Foreign Affairs Committee on June 1st, 2023

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

Thank you all for being here today. I know it's a large panel.

I'd like to pick up on a brief line of questioning I had in the previous panel. Canada announced that four individuals and one entity are on the sanctions list because of grave and serious crimes that are being committed against the Uyghur people in China. We have listed those individuals and one entity. What are the impacts of that? Can anybody respond to that? What are the real impacts in terms of what has happened as a result of those listings?

[Jeremy Weil]

I would just intervene to say that it's probably a question that would have been better put to Global Affairs Canada in the previous panel. I don't think that I, from where I sit at the department, or my enforcement colleagues would have any information to that effect.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

The reason I am asking this panel is that we learned that Global Affairs chooses who is on the sanctions list, but I believe you are responsible for the enforcement of it. Am I correct?

[Richard St Marseille, Director General, Immigration Policy and External Review, Canada Border Services Agency]

Thanks for your question. I can speak to that from the immigration perspective in particular.

From an immigration perspective, as the committee would know, we were just here a couple of weeks ago on Bill S-8. There is a legislative gap on the inadmissibility side of the sanctions provision. Sanctions issued for breach of peace and international security do not trigger inadmissibility today. If Bill S-8 were to receive royal assent, it would trigger inadmissibility. Similarly with respect to entities, that's also a gap that would be closed if Bill S-8 received royal assent, which aligns with a recommendation from Parliament in a 2017 report.

If I may just take a moment to address the interdepartmental coordination aspect, from an immigration perspective, as found in IRPA, the policy responsibility for inadmissibility due to sanctions rests with the Minister of Public Safety. It's the CBSA that will do interdepartmental coordination with GAC. We consult on the development of the regulations, and then we ensure that our systems with the immigration department are updated to ensure that lookouts are entered for people who are inadmissible so that we are all able to effectively enforce those provisions on the immigration side.

[Annette Ryan, Deputy Director, Partnership, Policy and Analysis, Financial Transactions and Reports Analysis Centre of Canada]

Mr. Chair, if I could respond on the financial side from a FINTRAC perspective, I would build on the response from my colleague at GAC, who spoke about the economic measures having an impact commensurate with the economic relationship with Canada.

To the extent that the individuals you speak about have financial dealings with Canada, we in FINTRAC would have, essentially, measures in place to ensure that financial institutions build these considerations into their risk management frameworks, that they take appropriate measures to limit their business dealings with such individuals, and that they take appropriate steps to report any problematic transactions or ownership of property to the RCMP in the case of sanctions.

I would offer that, among ourselves, this is quite clear. I think we can speak to that in turn as we go along.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

Thank you.

I'm looking at the list right now of the four individuals and one entity. The entity in question, in the Uyghur region, was the Xinjiang Production and Construction Corps Public Security Bureau. This entity is involved in construction. It is on our sanctions list.

I'm curious to know if there is a dive being done in terms of Canadian companies that may have relationships. If so, are they being put under the microscope? If people are inadverently, let's say, entangled with that company, is there something that's being done to disentangle them?

[Annette Ryan]

I would say that if the entity has financial relationships with Canada, the provisions would apply via private sector partners in the first instance. If those relationships are through a trade channel, that would be something that CBSA could speak to.

[Fred Gaspar]

Yes, and on that point, I can confirm that those kinds of companies form part of the type of analysis that our intelligence program does in issuing lookouts and targets for inbound imports. That is definitely a key component of import declaration lists against which we run our targeting program.

That is something that's core to what we do, and it's information we share and exchange with our international trading partners per our customs mutual assistance agreements, where appropriate, to ensure that there's a cohesive approach.

[Sameer Zuberi, Liberal, Pierrefonds—Dollard, QC]

We've heard that one shipment that originated from the Uyghur region was stopped, but was later permitted to enter. This, I know, is not specific to our testimony. I hope to hear what areas of improvement you have for us.

I'm sorry. I used up all my time, but maybe in your other answers you could share what areas of improvement you have for us.

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Thank you.

Next we go to Mr. Bergeron.

You have six minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

Sometimes, applying a measure indiscriminately leads to the opposite of the desired effect. In fact, that was the case with part of the order implemented in March 2022. It subjected all goods coming from Russia or Belarus to a 35% customs tariff. It was part of the sanctions Canada levied against Russia after it invaded Ukraine.

However, a significant amount of fertilizer imported for farming in Canada and Quebec came from Russia. In Quebec, nearly half of imported fertilizer came from Russia. That means our farmers had to pay the price for importing those fertilizers. It led to increased farming costs in Canada and Quebec, so much so that Russian agricultural products became more competitive than Canadian products on international markets.

When the Canadian government became aware of the situation, it promised to compensate Canadian and Quebecois farmers. However, there has not yet been any compensation. It would seem that there's a dialogue between grain farmers and the government of Canada. However, there are currently no measures to support our farmers, so much so that Canadian agricultural products are less competitive than Russian products on international markets because of this measure.

The sanction intended to penalize Russia, but we actually got the opposite effect. We penalized ourselves and favoured Russia.

Where are we at in this file?

[Fred Gaspar]

It's certainly true that importers are responsible for paying applicable duties and taxes, be they duties that are normally ascribed through the customs tariff or duties that are done through the Special Economic Measures Act. It is certainly true, and there are unintended consequences when that occurs.

I can't speak to any policy considerations that the Government of Canada may have in that regard or with regard to compensatory measures. You're absolutely correct that it is the importer who is liable for paying the applicable duties.

[Stéphane Bergeron, Bloc, Montarville, QC]

If I understand correctly, you're not able to enlighten us about the state of negotiations between Canadian grain farmers and the government of Canada on reducing the unintended effects of applying this measure to everyone, which not only punishes our farmers, it boosts Russian agricultural products on international markets.

Is that right?

[Fred Gaspar]

That's right. I can't give you any follow-up on it right now.

[Stéphane Bergeron, Bloc, Montarville, QC]

Very well.

Is it possible for you to check with the appropriate people and send us the answers, if any?

[Fred Gaspar]

Yes, we will follow up with our colleagues and communicate with the committee.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you very much.

In the last update on sanctions, the RCMP provided details on several points, including "there have been no reports of frozen assets."

What are we to make of this somewhat enigmatic statement?

[Supt Denis Beaudoin]

First of all, we need to understand the RCMP's role when a person or company gets designated. When Global Affairs Canada designates a person, banks search their systems and check to see if they have assets there. I'm using banks as an example, but all Canadian companies are responsible for conducting those checks.

Then, they have to freeze said assets and notify the RCMP. In those cases, we record everything frozen by financial institutions. The sentence you read means we don't have any information indicating that financial institutions or other Canadian companies froze any assets.

[Stéphane Bergeron, Bloc, Montarville, QC]

Very well.

We have one of two things: To date, either no assets were seized, or no entity responsible for seizing or freezing assets sent you any relevant information.

Is that right?

[Supt Denis Beaudoin]

That's right.

[Stéphane Bergeron, Bloc, Montarville, QC]

In that case, regarding Haiti, how do we find out if there's been any follow-up in applying sanctions to a certain number of individuals?

[Supt Denis Beaudoin]

What do you mean by "follow-up"?

[Stéphane Bergeron, Bloc, Montarville, QC]

We applied sanctions to a certain number of individuals involved in corruption and weapons trafficking, specifically in Haiti. Announcing them is well and good, but we expect them to be applied.

So, I'd like to know if anyone can update us on how those individuals are being sanctioned. I think Canada has proven its virtue and will by applying the sanctions. That said, since the RCMP has no information on those individuals' seized or frozen assets, I'd like to know who can update us on it.

[Supt Denis Beaudoin]

I think Global Affairs might have been in a better position from the outset to explain the reasons leading to those individuals being sanctioned.

[Stéphane Bergeron, Bloc, Montarville, QC]

I don't want to know why. That's not the question.