Economic Relationship between Canada and the United States Committee on April 8th, 2021

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I'm going to put on my old Transport hat, because that was very much something that I was engaged in with the Secretary of Transportation in the United States. Where we harmonize with respect to regulations, we were indeed talking about the whole concept of autonomous vehicles and the very critical issue of privacy rights because of the environment in which autonomous vehicles would be operating.

I can assure you that for both Canada and the United States, when we talk about autonomous vehicles, we're not just talking about regulations with respect to how they operate. Because of the nature of autonomous vehicles, we're both very sensitive to privacy rights. That is part of the discussion that my successor, Minister Alghabra, is currently engaged in with Secretary Buttigieg.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Masse.

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

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, Minister, for being here this afternoon.

Minister, you were asked about the matrix in regard to the border reopening, what that looks like and what things you have to check off. Your answer kind of made it sound like it was a political decision, not a science-based decision.

Can you confirm that what goes on in regard to the decision around the opening of the border will be based on science? Or is it a political decision?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

It's first and foremost a scientific decision, and it's one that is based on the science with respect to COVID-19. We have to bear that in mind more than anything else—

[Randy Hoback, Conservative, Prince Albert, SK]

Okay. I'm sorry. I don't mean to be rude, but I only get five minutes

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

No, please go ahead.

[Randy Hoback, Conservative, Prince Albert, SK]

You also touched on the process you're using. It is similar to what we used for the USMCA, or CUSMA, negotiations. I was actually part of them. I worked very closely with Andrew Leslie at the time. We worked across party lines to talk about the Canadian-American advantage and how we work well together.

I see problems with that right now. First, you haven't assigned anybody to that role in your caucus. Second, we can't travel, and part of the process was face-to-face meetings. The U.S. has a new Senate. In fact, the Senate actually said no exceptions, if you look at the letter that 21 senators sent to the President. They didn't want to see any carve-outs, any exceptions.

How are we going to do the grunt work, the work that Mr. Masse, Mr. Easter and I were part of? How do we do that in light of the fact that we can't travel to the U.S. and can't visit?

I'm also very concerned when I start hearing from colleagues in the U.S. that they don't even understand the problem. When we were dealing with Line 5, for example, they didn't even realize that was an issue. What's your strategy to make sure that work gets done?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

You raise an important point. When we look at essential travel and essential workers, we look at the question of whether the job they do can be undertaken virtually as opposed to them having to be in situ. Sometimes that can be challenging, but sometimes, despite the fact that it's not as good as being there in place, it can be done virtually.

The other factor, of course, is the safety risks associated with having people, let's say, moving back and forth across the border—

[Randy Hoback, Conservative, Prince Albert, SK]

I'm sorry, but maybe you got me wrong. I'm not talking about travel. I'm talking about the outreach we did to have a successful conclusion to the USMCA. We had a team Canada approach, but we have an atmosphere now where we can't do that. We just physically can't do that. How do you take that reality and adjust your strategy to something new to reflect what you can or can't do?

I haven't been part of any discussions with regard to a new strategy concerning buy America. I don't think Mr. Masse has. I look at it as.... You just said we have a good friend now in the White House. We don't have Donald Trump; we have our buddy Biden. Buddies don't get you jobs, though; buddies don't create opportunities and buddies aren't relied on in the international context. That's where I'll leave it.

One other question I want to get to before I run out of time—

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Let me answer. We are talking to each other. We're doing it virtually, but we are talking to each other.

[Randy Hoback, Conservative, Prince Albert, SK]

That was the problem, though. The ministers were talking to each other during CUSMA, but they were not making headway. It was the conversations that Andrew Leslie, Brian Masse and I had—Erin O'Toole was down there too—that were moving the yardstick, and we never got credit for it.

As to the other question I wanted to ask you, what other allies do you have in the fight on buy America? Have you talked to our friends in the U.K.? Have you talked to Europe? Have you talked to Mexico? Have you created a nucleus of countries that will say to the U.S. that this type of process not only is going to hurt Canada, but also is actually going to hurt the global economy? What are you doing on the international scene to address buy America?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

We are dealing with the United States. The buy America policy, as it affects us, is the one we are concerned with. We are working bilaterally with the United States by reaching out, in a team Canada approach, to all the people who are influencers in the United States. They can help by understanding the strong link between our two countries, and they can help us to make the points we want to make so that there isn't undue protectionism between the two countries.

[Randy Hoback, Conservative, Prince Albert, SK]

Wouldn't it be helpful? Canada has very little ammunition, for lack of a better word, by itself. Wouldn't we be stronger if we had more of an international front with, let's say, the U.K. or France? They are going to have similar issues with buy America as ours. Why wouldn't we get together with them and put on a stronger face in that type of light?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Well, Canada and the United States have the largest two-way trade in the world. Roughly 75% of what we export goes to the United States. As a result of that, this is an issue we regard as being between Canada and the United States.

Thank you for your help during CUSMA. If I have not acknowledged it, thank you for your efforts during that time. I think our negotiations on CUSMA were extremely successful, and I think we came into the right place. We intend to continue to do that as we move forward.

Mr. Chair, may I fine-tune, not correct, something I said to Monsieur Savard-Tremblay?

This is about the question he asked me earlier.

I don't want to interfere with Randy's time.

[The Chair, Liberal, Raj Saini]

Mr. Hoback's time is up.

Go ahead if you want, Minister, but make it very short, please.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Savard-Tremblay asked me whether the United States intended to amend the list of products subject to the Buy America provisions. President Biden did indeed say that he planned to do that. However, we don't have the details, and we don't know what products he is talking about. We will have to wait a bit longer to find out.

However, it is true that the president said so. That is not a secret.

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

Thank you.

[The Chair, Liberal, Raj Saini]

Thank you.

For the final question we'll go to Mr. Sarai for five minutes, please.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Chair. Thank you, Minister.

Minister, you've heard this from some of the colleagues across the aisle as well. One of the successes of the CUSMA negotiations was a bipartisan, multipartisan, all-Canadian approach. I was part of the Canada-U.S. interparl that visited many congressmen, congresswomen, governors and senators to emphasize the amount of trade they had and that Canada was usually the largest trading block for most states in the U.S., and if not the largest, then the second-largest trading block.

In the same light, when it comes to procurement—and I've asked this before, so I'm not expecting an actual dollar figure—would it not be very important that we emphasize to American states, congressional districts, senators and otherwise how much procurement Canadian companies do in the U.S.? Also, vice versa, how many American companies do procurement in Canada? If they put buy America provisions on Canadian goods, and if Canada were to do the same, how much would be put at risk?

Has that been emphasized? Have GAC officials been able to collect that data? Perhaps you can let us know what you've been doing to get that message across to them.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you for your work. Passing those messages was an enormous outreach involving a lot of players south of the border.

When I was doing my part, yes, I can remember receiving sheets from GAC, from the trade side, that specifically talked in detail about how much trade was with that state, what products, how much they imported from Canada and how much they exported to Canada. Both sides of the ledger were provided, and that's the kind of information we were able to share with American lawmakers, with governors and with people in Washington so they realized it. Most of the time many of them admitted to not realizing just how extensive their linkages to Canada were.

Yes, you present both sides so they realize not only that is it important for them to be able to import certain products they want from Canada, but also how much their economy at the state level depends on being able to export to Canada as well.

[Randeep Sarai, Liberal, Surrey Centre, BC]

In the past, when speaking to your officials and trade officials, we've learned that the.... I think it was Mr. Verheul, who's here, who said it wasn't really a direct reaction to Canada but that this buy America is more of a reaction to other countries, particularly probably China and others who they may deem are dumping or flooding their market with cheaper procurement options, and they want to emphasize the United States-made products.

Can you also clarify, in your conversations with your counterparts in the U.S., that this provision is not intended to target Canadian goods but is intended to protect against others? Is that the case or not? Are they open to the idea of working with Canada to get an exemption for our procurement goods?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I think it was not intended. I'm going to interpret things here, but I don't believe the United States buy America policy was intended to be aimed at a particular country. I think it was a policy that the new administration decided to put in place.

Having said that, at the first encounter between our Prime Minister and the President, the subject was discussed, and it's been discussed several times since then. There is a realization in the United States that they would not want, through their policy, to have unintended consequences, because of the high level of integration in our supply chains between the two countries.

They are open to listening to us if we believe that something is having an unintended consequence. That is, in my opinion, a very positive position on their part, and it shows they're sensitive to the importance of maintaining strong, integrated supply chains between our two countries.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Sarai.

This portion of the meeting is now coming to an end.

Thank you again, Minister, for taking the time. Thank you also, Mr. Verheul. It's always good to see you. Thank you also, Mr. Grant, for taking the time to enlighten this committee.

We will suspend for a few minutes to onboard the next panel.

Thank you, again.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you.

[The Chair, Liberal, Raj Saini]

Welcome back, members. We are now in our second panel discussion.

With us today is Mr. William Reinsch, Scholl chair and senior adviser, Center for Strategic and International Studies. We also have here, from the Canadian Centre for Policy Alternatives, Mr. Stuart Trew, senior researcher. We're also hoping to have, once he's able to log on, from the Canadian Global Affairs Institute, Mr. Colin Robertson, vice-president and fellow.

Mr. Reinsch, we'll open the floor to you. I believe you have an opening statement. You can have the floor for five minutes. Please go ahead.