Economic Relationship between Canada and the United States Committee on April 1st, 2021

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

But, Minister, what will you do differently? We haven't been successful in preventing them in the past, so what can we do differently that will protect us in the future?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I think I'm not going to take lessons from the Conservatives, who asked us to capitulate in the negotiation of NAFTA. I think what I'm going to do is work in a team Canada approach, as we have done and demonstrated over the last five years, to stand up for Canadian interests. We successfully had steel and aluminum tariffs removed. We are working with the American administration. My colleagues and I at all levels are working, including the ambassador. We are going to work very hard to stand up for Canadian interests, just as we have done the last five years. I will be doing that today and every day going forward.

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

Thank you, Minister.

[The Chair, Liberal, Raj Saini]

We will now move to Mr. McKay for five minutes.

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

Thank you.

Minister, you'll be pleased to know I have no CORE questions for you today.

I don't know whether to direct this question to you or to Mr. Verheul, who is deeply involved in the negotiations of NAFTA 2.0. What puzzles me in all of these buy America or buy American or executive orders, etc., is that by and large the law provides that a treaty prevails over everything. NAFTA 2.0 prevails in all matters pertaining to trade. Therefore, I don't quite get what the president's authority, or Congress' authority for that matter, is to override a trade treaty.

Again, I don't know if the second, or really the flip, side of the question should be directed to you or Mr. Verheul, but if the Prime Minister did exactly the same thing as the President has done, and issued an executive order, or if Parliament passed a buy Canada or buy Canadian legislation, would that stand up in any kind of trade dispute?

I'll leave it there and ask either one of you to respond.

Thank you.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you so much [Technical difficulty—Editor]. I'm pleased to get questions from you, so here we go.

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

Sometimes more than others.

[Mary Ng, Liberal, Markham—Thornhill, ON]

No, no—always. As colleagues, of course, it's always about working towards solutions, so I'm totally okay with all of that.

With respect to the question, I guess the way I would respond is this. I had an opportunity, of course, to raise this issue with the new U.S. trade representative, Ambassador Tai. The administration is one that will be respectful of trade agreements, whether it is the new CUSMA between the U.S., Mexico and Canada, but it also will be a proponent for multilateral rules-based trade. I share that because it would be our expectation that the U.S. will continue and follow through with that.

I think that what the work we are doing here in using a team Canada approach really is about—at many levels and through many interlocutors, including businesses and workers—is to demonstrate and make the case about how integrated our supply chain is. In relying on the Canada-U.S. supply chain, whether it's infrastructure, energy or rolling stock sectors, we really are able to make the case on that road map to Canada in the U.S., because whether it's construction materials that are sourced from Canada and are typically lower-carbon materials, or our energy and our electrical systems, which are among the cleanest in the world, or Canadian manufacturers that manufacture highly efficiently and generally emit less carbon, and these Canada-U.S. supply chains are so integrated—

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

I'm not disputing that the Canada-U.S. supply chains are integrated and that we have terrific companies, etc. What I would like to know is what is our legal position when, on the face of it, the Government of the United States of America breaches a recently negotiated treaty that Mr. Verheul and many of his colleagues were intimately involved in. Whether it's President Biden, who I like a great deal, as do many of us, as opposed to the predecessor, I just don't understand how he gets to say what he gets to say and that ends up being where we're at. I'd be curious as to what our legal position is.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Well, our position is that we are working with the U.S. administration to ensure that as they are implementing any provision there is no unintended consequence that will occur and will affect the U.S.-Canada supply chain.

I know that you're going to have Steve here in the next session—I think he's here for an hour and the officials are here for the next hour—so I guess he could take the legal question now or he could take the legal question in the next session. It's up to you.

[The Chair, Liberal, Raj Saini]

Unfortunately, he'll have to take it in the next session. We're out of time.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Oh. All right. There you go.

[The Chair, Liberal, Raj Saini]

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

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

Thank you.

Just yesterday, President Biden promoted the first part of his infrastructure plan, the first part being $2 trillion of a total of $4 trillion over 10 years. The plan states that all contracts would go to U.S. companies and benefit U.S. workers.

As part of this infrastructure plan, do you think there will be new U.S. content requirements? If so, to which products would they apply?

[Mary Ng, Liberal, Markham—Thornhill, ON]

The announcement was an announcement, so I'm saying to my colleagues here, as well as to Canadians, that if there is an effort to expand or introduce new domestic content requirements, we will absolutely work to ensure that they do not apply to Canada or they don't affect Canadian supply chains. When we're talking about American infrastructure, in many of the meetings we're having with American stakeholders, as well as Canadian and American businesses, we make the point that whether it's a waste-water project, for example, as happened last time.... A waste-water project gets initiated in the U.S. There are water filters that are made here in Canada, made by General Electric in Canada. Delays were caused as a result of some of those content requirements, or they were going to be spending a lot of money on transit. Many American manufacturers are actually part of this supply chain in Canada.

We're going to continue to share these many examples, because it's American companies that are also talking to me and American workers who are talking to us. I think the effectiveness of a team Canada approach, and a strong one, will hold us well. We want to be sure that it isn't affecting Canadian supply chains, because it also can affect American workers and businesses as well. This is why I think it's really important to make sure that we are sharing what that integration is and to remind our American friends and colleagues that Canada is also the top customer for 32 states. We want to make sure that we are building back better in this relationship so that it really benefits Canadian workers and Canadian businesses that also [Technical difficulty—Editor] U.S. businesses as well.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Savard-Tremblay.

We will now go to Mr. Cannings for two and a half minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I have a company in my riding, Frankia Fertilizers, that develops and export organic fertilizers to the United States. They obviously have to compete with American companies there. They interact with federal agencies on both sides of the border, and with state agencies. One of the big stumbling blocks they face is the time it takes to get a new product registered with both the CFIA and the Canadian intellectual property office. The CFIA takes 465 working days to respond, while the performance target for the Canadian intellectual property office for trademarks is 22-plus months. That compares with just a few weeks or months for American regulators that they deal with.

The people at Frankia Fertilizers are not objecting to these regulations around testing and registration. They simply feel that these regulations should come with enough funding support so that their applications can be dealt with in a reasonable time frame.

Can you commit to getting more resources to these Canadian agencies so that Canadian companies aren't at such a disadvantage?

[Mary Ng, Liberal, Markham—Thornhill, ON]

That's a really important question, particularly for me. The core of my mandate is about helping Canadian businesses grow domestically but also in exporting and making sure that regulations and the alignment of such, and the speed of such, support our businesses in that work. That trade facilitation is what my department and I have been working very seriously on.

I'll give you an example. The recent CanExport funding that we have put out is $75,000 worth of funding. We've changed it in the course of this pandemic precisely to address what you just talked about, which is some additional funding so that the companies will get that to deal with any barriers that might have come up to trade facilitation during the pandemic. It would also help them directly with IP support as well. That's one example. It is something that we are actively working on. We have to make sure that we are working in this horizontal way to support our businesses.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Cannings.

We'll now go to Mr. Strahl for five minutes, please.

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

Thank you very much, Mr. Chair.

In my neck of the woods here, Washington state is now offering vaccines to 16-year-olds. We've heard cases of the United States actually offering vaccines to zoo animals. We're still at people in their seventies and eighties booking appointments well into the future. We're into more lockdowns here now because, quite frankly, we're so far behind the eight ball when it comes to vaccines.

I was very disappointed to hear that there was no plan to address the border issue. I would argue we can't simply wait to catch up on vaccines, then. We talk repeatedly about integrated supply chains, but that includes more than just the groceries. As my friend Mr. Lewis said, it includes people. It includes technicians, sales people, managers. As we fall further and further behind on vaccines, we lose more and more business to the U.S., which is able to operate and open more rapidly than us.

I'll ask again what Mr. Lewis asked. Is there a plan? Are there metrics in place? Are you in active negotiations to come up with a way for us to stem the flow of jobs to the United States while we catch up on vaccinations, on which we are so far behind the United States right now?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Let me start where you ended, with respect to vaccines. I just want to assure you, and Canadians, that we are on track to get 43 million vaccines by the end of June, and nothing is more important to us than working urgently to have vaccines in the arms of Canadians. Of course, I am working in a whole-of-government approach with my colleagues to be sure that the very careful balance of fighting COVID-19 here is done, while at the same time, working to support businesses on that road to recovery.

We've also taken some creative approaches to helping businesses grow and get into the international markets, using opportunities like virtual trade missions, literally around the world. We've done several throughout this pandemic and businesses are benefiting—

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

Thank you, Minister. I have such a limited time, and I was asking about the border.

I will go back. You keep talking about this team Canada approach. Quite frankly, I think the approach this government has taken has failed us on Keystone XL, it's failed us on softwood lumber and it's failing on Line 5. I'm just wondering why.

If we do the same things over and over again, I think we're living in a fantasy land if we think [Technical difficulty—Editor] haven't worked in the past, simply because there is a new administration in Washington. This administration has been very clear, as Ms. Alleslev said, about what its priorities are. When it made that known to us previously on the Keystone XL pipeline, the Prime Minister said that it was a campaign commitment the President made and he's going to keep it.

He has also made a campaign commitment on buy America, so what makes you think that we are going to be successful this time around, when on Keystone XL, Line 5 and softwood lumber, the government has failed to get the agreements and the results that Canadians expect them to get on those files?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Let me start with softwood lumber. We absolutely are going to stand up for Canadian businesses. We believe that the way forward is a negotiated agreement. I raised this issue with both the President as well as the new U.S. trade representative.

The cost of lumber is such that it is driving up housing prices, and it's harming both the sector and its workers. I am keen to continue this work with the new administration, and we'll press for a negotiated agreement around softwood lumber.

Around buy America, as I said, if there are efforts to expand or introduce new domestic content requirements, we will absolutely work to ensure that they do not apply to Canada, and they do not apply to and affect Canadian supply chains.

In my interaction, as well as that of our government, we have agreed that we are going to work together to make sure that there aren't unintended consequences to our supply chains. This is work that continues. We have successfully worked in a team Canada approach with many interlocutors from business to labour to government officials.

I do that work, along with my colleagues, but I would also invite all of us, as parliamentarians, to take that team Canada approach. Let's work together to make sure that we are advancing this important economic and bilateral relationship to the benefit of our businesses and our people.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Strahl.

For the final question, we go to Ms. Romanado for five minutes, please.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you very much, Mr. Chair.

Thank you, Minister, for being here.

I just wanted to reflect on the last member of Parliament's question with respect to Line 5. We are on meeting number seven, and the six previous meetings of this committee have been dedicated to Line 5 and to studying it. In no way have we heard that this was not a very active file. At every level we are engaging with our American counterparts to prevent the closure of Line 5. I just wanted to reiterate the position of Canada and the federal government in that regard.

Minister, my riding of Longueuil—Charles-LeMoyne is approximately 45 minutes from the Saint-Bernard-de-Lacolle border. In fact, in 2015 the then mayor of Longueuil signed an agreement with the mayor of Plattsburgh to increase collaboration with respect to transport, which is a major industry in my riding, and aerospace. Aerospace is a huge industry in my riding. In the agglomeration of Longueuil, 80% of the businesses that export actually sell to the United States. The agreement and relationship between Quebec and the United States is incredibly intertwined. As you know, hydroelectricity is one of the main exports from Quebec to the United States, especially along the eastern seaboard.

Given the road map for renewed U.S. partnerships, the discussions about zero-emission vehicles, and conversations about clean electricity transmission, I wanted to give you an opportunity to reflect on some of the opportunities you see going forward for Canada and the United States in these areas of clean tech.