International Trade Committee on Jan. 29th, 2021

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Mr. Savard-Tremblay for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

My question is for you, Mr. Dade. You spoke to us earlier about the multiplication of agreements and the expansion of existing agreements. We know that, unfortunately, these negotiations often turn into vaudeville, where parliamentarians, provinces and stakeholders have no voice and must ultimately stamp existing agreements.

I'm going to touch on another aspect, that of the rediscovery of local purchasing since the pandemic began, and the need to offer some form of support to our companies and give them a certain priority in the awarding of public contracts. Quebec, for example, in the agreement with Europe, fought to keep a share of public contracts that could be awarded with Canadian content. It could even require the assembly of certain vehicles to be done in Quebec.

If we multiply the agreements, could this create problematic overlapping regulations? For example, in the case of rules of origin percentages and local content percentages, if a country signs multiple agreements, it could make these percentages difficult to combine.

[Carlo Dade]

Thank you for your question.

I will answer in English so that all committee members understand.

Yes, that rationalization of different rules amongst agreements is done through the legal scrubs and through processes at Foreign Affairs and the trade commission. It's also the work of export promotion agencies and export support agencies to help work with businesses on nationalizing those and coming up with the best advantage. I look on it as a glass half full. There are opportunities to search for the best solution and the best set of rules that fit businesses and give more opportunities to businesses.

I would quickly caution about the local buying requirements and rules. We are preparing to fight with the Americans over buy America. By international comparisons, I wouldn't say Canada has a bad reputation, but the data indicates that we are not one of the best performers in making government procurement available. We fall under the OECD average for per cent of government procurement made available under the World Trade Organization government procurement agreement. It took Canadian provinces 20 years—two decades—to sign on to the WTO government procurement agreement. None of this stands us in good stead internationally.

I would point to Saskatchewan, though, as an example of a province that I think is going about this right. Priority Saskatchewan is working with businesses in Saskatchewan to give them business assistance and training, strengthening their ability to bid for contracts so that businesses in Saskatchewan can bid for local contracts and compete against firms from larger jurisdictions that are better resourced.

The way to go about this is not through government regulation but through capacity building and strengthening of businesses to allow them to compete not only at home but also abroad.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Dade.

Mr. Blaikie, you have two minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Just pursuing the earlier question, it seems to me that Canada stands out as being a country that does significantly less industrial planning domestically than a lot of our competitors do. We talk a lot about international trade, and I would say sometimes we even have a dogmatic emphasis on free trade agreements, yet we hear that Canadian business is often unready to exploit the touted advantages of the agreements we sign. To what extent is that a product of not really having an industrial strategy as a country?

We also take a kind of laissez-faire approach to our domestic economy as an article of faith, but it seems to me not to work very well when we talk about what we want to accomplish on the international stage, how we want to support companies to succeed on the international stage, and how we want to translate that into value-added jobs in Canada. We've also seen, over the last 25 to 30 years, a loss of a lot of value-added production. We're out signing international trade agreements. There's been GDP growth, to be sure, and a lot of Canadian businesses have thrived, but we've lost a lot of value-added work. We don't have industrial strategies domestically. We're signing agreements that open up our markets as much as they provide us market access, yet we don't seem ready to seize those opportunities.

Does anybody care to speak to the relationship between industrial planning at home and having a cohesive international trade agenda?

[Jan De Silva]

I'm happy to provide a few points of context.

As Leigh mentioned in his remarks, we work with major cities across Canada for our programming. We also, closer to home, work with the 34 municipalities that are the Toronto-Waterloo corridor. We view this as a large economic zone. If you think of economic zones in other parts of the world, if you look to Australia or look to markets in Asia, there's much more attention on what the conditions are for success for those economic zones. Look at the movement of goods strategy, employment land use, deployment of technology—all of those things require attention to support our local economy but also support the development of companies in supply chains, for example, that have the potential to not only service locally but also have the capacity to go global.

Right now I would point to the very live emerging case study of Ford and GM signalling that southern Ontario has the potential to become a global EV, electric vehicle, centre. There is $1.8 billion of funding by Ford, matched by $600 million of government funding. The impact is not just those workers in the Ford factory in Oakville. It's all the supply chains in southern Ontario and all the talent coming out of our universities that will need to be equipped to work in that environment.

I would simply say that it's not one or the other. I think things need to be happening in parallel. I would say that the markets that are more economically competitive than ours have found a way to get their arms around thinking of our economy not as a city or a place but as an integrated set of activities in a geography that needs to have competitiveness considerations to eliminate pain points.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry, Mr. Blaikie, but we've run out of time.

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Chair.

I know I have a short time, but I have a question for Mr. Dade. The Keystone pipeline was cancelled and Line 5 is scheduled to shut down by May. In the short time I have here, probably a couple of minutes, how do you read this overall, because when it comes to the oil and gas industry and the future of trade, a big chunk of all trade with the U.S. is in oil and gas.

[Carlo Dade]

Thank you for that question. Before I dive in, for Mr. Blaikie, I'm happy to talk with you off-line about the issue you raised. It's a major subject among us pinheads, so I'm happy to talk to you in depth off-line about that.

On Keystone, there are a couple of points. One is that the direction on Keystone was clear. We knew seven months ago what was going to happen, yet we chose not to listen and we chose not to pay attention. We sought out voices that told us what we wanted to hear, not what we needed to hear.

The first thing for the wiser committee is thinking about how much the U.S. has changed from under Obama to under Trump. I don't think the analysts who are working on this have evolved with the U.S. Racial reconciliation as a central issue, even in economics and trade, with the new interior secretary in the States, yet of all the analysts you have coming in to talk to you, how many are prepared to talk about the new reality in the States?

On Keystone, the Biden administration has signalled that the U.S. is serious about the transition away from fossil fuels. It's not quitting cold turkey; it's a gradual transition. With Keystone they've cut the rate of growth of imports of Canadian oil. They've done the same thing to themselves by cutting new leases on federal lands. It's to begin an orderly transition. They are very clear about this.

We have to realize that if this is the direction the U.S. has gone, and we do not have votes in Congress to change them, we are going to have to adapt to the new opportunities that they're putting out with EVs, clean tech and carbon capture. We have to respond to the new opportunities and, at the same time, we have to make sure that this transition does not first hit the Canadian oil patch. As the U.S. slowly looks to cut, we have to make sure that the current movement of oil and goods to the U.S. remains the same. I do not believe that Americans are ready to quit oil cold turkey. They are ready to start transitioning, and we have to be prepared and adapt to that. This could mean decades of continued oil from the oil sands, but the days of rapid growth, booms and busts, I think, are over, and we have to adapt to this reality.

GM announced today or yesterday that they're no longer going to be making gas vehicles. The reality is there. We have opportunities to profit from the shift in the U.S. We have to pivot and begin to look at that, while we maintain our current production to the U.S. as they move away.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Aboultaif.

Ms. Bendayan, you have one minute.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

I'll ask just one quick question before we wrap up this session. I will address it to Mr. Leigh Smout, who, I believe, was at the Toronto Global Forum, chairing a panel I was on. As chair, he wasn't able to intervene on the subject we were discussing.

We had discussed the rise of protectionist tendencies in the world and our concern as Canadians for the protection of free trade. I wonder, Mr. Smout, if you would like to comment here today on where you see global trends moving and how you feel Canada can continue to push for open borders and free trade.

[Leigh Smout]

Thank you so much Member Bendayan. It's very nice to see you again.

I think it probably goes without saying that we are strong advocates of free trade, of opening borders, of allowing businesses to move products, of reducing non-tariff barriers and so on. I think the opportunity is to join with like-minded organizations to work together. It has to be all about collaboration.

I was on a call today with the ICC, the International Chamber of Commerce out of the U.K., about green programming or trying to run with COP26. I think the opportunity for us in Canada is to engage with like-minded folks. Our market is far too small for us to think that protectionism is going to support us in any way. We have to be open to outside markets, and for that, we have to reduce protectionism here and we have to advocate for it to be reduced elsewhere.

[The Chair, Liberal, Judy Sgro]

Thank you very much to you and all of our witnesses. It was very valuable information as we move forward into 2021. I wish you all luck.

Committee members, we have to leave this call and tap into another ID number and so on for the committee business, so I'll ask everybody to leave and re-sign in with the other connection.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Chair, I would like to know one thing.

[The Chair, Liberal, Judy Sgro]

Yes, Mr. Savard-Tremblay.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Is there a pause in between or do we need to reconnect immediately?

[The Chair, Liberal, Judy Sgro]

The concern is that it's going to take a few minutes. It's different from how we've done it before. I guess everybody could take a two-minute break, but get signed in first so that we're all going to be there.

Thank you. See you all in a minute.

[Proceedings continue in camera]