International Trade Committee on May 2nd, 2024

[Michael Woelcke]

It's currently about 16 to 18 weeks. However, we're actually in the midst of an academic study with some world-renowned ice scientists who've confirmed that Churchill can operate six months of the year right now. We just need to get sufficient data. We're doing more targeted research with them now. They will confirm that.

For the process, you have to go to Lloyd's of London. They're the insurer. They have to insure the ships, and then the shipping companies will ship. We could go six months of the year. That would have a huge impact on the Kivalliq region of Nunavut, because it would allow ships to come up Hudson Bay from Churchill for a much longer period of time. I think, as you said, the capacity out of Montreal is pretty significantly full right now. This offers an opportunity to enhance that and to work. It's not to compete against them but to add capacity, which will assist the communities.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

That's the region—

[The Chair, Liberal, Judy Sgro]

I'm sorry. That's time.

We have Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I'd like to thank the witnesses for being with us today.

I'm going to start with Mr. Woelcke.

In your remarks, you mentioned a vision of maximizing Arctic trade and the Arctic trade corridor. You mentioned the benefits, including reconciliation and the participation of indigenous communities as full partners.

My colleague spoke earlier in his questioning about—unfortunately—budget 2024. There are no additional dollars towards the critical supply chain infrastructure required.

You mentioned the investment so far. For rail, it's about $150 million to stabilize the current Hudson Bay rail system. You're going to need a $500-million investment in the port itself. You also talked about your three points. One was increasing access to Arctic regions. My colleague mentioned it best—the notion of a sealift. However, you mentioned the investments required for your specific projects.

Do we have the capabilities in other areas of our Arctic regions to handle that additional sealift? Do we have the ports and facilities to address the growth you plan and hope for?

[Michael Woelcke]

Sealift is provided by ships that are about 10,000 to 15,000 tonnes, out of Montreal. An alternative that we have considered and are seriously looking at is what's called a tug and barge operation.

If you operate a tug and barge out of Churchill, you could operate probably a weekly sealift using tug and barge. In other words, you could go to a frequency of 18 in a season right now. That additional capacity....

You see all these communities like Rankin Inlet or Arviat and you speak about the housing construction. None of them have built-up ports that you can actually bring a ship right next to. They use a lightering system. They bring smaller ships out. Barges can be moved in closer as well, so you could have a mechanism that works together with sealift that could provide for significantly greater commodities and goods.

We talk about the housing supply challenge. We could assist by bringing prefabricated components through Churchill to that region.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That leads into my next question.

What kinds of sectors of the economy do you see benefiting from this and the investments that are being made?

[Michael Woelcke]

The commodities we're looking at targeting.... One group is Nunavut resupply. Another would be agribusiness.

There are still large sectors of Saskatchewan, Manitoba and parts of Alberta that are the farthest away from any of the current ports, and for their agricultural product capacity, Churchill is the nearest port. It would allow them an opportunity to ship commodities to Europe, the Middle East and even South America.

Another one is critical minerals. Everybody's looking at critical minerals right now. Manitoba, like many other provinces, has a significant abundance of them. In fact, we're doing our first shipment of zinc concentrate from Manitoba to Churchill to Europe this summer. It's something we're pretty excited about.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Mr. Onalik, has your agency looked at the types of investments in infrastructure that would be required to handle increased capacity with, for example, sealift? What would be required?

[Jimi Onalik]

It's definitely a part of the conversation. I know we've been working with several companies that are looking to scale up in modular housing. The current sealift system is not really set up to handle modular in that way.

It's really exciting. I think the opportunity for us to leverage what's already been committed—what's already in the plan—and get things built faster and get things built is probably less money and more coordination. That's something that CanNor hopes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

In our briefing notes it says that under the five-year plan of the pan-territorial growth strategy, some food sectors are looking to export their products, but it indicated some regulatory problems that were hindering that ability.

Can you explain what some of those regulatory burdens are?

[Jimi Onalik]

We've been working a lot with the territorial partners who have a lot of the infrastructure responsibilities to handle food inspection and to make sure that meat plants are export-capable. We've been working behind the scenes to support their work in that area.

[The Chair, Liberal, Judy Sgro]

Thank you.

Ms. Fortier, you have five minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Madam Chair.

The issue of the north, which we're discussing today, is of great interest to me, particularly when it comes to northeastern Ontario. That's where my parents and grandparents came from, and they did a lot of business there.

I'm very interested to see how francophones have played an important role in northern Ontario for many decades. They play a critical role in its economic development. You said that they represented 24% of francophones in the province, if I'm not mistaken, Ms. Perreault.

How is the Federal Economic Development Agency for Northern Ontario, or FedNor, helping businesses in northern Ontario to succeed and prosper, both in the region and elsewhere?

[Lucie Perreault]

FedNor provides targeted support to the region's official language minority communities, including through the Government of Canada's economic development initiative. Since 2015, approximately $6.4 million has been invested in francophone communities under this program. In addition to this initiative, our core programs have also made it possible to make key investments in official language minority communities, totalling $60 million since 2015.

For example, we supported Drillco Mining, a francophone company in the critical minerals sector that created the industry's first modular clean‑tech drilling system. We've helped them export that technology.

I would also like to point out that FedNor has 101 positions, more than 50% of which are designated bilingual. This allows us to support bilingual organizations.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Have these companies told you about certain barriers? Have they talked to you about how they might be able to develop and export their products through your investments?

Do you do that type of analysis to adapt the programs?

Do you think certain programs need to be adapted to allow the initiative to move forward?

[Lucie Perreault]

Francophone businesses and a number of businesses in northern Ontario are very small, and they're having trouble growing. Part of it is that it's a very large area, so there are challenges. However, it's also a question of capacity.

To be able to advance the situation of francophone businesses in those regions, you need a critical mass. We're working on types of models, such as co‑operatives, to bring people together and reach that critical mass. That way, they can move forward and get the support they need. We want it to be multi‑purpose.

It's a good approach, but it always comes back to the capacity issue. The businesses are small, and we need to bring them together so that they're able to move forward and work more collaboratively.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

I'm going to move on.

Last year, I had the privilege of touring northeastern Ontario to understand how certain companies operate and their connections not only with FedNor, but with other authorities as well. In fact, I had the opportunity to meet with you on this tour.

I visited Three H Furniture Systems in Temiskaming Shores. I was pleasantly surprised to see that it does business with the United States. However, I've heard about some of the regulatory barriers and difficulties. I know that some thought had been given to how FedNor could help businesses facing these difficulties.

Do you think FedNor can help these companies? Are there other ways to help businesses that face regulatory barriers?

The company I mentioned gave me a real‑world example of the difficulties it faced. What's preventing it from doing more is the lack of targeted support.

I'm trying to understand if your programs can help them or if there are other ways to remove those regulatory barriers.

[Lucie Perreault]

This is a good example of how the agency is able to help these businesses with the regulations.

If we're not able to provide businesses with financing, we're still able to give them advice on certain things.

We're also prepared to sit down at the table to find solutions and reduce the number of barriers. We can also discuss what we can contribute to other levels of government or to the departments.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you to all of our witnesses. We received valuable information from all of you.

I will suspend for a moment while we exchange places and have the other witnesses come to the table.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

I call the meeting back to order.

Thank you all very much.

We will start with opening remarks from Mr. Carey and Mr. Harvey for up to five minutes.

Please go ahead.

[Michael Harvey, Executive Director, Canadian Agri-Food Trade Alliance]

Good afternoon.

I'd like to thank the members of the committee for inviting us to take part in this study.

The Canadian Agri‑Food Trade Alliance, or CAFTA, is a coalition of national organizations that advocate for a freer and fairer international trade environment for the agriculture and agri‑food sector.

CAFTA's members include growers, ranchers, farmers, processors, producers and exporters from key trade sectors such as beef, pork, grains, oilseeds, sugar, pulses and soybeans.

As I said, CAFTA works for a fair and open international trade environment. This is in our country's economic interest and in our national security interest with respect to making an important contribution to international peace and stability.

Economically speaking, agri-food is responsible for one in nine jobs in Canada, the majority of which are in export-based agri-food. In 2022 Canada exported nearly $92.8 billion in agriculture and food products, including raw agricultural materials, fish and seafood and processed foods. More than half of our agricultural production is exported or processed to be exported.

[Dave Carey, Acting President, Board of Directors, Canadian Agri-Food Trade Alliance]

CAFTA members have established the following priorities for our work.

One, to open new markets for Canadian agri-food, including by prioritizing trade liberalization discussions with growing emerging markets like Indonesia and ASEAN countries.

Two, to uphold the international rules-based trading system. A delegation of CAFTA members attended the WTO's recent ministerial conference in Abu Dhabi. We witnessed first-hand the challenges the system is facing, and we support Canada's efforts, through the Ottawa Group, to advance key priorities at the World Trade Organization.

Three, to strengthen trade diplomacy capacity and industry-government collaboration. We welcomed the opening of the Indo-Pacific Agriculture and Agri-Food office in Manila and we are co-chairing the industry working group that is assuring alignment between government and stakeholders.

In terms of our national interests and our contribution to the world we live in, Canada is the world's fifth-largest agri-food exporter. We are one of the few countries in the world producing enough food for ourselves while at the same time feeding others around the world. We make an important contribution to international peace and security and to feeding the hungry, especially at a time of international instability when major grain producers are at war. We cannot forget that these economic and national interest contributions are a function of ensuring that our customers see Canadian products as being competitive and reliable.

These customers place great emphasis on predictability in food delivery. Supply chain challenges affect predictability, as evidenced by COVID and the effective closure of the Suez Canal and the Red Sea, as well as reduced capacity in the Panama Canal. There have also been major disruptions in Canada caused by natural disasters, strikes and other protests.

Key elements of Canada's supply chain affecting Canada's predictability are bulk and container shipping and rail, road and port infrastructure. We know you've listened to representatives of these key sectors in your previous committee hearings. There are also deficiencies in the road and bridge infrastructure in smaller municipalities where farms are located, making the connection from farm gate to national trade corridors less efficient.

Further, it is important to underline that reliable labour relations have been a challenge in recent years, and our customers are noticing. Customers abroad and exporters in Canada are the main sufferers when strikes or lockouts take place in monopoly service providers, such as the railroads.

These are just some of the ways in which supply chains can affect our ability to succeed in global markets.

We'd be pleased to answer any questions the committee members may have.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

From the Canadian International Freight Forwarders Association, we have, by video conference, Bruce Rodgers and Julia Kuzeljevich, director of policy and regulatory affairs.

[Julia Kuzeljevich, Director, Policy and Regulatory Affairs, Canadian International Freight Forwarders Association]

Good afternoon.

Madam Chair, committee members, on behalf of the Canadian International Freight Forwarders Association, or CIFFA, I'd like to thank you for the opportunity to appear before you today.

CIFFA is keenly interested in measures to enhance and protect our national supply chains. Our membership represents all parts of the chain, including the truckers who serve the ports, called drayage operators; the brokers and forwarders, who manage 80% of Canada's imports and exports; the customs brokers, who facilitate shipping through national borders across the world; and operators of warehouses, where goods are stored awaiting release, assembly and distribution.

We really appreciate the committee's decision to invest time in this subject. Supply chain issues are a critical factor in our national economy. In your study, CIFFA suggests several topics we believe you should carefully examine. Of course, we're ready to discuss any other item that may be raised as well.

Labour disruption in the ports and railways has been a chronic problem in our country, significantly impacting our reputation as a reliable trading partner. Our economy took a major hit last summer due to the west coast port strikes. Although resolved with the longshoremen, the agreement with the foremen of these individuals is not, and we could be experiencing another disruption this month. We continue to experience ongoing challenges between the parties in Montreal and could be faced with another work stoppage at any time, with only 72 hours' advance notice.

Additionally, both railways are also in a mediation process that could lead to strike action later this month, on May 22. We have received notice from the railways indicating the negotiating parties remain far apart. We have also been informed that in the event of a strike, commuter train services in three major cities will also be disrupted.

Canada is suffering a very serious decline in investment, and this is why: We have an unreliable business environment and we seem to be unable to create an efficient resolution system. These disruptions may close a port for just a couple of days, but the system doesn't bounce back very quickly. It takes weeks to gear up to full capacity again.

The labour minister has promised a study on the key issues in port labour, and we are impatient to see this. Any thoughts on how Canadian labour issues could be resolved with less confrontation and fewer delays would be very welcome, but now we understand that the minister's study may take another couple of years.

As you know, workers often get their lost wages back upon settlement, and the international shipping companies divert traffic to keep it flowing. It's the ordinary Canadian citizens and small businesses that actually suffer.

[Bruce Rodgers, Executive Director, Canadian International Freight Forwarders Association]

Last year, the government's magic bullet in supply chain efficiency seemed to be data sharing. We agree that this can be critical, but we've still not seen a coherent plan and we don't know what data will be required or how it will be shared among agencies.

Another recent issue is the requirement to file data elements on air shipments to the government for security screening. Both the CBSA and Transport Canada require identical data elements, although Transport Canada requires the information pre-load, while CBSA requires the information pre-arrival.

These two agencies do not share the data. Canada is running two separate systems performing risk assessments, and both have the potential to levy administrative penalties. This is not a shining example of efficiency. We have not been given any explanation of why the data isn't shared or any assurances that this will be addressed.

It would be great if this parliamentary committee were to demand some explanation. Managing data relations between governments and a huge business community is very challenging. We think the guidelines should include data that is produced in normal operations and doesn't require someone to recreate it, data that reveals industry-wide trends without trespassing on business confidentiality, and data that can be shared in a single form through a single portal for all government users.

The establishment of a supply chain office is an encouraging initiative that we support. We are eager to see the plan the officials are currently crafting, but we certainly have a lot of questions.

A lot of time and effort was expended after the floods and fires in British Columbia. A panel of knowledgeable people toured the country to get input and create a report. A supply chain office was one item of value that they recommended, and it has been established, but the recent federal budget did not provide any funding.

As we all know, infrastructure is one of the key factors in an efficient supply chain. We have seen large funds established for transport infrastructure, but there's no national strategy to help guide investments. We suggest that the committee may want to ask about the role of the new supply chain office in directing infrastructure investments, such as the national trade corridors fund.

One of the urgent issues we face is the need for strong contingency plans for disruptions. In this country, that means close co-operation between provincial and federal governments. We want to encourage planning now to avoid major delays and disputes when a crisis emerges. We would encourage the committee to push for answers about who has the leadership, what funds would be available and how approvals are granted.

Disruptions can take many forms. CIFFA supports the implementation of processes that are designed to insulate business operations from disruption wherever possible. However, CIFFA members are concerned about the imminent implementation of the CBSA assessment and revenue management, or CARM, digital initiative to change how CBSA assesses and collects duties and taxes on commercial goods imported into the country.

According to the World Bank, Canada is ranked number 51 for trading across borders on the 2020 ease of doing business index. We fear that the implementation of CARM without added contingencies, improved communication channels and a fall-back alternative puts Canada at significant risk.

In conclusion, we see the supply chains as an illustration of our national economic efficiency. In recent years we have been underperforming, and we need to bring urgency to the resolution of problems. This committee is doing a great service by spending time assessing the Canadian model and identifying its weaknesses and opportunities.

Thank you very much for the opportunity. We're happy to address any questions.