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

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you very much for that response.

Have you reviewed the credentials of the diplomats from China? Have they had any involvement with these alleged police stations in Canada?

[Weldon Epp]

Mr. Chair, that's an excellent question.

I would say that we are not at liberty in an open context to discuss our ability to work with partners from across town to acquire that kind of knowledge.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you very much.

I'll switch to another topic, which is the Indo-Pacific strategy.

I was hoping you could shed some light on Canada's positioning itself a bit more towards the AUKUS agreement or the quadrilateral security dialogue. Those weren't mentioned in the strategy.

Are we not striving to join those? Is that not a priority?

To me, it just seems that it's not a priority. Perhaps you can explain why that is and if that is detrimental at all. It seems like it would fit very well, based on the language used and the partners that we're looking to partner with to share intelligence and the like.

If you could just comment, that would be appreciated.

[Paul Thoppil]

Thank you very much for the question. I think it's one that others have asked as well, so it's a very good one.

I think Canada looks at plurilateral groupings regardless of what the objective is, based on whether there's a Canadian interest to do so. When we look at AUKUS, I think the Prime Minister was clear that it's an arrangement to acquire nuclear submarines. To my knowledge, National Defence is not necessarily advocating the acquisition of those.

There are, within the confines of that agreement or understanding, working groups on other aspects, such as emerging and critical technologies. That is of interest. We have informed Australia of our interest in certain aspects of the working groups under that agreement. Australia has been favourable to that.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you very much.

My next question is on critical technologies. I'm jumping around a bit.

It's on Taiwan's microchips and semiconductors. There's been a lot of discussion on whether, should it take over Taiwan—so to speak—China would, in essence, be in full control of the largest producer of semiconductors and microchips in the world. We would be, along with most other countries in the world, very vulnerable.

Has Canada had any discussions with our allies to make us less reliant on Taiwan for this? Is this on the radar? I did not read every word in the Indo-Pacific strategy yet, but I did not notice it being a priority or concern. I'm wondering whether it is a concern and what we're doing about it.

[Paul Thoppil]

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

[Weldon Epp]

Mr. Chair, I have a couple of things in response to that.

First of all, in response to the premise of the question—which is a very important one—some members may have noted a very recent but excellent report by the Rhodium Group based on economic modelling, which costed the impact of an economic blockade on the global economy, mainly because of the supply chain for chips. If you imagine China doing what it did as an exercise in August, but using that to enforce an economic blockade, that alone would have—they estimate—something like a first-order impact of two and a half trillion dollars on the global economy.

There are two reasons why that's important.

It gets to the question asked, Mr. Chair, which is, how do we work with partners to ensure that disruption to an essential part of everything we do—our whole economy—is something we don't wait to plan for the day after there is an embargo? There are very active discussions.

I think what's also important about the Rhodium Group study is that this should not be a concern only for China itself. Its own economy would be impacted by disruptions to supply chains in the chip sector—Canada's, as well...and China's most immediate neighbours. The premise of the Chinese government that what happens across the Taiwan Strait is an internal affair.... With respect, even the kind of exercise they undertook in August would have an immediate global economic impact.

I think a scenario where China takes over Taiwan and then controls that supply is very hypothetical. There are lots of variables there. That's why organizations like the Rhodium Group have responded to your question by isolating even a more limited impact. It would make the economic impact of Ukraine look small by comparison.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Ms. Dancho.

We'll now go to Mr. Dubourg, who is going to split time with Ms. Yip.

[Emmanuel Dubourg, Liberal, Bourassa, QC]

Thank you, Mr. Chair, and yes, exactly: I'm going to share my time with Ms. Yip.

I want to begin by welcoming the witnesses and thanking them for being here.

I have just one question for them.

I applaud the Indo-Pacific strategy Canada released on Sunday. However, a witness told the committee that, given the current geopolitical landscape, Beijing seems to be realizing more and more that it will not get a hold of Taiwan through peaceful means, meaning that some type of confrontation with the U.S. and its allies will be inevitable.

How should Canada protect itself from that potential risk? How might that affect Canada's Indo-Pacific strategy?

[Weldon Epp]

Mr. Chair, I'd be happy to take that question.

I think the member's right in citing the fact that analysts and governments around the world look at the situation across the Taiwan Strait and recognize a basic, obvious fact that I think we very much are taking to heart in our own policy planning; that is, a situation that for decades had a relatively stable, external environment—there were ups and downs and tensions, but basically the premise was quite stable—is changing. It's dynamic, and there is a lot of concern.

After that, things get more muddy, of course, because we're talking about the future. Of course there is concern that the Chinese leadership has put a bit of a clock on the situation in Taiwan, and some analysts focus very much on a time frame.

I would like to make a couple of points. I think it's hasty for us to assume that an invasion of Taiwan is inevitable. We all know that the official policy of the Communist Party, and all of their planning, is to reunify Taiwan; but their preference, obviously, would be to take any action that could do so short of a kinetic activity or warfare, not least for the impact that warfare would have on their own economy and their own people.

There is no inevitable invasion, but there is now growing tension. To the second part of your question, that is where, Mr. Chair, Canada is very actively working with like-minded countries to understand how we respond effectively to a dynamic situation, but with a common goal. The minister has made very clear in her public statements—and we have diplomatically—and to her ministerial counterpart, Mr. Wang Yi, that Canada is in very good company in opposing any action that would unilaterally destabilize the Taiwan Strait, the situation across the strait.

But that can't happen in isolation. We can't have impact on that on our own. That's why there are ongoing discussions, and that's why you see the G7 in the last few months has increasingly spoken up, with a shared voice, to make the same points.

Thank you.

[Emmanuel Dubourg, Liberal, Bourassa, QC]

Thank you so much.

Ms. Yip, it's your turn.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

In reaction to Speaker Nancy Pelosi's visit to Taiwan this past August, the PRC imposed targeted sanctions banning the imports of fruit and seafood from Taiwan. I can recall in previous years that there have been other fruit sanctions, such as on pineapples, causing much lost trade financially and food wastage in Taiwan.

Is this an ongoing issue with China? How does Taiwan deal with these trade fluctuations?

[Paul Thoppil]

Mr. Chair, what China did in response to Taiwan is yet another example of economic coercion that Canada has felt in a long history of coercion against other countries to advance political objectives—including Norway, Lithuania, Australia, South Korea, just to name a few.

It is hard for exporters to have a revenue stream that is reliant on one dominant buyer, as it is for many, as a previous member had indicated with regard to fisheries, and then suddenly find after so many years of predictability that it's suddenly interrupted. It causes tremendous hardship, and there are two challenges. How do you keep your current operations going, and where do you find the funds to try to seek out new markets? It is that very unpredictability that is at the heart of one of the strategic objectives in the strategy to encourage Canadian businesses to diversify. The Government of Canada is trying to set that table with other markets to do so.

[The Chair, Liberal, Ken Hardie]

Thank you, Ms. Yip. I appreciate your question.

It's time now to go to Mr. Bergeron for two and a half minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

I'm going to follow up on my earlier line of questioning.

I have two questions about your discussions with your Taiwanese counterparts.

Do you sense that the Taiwanese are open to sharing their experience with us?

Did you pass on any such information to the appropriate Canadian agencies when you got back?

[Paul Thoppil]

That's a very relevant question.

The one China policy provides significant opportunity to engage with Taiwan, where, as I said previously, it's within the Canadian national interest.

You have recognized in the question that they have an expertise that's in our interest to learn from. Conversations have been initiated for that very same reason, both in terms of how they address in countering disinformation—and I cited how they are doing so with speed and responsiveness—and also, perhaps, that they are the best party globally in understanding China and China's behaviours.

So it is incumbent upon us, in order to engage and work with them to best understand and, therefore, incorporate what are practices that would work in our system.

[Stéphane Bergeron, Bloc, Montarville, QC]

Perhaps I misunderstood your answer, but I'm going to ask the question again.

Do you sense that the Taiwanese are open to sharing the lessons they've learned with us? Also, did you share that information with the appropriate agencies when you got back to Canada?

[Paul Thoppil]

The answer would be yes to both of those questions.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Bergeron.

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

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Chair.

I know the Indo-Pacific strategy outlines five pillars or objectives. Can you please expand on what promoting peace, resilience and security looks like in Taiwan? Furthermore, what role, if any at all, should NATO have in preventing tensions between great powers from escalating into armed conflict in the Indo-Pacific?

[Paul Thoppil]

Mr. Chair, I think the Indo-Pacific strategy is clear: what Canada aspires to is the status quo in terms of regional peace and stability in the region. Therefore, we will engage, together with other like-minded countries, in opposing any unilateral actions that will threaten the status quo.

As part of that effort, Canada has invested in a number of initiatives to help contribute to the status quo and the regional peace and security in that area. That is a multi-initiative contribution, including an enhanced naval presence and a cybersecurity initiative, to cite two elements under that strategic objective of promoting peace and resilience and security.

With regard to second question on NATO, I think we need to be mindful that NATO is the North Atlantic Treaty Organization. Therefore, we need to be mindful of what Asian countries would like in how do they organize, discuss and reach out to non-Asian countries in terms of their desires to have them engage in order to be helpful in that regard. That's why participation in forums such as the ASEAN Post Ministerial Conference and the ASEAN Regional Forum are very important so that we can understand what is it they need in the way of supports to deal with their objective and our objective, which is regional peace.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much.

We did get started a little late with this panel, but we also have, of course, a changeover to make to the next panel. What I'm going to propose is two and a half minutes for each.

We'll start with Mr. Chong for two and a half minutes.

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

Thank you, Mr. Chair.

I have just a very quick question.

Minister Freeland and Minister Champagne have talked recently about reducing trade with the People's Republic of China and other authoritarian countries. Ms. Freeland was in Washington on October 11 at the Brookings Institution to about friend-shoring, and Minister Champagne was in Washington on October 21 talking about decoupling.

How is reducing trade and commercial relations, in other words friend-shoring or decoupling, consistent with the Indo-Pacific strategy, which says, “Canada will continue to protect Canadian market access in China”?

That's my question.