International Trade Committee on Nov. 20th, 2012

[Rahul Shastri]

I think part of the issue with Australia is proximity. We're a little far away from Australia, but the advantage we have over Australia is a substantial diaspora here. That diaspora is now becoming more engaged than it ever used to be, and there's a sense now that there's a substantial proud heritage, whereas before it wouldn't be something that people would necessarily publicize or publicize as loudly as they do.

But India is more than just the flavour of the month. India has arrived. People from India wear their heritage with great pride now. People are getting engaged in those discussions, whereas perhaps 20 years ago those discussions weren't as commonplace.

[Jasbir Sandhu, NDP, Surrey North, BC]

You mentioned in your testimony here that Australia has a very small Indian population and then there are usually first nations. Have we failed to tap into the very economically vibrant Indian community here? Has the government failed to tap into this group or to facilitate to have this group to be able to help us build bridges with India?

[Rahul Shastri]

Well, I don't think the government has failed. I just think, as I indicated earlier, that the emergence of India and China over the past number of years perhaps was not as big an issue as it could have been until we had the financial crisis in 2008. After that took place, I think people looked further afield for markets. That is what has taken place as a consequence of that crisis. Also, I think the diaspora here is established, is successful, and is now engaged and is attempting to do what it can to assist the government to bring prosperity to its home country. I think that's great.

[The Chair, Conservative, Rob Merrifield]

I just want to go back to your first question just to make sure that the facts are right. The trade deficit was $50 billion...? Is that what you're saying?

[Jasbir Sandhu, NDP, Surrey North, BC]

Well, we had a trade surplus of $25 billion when we started in 2006. Now we have a trade deficit of over $50 billion.

[The Chair, Conservative, Rob Merrifield]

I believe that last year we had a trade surplus again.

[Don Davies, NDP, Vancouver Kingsway, BC]

No, it's the current account—

[The Chair, Conservative, Rob Merrifield]

Just check your numbers on that. I'm just going by what our—

[Don Davies, NDP, Vancouver Kingsway, BC]

The current account deficit is $50 billion.

[The Chair, Conservative, Rob Merrifield]

We'll check those numbers and get back to the committee.

[Jasbir Sandhu, NDP, Surrey North, BC]

Sure.

[The Chair, Conservative, Rob Merrifield]

We'll move on to our next questioner, Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I'm always interested to hear from the opposition, but much more interested to hear from our witnesses.

Welcome to the committee. It has been a very good discussion so far.

There were a couple of points raised both in your testimony, Mr. Shastri, and in the testimony of the witnesses before you. I just want to try to drill down a little deeper into that, if we can.

There was a comment you made, Mr. Shastri, about the financial wall that the world hit in 2008. Suddenly we woke up and realized—as we'd realized for some time—that the American marketplace wasn't going to be the be-all and end-all for Canada. We'd already lost market share—from 85% down to 72% prior to 2008—so we knew the direction it was going in. I think it is fair to say that governments were slow to pick up on the rising economies in Asia. We knew we had to do something about that. I very much feel that our government has done something about that in a very positive and progressive way.

One of the issues that has not been discussed is the nuclear cooperation agreement. I think that agreement alone has shown a lot of good faith on the part of Canada. I think it has also changed attitudes, quite frankly, from a former government that treated India, especially in nuclear energy, with a more colonial or even paternalistic attitude.... How much has an agreement like that, where Canada has finally recognized that India has nuclear power, and that we can participate in that resource.... India is going to need tremendous reserves of energy for a growing economy. Hopefully the FIPA will be signed and the final i's dotted and the t's crossed. It has been slow, but those agreements form the building blocks for a proper free trade agreement. Do you have any comment on that?

[Rahul Shastri]

As we've indicated in our presentation, only 20% of India's nuclear requirement has been met. There's an extraordinary opportunity there for Canada. I think the Prime Minister has recognized it, and I think the government has recognized it, first of all by starting these discussions with India a few years back, and now by setting a sunset date—and a hopeful sunset date—on the conclusion of an agreement within the next year or so. Some may say it's optimistic, but I would agree with you that the government has done quite a lot to advance into looking to markets beyond the United States. I think it's important.

Insofar as the nuclear cooperation agreement is concerned, there was great fanfare when it was announced in 2010 and then it seemed to hit a bit of a wall. The recent visit by the Prime Minister reignited the interest. We're very hopeful that, as you put it, the i's can be dotted and the t's can be crossed in the not too distant future. That will allow the flow of uranium into India, the uranium that miners in this country are sitting on and can't do very much with. We've all seen what has taken place in Japan over the last couple of years with its decision to basically move away from nuclear reactors, and many countries in Europe are doing the same thing.

But beyond simply just the trade in raw materials—and I indicated that earlier—there's the opportunity there for technology, and that technology is where the value added is for Canada. It's value added in terms of the dollars that can be gained from the technology and the jobs that can be created here through the technology—

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I'm going to have to cut you off for a second, because I have another couple of points that I want to get into the mix and get comments on.

When we talk about energy, certainly the uranium and the nuclear energy are a huge part of Asia's future—India's future in particular—but it's also oil and gas, and natural gas, which Canada has a great and secure supply of, but I'd like to look to the east coast for a moment, if we can.

Mr. Khurana mentioned the lobster required for an Indian wedding. Part of that was tongue in cheek, but part of it is the reality of a huge market in India, with a tremendously fast-growing middle class. They can't meet their infrastructure needs, even at the 7% or 8% growth that they have now. The discussion is that they require 11% or 12% growth to just build the infrastructure that the growing middle class will need.

The closest port to India in Canada is Halifax, on the east coast, through the Panama Canal. We often forget that. The east coast has oil and natural gas as well. I don't know if we've looked for a trading partner anywhere that will benefit both the east coast and central Canada, and also the west coast, as much as India has the potential to.

[The Chair, Conservative, Rob Merrifield]

It's not the Panama Canal.

[An hon. member]

It's the Suez.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

The Suez Canal—did I say Panama?

[The Chair, Conservative, Rob Merrifield]

Yes.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you for correcting me. We've been talking about Panama. We finally actually got Panama passed...so it stuck in my brain. No, it's the Suez Canal. I apologize.

[Yuen Pau Woo]

The central challenge in the Canada-India relationship is the asymmetry in the relationship. India is a very large country. It feels that it's arrived on the world stage as a large power, if not a superpower, and India is being courted by many countries. It's absolutely essential that we close the nuclear cooperation agreement, but we are one of many. Everyone else is getting on board. It's absolutely essential that we do this free trade agreement and that we do the foreign investment protection agreement, but we are one amongst many countries trying to strike deals with India.

The question for us is this: how do we distinguish ourselves from the competition? I think you and others have touched on at least two of the ways in which we can distinguish ourselves: energy security and food security. When the Indians look around the world and they think about where they can get help and trade and expertise on energy and food, they can think of Canada. We genuinely have leverage on those issues.

Uranium has certainly opened the door for an energy cooperation relationship that goes beyond simply shipping uranium. I don't know if it is really viable for us to sell LNG to India when Qatar is the world's cheapest producer and it's a stone's throw away, but we can try. But for sure we can help on energy cooperation more broadly: energy conservation, smart grids, green technology, and perhaps even raw materials.

On food, we're already a major exporter to India. I know this, and do you know why? When I was in Myanmar recently, in Burma, I met with some agricultural interests there and they said to me: “We want to learn from Canada. Did you know that Burma is the second largest producer of pulses in the world and you are beating our pants off by selling to our neighbour?” People watch us, and they watch how successful we are at exporting peas, lentils, beans, and so on, all the way from Canada. We have an ability to build on that expertise.

[The Chair, Conservative, Rob Merrifield]

You're done.

Mr. Easter, you have seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

First off, in regard to the agribusiness and food processing report you have, I think we'd all agree that we would appreciate that, Mr. Chair. If that could be forwarded to the clerk, he'll see that we all get a copy. That would be fairly valuable to us. Thank you for that.

Just in starting, though, with the recent press that's out there on the Foreign Affairs document that has been leaked, it shouldn't be any surprise why we're behind the eight ball into Asia.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

It's crap.

[Wayne Easter, Liberal, Malpeque, PE]

No, it's not crap. It's the reality. Look—