Foreign Affairs Committee on May 4th, 2021

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

I'm just wondering how Canada would stack up with other progressive countries in the world. We know that we have been a bit slow when it comes to permitting—for various reasons—so how would we stack up?

[Mark Agnew]

I don't have to hand the rankings of how we stack up. I would just say anecdotally that when our members are talking to us, we certainly hear vis-à-vis the United States that our system is less timely with the turnarounds, and that's the market that our companies would tend to benchmark against.

Certainly, if you're looking at where to place investments, the U.S. offers the closest substitutability for looking elsewhere to conduct your operations.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Professor, do you have just a brief comment?

[Yan Cimon]

I concur that the U.S. is the benchmark, but compared with some European countries, Canada should not fare so badly. I do not have [Technical difficulty—Editor]

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Thank you.

[The Chair, Liberal, Sven Spengemann]

Mr. Diotte, thank you very much.

Ms. Sahota, the floor is yours.

[Ruby Sahota, Liberal, Brampton North, ON]

How much time do I have, Mr. Chair?

[The Chair, Liberal, Sven Spengemann]

You have five minutes.

[Ruby Sahota, Liberal, Brampton North, ON]

Thank you.

I want to start off with some general thoughts. At the previous meeting on export permits, we heard from academics and civil society organizations. After listening to them, you really felt that Canada was willy-nilly providing export permits for almost every application. When you look at the numbers, you see that in 2019 there were 3,563 permit applications submitted to GAC and 3,201 of those were issued. One was denied, 35 were cancelled or suspended and 206 are still under review.

In large part, fewer than one per cent of cases annually are actually denied by GAC, but after listening to them, you felt that we didn't have stringent enough standards. After listening to people on the industry side, you're hearing that there's not enough transparency and that [Technical difficulty—Editor] permits are denied without industry really being aware of why, or they're caught off guard.

There was a recommendation made that we should have an arm's-length committee. I didn't hear a lot of advocates for that in the last panel. What would you think about having an arm's-length committee that would perhaps not address political considerations, which I know that Mr. Agnew also mentioned? There are always political considerations when perhaps making [Technical difficulty—Editor] or in consideration when it comes to these permits, but there's been a lot of desire for us to remove that political conflict, and that perhaps the test is also too stringent and any risk whatsoever should be enough reason to deny applications, so.... I feel like we're going in circles with the arguments on two sides between civil society and between industry.

How do you square the circle? That question is going out to anyone who would like to attempt it.

[Mark Agnew]

In terms of the metrics, I know that in the previous panel there had been a discussion around the rejections. Where our head is at is a bit more on the processing times and the service standards, because even if you're late but still with a favourable decision, you still run into reputational risks and penalties. The metric we're looking at is a bit different from the one the member cited.

In terms of the role of an outside panel, I think we would want to see a bit more detail as to what that mandate would be. We fully agree with what's been said earlier, which is that such a panel should not become an outsourced body for decisions on individual applications, but certainly, if there's a willingness to bring folks together to talk about the system as a whole, then that could be something that is worth exploring, again [Technical difficulty—Editor] seeing the details.

[Ruby Sahota, Liberal, Brampton North, ON]

You think there should be an outside panel to review the processing of GAC applications, but not an actual outsourced body for reviewing the applications themselves?

[Mark Agnew]

Well, I would say it's qualified support for there being an external review of the system as a whole, but, again, the big qualification is that we'd want to see the terms of reference, the composition and the specific mandate of it. We're not in the market for a photo op or talking shop. We welcome substantive discussions.

[Ruby Sahota, Liberal, Brampton North, ON]

Is there anyone else?

[Yan Cimon]

I would say that adding committees to a process will not make it more effective. The whole process has to be reviewed, meaning the way in which questions are asked, which points are up for debate, the parameters used for that debate, and the way in which decisions are reached.

One objective is to come to a conclusion quickly, because the industry bears the costs. Another objective is to come to a conclusion that matches Canada's policy and Canadian values. That is a very difficult balance. As a result, simply adding a committee would reduce the efficiency of the process.

[Ruby Sahota, Liberal, Brampton North, ON]

It is indeed.

Your issue is with lengthy procedures. If there were more or quicker denials, instead of lengthy procedures, would that be a better outcome?

[Yan Cimon]

No, not necessarily. For quicker denials, yes, but for more denials, not necessarily.

[Ruby Sahota, Liberal, Brampton North, ON]

Okay.

[The Chair, Liberal, Sven Spengemann]

Thank you very much, Ms. Sahota.

Thank you, Professor Cimon.

We will now go to Monsieur Bergeron.

Mr. Bergeron, the floor is yours for two and a half minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Professor Cimon, I would like to continue our conversation where we left it a few moments ago.

My impression is that we are walking into a dead end. As the saying goes:

“Damned if you do, damned if you don't.”

If we apply our own principles, we may well find ourselves overtaken by our own allies and, if we are part of a multilateral policy with our allies, we may well be overtaken by less scrupulous states in terms of arms sales to countries that are equally unscrupulous.

Do we have a way out of that?

[Yan Cimon]

We have a way out if we take a measured and balanced approach. We were talking earlier about transparency. If we have criteria that are set, clear, easy for the industry to accommodate and for the general public and everyone involved to understand, we will have taken a great step forward. It would help the industry, the public and the decision-makers all at the same time. As a consequence, it could even help us to become a model, because Canada really likes showing that our industry and our way of working are based on ethics and human rights. This would be an additional way to prove it.

[Stéphane Bergeron, Bloc, Montarville, QC]

If being a model means that we lose market share, what have we gained?

[Yan Cimon]

Becoming a model does not inevitably mean losing market share, quite the contrary. We can have processes and work multilaterally without automatically being outdone.

We just have to be very strategic in the way we help our companies position themselves in supply chains.

[Stéphane Bergeron, Bloc, Montarville, QC]

You were telling us that, if we act unilaterally, we may well be outdone, not only by less scrupulous states, but even by our allies.

Do we have to go it alone or do we go with NATO? Even if we act together with NATO, what guarantees do we have that we will not be outdone by less scrupulous states?

[Yan Cimon]

That is an excellent question.

I would really like to have a precise answer, but I do not.

I can suggest a possible answer, however. Working multilaterally still allows us to limit the pitfalls and the possible losses for our companies.

That is not the case if we just work unilaterally.

[The Chair, Liberal, Sven Spengemann]

Thank you, Mr. Bergeron and Professor Cimon.

We'll now go to Ms. McPherson for our final round.

You have two and a half minutes.