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

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Savard-Tremblay.

Mr. Blaikie, you have two and a half minutes, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

I'd like to use these minutes, if I could, just to come back to the question I posed earlier about the potential for a united front around climate change to create some leverage, if you will, on the buy America front in order to maybe relax some of the worst of those provisions, at least when it comes to Canadian products and services that would help municipalities, states and the federal government in the United States reduce their greenhouse gas emissions.

[Kirsten Hillman]

I'm going to answer your question by being a bit more general, because I think the answer to your question isn't specific to environmental supply chains. I think it's an answer that applies to all Canada-U.S. trade.

Buy American policies are put in place because there's a perception that doing so creates jobs in the local economy. When it comes to Canada-U.S. trade, that is not true. It does the opposite. It actually makes us lose jobs. This fact is understood by many in the United States. It is clear. It was sort of reinforced through all of the legwork we did during the NAFTA negotiations.

Just last week, our leaders spoke about the fact that a deeply integrated, mutually supportive economic relationship is going to be vital to our economic recovery, and they launched this strategy to strengthen Canada-U.S. supply chains. The point is, as we have said and we will continue to say, it is impossible to be heading down the supply chain integration, mutually reinforcing “Let's help each other out of this recession and let's get out of it faster together”, and at the same time impose domestic content requirements.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I do hear that kind of general argument, but at committee on Tuesday we heard from Steve Verheul, who is somebody I believe you know quite well, a very serious skepticism about Canada getting any kind of general exemption or any kind of large-scale scaling back from buy America policies. I'm just wondering if we have a strategy that's a little more targeted for certain kinds of goods and services in order to ensure we're getting as much access as possible to the American market.

[Kirsten Hillman]

Again, I would get back to what buy America is versus buy American. The only policies that apply to Canada are buy America. At this point, they apply to steel, iron and some manufactured goods. We are living with those.

If there is an effort to ratchet those up, we will absolutely seek an exemption from everything that applies to Canada and affects Canadian supply chains.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I think what we've heard is that there is a bill now for a considerable amount of infrastructure—

[The Chair, Liberal, Raj Saini]

Mr. Blaikie, I'm really sorry but we're out of time.

Can we go to Mr. Strahl for five minutes, please?

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you, Mr. Chair.

Thank you, Madam Ambassador, for your presentation today.

I want to talk about China specifically. Did the issue of the Uighur genocide and Canada's failure to declare it such come up at the bilateral meetings? I know there was a section on China. It did not mention the Uighur genocide. It talked about human rights violations.

Clearly, the new Secretary of State and the past Secretary of State have both declared that what is happening in China with the Uighurs is a genocide, so I'm wondering if that was discussed and if the Biden administration pressured the Canadian side to join with it and join with, quite frankly, the House of Commons and declare that what is happening to the Uighurs in China is a genocide.

[Kirsten Hillman]

The situation in China with respect to human rights abuses generally and with Uighurs in particular was discussed in a series of meetings last week. We shared perspectives on that. The U.S. administration didn't really raise Canada's position at all.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Did the U.S. administration raise the issue of Canada's failure to exclude the Huawei company from Canadian 5G networks, as it has done?

[Kirsten Hillman]

No.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

With respect to the Biden administration's shift or attempt to rebuild some alliances to counter China's influence in the U.S., the countries that are always mentioned are Australia, Japan and others. Is Canada a part of that, or does our government's approach to China on things like Huawei or the much closer alignment with China that our government has impede our ability to be part of that new alliance that the Biden administration is proposing to counter China's influence around the world?

[Kirsten Hillman]

I would say that Canada's concerns, whether with the economic pressures of China, human rights violations or security, are something that we discuss with the Biden administration and that we discussed with the previous administration on a regular basis. Between me and my team, every week, no doubt, we discuss it bilaterally. We discuss it with our Five Eyes colleagues. We discuss it in NATO contexts. I know that there is no perception in any way, shape or form by any American counterpart, present or past, that Canada is in any way soft on China.

We are living through an incredibly challenging time with China. Our bilateral relationship, I would say, is at a very low point after the arrest and arbitrary detention of the Michaels and the effects of certain economic consequences for our canola industry and others. I don't think there's any suggestion at all that Canada is anything but strong and aligned with all of our like-minded colleagues around the world with respect to our values, whether regarding the economy, human rights or anything else.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

I don't know how much time I have, Mr. Chair.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

I'll shift back to the energy focus of today's meeting. Have you been given a mandate by the Government of Canada to promote and market Canadian energy? Specifically, the minister talked about how, environmentally speaking, we do well at producing it. Obviously, that message did not make it through to the Biden administration with regard to Keystone XL. Have you been given a mandate by the government to double down on that and to promote our world-leading oil and gas sectors?

[The Chair, Liberal, Raj Saini]

You have less than a minute and a half.

[Kirsten Hillman]

Yes. Just to be super clear, since I've been here in D.C., which is I guess three and a half years now, advocating for Canadian energy infrastructure, our oil and gas sector, has been a major focus of this embassy. We have an entire section that deals with energy, and individuals who deal with the oil and gas sector in particular.

In 2019, in anticipation of the federal election, we worked for well over a year with Alberta and the sector, long before President Biden was even a candidate, to get all of the information out there about what's happening in our sector, about the innovations that have been made, about the regulations that are in place and about the benefits of the Canada-U.S. energy relationship and the oil and gas relationship in particular. I believe that we made an incredibly strong case. We spoke to hundreds of people around this over the course of a year and a half, including the top decision-makers.

It's very challenging. Energy infrastructure is very challenging. That particular project was also very difficult.

I'm from Alberta. I grew up in Alberta. I have a lot of family in Alberta. I have family that works in the energy sector in Alberta and Saskatchewan. I know how hard that decision was. I know how hard it is for Canadians, but we are working on this non-stop every day, here and across the country.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you.

[The Chair, Liberal, Raj Saini]

I'll go to the final question and Mr. Housefather.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you very much, Mr. Chair. I'll be sharing my time with Ms. Bendayan.

Ambassador Hillman, it's great to see you. Having been to law school with you, I hope you don't mind if I ask you a couple of legal questions.

Basically, the first report from this committee is about Line 5. I understand that this is a private dispute between Enbridge and the State of Michigan and that we're looking for a diplomatic resolution in every direction. I totally understand that, but I'd like to just ask, is it the opinion of the Government of Canada that the PHMSA, the federal government's Department of Transportation, has the authority to overrule the State of Michigan's decision to end the easement? That's number one.

Number two, is it our opinion that the legislature of the State of Michigan has the ability to overrule the decision of the executive of the State of Michigan if the Senate and the reps of Michigan vote that way?

Number three, if none of that happens, does the Government of Canada believe that, either through bilateral agreements with the United States or international treaties that we're parties to, we have the ability, as Canada, to be a party to stop Michigan from ending the easement?

[Kirsten Hillman]

Thank you, Mr. Housefather. I know you've been asking all of the witnesses these legal questions, and I fear I may give you an equal amount of dissatisfaction in my answers.

These are all important questions. I'm not denying that.

On the first question, I have no real comment on that.

With respect to the revocation of the easement, my understanding is, it wasn't an executive order. It was done according to the terms of the easement itself. I don't know and we don't know on that particular act—and there are discussions and analyses, I would assume, being undertaken—whether that is subject to some sort of intervention by the state legislature. I'm sure they are looking into that question themselves, because the state legislature in Michigan is supportive, by and large, of Line 5, as I'm sure all of you know.

Those are important questions in what's becoming quite a complex and tangled set of litigation. Our consul in Detroit is in touch regularly with the legislature to discuss this issue with members of the legislature, as well as with the governor's office and her people. He'll probably be the person who would come to understand what the legislature's position is more quickly than anyone. We'll watch that. Obviously, that's an issue that is internal to that state and their political apparatus.

With respect to the Government of Canada and what we may or may not do from a legal perspective in, as I say, these different legal cases that are under way, we're assessing that. That's the honest answer. We are looking at that. We're assessing it. We will close no door, and we will make the decision that we think is going to have the best chance of ensuring this issue is solved and that we are assured that Line 5 will continue.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thanks, Kirsten.

Rachel, I'll pass it over to you.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, colleague.

Thank you, Ambassador, for being with us tonight.

I want to take the opportunity to clarify a couple of things on the record since Canadians are listening to us. Of course, as you mentioned earlier, Canada does have an exemption from buy American under WTO treaties.

Buy America, which has been the subject of some discussion tonight and which will be the subject of our next debate, is an issue. I would like to clarify, because my colleague, I think, raised an infrastructure bill that doesn't exist yet. I would just like to point out that there is discussion of an infrastructure bill in the United States but there is nothing yet on the table.

Second, from where I sit as parliamentary secretary to the Minister of International Trade, working with Minister Ng, I can say that we certainly have not taken our foot off the gas. We continue to press our counterparts on this issue, and I imagine it's the same for you.

Ambassador, can you please let us know if your foot is still very much on the gas on this issue?

[Kirsten Hillman]

Is it on the gas on the issue of buy American?

[Rachel Bendayan, Liberal, Outremont, QC]

The issue is buy America.