Industry and Technology Committee on May 25th, 2026

[The Chair, Liberal, Ben Carr]

Good afternoon, everyone.

I hope you had a good two weeks in your ridings.

We are here for two hours this afternoon. The first hour will be with Minister Joly.

She will talk to us about a number of things about the Department of Industry.

We have officials who are going to stick around for the second hour.

I can confirm that all the audiovisual tests have been done.

Colleagues, this is pursuant to Standing Order 81(4) and the motion adopted by this committee on Thursday, March 12, 2026, for us to commence a study on the main estimates. Pursuant to Standing Order 108(2), a motion was adopted by us on that same day to study the subject matter of the supplementary estimates 2025-26.

With that, Minister, I'll give you the floor.

[Mélanie Joly, Liberal, Minister of Industry]

Thank you, Mr. Chair.

It's a pleasure to be here.

We're going through a moment right now of profound global transformation, as we know. We're living through a period of significant economic change. Around the world, governments are moving quickly to secure supply chains and protect strategic industries, and trade patterns are shifting. We all know that. Uncertainty is no longer the exception; it's the environment in which we operate.

We have seen this first-hand in recent months, from decision-taking in Washington to growing protectionism and direct impacts on sectors such as aerospace, steel and auto.

Mr. Chair, let's put it bluntly. We are in a trade war. Canada has been required to respond in real time. We know these pressures will continue, but we also know this. While there are many things in the world that we cannot control, and we certainly cannot control what's going on in Washington, there are many things we can control here at home.

In 2025, we were much more in reaction mode. In 2026, we have a plan, and we're putting it into place. The results are already there.

Last year, Canada created 189,000 jobs, more than the United States, despite having an economy 10 times smaller.

Our approach is simple and focused. It can be summed up in three verbs: protect, create and attract.

First, it's about protecting jobs.

In sectors like steel, aluminum, forestry, critical minerals and manufacturing, Canadian workers are facing very real pressures, so we took action.

We have strengthened the enforcement of our trade rules to ensure a level playing field.

We have also increased support for affected industries through targeted liquidity and investment tools. That includes the recent announcement of a new $1‑billion program at the Business Development Bank of Canada, or BDC, to strengthen Canada's economic resilience, including in key sectors such as steel, aluminum and copper.

On top of that, we have set up a new envelope of $500 million as part of the regional tariff response initiative to give real support to the various businesses affected by the tariffs in all sectors combined.

We are also working directly with businesses to maintain production and protect jobs across the country. That is certainly the case in the automotive sector.

As we all know, over 90% of Canada's auto production is exported to a single market, which is now facing tariffs. We acted quickly. Through our auto strategy, we're protecting over 500,000 jobs while positioning Canada for the future. Within the next five years, we know that 40% of vehicles sold globally are expected to be electric. Canada will not fall behind; we will lead.

We're supporting companies as they invest and adapt and rewarding those who choose Canada and invest in Canadian workers. Through the strategic response fund, we have committed $3 billion to help firms diversify, modernize and compete globally. We're also prioritizing Canadian sourcing through procurement and strengthening domestic supply chains to reduce vulnerability.

At the same time, we're leveraging our 52 trade agreements to expand into new markets. We know that resilience requires diversification and strength. This is why I also announced last Friday 200 new jobs and a $76-million federal investment in Tenaris's project in Sault Ste. Marie. This will modernize and diversify Canadian steel production and strengthen our domestic industrial base. Basically, our plan is working.

Second, as we're creating jobs, we want to make sure that we're building industries for the future. We're advancing major national projects. Of course, we're thinking of nuclear reactors in Darlington and the high-speed rail between Toronto and Quebec City. We're also accelerating approvals for major projects. We're investing in artificial intelligence, quantum computing and advanced manufacturing.

We're supporting the scaling up of Canadian firms through access to capital and helping companies grow into global leaders. We recently announced $55.7 million to MDS Coating. That's a very important company in P.E.I. that is maintaining and creating up to 230 well-paying careers on the island. That's in the aerospace sector.

Third, our goal is to attract talent and investment.

At a time when many countries are turning inward, we want to move forward and open up even more. We have launched an ambitious talent attraction strategy with a budget of $1 billion. The goal is to both attract the best researchers to our universities and create a space where we can create more support between our universities and the industry to really position Canada as a global innovation hub.

Finally, we're currently working to attract new capital. The best example I could give you is that, as many of you already know, AirAsia chose Canada by buying 150 new Airbus A220 aircraft manufactured right here at home, that is, in Mirabel, Quebec. This is the largest order of its kind in our history. It's truly a vote of confidence in our industry and our workers.

I could also talk to you about the defence industrial strategy, which aims to create 125,000 jobs, as well as rebuild an industrial base in defence, but I know that speaking time is limited.

I will just say to end that in a world of increasing geopolitical competition, Canada must act from a position of strength. We must strengthen our domestic capacity and reduce vulnerability.

Mr. Chair, Canada is not standing still. We're protecting what we have built, we're creating what comes next and we're attracting the people and the capital that will define our future.

Thank you. I'm ready to answer all your questions.

[The Chair, Liberal, Ben Carr]

Thank you very much, Minister.

In my excitement to get us going, I forgot to introduce your colleagues. I'm going to take a moment to do that.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I'm all yours.

[The Chair, Liberal, Ben Carr]

Joining us is Valerie Huot, acting chief financial officer and assistant deputy minister. With her is Mark Schaan, associate deputy minister.

Thank you very much to my colleagues on this side for allowing me the grace to make that introduction.

With that, we will go into our first line of questioning.

Madam Dancho, the floor will be yours for six minutes.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you very much, Mr. Chair.

I thank you and your colleagues, Minister, for being with us today.

Minister, you outlined in part the crisis facing our auto sector. Can you clearly outline the top-line argument you have for importing 49,000 Chinese EVs into Canada and how that will benefit—or not—our domestic auto manufacturing sector?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I think the plan was clear, and the Prime Minister mentioned it at the time. Our goal was to make sure that, first, we would be able to support our canola farmers, who are so important in the Prairies, as you know. Second was being able to protect our fishers, who also have been targeted by tariffs. That was good for people in Atlantic Canada, in the north and on the west coast. Third, in 2023, Canada was already importing 43,000 cars from China. This is a small increase from where we were in 2023.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

Thank you very much.

I appreciate your bringing up the agricultural exports. As you know, that's not really an equal exchange, the way that your government negotiated. It was only a temporary reprieve of some of the agricultural export controls that China put on, as pork still remains, canola oil still remains and the reprieve that you did get is expiring by the end of this year.

When these Chinese EVs come into Canada, as you well know, they're here to stay. You didn't negotiate a long-term agreement for our canola farmers, and they don't think that exchange is quite how you're selling it, but I am glad that you brought up 2023, because it was in the following year, about a year and a half ago, I suppose, that you yourself, as you know, put in quite strong restrictions for Chinese electric vehicles.

In fact, you said the reason was that they would put unwarranted downward pressure on pricing, challenging the profitability of Canadian producers, and they would reduce choice by crowding out other imports. You were really correct in that instance, Minister. Of course, in Mexico, Indonesia, Brazil, Australia and most places that have allowed Chinese EVs, they have crowded out that market and jeopardized that domestic supply chain. Again, I'm not clear why you're bringing these in when we're facing such a crisis in the auto sector in Canada.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

First, when it comes to negotiations with China, I think that many premiers were actually very positive regarding the importance of this deal and the consequences for Canadians, particularly those in the Prairies, including Premier Moe, the Conservative premier. I think it was important to be able to settle key issues, particularly when it comes to agriculture.

At the same time, I think it was important—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

They're not settled. Those issues are not settled, Minister.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I think it is also important to understand that although 49,000 vehicles will be imported, that is less than 3% of the entire production in Canada—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

But 40% of our electric vehicle—

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I'm sorry. My colleague is talking over me, but I just want to finish my answer.

[The Chair, Liberal, Ben Carr]

Madam Dancho, I'm going to give the minister another 20 seconds or so to wrap up her response, at which point we'll go back to you.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

My point is that it's less than 3% of production, and in that sense we are working already with many companies that will be importing to Canada. At the same time, we're trying to support not only ongoing production in Canada but also an increase in production, and that increase is exactly what has happened in the last year in the auto sector.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

The agriculture issue is not by any means settled. Again, it's a temporary reprieve on part of the agricultural exports. In fact, in the last 10 years that you have been a minister and that the Liberal government has been in power, the Chinese government has used our agriculture and our farmers as a baton to beat Canada with, to coerce us, over four or five times, I believe. Consistently this is an issue that you have failed to resolve in the long term.

One of the three standards for allowing these vehicles into Canada, which you cited the last time you were here, was labour standards. I want to go back to the forced labour issue.

You said to my colleague Mr. Falk that your point of view will always be to follow what the UN is saying. The UN is unequivocal, and of course, as you know from the Office of the UN High Commissioner on Human Rights, they've said that there were various coercive methods being used to secure surplus labourers in Xinjiang. Serious human rights violations have been committed in XUAR.

A 2022 UN report says there are indications that labour and employment schemes appear to be discriminatory in nature and involve elements of coercion. In January of this year, a UN report says, “UN experts...expressed deep concern regarding persistent allegations of forced labour”. The report quoted them as saying, “In many cases, the coercive elements are so severe that they may amount to forcible transfer and/or enslavement as a crime against humanity.”

If you're agreeing with the UN, how are you allowing the import of vehicles that may have aluminum in them, for example, which has been traced to forced labour help? How are you justifying this?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

There was an entire testimony on my part three weeks ago, just before the recess, where I spent an hour explaining our position on EVs. I think there's been an entire study on the part of parliamentarians.

Of course, everything that I said at the time still holds, and everything that I said on forced labour still holds.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

At the time you kicked the bucket over to CBSA and your Public Safety colleague. You said that he'll deal with it, but if you agree that there's forced labour going on, you have allowed this negotiation to allow these 49,000 vehicles to enter, and you're saying, well, Public Safety will deal with it.

This is a nonsensical position. Either you believe this is happening, that they therefore should not come in, or you're kicking it over to your Public Safety colleague and saying, well, maybe he'll catch them.

Is the federal government's position, then, that Public Safety and CBSA will turn them away?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I think you're making an assumption on the 49,000 EVs that is only linked to different Chinese auto companies. I would challenge that, and we are—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

You don't believe you have forced labour on—

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Can I just finish my answer?

[The Chair, Liberal, Ben Carr]

Yes.

We're going to be over time, so I'm going to give the minister the opportunity to reply.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

My point is that there will be lots of western auto companies shipping their cars to Canada, and eventually there will also be—

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

What about Chinese ones?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

—a Chinese team, but at this point the allocation of the 49,000 is not over yet.