International Trade Committee on May 9th, 2024

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

Keeping with the rail association, recently the federal government made an announcement through the national trade corridors funding to the tune of $10.5 million. It leveraged just over $30 million in funding from the private sector and the province for a rail line between Sault Ste. Marie and Sudbury. While the owner is Genesee & Wyoming, it operates as Huron Central in the area. We worked quite a bit with the rail association.

I noted that in your presentation you talked a bit about the different rail, but this one was a short line. The short-line rail lines are usually under the purview of the provinces and territories. At this particular time, through the national trade corridors funding, in this round we were able to fund this short-line railway. It provides absolutely important services. Without it, it would be like putting 30,000 transports on the road in a year. It's not just between Sault Ste. Marie and Sudbury, because you're not going to stop and reload them onto a train and then send them to Montreal or Toronto. Rather, those transports would probably continue. It was a safety issue, it was a carbon issue, but it was also an operating economic issue.

How important is the national trade corridor funding to the rail industry and the supply chains, and how important was it to change the criteria to make it more extensive?

[Lora Smith]

I can't speak to the exact example you're asking about with Huron Central, but I know that in general for short lines the biggest problems are that these are often very small businesses that are operating infrastructure that is spun off from the class I's. Therefore, some of the lines and infrastructure they inherit, as they attempt to optimize and provide service to these rural and regional areas, need a lot of work right from the beginning. Having the financial instruments that can help them be able to have the ability to plan and have that money available to them is critical. The predictability of it and making it administratively simple, which we've heard from other speakers, is also very key and very fair.

We were disappointed in the budget in that there wasn't more national trade corridor money, because it is critical for those in the supply chain to make these large investments when it's needed. Having dedicated funding mechanisms remains a real concern for the industry.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you for that.

Just keeping on that, I think that's a perfect example of where one issue in the supply chain lies that was brought to my attention. I've been working on this rail file for quite a while. I kind of inherited this when I became an MP. It was explained to me pretty succinctly. In the shipping industry, nobody owns the oceans or the Great Lakes, per se. In the airline industry, no one owns the air. But the rail lines are owned by rail companies.

Here's where the quagmire is: That line was owned by CN. They allowed it to degenerate to a place where, quite frankly, they didn't want to operate it and they didn't want to invest in it. You know, it was one of the.... They don't own the rail line, this company wants to operate on it and they were all doing this. How can the rail industry take a little bit of ownership on the infrastructure that they do own? It's very important.

Lora, I comment on this particularly because we can bring that stuff up to a level where freight can operate on it. However, as you've noted in your remarks, we want to see more passenger rail. Passenger rail needs a newer level, a bigger level, of what rail lines are doing so that they can operate at a speed, between, for example, Sudbury and Sault Ste. Marie, that would allow for passenger rail. Freight operates on a level that is at a lower speed, but if you want to get passenger rail, you'll have to see the infrastructure on the rail lines, privately owned, pick up.

Is there an interest by the rail carriers? I've heard not—that they don't want to be in passenger rail and they only want to do freight. Could you please just explain to the committee what I've heard over the last few years and what exactly the rail industry is doing about passenger rail?

[Lora Smith]

As an association we and our members advocate for dedicated track for passenger rail in order to accommodate the growth that's needed and predicted, or forecast, for both freight and passenger.

We feel that it's the best way to go to assure that for the future—to future-proof it—to be able to take advantage of the greenhouse gas reductions that we can have from rail, to take advantage of the environmental advantages that rail offers. The RAC believes that dedicated track is the way to go for passenger rail.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much. I hope to see more passenger rail and not just through the major corridors.

[The Vice-Chair, Conservative, Kyle Seeback]

That's the time, Mr. Sheehan. We're well over. Thanks very much.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much. I appreciate it, Chair.

[The Vice-Chair, Conservative, Kyle Seeback]

We'll now turn to Mr. Savard-Tremblay for two and a half minutes.

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

Thank you.

Mr. Simard, we know that the United States and Mexico were both victims of a major aluminum transshipment scheme in the mid‑2010s, whereby huge quantities of Chinese aluminum billets were disguised as different products in order to avoid hundreds of millions of dollars in tariffs.

Do you think Canada is vigilant enough to prevent such schemes? Does it enforce the rules of international trade law firmly enough in the sector?

[Jean Simard]

We remember that case. A Chinese billionaire used aluminum to move his fortune out of China. The aluminum reserve was discovered in the Mexican desert from an airplane flight before being repatriated to Vietnam. We're talking billions of dollars.

Such a scenario would be impossible in Canada, which has a very robust import control system for aluminum, including mandatory reporting by importers. This system provides a high level of visibility in near‑real time, with data available within 24 hours. Our industry is vigilant, and we're very satisfied to date with the measures put in place by Canada.

That said, it's a very fluid market. It's a very valuable metal. The North American market is certainly the most attractive market in the world for aluminum exports. So we're not immune to such attempts. The important thing is to remain vigilant and to work, as we are already doing, with the Government of Canada to maintain ties and to identify any anomalies that could eventually lead to a crisis situation.

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

We know that the aluminum produced in North America is one of the cleanest in the world. Carbon emissions per tonne of aluminum have decreased by nearly 50% since 1991. We know that this is essential to the transition to green energy in the transportation, electricity generation, construction and packaging sectors, to name but a few.

Can you tell us a bit about the advantages of Quebec aluminum over aluminum produced elsewhere in the world? How could the sector be better supported?

[Jean Simard]

Canada produces metal responsibly and with the lowest carbon footprint in the world. In future agreements on carbon border adjustment mechanisms, we must ensure that our metal, within the parameters that will be decreed, finds its rightful place. We have to make sure that, in the future, we manage to monetize its low carbon footprint, which isn't the case at the moment. Finally, we must continue to support the development and deployment of the ELYSIS technology, to move from two tonnes of carbon emissions to zero, and once again make Canada a world leader in the field.

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you very much.

We'll go to Ms. Blaney for two and a half minutes.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Chair.

Just quickly, I want to say that the interpretation was amazing. Every once in a while, you know, I am just so used to listening to it, and then I hear it clearly and I am just amazed. Thank you to the interpreters for their amazing skills, because I could not do it.

I am going to come back to Mr. Deith again. One of the things I'm reflecting on from your presentation to us is the fact that we are in a global market where a lot of countries have different environmental and labour laws. We know that as we look at Canada specifically we want to find a way to build up that economy and see some growth, especially when it comes to the green economy and the great need we have for that, both in terms of labour and the environment.

Do you feel that Canada should require trading partners to meet our higher standards for the environment, labour protections and health and safety when we have trade agreements? How could we have an opportunity to celebrate the good things that Canada does, especially in terms of these very issues, to promote our goods?

[Jamie Deith]

Yes, I think Canada should hold non-domestic producers to the same standards to which we hold ourselves. One of the reasons we have monopolistic markets, such as what China holds in terms of battery minerals right now, is that the standards are so much lower.

There is the human aspect of this—there's a lot of pointless human suffering that goes on because of lax standards around the world—but also, from a practical, competitive perspective, we're expected to compete on an unfair playing field.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you for that.

For the next part, as we are trying to grow the green economy and look at our transition and our sustainable future, how do we talk about what Canada can bring? How do we provide the stability to those businesses so that we can grow that market internally and externally?

[Jamie Deith]

As a general matter, I would say we want to bring plenty of incentives for an ecosystem to develop domestically. I think we have to get serious about sourcing our supplies and, if necessary, actually using what they call border pricing for differentiating between “clean” and “unclean” sources of materials.

Make up for the difference where we perceive it to be unfair and untenable from a long-term environmental standpoint or from a social perspective for workers, etc.

[The Vice-Chair, Conservative, Kyle Seeback]

Thanks. That's the time.

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

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Chair.

Thank you to all of the witnesses for being here this afternoon.

I'm going to begin with the Canadian Trucking Alliance and Mr. Laskowski. Thank you for your presentation and for providing your seven recommendations, which you shared with the government in February and with us today.

I'm interested in your comments on the whole CBSA and sufferance warehouse aspect, as well as CFIA inspections, as opposed to regular border crossings on commercial aspects.

I guess the CFIA only works on a nine-to-five basis. Could you explain that to me a little further?

It seems to me that sometimes, when we look at supply chains, the government itself can be the obstacle. We can work to eliminate that and make sure that the government is in the facilitation of trade, not hindering it.

I was wondering if you could provide some comments, please.

[Stephen Laskowski]

Thanks for the questions.

I'll start with the sufferance warehouses. As I mentioned earlier in my opening comments, in essence, these sufferance warehouses allow the supply chain and the trucking industry that's moving those supply chains to, instead of clearing loads at the border, which sometimes can be very congested....

Going back to the Gordie Howe bridge, now you'll have what's referred to in our industry as the "secondary" inspection. If you don't clear, the truck has to go for inspection at the secondary inspection, and some of those secondaries can be very crowded.

What a sufferance warehouse does is allow the carrier and the customer to potentially clear inland into a secure area with Canadian customs present. Obviously, that requires investments and technology and secure yards—all of it. The request has been to bring these sufferance warehouses back in greater numbers.

I'm oversimplifying everything, but it requires investments.

As we see currently, when we have labour disruptions, like at marine ports and all the rest of it, the same thing could apply. You could bring those containers out, bring them to the sufferance warehouse yards and clear them in those yards. The ask of the CBSA, and through budgets, is to increase the spending here, both on technology and on labour, because you need someone physically at those yards.

With regard to the CFIA, the USDA and the rest of it, as mentioned earlier, the border is open 24-7. Trucks clear it 24-7. When it goes to Agriculture and FDA, in particular in the United States, they are not there 24-7. It's much to their chagrin, as well. These are their customers we're moving, so a long-standing request is to correct this.

We're always amazed, as an industry. We spend billions of dollars on both sides of the country to make trade work. I'm always accused by some folks of oversimplifying things, but we're talking about a few people here, folks, not billions of dollars. That needs to happen, because what happens once those people leave is you are shut down. When it comes to food and produce, that product cannot move inland; it needs to stay, because we have health and safety rules and food security rules. If there is a recall, everything needs to be traced.

Those trucks wait. Sometimes they wait for hours, and sometimes they wait for days, just for someone to come back to work.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's what I want to follow up on: your term for or notion of waiting.

At our last committee hearing, we had the general manager of the Buffalo and Fort Erie Public Bridge Authority, and he mentioned an upcoming piece of U.S. legislation, the security port act, whereby all U.S.-bound commercial vehicles would now need to be scanned.

They've got an innovative solution that they're working on with Customs and the border patrol. The Americans are investing $20 million. They're putting that scanning equipment on the Canadian side so that it's scanned. By the time the commercial vehicle crosses the bridge, all the information is settled and they get a “go” or a “no go” at the Customs booth.

I'm just wondering, has the government worked with the Canadian Trucking Alliance on this? Are we seeing this at the Gordie Howe bridge, for example?

[Stephen Laskowski]

The answer is yes. We have worked both as the Canadian Trucking Alliance and as the Ontario Trucking Association with the Peace Bridge and the authorities there, and that is the goal: this technology. Because in essence, what everyone wants—both the Americans and the Canadians, and the trucking industry and our supply chain partners—is to have a secure border and secure trade, but with technology we can do it better and faster, and that's what this project is all about.

[The Vice-Chair, Conservative, Kyle Seeback]

That's your time, Mr. Baldinelli. I apologize.

We will now turn to Mr. Miao for five minutes.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

Thank you to all of the witnesses for being here today.

A common theme that we have seen in discussion of Canadian growth and productivity is that Canadian businesses are incredibly innovative but seems to hit a bit of a glass ceiling in scaling up and expanding.

For CFIB, do you have any thoughts you can share with the committee on how access to international markets can assist in the scaling-up process?

[Michelle Auger]

Yes.

Actually, the survey we did in January asked questions around how exporting can help grow businesses, and we did find that a majority of businesses were seeking international opportunities to help grow their business. I do have the deck here, and I'd be happy to circulate that information with you afterwards with the exact data, but that is certainly one of the findings from that survey. Businesses are seeking other markets. However, a significant proportion of those businesses in Canada are very happy with the domestic demand as well.