Canada-China Relations Committee on Nov. 29th, 2022

[The Chair, Liberal, Ken Hardie]

I call the meeting to order.

Welcome to meeting number nine 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 for its study of the Canada-People's Republic of China relations, with a focus on the Canada-Taiwan relations for the first hour and a focus on the exposure of Canadian investment funds to Chinese equities and bonds linked to human rights violations for the second and third hours.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I have a few comments to lead with.

For the benefit of the 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 mike. Please mute it when you're not speaking.

I think everybody on Zoom has received the test and all of the instructions, but you have the choice at the bottom of your screen of the floor, English or French for interpretation. For those in the room, you can use the earpiece and selected the desired channel.

I would remind you that all comments should be addressed through the chair.

For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we appreciate your patience and understanding in this regard.

In accordance with the committee's routine motion concerning connection tests for witnesses, I can confirm that all of our virtual witnesses have had the test and are ready to go.

I would like to welcome Ms. Mathyssen and Mr. Kurek to.... I'm sorry. It's Ms. Blaney. I knew that, but it's a long way down there. Thank you for filling in. By the way, please pass on our best to Ms. McPherson, who's not well at all today. Make sure she knows we're thinking of her.

I'd now like to welcome our witnesses for the first hour. From the Department of Foreign Affairs, Trade and Development, we have Paul Thoppil, assistant deputy minister, Asia-Pacific; Weldon Epp, director general, northeast Asia; and Jennie Chen, executive director, greater China political and coordination.

There are two quick things.

As you know, this panel was due to visit with us last week, and at the last minute was unable to. Letters have been exchanged and explanations given. I believe those have been distributed to the committee.

I'd also ask the committee's indulgence. The topic this panel is here to present to us is all about trade and it might be, in fact, a good crossover between the focus on Taiwan and the focus of the next study we're doing on trade with China. I would ask your indulgence in accepting questions and answers from this panel for use in the Taiwan study, as well as the following study.

If everybody is in agreement with that, we will ask, I believe, Mr. Thoppil to make the opening comments.

You have five minutes or less.

[Paul Thoppil, Assistant Deputy Minister, Asia Pacific, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Chair, for the opportunity to address this committee on Canada's engagement with and concerning Taiwan.

Let me first offer my sincere regret for the unintended inconvenience to committee members last week due to the technical difficulties both GAC officials experienced. After repeated unsuccessful attempts to connect, House of Commons IT advised us that the appearance by officials via video conference could not proceed—although both officials remained on standby pending instructions or options at that time.

I am here with the same officials this evening to answer your questions. Should the committee be interested, I would welcome an opportunity to also update you on my recent engagement at the 18th Annual Canada-Taiwan Economic Consultation in Taipei, where I was last week at the time of the committee hearing and where I met with various Taiwanese cabinet ministers.

Since 1970, Canada has built significant cultural and economic ties with Taiwan, as well as people-to-people ties. Taiwan is an innovative, democratic and globally-connected society.

Canada's engagement with Taiwan is anchored in its one China policy, under which the Government of Canada recognized the People's Republic of China as the sole legitimate Government of China, taking note—neither challenging nor endorsing—the Chinese government's position on Taiwan.

This framework has allowed Canada to deepen co‑operation with Taiwan in areas such as renewable offshore wind energy and indigenous trade.

Whether it is maintaining semiconductor supply chains to support critical global industries or providing medical assistance and expertise toward fighting the COVID-19 pandemic, Taiwan has become an important stakeholder across a range of pressing issues of global concern. It is for this reason that Canada continues to support Taiwan's meaningful participation in international organizations where there is a practical imperative and where Taiwan's absence would be detrimental to global interests.

As you may know, Canada has a complementary and growing trade and economic relationship with Taiwan based on robust business-to-business ties, shared values and significant science, technology and innovation collaboration. Canada's ongoing economic consultations with Taiwan continue to be very productive, covering a broad range of topics, such as agricultural market access, co-operation on indigenous affairs, green economy, supply chain security, intellectual property policy dialogue, export controls and education.

Although Canada regained partial access to the Taiwanese beef market in July 2016, we continue to advocate for greater Canadian market access for beef over 30 months of age.

Canada remains gravely concerned about the events in August that led to a rapid escalation of tensions across the Taiwan Strait. In response to the PRC's live-fire exercises and economic coercion following a visit by U.S. Speaker of the House of Representatives Nancy Pelosi to Taiwan on August 2 and 3, Minister Joly and her G7 counterparts urged the PRC not to unilaterally change the status quo by force in the region and to resolve cross-strait differences by peaceful means.

Canadian officials have also communicated directly to the Chinese embassy on Canada's concerns in the region.

As a Chinese-speaking democracy, Taiwan continues to make significant strides toward consolidating a dynamic and pluralistic society in which the rights and freedoms of women, the LGBTQ+ community and indigenous peoples are guaranteed by the rule of law.

Within the parameters of its “one China” policy, Canada engages both sides of the Taiwan Strait to advance issues of common interest, while maintaining respect for human rights and fundamental freedoms. This has informed the Government of Canada's approach to advancing its interests with and concerning Taiwan for over five decades, and will serve as a basis for continued engagement into the future.

As we move forward, Canada's recently released Indo-Pacific strategy will also contribute in shaping the development of our relationship with Taiwan. The strategy presents a comprehensive framework to deepen our presence and engagement in the region by increasing our contributions to regional peace and security. Finally, it will allow Canada to strengthen its position as an active, engaged and reliable partner in the Indo-Pacific, including Taiwan.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much.

We will go to our first round of questioning with Mr. Chong for six minutes or less.

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

Thank you, Mr. Chair.

Thank you to our witnesses for coming today to testify in person. We appreciate that greatly.

In the Indo-Pacific strategy, the government says “we will challenge China” when it comes to China's belligerence and threatening behaviour in the region. You mentioned, as was noted, that Minister Joly spoke up publicly when China increased its military aggression towards Taiwan around the visit of Speaker Pelosi.

My question is on whether there a process in place in the department to assess when the Government of Canada is going to speak up to challenge China on this kind of behaviour, or is it more of a situation-by-situation assessment?

[Paul Thoppil]

I think the framework that's been outlined in the Indo-Pacific strategy is quite clear. It provides guidance for us to be proactive in providing guidance to the minister and the Government of Canada in responding to events in a much more proactive way, based on the agreed framework. I think what you will see, Mr. Chair, are more recommendations where China is contravening the international rules-based order.

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

There is a process the department has put in place to make those assessments to provide advice to the minister in future situations. Okay, thank you.

The strategy also mentions that the Government of Canada is reviewing all mechanisms and structures, such as memorandums of understanding and dialogues with the People's Republic of China. I have two very quick questions. How many of these do we have? I assume they're in the dozens between Canada and the People's Republic of China. Second, how long is this review of these memoranda and dialogues expected to take?

[Paul Thoppil]

Mr. Chair, I'm going to ask my colleague Weldon Epp to respond to that.

[Weldon Epp, Director General, North East Asia, Department of Foreign Affairs, Trade and Development]

I don't have at my fingertips the actual number. You're right, it would be in the dozens of dialogues. We're talking about dialogues, MOUs and agreements. They're not all the same in terms of the mechanisms, the legal import and certain obligations under them.

That review is under way. It's already begun, so we will continue through a process led by GAC to work with partner departments to review them. It's very important.

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

Will the department make any public announcement when the review is complete?

[Weldon Epp]

Mr. Chair, I would say that's a question for which I don't have an answer, because the review is under way. I think that, once we understand what the results of the review are, there will be opportunities, particularly because some of these do involve stakeholders, and they will have to be publicly discussed.

I would just say that the premise and the philosophy is that everything's under review, but not everything reviewed will change or disappear.

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

I understand.

[Weldon Epp]

If there are changes, those would have to be communicated publicly.

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

My advice is that it would be good to have a deadline. If there are no deadlines, things tend to drag on.

I have a question with respect to Taiwan. Earlier this year, the Government of Canada announced that it intended to enter into negotiations on a foreign investment promotion and protection agreement. Where are those? Where are we in the process? Have negotiations begun? When are they expected to begin, if they haven't? When are we expected to conclude such an agreement?

[Paul Thoppil]

Mr. Chair, as we know, in January Canada launched exploratory discussions with Taiwan on a foreign investment protection agreement. Those discussions have now been concluded. Now an assessment is under way as a result of those discussions. What Minister Ng has conveyed to her Taiwanese counterpart is that a decision will be made soon and will be conveyed to him, as I said, soon.

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

Another quick question is on part of the new strategy. Are there any plans for a minister of the Canadian government to visit Taiwan, as we saw with Minister Manley's visit some time ago to Taiwan?

[Paul Thoppil]

Right now I'm not apprised of a planning calendar whereby Canada's trade minister would go.

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

There are no current plans for a visit.

[Paul Thoppil]

There are no plans based on our current planning calendar, but, that being said, a ministerial visit will be dependent upon which of Canada's interests necessitate a ministerial trip.

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

When a new FIPA's concluded, I think it would be appropriate for the relevant minister to sign the agreement in Taipei. That's just something I put on the table.

Just as a final, quick question, Minister Joly mentioned that the Government of Canada would be deploying a new frigate, a third frigate, to the Pacific region as part of this strategy. Many defence analysts have pointed out that Canada doesn't have a resupply capacity of any sort in the Pacific region.

As part of the ongoing defence review, is the government planning on bringing military and security resources to the region in addition to what's been outlined in the Indo-Pacific strategy?

[The Chair, Liberal, Ken Hardie]

Give a brief response, if you could, please.

[Paul Thoppil]

Mr. Chair, I think that's a question that should properly be asked of Department of National Defence officials, particularly in the context of the development of the defence policy update. The Indo-Pacific strategy has already been quite clear in what the military contribution is, but I can't say more beyond that.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Chong.

I will go to Mr. Cormier, for six minutes or less.

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

Thank you, Mr. Chair.

I'd like to thank the department officials for being here this evening. We appreciate it.

I have a few questions about Canada's Indo-Pacific strategy. In speaking with business people in my riding, I am often asked what the much-touted Indo-Pacific strategy is all about.

The second objective in the strategy focuses on expanding trade, investment and supply chain resilience.

Can you describe how Canadian companies can benefit from the strategy? After all, the strategy will be in place for years, not just a week or a few months.

How will Canadian businesses be able to leverage the new strategy?

I would appreciate it if you could keep your answer to a minute or two, because I have more questions.

[Paul Thoppil]

We have to start with examining what are Canada's Asia exports. If you look at the flows as well as the FDI investments from that part of the world into Canada, they're dominated by certain countries. What the objective of this pillar of the strategy tries to achieve is ensuring expanded market access, diversification of trade flows and, therefore, ensuring more predictability and reliability of those export streams, and particularly foreign direct investment from trusted partners going forward.

What you will see are earnest efforts that have already been announced in terms of free trade negotiations with ASEAN, Indonesia, and early progress harvest agreement negotiations with India in order to send a signal to Canadian business about the opportunities with some of the fastest-growing economic growth regions in the world.

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

All right. Thank you.

I'm going to come back to my riding, because as you know, our fishery sector exports a lot of products to China, particularly crab and lobster.

One of the issues that kept coming up was the fact that it took years to build a market for these products in China.

How many years will it take to build similar markets in those other countries?

Are you sure there's potential for market diversification in those other countries? Certainly, it's going to take a long time.

Strategically speaking, are you confident that Canadian businesses will be able to take advantage of these new market opportunities?