International Trade Committee on May 3rd, 2018

[Some hon. members]

Agreed.

[The Acting Chair, Liberal, Kyle Peterson]

I'm going to turn it over to Mr. Fonseca for the last five minutes.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you very much, Mr. Chair. I too would like to welcome the Havergal students and staff who are here with us today. I'm sure you feel right at home. I know that your school has the same kind of Gothic stone that we find here at the Parliament buildings. You're modernizing it now, I see, in the back and on some of the sides. Welcome.

Mr. Adams, you brought up that on some of the lines down in Brazil, as one of the largest car manufacturers in the world, they may not have some of the models we produce here in Canada or in North America. Do you know what kinds of cars we would be exporting, which ones would we be exporting to Brazil, Argentina, and other Mercosur countries?

[David Adams]

I don't have an indication of that. I could probably determine that by consulting with our members, to figure out, if they did have the opportunity to export down there, which ones might be the ideal candidates.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

So at this time they're not exporting at all?

[David Adams]

To my knowledge, no.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

No cars are going. Is that because of the 35% tariff that they brought up? Do you think that would be the major barrier to getting cars down to that part of the world?

[David Adams]

Yes, and I think some other witnesses have noted that at the peak, it was only about 20,000 units or so going into the whole Mercosur area. If you're looking at what some of the inhibitors are, certainly, the tariffs would be the major issue in terms of exporting vehicles down there, for sure.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you.

Beyond that, how about the non-tariff barriers?

[David Adams]

The non-tariff barriers, I think, are significant going into those countries. Those would need to be addressed in a free trade agreement as well.

If I could just chime in on welcoming the students as well, the Global Automakers of Canada is a supporter, a sponsor of the Forum for Young Canadians. We encourage young people to get involved in the process that they provide for students to come up to Parliament Hill and spend time better understanding our parliamentary process.

Sorry to eat into your time.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Well, thank you for that support. I'm glad you're wearing the right tie—he's wearing a green tie just like the students here—so you're a full-on supporter.

As we've been doing various studies and various trade agreements, we've heard from many of the witnesses that in Japan and Korea there are many non-tariff barriers for vehicles. That has been the subject of much discussion here. Are the barriers that those two countries have the same as they would have down in the Mercosur countries?

[David Adams]

I would encourage the committee to actually take a closer look at what some of the supposed barriers are, going into both Japan and Korea, because I think some of the information that's often relayed is based on outdated information in terms of access to those countries. We certainly don't want to preclude any opportunities for exports, but as I said in my remarks, the reality is that, currently, the five vehicle manufacturers in Canada are exporting almost all of their 85% to the U.S., and 15% would remain in Canada. There might be some vehicles around the fringe that are exported to other jurisdictions around the world.

Some companies are striving to obtain global mandates to say that they can build a vehicle here and sell it anywhere. Really, what any manufacturer wants to do is to pick a country that makes the most sense for them to produce a vehicle and be able to sell that anywhere in the world.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Let's look at beyond North America, so Mercosur and other countries.

You spoke to innovation. We're reading about the electric car—

[David Adams]

Sure.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

—about the autonomous car, all this innovation that's happening.

Is that the opportunity you see here in Canada: one of the places where a lot of that development is happening, and the ability to export that, or do you see that just staying here in the North American market?

[David Adams]

I think Canada has some real competitive advantages in the whole area of the factors that lead into an automated vehicle.

When we think about artificial intelligence, we have world-leading scientists in Canada on artificial intelligence. We have a lot of companies, again, that are world leaders in technology, such as LiDAR technology. There's a world-leading company in Quebec in LiDAR technology. That's a prerequisite for automated vehicles.

Certainly there is a lot of capability in Canada to be part of the automotive industry in the future. I think the challenge is no different from a lot of our challenges of the past. We have the technologies, and how do we commercialize it, bring it to market, and be a world leader in those technologies?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Okay, thank you.

Mr. Innes, sticking to looking at innovation, the supercluster that you brought up, the proteins, and also with agriculture, I hear that for canola, Mercosur may not be the greatest opportunity. But do you see the Mercosur as...with your whole supply chain?

We just heard from the Agricultural Manufacturers of Canada. They see a great opportunity there. They would be part of that supply chain with canola. Do you see that as building out agriculture in Canada and being able to have a bigger presence and going global?

[The Acting Chair, Liberal, Kyle Peterson]

A quick answer, please, Mr. Innes.

[Brian Innes]

Being globally competitive is what Canadian agriculture has succeed at, so opportunities for the whole sector to do that are important. For the canola sector, we focus on where the greatest opportunities are.

[The Acting Chair, Liberal, Kyle Peterson]

Thank you.

Thank you, Mr. Fonseca.

Thank you, Mr. Innes and Mr. Adams, for being with our committee today. We always appreciate your input. If there's anything that you need to follow up with, please reach out to the committee and submit any other information you think might have been overlooked. We're happy to accept it.

On that note, we're going to adjourn a couple of minutes early to have some time to network with our students here from Havergal College.

Once I adjourn, students, feel free to come forward and work your way through the room as you see fit.

Thank you, everybody.

The meeting is adjourned