Evidence of meeting #105 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was businesses.
A recording is available from Parliament.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Do we get complaints about procurement or opportunities given to aboriginal companies for procurement? Do we get complaints from outside?
Executive Director, Strategic Policy Development and Integration, Department of Public Works and Government Services
That would be a question that probably would be best answered by our folks over at Indigenous and Northern Affairs Canada. The reason I say that is that an aboriginal business under PSAB must be registered with our colleagues in INAC—
Conservative
Executive Director, Strategic Policy Development and Integration, Department of Public Works and Government Services
—and then those types of complaints would go more to them.
Conservative
Kelly McCauley Conservative Edmonton West, AB
It's a set-aside. Do we get complaints from other countries saying we're doing this unfairly with such set-asides?
Executive Director, Strategic Policy Development and Integration, Department of Public Works and Government Services
In my experience, no. It's a recognized derogation from the general rules. In my experience, the answer to the question is no.
Member, Canadian International Trade Tribunal
I would refer you, Mr. Chair, to the case of Avaya back in 2011. We had a complaint from a foreign company as to the scope of that, and that was the issue.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I just want to make sure other countries are not using that to try to delay stuff or interfere with our internal procedures.
Member, Canadian International Trade Tribunal
That was dealt with in 2011, and it was shut down.
Conservative
Erin Weir NDP Regina—Lewvan, SK
Thank you.
Thanks to our witnesses. As someone who also has a small amount of Swiss-German heritage, I'd particularly like to welcome Mr. Wildhaber.
I want to ask the panel about environmental policy and procurement. It emits about five times as much carbon to produce a tonne of steel in China and ship it here than it does to produce it at the steel mill in Regina. Similarly, more carbon is emitted in producing cement in China and transporting it here than in producing it in Canada.
I'm wondering if federal procurement policy can take account of the differing carbon content of goods as a legitimate environmental policy that is exempt from trade agreements, or would that be considered some sort of discriminatory local preference?
Perhaps I'll start with the tribunal.
Member, Canadian International Trade Tribunal
I think you have to take it. I don't think it's in our—
Director, Procurement, Trade and Environment, Department of Foreign Affairs, Trade and Development
As Ana mentioned earlier, our trade agreements allow for provisions for the conservation of natural resources and the protection of the environments to be built into the tendering process. These would be in the form of technical specifications whereby whoever is carrying out the procurement would include technical specifications around the good or service being procured. The specifications could include environmental criteria in terms of the environmental performance of the good or service being procured.
The trade agreements allow for that, provided we're applying it in a non-discriminatory way. We cannot say you cannot procure steel from, say, this country that's a trade partner because we think that their steel is not produced in an environmentally sustainable way. The specifications must be very much tailored to the good or service specifically.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay, so the Government of Canada could specify that it wants to procure the cleanest steel, or that it will only buy steel with carbon content below a certain limit. If China managed to produce steel within that limit, we would have to accept it, but we could enforce those environmental standards on federal procurement.
Director, Procurement, Trade and Environment, Department of Foreign Affairs, Trade and Development
Yes. I was going to say nothing in our trade agreements would prevent that. Whether we have domestic regulations or policies that would conflict with that approach is not for us to say, but there's nothing in our trade agreements.
Executive Director, Strategic Policy Development and Integration, Department of Public Works and Government Services
Perhaps I will supplement the response by saying it's very early on. The principles are engage early, engage meaningfully, and engage often. It's very early on in the stage of setting procurement requirements that the requirements for steel, for example, are set, as well as the nature of the steel: what it is, what type of content it has, and so on and so forth.
In terms of environmental considerations, I'm sure PSPC, for example, would be looking at setting targets relating to GHG emissions. We currently have 40% reduction of GHG emissions. We're looking at cutting emissions from our buildings and fleets. Using 100% clean power is our target for the year 2025. We're scaling up clean procurement, for example, looking not only at ourselves at the federal government level but also at provinces and territories.
There are various ways we can accomplish this, as long as, as Mr. Marier said, it's in accordance with our trade agreement obligations and we're not going to run afoul of those obligations.
NDP
Erin Weir NDP Regina—Lewvan, SK
Right. Exactly.
Two months from now, the federal government is going to enforce a carbon price across Canada, which of course will somewhat increase the cost of steel, cement, and other products manufactured in Canada. It won't increase the cost of imported steel and cement.
Would it be possible for the government in its procurement policy to either be willing to pay a bit more for Canadian products to take account of that carbon price, or to add some notional amount to bids from outside of Canada to try to create a level playing field?
Director, Procurement, Trade and Environment, Department of Foreign Affairs, Trade and Development
It sounds like that would provide some preferential treatment to Canadian suppliers, and that is what the agreements do not allow.
NDP
Erin Weir NDP Regina—Lewvan, SK
If it's applying the same price to imported goods as is being paid by Canadian suppliers, how would that be considered discriminatory?
Director, Procurement, Trade and Environment, Department of Foreign Affairs, Trade and Development
Those situations would have to be considered by those who are carrying out the procurements. If there are technical specifications that are configured around the good or service being procured that are done in a way that is consistent with our trade obligations, then we have a lot of scope to do things, provided we're not discriminating on the basis of the origin of the good or service.
It all comes down to where the good was produced. If there's something in the bid process that gives some kind of preferential treatment to goods from a certain part of the world versus others, then we start getting into conflicts with the trade agreements.
Executive Director, Strategic Policy Development and Integration, Department of Public Works and Government Services
I'll echo my colleague's comments—it comes down to the procurement requirement itself, what benefits you're trying to achieve under the requirement, and making sure those are consistent with your treaty agreement obligations. To the extent that you can allow for that, then yes. To the extent that it's not allowed, then no.
NDP
Erin Weir NDP Regina—Lewvan, SK
I appreciate this is getting a little bit beyond procurement, but since I have all these international trade experts before me, I am wondering about the feasibility of generally applying Canada's carbon price to the carbon content of imports and rebating it on Canadian exports. Right now, we apply the goods and services tax in our own economy. We also apply it to the value of imports coming in, and we rebate it on the value of exports going out. Would it be possible under international trade agreements to do the same thing with carbon pricing?
