Evidence of meeting #31 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
1:55 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Madam Chair, perhaps I might just have a quick intervention before we get started.
1:55 p.m.
Liberal
The Chair Liberal Judy Sgro
Please, very quickly, we have a lot of important information here.
Go ahead, Mr. Blaikie.
1:55 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
I appreciate that. It's just with respect to the last round of questions. I know that usually if my colleague from the Bloc gets to his next question, that courtesy is usually extended.
I do want to get on with the meeting, so I'm not going to make any more of it for now. I know you have many things to manage in the course of a meeting, but it's a practice that may become contentious were it to continue, so I just felt obligated to raise that with you.
1:55 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Blaikie. I should have clarified that. I was supposed to have stopped at 1:45. I'm always anxious to try to get everybody a chance to speak as much as possible, and I missed the 1:45 deadline, so that's where we're at.
Thank you for raising both of those issues, both members.
Okay, Ms. Kwan, you have the floor, please.
1:55 p.m.
Rosaline Kwan Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Thank you, Madam Chair.
Good afternoon. I'm Rosaline Kwan, director general of the trade sectors bureau of the trade commissioner service at Global Affairs Canada. It's my pleasure to be here with you today. As a representative of Global Affairs Canada, please allow me to say a few words about the trade commissioner service, the TCS for short.
The TCS is a network of international business professionals who help Canadian businesses grow through international sales, commercial partnerships and investment. The TCS has over a thousand trade representatives working in over 160 cities around the world, including in offices across Canada, to help Canadian firms succeed in entering or expanding in international markets. Over a hundred of these trade commissioners have responsibilities that include supporting Canadian clean-technology firms.
Within the federal clean-tech ecosystem, the TCS is just one player in the wider ecosystem of clean-growth partners that includes colleagues who are with us here today: NRCan, ISED, ECCC, SDTC and our international trade portfolio partners EDC, BDC, CCC and Invest in Canada. We all work closely together to help start-ups and scale-ups of clean-tech firms. Witnesses here today are all part of the clean growth hub, a unique whole-of-government focal point for clean technology, dedicated to supporting Canadian companies to navigate federal programs and services.
As this committee has heard through the input of industry witnesses, domestic efforts to scale and finance clean-tech companies are key to increasing clean-tech exports, and we collaborate closely on this effort.
ISED supports Canadian clean-tech businesses through a number of programs and initiatives, including the strategic innovation fund and the recently announced net-zero accelerator. The strategic innovation fund has been a critical tool to growing Canada's economy while advancing Canada's green industrial strategy and transforming the economy for long-term, cleaner growth. The strategic innovation fund has invested over a billion dollars in large projects with a significant clean-tech component, and the net-zero accelerator will further drive investment to large emission-reducing and job-creating projects across every region of Canada.
Budget 2021 includes funding of $1 billion over five years to leverage private investment towards large, transformative clean-technology projects. This initiative will eliminate risk from decarbonization projects for traditional lenders, bring down the cost of capital and make many of these large-scale projects more economically feasible while decarbonizing the Canadian economy and creating new jobs.
Other partners I've mentioned include SDTC, which supports small businesses and start-ups in their commercialization efforts. As of March 2020, SDTC has provided $1.28 billion in funding to 447 projects. SDTC-supported companies have generated $2.7 billion in annual revenues, created more than 14,000 jobs and brought 126 new technologies to market, reducing greenhouse gas emissions by an estimated 19.3 megatonnes annually.
BDC has the only dedicated pan-Canadian clean-tech financing team, with Canada's largest clean-tech fund of $600 million. Through this team, BDC offers clean-tech entrepreneurs equity and financing solutions to support and accelerate their growth and operations. As of March 2021, $370 million has been committed.
NRCan helps Canadian companies develop new, innovative technologies and products to transition to a low-carbon future. The department also assists Canada's natural resources sectors, helping them to improve their efficiency, adopt clean technologies and develop our resources sustainably. NRCan has several clean-tech support programs and initiatives to support resource industries and value chains.
ECCC has policies, regulations and funding that spur the development and scale-up of our clean technologies domestically and abroad. ECCC helps Canadian exporters of environmental and clean-tech goods and services expand into foreign markets by leveraging ECCC's international environmental co-operation networks with foreign governments and stakeholders, and through its multilateral and bilateral initiatives, including environmental co-operation agreements or environment chapters of free trade agreements.
Canada's export credit agency, EDC, plays an important role in supporting Canadian exporters through the provision of innovative financial solutions. EDC is the largest provider of financial solutions for Canadian clean-tech companies looking to expand their businesses internationally. In 2020, EDC served 288 clean-tech companies and facilitated $4.6 billion in trade in the clean-tech space and close to $14 billion since 2012.
Canadian firms are leading the way in the development of the clean technologies the world is seeking. The environmental and clean-tech sector contributed $70.5 billion to GDP in 2019, provided more than 341,000 well-paying jobs and is growing faster than the rest of the economy.
The sector exported $13.5 billion of environmental and clean technology products in 2019, accounting for 1.8% of total Canadian exports. Three-quarters of these exports were destined for the United States. Europe, with $1.7 billion, and Asia, with $1.2 billion, were the other important markets for Canadian environmental and clean-tech products and services.
Canada's modern free trade agreements provide Canadian clean-tech companies advantages by eliminating tariffs, creating an equal playing field for service providers, improving labour mobility provisions, and expanding access to government procurement opportunities when applicable, among others.
For the trade commissioner service, promoting clean tech in global markets is a key priority, as you've heard from many of the witnesses through the sessions you've had, a priority supported by our clean-tech international business development strategy. This strategy was first announced in budget 2017 and renewed through budget 2021. It has proven successful at helping Canadian clean-tech firms tap into export opportunities and the rapidly growing pools of global climate finance. Since 2017, this strategy has helped generate more than $83 million in commercial successes by Canadian clean-tech firms, helping them to scale internationally.
Our trade commissioner service programming and services have supported hundreds of Canadian clean-tech firms across Canada to secure international research and development partnerships and diversify into global markets. Through our CanExport programs, we have provided $10 million to support over 260 clean-tech projects. Since 2019, our Canadian technology accelerator programs have supported over 85 of Canada's most promising clean-tech firms to improve their access to global markets.
The clean-tech sector represents significant opportunities for Canadian companies and the economy as a whole. The collaborative efforts of the TCS and all our partners in promoting clean technologies position Canadian workers and businesses to be among the leaders in the increasingly low-carbon global economy.
Thank you for the opportunity to join you today. We look forward to your questions.
2:05 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Ms. Kwan. It was great to see you again.
We'll go on to Mr. Aboultaif, for six minutes, please.
2:05 p.m.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
Thank you, Madam Chair, and thanks to the witnesses.
This question is for Ms. Kwan, since she spoke first on behalf of the departments.
We have a trade deficit of $6.4 billion on complete trade of $33.5 billion, and 70% or more of that export goes to the United States. That means the deficit is mostly with the United States. In the 2021 budget, there's $21.3 million over five years to enhance the export and activities of ECT.
In your honesty, do you believe the $21.3 million over five years is going to really help us to at least balance the trade, which is significant, $6.4 billion or about 20% overall?
2:05 p.m.
Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Thank you, Mr. Aboultaif, for your question.
Yes, we did get a renewal through budget 2021 for the resources we have in the trade commissioner service. That includes trade commissioners in Canada at regional offices. That includes trade commissioners abroad in international key hubs where we see the greatest opportunity for Canadian clean-tech products and services. As I mentioned, these resources were put in place first in 2017, and as I outlined, we've seen through our metrics and tracking that they have generated promising and very positive results.
What we do with our resources, starting from within Canada, is supporting our Canadian companies and working with them and linking them up through the network that you see here with us today and through their reach—you can imagine how expansive that could be and that could be beneficial to Canadian companies—to the international piece where we have trade commissioners locally in place to help connect them with the opportunities abroad.
2:05 p.m.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
The $21.3 million is going to be spent on hiring more people from the public sector in order to help and assist. What about the industry? How are you going to help the industry to enhance the export and do more, when the trade deficit has not been getting any better since 2016? What makes you believe that what we're doing is working, and how are we going to really, again, balance those trade deficits?
2:10 p.m.
Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Thank you. You raised a really important point. Perhaps I could address that first by talking about the trade diversification strategy. As you mentioned, we want to be able to help our companies grow internationally to build up their capacity to succeed globally. Maybe I'll pass it over afterwards to my colleague at ISED, Mr. Noseworthy, to talk about programs that will be put in place, that have been put in place, to support Canadian industry.
As part of the trade diversification strategy, as you might have heard from other witnesses as well, we look very much at enhancing tools and opportunities for our Canadian companies and increasing the capacity of our own network to be able to serve our Canadian companies. We look at where we trade, whom we trade with, what we export and who exports, including very much supporting some of the themes that were talked about in the session just before, in promoting women leadership, under-represented communities, etc.
We have a number of programs. I talked about CanExport and the funding that's gone into that to help Canadian companies make connections abroad, internationally. Also, there are tools that we've built, and we continue to build, to be able to work with our companies and help them access information at their fingertips through websites and information tools, as well as through the resources of our network, as I've explained. The trade diversification aspect is important, because it does help us access more markets and tap into more opportunities internationally.
Maybe I'll stop there. I will invite my colleague Mr. Noseworthy to talk a bit about programs under ISED that are helping Canadian companies in this area.
May 14th, 2021 / 2:10 p.m.
Andrew Noseworthy Assistant Deputy Minister, Clean Technology, Department of Industry
Thank you for the question.
I'll start by saying that the clean-technology sector across Canada is undergoing a transition. We're starting to see companies scale, but the majority of them are still quite small but highly dependent on export markets.
There have been two key pieces that, I think, specifically address how the companies in this space can help build Canada's trade capacity. The first is that we've been working very closely with them to assist them in developing first commercial demonstration projects in international markets. Collaboratively with the trade commissioner service, we did an exploration trip to India with a number of companies related to water technologies about a year and a half ago in that space. Both the IREP program and SDTC are capable of supporting companies as they move in that space.
2:10 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Noseworthy. I have to move on.
Ms. Bendayan, go ahead, please.
2:10 p.m.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you, Madam Chair.
I know that we have a very impressive list of witnesses before us and not a lot of time. I may therefore ask in some of my questions that information be tabled with the committee.
First, Ms. Kwan, I'm thinking, in particular, of your reference regarding BDC's assistance in scaling up clean-tech companies. If there is any information that you could provide to the committee in writing regarding how many companies are in those initiatives, that would be very helpful.
I'm also interested in hearing about how discussions and development with our American counterparts are going about establishing harmonized standards for electric vehicles. I know that work began some years ago and is ongoing. I'm not sure if anybody is able to speak to that at this time.
2:10 p.m.
Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Madam Chair, we'll be happy to provide some statistics and information on BDC. If we have time, we have Susan here, who could very much talk about that, maybe briefly.
On the U.S. harmonized standards and e-vehicles, in terms of specifics, I wouldn't have those on hand. I was going to invite our colleagues over at NRCan, Mr. Dufour perhaps, to talk a little bit about our work related to the importance of e-vehicles and the battery—
2:15 p.m.
Liberal
2:15 p.m.
Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Maybe I'll invite Mr. Dufour, and if we have one minute left or so, we can invite Ms. Rohac as well.
2:15 p.m.
Daniel Dufour Director General, Innovation Branch, Department of Natural Resources
Thank you, Rosaline.
I think this one is better addressed by my colleague from ISED.
2:15 p.m.
Assistant Deputy Minister, Clean Technology, Department of Industry
My apologies. I have no specific information in this space and have not been dealing with the issues around the U.S. market.
2:15 p.m.
Liberal
Rachel Bendayan Liberal Outremont, QC
Okay, that's not a problem.
I wonder, then, if we could hear from any of the officials on how discussions are moving forward in terms of getting electricity grids. I know that President Biden and our Prime Minister did have the opportunity to discuss the export of some of our electricity to the United States. I'm not sure if anybody has knowledge about those initiatives.
2:15 p.m.
Director General, Trade Sectors, Department of Foreign Affairs, Trade and Development
Thank you.
I would perhaps invite Mr. Presutti.
Would you have any comments in that regard?
2:15 p.m.
Marco Presutti Director General, Low Carbon Energy Sector, Electricity Resources Branch, Department of Natural Resources
Certainly. On connecting clean power, when it comes to our power centre, Canada is in the envious position that we have a large share of resources, our electricity supply, coming from non-emitting technologies. About 82% of our supply comes from hydro power, nuclear and sources that don't emit greenhouse gases.
We have been working at NRCan not only from the perspective of the Canada-U.S. relationship but also interprovincially between provinces in Atlantic Canada, between Saskatchewan and Manitoba and in British Columbia to develop transmission interconnections. It's a big focus of our work. We have been working to do due diligence on particular projects. We have been working with the Canada Infrastructure Bank to try to develop co-financing models where we could support provinces and utilities in developing those technologies.
With regard to Canada and the U.S., there are a number of projects that have been proposed that are going through regulatory processes, both on the Canadian side of the border and on the U.S. side of the border, particularly in eastern Canada with some of the northeastern states. We're working with some of those jurisdictions to advance those projects, again through the regulatory process, and consider possible opportunities for federal co-financing of projects.
2:15 p.m.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you very much, sir.
Madam Chair, do I have time for one more question?
2:15 p.m.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you very much.
Given that you touched a little bit on the possibility of interprovincial grids, would it be possible, either now or by tabling with the committee, to give us a sense of where some of those projects are at? I believe there is ongoing work, as you mentioned, connecting the Atlantic provinces with our very clean and important electricity here in Quebec.