Evidence of meeting #30 for Industry and Technology in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was china.
A recording is available from Parliament.
Conservative
Liberal
The Chair Liberal Ben Carr
Colleagues, just one moment. I sense we have a little bit of tension brewing. I have a point of order that I'm going to address.
Ms. Borrelli, I've paused the clock so that you won't lose time on the matter.
Madam O'Rourke, you have a point of order.
Liberal
Dominique O'Rourke Liberal Guelph, ON
Thank you, Chair Carr.
We've frequently had the vice-chair use a similar line and tone in questioning, and so there's nothing untoward in terms of my colleague's interaction.
Liberal
The Chair Liberal Ben Carr
Thank you, Madam O'Rourke. I didn't hear a point of order in that.
Madam Borrelli, you are, of course, free to use your time as—
Mr. Ma, go ahead on a point of order.
Liberal
Michael Ma Liberal Markham—Unionville, ON
Well, I obviously have been accused in public. I'd like an apology from the member from the other side.
Liberal
Liberal
Michael Ma Liberal Markham—Unionville, ON
Well, give me any evidence that there's any violation that requires an apology from me or on my behalf.
Liberal
The Chair Liberal Ben Carr
Mr. Ma, I think we're getting into a bit of debate at the moment.
Ms. Borrelli, I might ask, just for the sake of allowing us to get back to our line of questioning, that we focus, if possible, on the substantive content and nature of the discussion before us. With that, I'm going to return the floor to you, with four minutes and 52 seconds remaining of your five minutes.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Well, I'll continue with my apology for the behaviour of the member across the aisle. You're giving very good testimony.
Liberal
Michael Ma Liberal Markham—Unionville, ON
On a point of order, I did not ask you to represent me, to apologize, though. Thank you.
Liberal
The Chair Liberal Ben Carr
Colleagues, it's obvious that there is some disagreement about the language being used. I think we can move past this.
We have two witnesses before us who are offering some insight into an important study that we asked for. I would suggest that, instead of focusing on the internal dynamics among members, we direct our questions to the witnesses before us, in an attempt to gain some further insight into the matters before us.
Ms. Borrelli, I turn the floor back to you.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Thank you, Chair.
Ms. McCuaig-Johnston, my job as a parliamentarian is to protect Canada, not to protect a hostile foreign country. My questions are going to be in regard to the ramifications in Canada from this importation of Chinese electric vehicles.
When you combine the labour cost gaps—89% to 90% of the labour costs in China are paid off with subsidies—with state subsidies and the access to capital that the Chinese have, is it accurate to say that this is not traditional competition for Canada, but a state-backed industrial strategy that Canadian companies simply can't match?
Senior Fellow, University of Ottawa, As an Individual
Canadian companies could never match the labour costs of China, even if there weren't subsidies in China, which there are at many levels. We see that in where they choose to manufacture. When I say manufacture, I use that term loosely, because what they do is assemble. They bring the cars over to Brazil, Hungary or Spain, where wages are low and assemble in a very highly roboticized factory. There aren't the same numbers of highly paid unionized jobs that we see in Canada.
When BYD went into Brazil, it said it was using Brazil as its wedge or entry into South America. Then it said it's going to use Canada as its entry into North America. It was asked if it would do a joint venture, and it said no. A week and a half ago, it announced it will not do a joint venture in Canada. They want to do their own assembly here in Canada.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
The real issue is not about competitiveness but whether or not Canada is willing to allow its workforce to be displaced by a foreign one.
Senior Fellow, University of Ottawa, As an Individual
This is what we see in Europe, where the cars have been brought in and they're priced 10% to 15% below the competition, just enough to make the sale. They're displacing not just EVs in that market but also combustion engines and even used cars. This is what will face Canada.
It's suggested that 70,000 cars aren't very many. That's 70,000 a year, and we can be sure that within a year, the Chinese embassy is going to be pushing our officials to move that number higher.
Conservative
Kathy Borrelli Conservative Windsor—Tecumseh—Lakeshore, ON
Is it fair to say that without a change in policy direction, Canada risks losing its domestic and manufacturing workforce over time?
Senior Fellow, University of Ottawa, As an Individual
I think that could happen. It depends in the longer term on how many are allowed in and whether there are joint ventures. Joint ventures might work with a lot of guardrails, such as technology transfer, QNX software and the western company owning more than 60% of the joint venture.
I've done a six-year study in China of joint ventures and Canadian technology joint ventures, and every single one of them has had serious problems, so I'm not optimistic about joint ventures. If we do them in Canada, there might be hope if they're well negotiated, but if they're joint ventures in China, I just wouldn't do any more, because they've been so problematic up until now.
Liberal
The Chair Liberal Ben Carr
Thanks, Ms. Borrelli.
Madam O'Rourke, the floor is yours for five minutes.
Liberal
Dominique O'Rourke Liberal Guelph, ON
Thank you very much, Mr. Chair.
Ms. McCuaig-Johnston, I have a couple of yes-or-no questions.
First, I'm thrilled to hear that you're supportive of the Canadian government's automotive strategy and its investment in the EV supply chains.
I'm curious, given your having worked at Industry Canada, whether you also support the strategic response fund, the regional tariff relief initiative and the productivity superdeduction, all of which support Canadian manufacturing.
Could you give me a yes or no?
Senior Fellow, University of Ottawa, As an Individual
Yes, absolutely.
Liberal
Dominique O'Rourke Liberal Guelph, ON
Wonderful.
The other piece I'm curious about is that the Minister of Industry said that, through the Investment Canada Act, we could require Canadian parts, technology and inputs, as well as labour constraints, and we could also reduce any sort of risk to software. Is it your understanding that all of these concerns could be addressed through the Investment Canada Act?
Senior Fellow, University of Ottawa, As an Individual
I don't think they could all be done through the Investment Canada Act. That would be one tool to use. One of the problems with technology transfer, which I know Minister Joly has talked about, is that in China there's a law that the government and governmental authorities are not permitted to request that Chinese companies share their intellectual property with foreign firms, ever. That would mean there could not be technology transfer to Canada or a western company.
Liberal
Dominique O'Rourke Liberal Guelph, ON
Okay, but we have some tools to meet some of the concerns that you've raised.
Senior Fellow, University of Ottawa, As an Individual
There are some, yes.