Industry and Technology Committee on May 25th, 2026

[The Chair, Liberal, Ben Carr]

Thank you very much, Madam Dancho.

Madam O'Rourke, the floor is yours for six minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you, Chair Carr.

Welcome, Madam Minister. It's lovely to see you again.

We're speaking about the estimates and about these significant investments in supporting industries that have been fully attacked in this trade war, and also about helping other industries to develop, to take advantage of a number of new opportunities in defence, aerospace, nuclear, electricity, infrastructure, major projects and the buy Canadian policy.

We're investing in shoring up and protecting some industries and then expanding others, and also making sure that we train the people to do the building here in Canada. I'm wondering if you would like to share with us what you're hearing from Canadian industry in terms of the steps the government has taken in the past year to support them through the trade war, to help them pivot. What's their feeling about all of the opportunity that is before us in the coming year?

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

Listen, it's been a tough year for many Canadian businesses, which are dealing with so much uncertainty at a time when a lot of their business models have been very much focused toward exporting to the U.S. That definitely was the business model of the steel sector, the aluminum sector, the auto sector, the forestry sector and many of the small and medium-sized businesses across the country. We still have the best deal on planet earth when it comes to access to the U.S., but the tariffs have been impacting a lot of people.

That being said, I think the reaction has been positive. That's because, first, we have a plan, and second, as our plan is being put into place, really it is working.

The best example I can give you is Tenaris, where I was last week with Premier Ford, who is the Ontario premier, as we all know. We were in Sault Ste. Marie, and we announced 200 new jobs and an investment of more than $70 million. That investment was possible because of the fact that we've approved many of the energy sector projects out in the west. Now Tenaris, which is a global company, has decided to invest more in its pipes and tubes processing, because it believes the demand is increasing in Canada and therefore there's a business case for it. What does that mean? It means it's good news for Algoma in Sault Ste. Marie, and it's also good news for Tenaris.

At the same time, the other example I could give you is definitely the defence sector. We started from having nearly no defence sector or a very small defence sector in Canada, and now we have an opportunity that is actually one of the biggest commercial opportunities in decades. We came up with this defence industrial strategy. Our goal is to create 125,000 jobs, as I said in my introductory remarks. I say that because, of all the industrial strategies that the government has ever announced, it is the most funded since the Second World War, because it's supported by a $500-billion budget.

What are we seeing concretely? We're seeing the aerospace sector really investing and trying to create new jobs. That was the example of MDS Coating in P.E.I. It was the biggest private investment and federal investment that we've seen in the last decades in P.E.I., and it's creating and maintaining 230 jobs in the aerospace sector.

We're seeing that in investments in the aerospace sector in Mirabel—at L3Harris and also Airbus. We're seeing that across the country, as we know that the manufacturing sector is affected by the tariffs.

My last point would be that we know that the auto sector is really impacted, so we want to make sure that certain plants can work on the defence front, to save jobs.

[Dominique O'Rourke, Liberal, Guelph, ON]

I'd like to thank you, Minister, for responding very quickly to the new interpretation of section 232 tariffs for steel, aluminum and copper. Thank you for the immediate response, with the $1.5 billion of support for those industries. It's meant a lot to southwestern Ontario.

What are you hearing from people on the ground?

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

I'm hearing particularly from people in southwestern Ontario. I know you represent Guelph well. You've been a strong advocate for the manufacturing sector in the region, Dominique.

I think the support has been timely. I think we needed to react quickly. Why? It was because the White House had changed its interpretation of the steel and aluminum tariffs and expanded it to derivative products. Companies that were not necessarily impacted by tariffs are now impacted, because, basically, the interpretation is now the full value of the product in which steel and/or aluminum can be included.

Based on that, we needed to come up with some real support, which is not only support through loans but also support through subsidies in order to protect companies and not have them go into a spiral of debt. It was also influenced by what we did last time during the section 232 tariffs under the first Trump administration. Based on that, we decided to go further. I think the reaction is good.

Let me be frank: We're not claiming victory, whatsoever. We will continue to work with the sectors that are impacted, and we'll continue to be in listening mode and action mode.

[Dominique O'Rourke, Liberal, Guelph, ON]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you, Ms. O'Rourke.

Mr. Ste‑Marie, you have the floor for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

Minister, Mr. Schaan and Ms. Huot, thank you for being here at the committee meeting.

I'm going to start with a comment. There was talk of Chinese electric vehicles and western canola, but, again, there was no opening for Quebec pork. It's important for our producers to have an outlet to Asia, particularly to China, which was a major client. Thank you for taking note of that.

Minister, you were with us three weeks ago. We see each other often in this committee.

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

Yes, I'm so available; it's incredible.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you for being here.

On the subject of electric vehicles, I had asked you to tell us the total amounts paid toward the battery industry by province. I don't think the committee has received that information.

I also asked you for something else related to the matter that Mr. O'Rourke discussed. I asked you to provide us with an overview of the number of small and medium-sized businesses and jobs, by region and by sector, that had been affected by the executive order that the U.S. President signed in early April. At that committee meeting, Ms. Gould cited, for example, a University of Calgary study that said that around 60% of the products exported from Ontario and Quebec could be targeted. Desjardins published a study indicating that it would actually be a quarter of Quebec's products that would be affected. In that case, Quebec businesses would be the most affected.

Could your department give us an overview so that we know what the situation is?

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

First, on the issue of Quebec pork, there's no problem. We are indeed taking steps, and we're very aware of the situation. I'm working with the Minister of Agriculture and Agri-Food and the Prime Minister on this, so it goes without saying that this is a priority. Of course, the goal is to have zero tariffs imposed by China on any of our agricultural products and any of our fishery and seafood products.

Second, you had indeed given me two requests, and I'm going to answer them, because I agreed to them. I would just like to clarify the requests so that both Mr. Schaan and Ms. Huot can hear them. You wanted to know the total amounts paid in the battery sector, by province, as well as the number of SMEs, by region and by sector, affected by the U.S. tariffs.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

My request concerned the SMEs affected by the President's latest executive order, but also the number of jobs affected.

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

Yes, we're indeed talking about the latest executive order on steel, aluminum and copper.

We have an interpretation for this issue, but I don't think we're going to have a completely set point of view, because there are still many companies that are gradually realizing that they're affected by this order or that they aren't. There can also sometimes be issues with the clarity or interpretation of the order, depending on the officials. However, we decided to not wait and to put an approach in place.

We'll be able to read the situation better once the Business Development Bank of Canada and the regional economic development agencies can give us their accounts of the demand.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much for all that.

Has your government discussed the consequences of this executive order with the U.S. administration? Could the United States review this order or is it like everything else?

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

I have raised it a number of times with the Prime Minister and with Hon. Dominic LeBlanc. Minister LeBlanc is very aware of the situation. He has had a number of conversations. Just this morning, he spoke with Mr. Greer, the U.S. trade representative. I think you should ask him directly.

For my part, know that since I'm responsible for the impact of the tariffs, I'm working work with Minister LeBlanc, with Janice Charette, who is the Prime Minister's representative in the Canada—United States—Mexico Agreement negotiations, with Mark Wiseman, who is Canada's ambassador in Washington, and, of course, with the Prime Minister.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

I would now like to talk about the $1.5‑billion assistance plan that you quickly rolled out. In fact, we welcome this initiative and sincerely thank you for it. However, I'm hearing a concern from SMEs. The government is investing $500 million in the program to encourage the purchase of machinery and to increase productivity. It's an excellent program, but it may not be very well suited to SMEs, which are currently facing fewer orders and therefore less revenue, so they don't have the capacity to buy new machinery.

As for the loan program, there are many concerns that the targeted businesses may be too large compared with the reality of SMEs. Entrepreneurs told me that, in times of hardship, they could access a loan of $100,000 or $200,000. A two‑million dollar loan is much bigger.

Could the criteria be changed, if necessary?

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

I'm completely open to changing the criteria. We have always been able to adjust.

Let me explain my concern. There's a lot of work with the major contractors, the big companies. However, it's really important to understand what's happening in the supply chain and in small and medium-sized businesses. I have actually had a number of conversations about this with the Prime Minister.

I'm very open to feedback, of course. We're also in contact with a number of SMEs that give us their feedback. It would be my pleasure to work with you, Mr. Ste‑Marie.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Once again, thank you for all that, Ms. Joly.

Regarding the forestry crisis, there was the Business Development Bank of Canada program to support struggling forestry companies, but some of them were ineligible. I recently heard that there could be an opening and that the programs could be reassessed to expand the assistance. I would like you to give us some details on that.

The industry and the unions are also suggesting that the government assume half of the illegal countervailing duties imposed by the U.S. government so that companies can export their products. It's held in a trust fund. Our companies have always come out ahead after years of fighting the U.S. government. The government could repay itself at that point.

Is that a strategy you're studying?

[The Chair, Liberal, Ben Carr]

Mr. Ste‑Marie is the best member at taking advantage of the clock: He knows he asked a question when he had no time left. That said, Minister, I'll allow you to quickly answer the question.

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

Thank you, Mr. Chair.

My colleague Tim Hodgson is currently working with the industry and the unions. He has set up a round table, and the recommendations will be submitted shortly. I will have the opportunity to work on the forestry industry with him and the Prime Minister this week.

I'm involved in this file because the Business Development Bank of Canada has been there from the start, and the BDC is my responsibility. However, it goes without saying that the BDC program doesn't go far enough. That's why, while we have made some adjustments for steel, aluminum and copper, we want to do the same for the forestry industry. My colleague Mr. Hodgson will soon have an opportunity to share some good news with a sector that's heavily affected by this.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Minister.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Ms. Dancho, the floor is yours.

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

Thank you, Mr. Chair.

I want to talk a little more about the security implications of the Chinese EVs.

As you know, your government banned TikTok from government devices. You prohibited Huawei and had all the technology and cell phones removed from Canada. Today, in fact, the RCMP in Ontario restricted the use of Chinese EV drones, all for very similar security issues. As you're well aware, CSIS has said that the People's Republic of China is Canada's greatest espionage and foreign interference threat, and that its activities threaten Canada's national security and long-term economic prosperity. Your former colleague Chrystia Freeland said that your government was “absolutely” considering banning “Chinese-made software” in electric vehicles to counter “the security threat from China”. You cited a similar rationale in your ban a year and a half ago.

Really, nothing has changed in terms of the security threat from the software. The last time you were here, you said that you're “working on a...framework”, but the import of these is now allowed. Is this framework considering banning the software from those vehicles? Are they going to come in as empty shells in that regard?

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

These are really good questions that should be asked of the Minister of Public Safety and the Minister of Transport, as they are working on a new software approach when it comes to EVs.

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

You are working on that with them. You said that the last time you were here.

Are you not being consulted on this?