International Trade Committee on Oct. 21st, 2024

[Tony Baldinelli, Conservative, Niagara Falls, ON]

It's your failed policy, Minister. It takes 15 years to build a mine in this country—

[The Chair, Liberal, Judy Sgro]

Let the minister answer the question, please.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Your policy failed on creating the supply chain, and now you're exempting people from the 100% EV rules on steel and aluminum. How do you square that with the Canadian workers who are out there and the jobs that are at risk?

[The Chair, Liberal, Judy Sgro]

The minister is attempting to answer the question.

Minister, the floor is yours.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

When we do consultations, we talk to a range of businesses, from the large ones to the small ones. What we heard from some—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Did you talk to the 300 workers at GM who have been laid off because the company's V6 line is closed down, because GM is no longer going to be moving forward as—

[The Chair, Liberal, Judy Sgro]

Mr. Baldinelli, the minister has the floor.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

—Ford is with its EV plans?

[The Chair, Liberal, Judy Sgro]

Let her answer the question.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I'll finish the first answer.

When we talk to people, they include some from businesses in that supply chain who might be importing steel right now from China. In an effort to make sure they are not penalized, it's to help those in the supply chain who will take time to reshuffle their supply chain. That's what the remission order is intended to do. That is the answer to your first question.

Listening to Canadian businesses and making sure the actions we've taken—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

It's about their workers.

[Mary Ng, Liberal, Markham—Thornhill, ON]

—will not impact these other smaller businesses in the supply chain are what the remission orders are there for. I'm glad we're actually helping businesses along the supply chain, because that is what we're here to do. We're here to implement tariffs—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Implement a tariff, and then take it off.

[Mary Ng, Liberal, Markham—Thornhill, ON]

—strongly and not take them off but help those in the supply chain, like a construction company or a manufacturer, that actually might need them right now to give them some time to shift their supply chain away from product that is not produced with the right labour standards and environmental standards.

[The Chair, Liberal, Judy Sgro]

Thank you, Minister.

Ms. Fortier, please go ahead for four minutes.

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

Thank you, Madam Chair.

Good afternoon, Minister. Thank you for being here today with your officials.

In your opening remarks, you said that we need to be more competitive domestically and internationally and that the Government of Canada is putting in place measures to propel economic growth and ensure the full participation of all Canadians in this economy.

Given the current geopolitical and economic climate, our committee is looking at ways to ensure the full participation of women in the economy, among other things.

In 2018, the Government of Canada created a women entrepreneurship fund. Initially, when the women entrepreneurship strategy was put in place, the investment was $2 billion. That investment is now at nearly $7 billion.

I'd like to ask you two questions that are related not only to the study we're doing today, but also to the study aimed at finding ways to ensure the full participation of women in the economy.

First, based on your conversations with stakeholders and businesswomen you've met, is the government doing anything else to support women?

Second, what impact do you see these programs having on the rate of return for Canadian women entrepreneurs when it comes to international trade?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Women make up 50% of our society, but for far too long, there haven't been enough women business leaders or women entrepreneurs participating in our economy. That means not having the kind of productivity that we are absolutely able to have in Canada.

Putting forward a women's entrepreneurship strategy, a $7-billion investment since 2018, aims to do one thing: grow Canadian businesses and women entrepreneurs in businesses domestically here in Canada but also, as they grow, in those international markets.

What does that mean to the Canadian economy? The return on investment is $150 billion. If you add more women to the Canadian economy, you're going to add $150 billion to the Canadian economy. That means more jobs and more prosperity in communities.

If we do this globally.... This is the argument we always make with like-minded colleagues. Canada is part of the inclusive trade action group that is growing a network of like-minded countries and colleagues as we trade to grow and to be very deliberate in creating more opportunities for women entrepreneurs and seize the opportunity for $12 trillion for the global economy.

It is really important that we invest so that women's businesses can get access to capital and supports, like mentorship supports, and that we measure the progress. We have gone from 14% participation of women-owned businesses to 17% participation now.

In the trade missions I have taken to many different markets, from Africa to Europe, the United States and Asia, we have had dedicated women-led trade missions. I don't have the statistic in front of me, so I'd be happy to follow up. However, since the trade mission to Japan that took place a couple of years ago, we are seeing actual commercial deals result from that very mission.

Investments in the trade accelerator program help these women understand what it takes to grow their businesses in the international market. The ecosystem and organizations like the Asia Pacific Foundation have led some of these trade missions so that they can get into the market and grow.

However, as I always say as an economic minister, that ain't enough. It's not enough to just invest $7 billion so that women can grow the economy. You need affordable early learning and child care so that a woman can be more productive in their business and in their work. We have an 18-month parental leave, which we legislated many years ago. I talk to business owners all around the world, and the women who own businesses and the women leaders in those countries marvel at Canada's leadership with an 18-month parental leave so that women can be moms and own their businesses and be incredibly productive in the way that they choose to.

Then we passed pay equity. The thing is that women-owned businesses are never going to need that legislation. Do you know why? It's because women pay equally, no matter whether you're a man or a woman, in their businesses. While we have that legislation, which is terrific, I hope sometime in the years to come we will need it less and less.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Ng.

I'm sorry, but we're short on time here today. There's a lot of information and a lot of questions.

Thank you very much to you and your officials.

I will suspend momentarily. If Minister Champagne and his officials can quickly come to the table, we would appreciate it.

[The Chair, Liberal, Judy Sgro]

Members, if everyone could please take their seats, we'll begin the second part of our program today.

We very much appreciated having Minister Ng here. Now we welcome the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry.

We also have some familiar faces from the Department of Industry, including Charles Vincent, senior assistant deputy minister, industry sector; and Benoit Tessier, director general, automotive, transportation, digital and industry skills branch.

Welcome to you all.

Minister Champagne, I will give you the floor for up to five minutes, after which you should be prepared to answer questions from the committee.

[François-Philippe Champagne, Liberal, Minister of Innovation]

Thank you very much, Madam Chair and colleagues. It's a distinct pleasure to come back to the trade committee. That was my first post as minister, so I feel privileged to be with each and every one of you.

I know some of you are regulars—they tend to come to all of my appearances—so it's great to be well surrounded by friends.

I appreciate the opportunity to address this committee today on a topic that is key to the success of our economy.

I’m here today, Madam Chair, to speak about a uniquely Canadian success story: our auto sector.

Canada's automotive industry supports nearly 550,000 direct and indirect jobs in our country. Last year, it contributed something close to $18 billion to Canada's GDP, and it's one of the country's largest export industries.

For all of these reasons and more, our government is fiercely committed to supporting Canada's auto sector and the ongoing transition towards electrification.

Canada has a tremendous opportunity to seize this moment and leverage the transition to electric vehicles not only to create good jobs for decades to come and to spur innovation, but also to fight climate change. This transition is under way, and now is the time to act and seize the opportunities for future generations, as we have been able to do over the past few years. We cannot afford to continue to debate whether climate change even exists when the rest of the world is rapidly moving toward electrification.

In fact, Canada has everything it needs to lead in the global EV transition, and we should be proud as Canadians. We have a very strong automotive manufacturing ecosystem. Last week, I was in Brampton, with Mr. Sidhu, looking at the auto parts manufacturer. We have world-class talent and environmental standards, abundant sources of renewable energy, all the critical minerals to build the cars and batteries and unprecedented access to markets. That's why we have been able to build, right here in Canada, an end-to-end EV supply chain, which Bloomberg—imagine—has ranked first in the world, ahead of China.

Canadians have every right to be proud, and they're probably asking how we did it. Since 2020, through relentless efforts, we attracted investment in EVs and battery manufacturing as well as battery material processing through a number of initiatives. The first was to focus investment attraction—and a number of you contributed to that—through the strategic innovation fund and also the clean technology manufacturing and EV supply chain investment tax credits.

Our government is also making upstream investments, including through Canada's critical minerals strategy, to support projects and strengthen Canada's battery supply chain.

These significant investments are all likely to increase the supply of electric vehicles here in Canada and further encourage the transition of the automotive sector.

What Canada has accomplished in the past few years in the automotive sector is remarkable, and it is thanks to the talent, expertise and know-how of auto workers across the country.

However, we cannot and must not be naive. These investments, as well as Canada's automotive industry as a whole, are facing competition from Chinese producers, who benefit from non-market policies and practices. These policies and practices include unfair and pervasive subsidies, a lack of rigorous labour and environmental standards, and other measures to artificially lower production costs.

It is for these reasons that our government has been consulting on potential measures to address China's unfair trade practices in the EV sector.

Our analysis and the results of these consultations have only reinforced existing concerns about Chinese policies and practices. These practices harm the Canadian auto industry and our workers, while negatively impacting our transition to electric vehicles.

That's why our government recently announced the imposition of a 100% surtax on imports of EVs from China. The surtax will do three things. It will protect Canada's automotive industry from unfair Chinese trade practices, preserve our deeply integrated North American automotive supply chains and prevent the diversion of electric vehicle imports from China resulting from actions taken by third countries. In addition, our government announced its intention to examine concerns raised regarding unfair Chinese competition in other critical sectors, including batteries and battery parts, solar products, critical minerals and semiconductors. Last, but not least, we also announced action in response to concerns that were raised regarding unfair Chinese competition in the steel and aluminum sector.

Madam Chair, our government will always stand up for Canadian businesses and our Canadian workers, while defending them from the harmful effects of unfair trade policies. In conclusion, ensuring fair and open trade is and has always been a priority for our government. It will remain a key aspect of our commitment to protecting Canadian interests while, at the same time, maintaining strong relationships with our key trading partners.

Let's remember that, when everyone plays by the same rules, we—normally—win because we have the best and most talented workers in this country.

Thank you very much, and I look forward to questions from colleagues.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister.

We move to our speaking order.

Mr. Perkins, go ahead for six minutes, please.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Madam Chair.

Thank you, Minister, for appearing. It's always nice to see you.

I recently had a meeting with the Volkswagen executives in Germany about their plans in Canada. I asked them where they were getting the critical minerals, and they said, “Canada”. However, that's their intent because, ultimately, they said that it's not currently available. They said, “Not all our material at the moment will come from Canada.”

As we know, more than 80% or 90% of the cathodes and anodes for EV batteries are made in Asia—in China, primarily. Can you explain to me whether that's the reason that, a month after your government imposed tariffs on Chinese-made EVs, you provided a way for companies to actually get around them with the remission order?

What that is, for people who are watching, is an order that allows people to actually not pay that duty. Is that for Volkswagen and Stellantis because they cannot produce or get those materials in Canada?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Perkins, it's always a pleasure to see you. I was missing you during the last week.

I think what we need in critical minerals are speed and scale. Certainly we've been working extremely hard to make sure that we will have more scale when it comes to critical minerals. The recent focus of Teck in the critical mineral sector is good news. Recently Rio Tinto announced that they intend to invest billions of dollars with respect to lithium and other critical minerals.

You will know that we have the only refinery of cobalt in all of North America. We already have an industry of graphite in Quebec, and Nemaska Lithium is going to be one of the first refineries in the country. There are others in the country, so I think what we need now is to make sure that we match the demand and the offer, and I welcome these kinds of investments because they're going to provide scale.

To your other question on the exemption, if I may, for folks who are watching at home, it is quite standard, when you have tariffs that are imposed, that you have what you call remission order exemptions to support small and medium-sized businesses in very exceptional cases. However, having been in touch with the leaders of Volkswagen and Stellantis about their plants, this is not an issue that we discussed. Their focus is on making sure that their plant will be opening and that they can supply the North American market.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Will they be eligible for the remission orders?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Listen. I have not seen all the details, but I can tell you that none of them have been asking me for any kind of exemption when it comes to that.