International Trade Committee on May 30th, 2024

[Brian Kingston]

It's the EV mandate. Canada has always aligned its emissions standards with the federal U.S., and that has delivered significant emissions reductions year over year. It's why you have a compelling case to build vehicles in this market, because our regulatory environment is aligned with the U.S.

What Environment Canada has done is set up Canada-unique regulations dictating what vehicles can be sold in this country and at what ratio. This is a major departure from a long-standing approach to align with the federal U.S. It is a competitiveness challenge. It is a huge irritant, and it needs to go away before we get to a CUSMA review.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

You speak about some of the tariffs put on China. You mentioned it a little bit in your testimony. You spoke about what Canada could do to strengthen our position on that, and I'm hoping that you've come with some of your thoughts and suggestions.

[Brian Kingston]

Yes, there are a few things. First of all, we have to make sure that the Americans know that we stand shoulder to shoulder with them on this approach to China. That is priority number one, particularly as we get towards this review.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Do you think they don't think that now, Mr. Kingston?

[Brian Kingston]

I don't know if a signal has been sent, and that needs to be sent clearly and strongly. That's the first priority because as they look at the North American free trade deal in CUSMA, if they view us as a weak link on China, we will have a problem.

That needs to be communicated clearly. There are a number of steps that can be taken. There's obviously the tariff, which is a blunt instrument. You could do what the European Union has done, an anti-dumping or a subsidy investigation. That's another avenue. I think we should be looking at all possible avenues.

The other thing that we should examine, too, is that the White House has launched a security investigation into connected vehicles from China. If it's a security threat to the Americans, I would think it's a security threat to Canada.

Those are the types of things that we should be investigating and making sure the Americans know we are with them on.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I think it was a mutual friend of ours, Chris Sands, who said the levels of compliance will be an important issue going into the CUSMA review. Do you agree with him when he says that?

[Brian Kingston]

I'm sorry. Compliance in terms of...?

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I mean the levels of compliance in general. You've already spoken about some of the concerns when it comes to the industrial policy and the environmental policy, so I would suspect you would agree. However, when we look at where Canada's heading in 2026, and depending on which president we're dealing with at the time, would you agree that levels of compliance would be an important aspect to focus on when—

[Brian Kingston]

On compliance with the agreement, I'd say yes, absolutely. The success of an agreement is whether the parties have lived up to their commitments and, as a result, whether it is functioning as intended. I think that will be important.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

This is my last question. I have about 30 seconds left.

You said that we've done a poor job on critical minerals. What exactly can you point to that hasn't been successful on that?

[Brian Kingston]

The production numbers speak for themselves in that we've seen declines across the board. I think the big challenge is permitting. We hear the various estimates and about the time it takes to get a permit in the mining sector. You're talking about anywhere from 12 to 18 years. That's a challenge.

The government's EV sales mandate says to be 100% electric by 2035. If it takes 12 years to get a permit for a mine, we have a problem.

[The Vice-Chair, Conservative, Kyle Seeback]

We're going to have to end that.

We will move now to Mr. Sidhu for six minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

Thanks to the witnesses for taking the time to be with us here today.

As many of you may know, Minister Ng, Minister Champagne and Ambassador Hillman are leading our team Canada U.S. engagement strategy. I'd like to hear from the witnesses here today with respect to the work they're doing with their U.S. counterparts, and the engagement strategy and advocacy that they would find most helpful within this strategy.

We can start with Mr. Trew. You mentioned the team Canada U.S. engagement strategy in your opening remarks. Can we hear more about your thoughts?

[Stuart Trew]

I'm happy to. Thank you for the question.

My comments were in relation to.... We have team Canada, which obviously I think we have to do. I think most people recognize that. So far it seems to be pushing toward this kind of a smooth or smoother rollover approach.

We put the report out today, and what we're hoping to discuss with our American and Mexican counterparts—if you can call them that—in civil society organizations in those two countries is thinking bigger than that. It's thinking of the review as an actual opportunity to maybe reopen some sectors and some of the chapters to make them more centred on workers and the climate, I suppose, or make them more effective and more beneficial for workers in all three countries. That's where we're coming at it from.

There's no doubt we're looking forward to consultation processes in this country, in the United States and in Mexico over the next two years.

We're also thinking ahead to next year. We don't just have the CUSMA review in 2026, but of course we have a 2025 review of the labour chapter and the environment chapter. We're hoping that maybe this review and the work we're doing in the next year will include working with Mexican and U.S. labour unions and environmental groups on those policies as well.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

I'll turn to Mr. Kingston next.

[Brian Kingston]

In terms of the team Canada engagement strategy, first and foremost—the government's been doing this quite successfully—it's working with state governors, reminding them that Canada is, in many instances, their largest trading partner. I don't think lots of Americans necessarily wake up thinking about Canada, so it's important to remind them how critical we are to their economic success. That's number one, and that's just table stakes.

Number two, we need to find areas where we can show the U.S. that we are a constructive partner in achieving their desired outcomes. Regardless of who wins the presidential election, this transformation in the automotive industry, this desire to have critical minerals sourced from North America, positions us extremely well if we can show that we can be that reliable partner that can help that transformation happen. That would be another area where I think team Canada should really focus its efforts.

[Maninder Sidhu, Liberal, Brampton East, ON]

Going on that, are there certain regions in the U.S. where you think we can lean on industry and the industry-to-industry relationships? As you know, auto parts go across the border multiple times. Are there certain states that you think we have to focus on more?

[Brian Kingston]

I think anywhere you have a large automotive presence, the integration of our economies is well understood. Those are areas where you would have natural allies.

All you have to do is look at what happened when we had disruptions at the Ambassador Bridge and at the ripple effect that went through the industry, not just in Canada but across North America. Any state where there's an auto presence will understand that we're an integrated part of the U.S. economy. Therefore, it's really important that we get this right in terms of this agreement and our ongoing integration.

[Maninder Sidhu, Liberal, Brampton East, ON]

Absolutely.

You spoke about the Ambassador Bridge blockages. I heard from many folks in the industry, including residents at border towns in Windsor, about the impact it's had on trade. We need to make sure trade flows, and we need to make sure that all of us around this table are approaching this with a team Canada perspective.

I'd like to turn to Mr. Wiens, on the screen, from the Dairy Farmers.

What are your thoughts on the team Canada U.S. engagement strategy? Are there things you're working on with your U.S. partners and counterparts? What do you think would work in terms of advocacy?

[David Wiens]

You know, certainly the relationship between us and our counterparts in the U.S. is very different from what it is for other industries. I mean, obviously, they put pressure on their government to try to capture a bigger percentage of the Canadian market through the CUSMA, so they were given access. Our concern remains more that they continue.... Through the panels, they've tried to kind of change the rules somewhat on what had been agreed to in the CUSMA agreement.

Now, I'll say that we continue to relate to our counterparts on many areas, but I will say that, when it comes to trade, there is an area that we mutually have agreed to disagree on, certainly. However, we continue to work with our governments, too, in terms of how to approach the situation.

[Maninder Sidhu, Liberal, Brampton East, ON]

That's great.

Thank you, Mr. Chair.

[The Vice-Chair, Conservative, Kyle Seeback]

We will go to our next round with Mr. Savard-Tremblay for six minutes.

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

Thank you, Mr. Chair.

I thank all the witnesses for their presentations.

Mr. Gobeil, I suspected you had some things to tell us following what has been a real nightmare for your sector in relation to CUSMA. As a matter of fact, I had the opportunity to visit your farm in La Baie last January, if I'm not mistaken.

Can the dairy sector still afford even a small dent?

[Daniel Gobeil]

No. I would tell you that in the last three major free trade agreements, the one with the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, and the CUSMA, the dairy sector conceded nearly 9%. Given the 18% concessions we're being asked to make right now, it's clear that this model is at the limit of what's acceptable, which is why it's so important to defend Bill C‑282 to limit dairy sector concessions.

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

I would like to clarify that Bill C‑282 deals with the supply management system in general, not just the dairy sector.

In your presentation, you mentioned Bill C‑282, which is currently before the Senate. Are you calling for its swift passage before the CUSMA is reopened?