Economic Relationship between Canada and the United States Committee on March 4th, 2021

[Kirsten Hillman]

Can I just say one thing? Our supply chains—and this was the point I made earlier—are working. In terms of commercial releases into Canada and Canadian commercial releases into the United States, we have a very small diminishment from last year. I'm not trying to deny how important this is—

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

That's not what we're hearing on the ground, though, Ambassador. People are feeling that they're losing business, but regardless, we need the border open. Recovery will be directly proportional to that, and we need to understand what those criteria are as quickly as possible. Likewise with the vaccines that are being produced in the U.S. and that Canada will have access to: timing matters. Do you have any insight into what that timing is?

[Kirsten Hillman]

Well, I can say that there is a contract with AstraZeneca, which is produced here in the United States, and my understanding is that those doses are to start being delivered to Canada in the second quarter. That's the timing I'm aware of.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

The road map was comprehensive, absolutely, but it also shows the areas that we agree on. I wonder if you could give us the top three areas that didn't make it into the road map and that are Canadian priorities that perhaps we want to further.

[Kirsten Hillman]

Well, I'm not sure I would....

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Would it be Line 5, or Keystone XL? Or are we to understand that that's off the table now? Canada has priorities. Not all of our priorities are in the road map. What are the priorities of Canada that are not there?

[Kirsten Hillman]

I would say that if Canada is very focused on making sure there are aspects of our relationship that are understood and there are aspects of what's been going on in Canada over the last four years since this president and some of his colleagues have been gone...there are things we have done that they are not aware of and that they are not fully apprised of.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you, Ambassador.

Could you give me some of the U.S. priorities that didn't make it into the road map, so that we're aware of what they would like that perhaps might be more controversial?

[The Chair, Liberal, Raj Saini]

Ambassador, you have 30 seconds or less.

[Kirsten Hillman]

There was no disagreement like “We would like this in, but we wouldn't like that in.” I have to be very frank with you. There really wasn't. There was a discussion around how we formulate certain things in relation to some of the work that we're doing internationally, how we wanted to articulate that, how explicitly we wanted to articulate that or whether we wanted to be more vague about it. We talked about things like that.

We talked about whether there was enough in there on international co-operation around COVID, whether there was too much, whether it should be focusing more on what we want to do together. There were those kinds of things, but the big buckets of things that we were working on were fairly well understood.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

[The Chair, Liberal, Raj Saini]

Thank you, Ms. Alleslev.

For the next five minutes, Mr. McKay, go ahead, please.

[John McKay, Liberal, Scarborough—Guildwood, ON]

If I appear to be surprised, it's only because I am. I did not anticipate this five minutes, but I thank you for it, Mr. Chair. I'll certainly start to think very highly of you because of this gratuitous five minutes.

The interesting issue is with the United States and this continuing China strategy and the changes that may well ensue as a result. I'm concerned about not only the issue of supply chain slavery but also the other issues on which we are going to have to realign our trade policy with that of the Americans. Perhaps you could give us some idea of what you think the short-term realignments will be.

The second issue is a commentary on the United States' position on the CPTPP. The senator who was questioning Secretary Tai described rejoining that as what I understood to be “a fool's errand”, and I wasn't quite clear what that meant.

Perhaps you can help the committee out with respect to both of those issues—where we are going to have to realign in terms of our trade priorities and what our relationship with the Americans and that trade agreement will be like going forward.

[Kirsten Hillman]

First, I would say that one of the things that we have learned—that Canada has learned, the U.S. has learned, and I think many of our allies and partners have learned—through this COVID crisis is that we need a certain amount of additional self-reliance when it comes to critical supply chains. Whether those are health supply chains such as PPE, food supply chains, energy supply chains, or national security supply chains, there's a certain degree to which.... That's where critical minerals come in, because there are also important military applications in some of those products. There is a need for us to be sure that we have the systems in place to be able to rely on those supply chains when the going gets tough. On some level, that means doing more ourselves, and on some level, that means doing more with allies who we know are going to have our back when the chips are down.

In my view, and in my experience over this past year, even though the previous administration was very challenging for us in a number of ways that we all know, when it came down to really working through some urgent needs around, for example, PPE at the beginning of the crisis, the existence of those supply chains and their interdependence became really obvious. It was demonstrated to us and to our American friends that we had each other's backs, if you will, to continue my phrase, when the chips were down. This is going to be an important policy consideration for our government and the American government going forward, also for the Europeans, our NATO allies and others. It's going to be important, as we reflect on the lessons learned from this past year that we have gone through and what's coming next.

In terms of aligning our trade policy with the United States, I think I would flip that on its head. I think I would say that we see with the Biden administration an administration that is now willing to align its trade policy with ours. The previous administration did not respect international treaties that we had entered into and did not respect international dispute settlement. It used tools that were not designed at all for regular trade disputes, in order to bring trade consequences to its closest partners. I think the previous administration was misaligned. I think that the Biden administration is very much aligned with the way that we see rules-based, organized, open international trade operating.

Oh, I didn't answer your TPP—

[John McKay, Liberal, Scarborough—Guildwood, ON]

I had a TPP question, but I also have another one.

Perhaps I can squeeze it in, with the generosity of the chair.

[Kirsten Hillman]

Sure.

On the CPTPP, my understanding of this.... We'll know more as U.S. Trade Representative Tai gets into place and we have more conversations with her, but my understanding is that right now the U.S. priority is not to negotiate international trade agreements really at all. They're really focusing, as all of us are, on looking at our own communities and our own people, and making sure that we're doing things that are addressing the most immediate needs first. That's how I take that comment.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Part of the readout between the Prime Minister and the President had to do with the renegotiations of the NORAD treaty and the defence and security—

[The Chair, Liberal, Raj Saini]

Mr. McKay, you have 10 seconds left.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Well, that's a simple question to answer in 10 seconds.

I'll possibly get another chance.

Thank you, Ambassador.

[The Chair, Liberal, Raj Saini]

Mr. Savard-Tremblay, you have the floor for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Good afternoon again, Ambassador Hillman.

You have explained the buy America principle and the Buy American Act. As you know, this is a Canadian concern.

In light of your discussions with the United States government, is similar legislation expected here? Will Canada respond with legislation that could prioritize Canadian companies? Is this a widespread fear? How often do you hear about it?

[Kirsten Hillman]

Regarding this issue, we always start by emphasizing that buy American policies are often designed with the idea that they'll create jobs for Americans. In terms of trade between Canada and the United States, cutting off the supply chain would have the exact opposite effect. That's what we're stressing.

However, clearly our government will soon be investing in our economy as well. It will spend money to buy goods and infrastructure for Canada. This is true at the federal level and it's undoubtedly true at the provincial level as well.

I believe that we must ask our American colleagues a very important question. Will we continue on the path of openness, with our mutually supportive trade relationships, or will we take a different path whereby we cut off these relationships, which are so effective, and invest only in goods created by our own companies?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So you don't feel undue fear. You don't feel—

[The Chair, Liberal, Raj Saini]

There are 30 seconds left, Mr. Savard-Tremblay.

[Kirsten Hillman]

In order to be quick, I'm going to answer you in English.

I think it's important to focus on the positive and to say that keeping the supply chains open and keeping these very mutually beneficial relationships going creates jobs. Cutting them absolutely leads to the loss of jobs. In fact, the questions around the border by some of the honourable members underline that very point. It happens in Canada, and it absolutely happens in the United States.

In addition, I think what we can say is that at the federal level—and no doubt at the provincial level—there will be stimulus spending over the next number of months. In that stimulus spending, governments will be buying things. I think it's a very legitimate question to pose to our American friends: Do we really want to be going down a path where we don't have our procurement open to each other? That doesn't seem like a very good idea, because Americans benefit an awful lot from Canadian government procurement as well.