innes]

Thanks for the question. Our product is grown by approximately 30,000 farmers across Canada. I always say that there's no such thing as a soybean farmer in the sense that we have an industry that's integrated with grains, often integrated with livestock as well, and that can take advantage of crops that are an important part of the rotation or work in certain regions of Canada to help farmers manage risk and profitability. We're very much part of a system.

The product itself is a plant protein. It's growing, and the demand for it is strong, but in terms of the whole industry, it is very much part of an ecosystem.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much. There have been some comments from my colleague...and I respect Mr. Kurek a great deal.

How important is the CPTPP for the expansion of trade in the Indo-Pacific and for Canadian trade?

[Michael Harvey]

That's a key agreement. You have some of the most important countries in the region and major markets like Japan and South Korea. The CPTPP is also an area in which we have a competitive advantage over the U.S. because they're not members. It's—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Exactly.

[Michael Harvey]

—a key agreement.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I agree. The second piece I want to ask about is the Indo-Pacific office. How important is that to expanding Canadian trade in the region?

[Michael Harvey]

We have asked for the Indo-Pacific office to concentrate very much on the expanding markets, the growing markets like those in Indonesia, Malaysia and the Philippines. We want it to concentrate on the regulatory issues that often become non-tariff barriers.

We were mentioning, just a few minutes ago, the difficulties of the EU, where there may not be tariff barriers but where we're being blocked out by non-tariff barriers. What we want is regulatory officials who can work with regulatory officials to work things out at a regulatory level. Whether the issue is lack of knowledge or uncertainty or, sometimes, in order to expose that the issue is really political, the best way to do that is to work through the regulatory issues.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

My point is that a government that does care about economic growth and that does care about supporting Canadian industry would probably enter into an agreement like the CPTPP or open an Indo-Pacific office. Is that right?

[Brian Innes]

The Indo-Pacific office is a very important tool that helps us take the next step to having more stable and diversified trade in the Indo-Pacific. For governments of many stripes, provincially and federally, in Canada, if we see things through the eye of our customer and we see things through the eye of the people who need food for themselves and to feed their animals, they value that stability and the relationship they have through their agreement with Canada through the CPTPP and by having the investment of Canada in the Indo-Pacific agri-food office.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

Mr. Kucharski, similarly, you mentioned the importance of infrastructure. Over the last nine years, I don't necessarily think the $35 billion towards that pipeline...and you said it would be the first time in Canadian history that there was going to be the opportunity for crude oil to be shipped across the Pacific. We have a commitment of $35 billion to get that pipeline done. For the first time in Canada, LNG is going to be able to be exported in a serious way. I'm not suggesting that everything has been perfect, but surely you would say this government has, in some cases, tried to move mountains to get products shipped.

[Dr. Jeff Kucharski]

I would say the TMX expansion took, what, 10 years? It really shouldn't take that long. If we're serious players in the world, we need to learn how to do these regulatory reviews and approvals more quickly. We need to do the permitting more quickly. We need to do the decision-making more quickly. Yes, it's absolutely important to the oil industry. It's absolutely important to the gas industry. I think we could do more. I think we could do a lot more. We're talking about this in the critical mineral space, in which the government is trying to speed up the approvals process, yet we still seem to have a problem with oil and gas.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Erskine-Smith. We'll now go to Monsieur Perron for two and a half minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I would like to take two and half minutes to quickly summarize the concrete proposals the committee could make to the government in the report it will write.

First, it would be important to maintain long-term relationships, that is to say, for more than three years. You're obviously talking about ambassadors, but also about the office, which must be maintained. As I understand it, you're implying that staff would have to be there for the long term. We have no choice but to think about the long term when we're on Asian territory. That was the first point raised.

Then you talked about ensuring a stable and regular supply chain, to give you predictability and credibility in the markets to which you export.

Mr. Carey, you also mentioned that more processing could be done in Canada. I'm very interested in the idea of adding value. Can you tell us more about that?

[Dave Carey]

Yes. There's a lot to unpack there and a lot of very good questions. On the value-added processing side, Canada is exceptionally blessed with our natural resources, whether in agriculture, forestry or oil and gas. However, what we've done historically is pull things out of the ground, export them as raw products and then import them value-added. If we get more into the business of adding value here, that creates high-paying jobs, and when we do export, we're getting that premium. We would absolutely support it across all the industries. My colleague Mr. Innes spoke to what the soy industry is doing, and we've seen billions of dollars in the canola crush plants.

We definitely need more investment infrastructure. We have a competition issue in Canada. We have two class I railways that were going to be in strike positions. They have now been referred to the Industrial Relations Board.

We need to invest in our ports. We need to invest in our infrastructure. Canada needs to be a country that can attract global investment in research and development. There's no silver bullet here, but a lot of the issues that we face as a country are barriers of our own doing. Geopolitics is one thing, but there's a lot we can do here domestically to be more competitive and more profitable.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Harvey and Mr. Innes, do you have anything to add?

[Michael Harvey]

We need to advance discussions with the Association of Southeast Asian Nations and with Indonesia. Those are two very important potential agreements.

[Brian Innes]

As far as the agricultural industry is concerned, we certainly want more value added in the processing process, but we also have an opportunity to diversify our crops and the way we produce our crops, such as soybean. For example, the food-grade soybean used in Japan represents about 30% more per acre for producers than basic soybean. So there's an opportunity to invest in high-end products, to give more to soy producers and processors to provide a product in a form that meets customers' specific needs.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Mr. Perron.

We'll now go to Ms. McPherson for our final two and a half minutes.