International Trade Committee on May 9th, 2024

[Wilson Miao, Liberal, Richmond Centre, BC]

What more can be done to give Canadian companies or small businesses the tools they need to scale up and compete at the international level?

[Michelle Auger]

I think it can come back to a lot of the comments made by Jasmin about the cost of doing business. There's a lot of cost and regulatory burden on small businesses right now, which impact their day-to-day operations, so the idea of looking into customs procedures just adds another task, right?

I know that we commented on the trade commissioner service earlier. They are certainly a service that we have promoted amongst our membership, but, unfortunately, they go underutilized for SMEs.

[Wilson Miao, Liberal, Richmond Centre, BC]

What about helping small and mid-sized businesses to diversify their export market and the range of goods and services they can export?

[Michelle Auger]

We have to look at that by industry, right? Certain services and goods are not exportable, but what we're seeing is fairly common across the industry. It's the agricultural businesses that are looking for other markets and looking to expand. It's the wholesale. It's the manufacturing. Obviously, targeting some of that communication is helpful.

[Wilson Miao, Liberal, Richmond Centre, BC]

Are your members benefiting from the Indo-Pacific strategies that our government launched to open more new markets or new relationships with countries in that region?

[Michelle Auger]

That's a good question.

We do have some data on where small businesses are exporting. The top exporting market is the U.S., because of its proximity. I can certainly share the slides with you following this meeting and you can take a look, but the number in Canada is quite small in regard to the Asian Indo-Pacific market.

[Wilson Miao, Liberal, Richmond Centre, BC]

That's great. Please do share it with the committee.

[Michelle Auger]

I would be happy to come to see you, yes.

[Wilson Miao, Liberal, Richmond Centre, BC]

The next question I would like to direct to Ms. Smith, from the Railroad Association of Canada.

Throughout this study, we have heard witnesses sharing the importance of climate-resilient supply chains and diversification. Could you please share your perspective on this with the committee?

[Lora Smith]

Certainly. I would be pleased to.

Railroads are four times more fuel-efficient than trucks, generating significantly less greenhouse gases than trucks, both for passenger and for freight. It's the greenest mode of transport.

There's been a lot of innovation done and efforts made. In fact, the RAC recently signed an MOU with Transport Canada on emission reduction. That's very exciting work to be done there in the next few years.

Things like alternative propulsion, alternative fuel and even battery and electrification throughout the passenger rail sector are also very interesting innovations, with exciting times to come in terms of being more sustainable.

[Wilson Miao, Liberal, Richmond Centre, BC]

This February our federal government provided joint funding of $60 million to the Arctic Gateway Group to finish the work on the Hudson Bay Railway.

Could you please share with this committee the significance of the Hudson Bay Railway and the Port of Churchill with regard to northern Canada and the prairie provinces?

[Lora Smith]

I don't have exact data on Churchill, in particular. For shippers, as I'm sure my fellow panellists would attest, it's all about options. It's important to have another way for product to reach global markets. It's critical for them to have funding that allows a short line to be able to finish that work and to assure, again, their planning and their ability to proceed further into their strategic planning processes.

[The Vice-Chair, Conservative, Kyle Seeback]

That's our time.

Members of the committee, it's five o'clock, but if we do a third round, we'll finish at about 5:25, so I'm going to suggest we do a third round.

For the Conservatives, actually, I'm going to take the round, but I'll make sure the clerk is looking at the clock, so I don't give myself too much extra time.

I want to quickly go back to the sufferance warehouses, because recently I met with the Maritime Group. They said that they're being told that their sufferance warehouses might not be renewed by the CBSA.

So, not only do we need more sufferance warehouses, because they speed the flow of traffic, but we might actually lose the ones we have.

How devastating do you think it would be to the Canadian economy if CBSA said, “We don't have the budget to actually come to do the work at these existing sufferance warehouses?” What effect would that have on the Canadian economy?

[Stephen Laskowski]

Well, I guess my message would be to find it in the budget. You need to look at sufferance warehouses as an investment. It's hard infrastructure, sort of, because one could spin it as a private-public partnership. Those sufferance warehouses are created with private money and are set up inland to assist in the movement of the supply chain. There are some similar messages about the struggles with budgets, and they're real. We encourage the minister, through the budgetary process, to find that money. It is not a deal maker when it comes to the overall scheme in a budget.

[The Vice-Chair, Conservative, Kyle Seeback]

Thanks very much.

I want to quickly turn to infrastructure investments. One of the things I've talked about in the committee is that Canada used to be ranked 14th in the world by the World Economic Forum in infrastructure, but we've fallen to 27th. Over that same period of time, the U.S. has gone from 18th up to 10th, and then fell to 12th. U.S. Secretary of Transportation Pete Buttigieg said the fall from 10th to 12th was such a big problem for its transportation infrastructure. In Canada, we've gone from 14th in 2013-14 to 27th recently. We have a massive lack of infrastructure happening in this country right now, and we're a trading nation. Some of that infrastructure, obviously, could be rail infrastructure or other things done by private companies.

What do you need from the government to make the necessary investments in infrastructure, so that we stop this incredible decline that we're seeing in our transport infrastructure, which is critical for trade?

I thought I'd ask the Railway Association first, and then the CFIB, if it wants to comment on that.

[Lora Smith]

Investment is what moves supply chains. It's what we need instead of prescriptive regulations. Investment in supply chains also needs to be looked at as a whole. Rail is one link, but, indeed, being able to invest and have a better policy regulatory framework that encourages investment would enable everybody in the supply chain.

[The Vice-Chair, Conservative, Kyle Seeback]

Do you have a specific policy, though, that would create the environment, so that our rail companies would say they want to make massive investments to expand rail across the country to move goods faster? Is there a specific recommendation you'd have for that?

[Lora Smith]

I gave an example in my opening remarks. Interswitching needs to be repealed. When it was used from 2014 to 2017, there was an indication that investment at that time was chilled. When the policy was repealed in 2017, investment rebounded for the railways—$21.5 billion in the last decade of private money into that network is significant. We would recommend to repeal that policy to encourage investment.

[The Vice-Chair, Conservative, Kyle Seeback]

CFIB, do you have any comments on that?

[Jasmin Guénette]

Very quickly, it's important to encourage investment in rail, road and ports, because our members, small businesses in Canada, use that critical infrastructure to send their goods to markets and to receive their goods. It's quite important that we have a fluid supply chain infrastructure in the country.

[The Vice-Chair, Conservative, Kyle Seeback]

I want to quickly go back to the type of graphite and critical minerals. One of the other problems in Canada is that we don't get projects approved fast enough, so the supply ends up going somewhere else. I just thought that maybe you could comment on this: When it's done in Canada, how important is it? It's done at the lower greenhouse gas emissions per tonne or per kilogram or whatever. There are great environmental standards and great labour standards. How important is it that we do these projects in Canada as opposed to relying on these projects in other countries, due to those countries' environmental and human rights records, etc.?

[Jamie Deith]

The importance is that it's a lot easier to to build a value-added ecosystem in Canada if it has its own secure source of supply here in Canada, or at least in countries friendly with Canada. As far as the North American scene goes, there are currently zero graphite mines in the United States. There's only one operating in Canada, and it's kind of on the downslide. There's a whole vacuum here.

If I understood your question regarding permitting, I don't actually perceive that the issues around the speed of permitting are particularly holding us up. Certainly, that is an issue in the United States. It's a little bit less so in Canada. The real issue, I think, is the inability to attract capital to these projects.

[The Vice-Chair, Conservative, Kyle Seeback]

Thanks very much. That's my time.

We'll now turn to Mr. Arya for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Mr. Simard of the Aluminium Association Canada, what is the approximate installed production capacity of primary aluminum in Canada today?

[Jean Simard]

It's 3.2 million tonnes.