International Trade Committee on April 6th, 2022

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order.

This is meeting number 13 of the House of Commons Standing Committee on International Trade.

Our meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during the proceedings.

I'd like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. For those participating via Zoom, you have interpretation options at the bottom of your screen of either floor audio, English or French. I will remind you that all comments are directed through the chair.

Welcome to all of our committee members, and welcome to our witnesses.

Pursuant to Standing Order 108(2) and the motions adopted by the committee on Monday, January 31, 2022, and March 21, 2022, the committee is resuming its study of the modernization of the Canada-Ukraine Free Trade Agreement.

On the first panel, we have with us, by video conference, from the Department of Foreign Affairs, Trade and Development, Jay Allen, director general, trade negotiations; François Rivest, director general, regional trade operations and intergovernmental relations; Andrew Turner, director, Eastern Europe and Eurasia division; and Sarah Geddes, deputy director, trade negotiations. From the Department of Finance, we have Michèle Govier, director general, international trade policy division.

Welcome, all of you.

[Randy Hoback, Conservative, Prince Albert, SK]

I have a point of order, Chair, before we get started. I have some housekeeping that I think we need to take care of relating to some of the items we asked for at previous meetings that haven't yet been delivered.

I'll read what I have in front of me, Madam Chair, and then we can continue with the meeting.

When the Minister of International Trade appeared before committee on February 7, she stated the following in response to my question regarding the government's game plan to head off American tax on Canadian businesses. I quote the Honourable Mary Ng:

Since President Biden has taken office, some 480 meetings have taken place at the most senior levels, at the cabinet level, between the President and the Prime Minister, but also between myself....

Later, in the second half of the meeting, the minister's ADM, Americas, Michael Grant, in response to a question from Mr. Lewis, told the committee that he would provide a list of the persons the minister met with during those meetings.

[The Chair, Liberal, Judy Sgro]

Mr. Hoback, can I just check with the clerk? The indication is that it is not a point of order.

Madam Clerk—

[Randy Hoback, Conservative, Prince Albert, SK]

The point of order is referring to the fact that we're waiting for documents and information that is incomplete. I am wanting to get those addressed through the committee here and now, and this is the process: to do it at this point in time in the committee. That is my point of order.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Madam Chair, I'm wondering if this might be better addressed with committee business at the tail end of the meeting.

[Randy Hoback, Conservative, Prince Albert, SK]

No. It's an official complaint that I have with the department in regard to its not providing documentation to the committee in a timely and complete manner. This is the only process I have to do that.

[Arif Virani, Liberal, Parkdale—High Park, ON]

It sounds quite clearly that there is a piece of contention Mr. Hoback is raising, which is debate rather than a point of order.

[Randy Hoback, Conservative, Prince Albert, SK]

It's to do exactly with this—

[Arif Virani, Liberal, Parkdale—High Park, ON]

What I would suggest, since we have witnesses here, is that we actually get on with hearing from those witnesses and use the committee time to deal with administrative matters at the tail end of the meeting.

[Randy Hoback, Conservative, Prince Albert, SK]

Again, Chair, I do have the floor, so I would request that I finish my letter, which will be a matter of another two or three minutes, and then you can continue. I would have it in the record, and then there would be some action the clerk could take in regard to getting the documents that have been asked for and committed to this committee.

[The Chair, Liberal, Judy Sgro]

Yes, absolutely. Please continue, Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

At the 16:35-minute mark of that meeting, Chris Lewis said this:

Thank you, Mr. Grant. I appreciate that. Of those 400 meetings, is somebody able to table with this committee exactly who the minister met with?

Mr. Michael Grant responded as follows:

Not at this moment, but I'm sure that is something we can provide through the chair.

Madam Chair, the list provided to the committee by the Department of Foreign Affairs, Trade and Development, which was circulated to committee members on March 1, is far below the 480 meetings stated by the minister—only 51 meetings, in fact.

I would therefore ask you, Madam Chair, to write to the minister on behalf of the committee to remind her of her assistant deputy minister's assertion that he would provide the committee with the full list of all the persons the minister met with during her 480 meetings with U.S. officials.

I've included the list they provided of the 51 names, which I can give to the clerk so that I don't have to read them into the record.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Hoback.

Mr. Allen, I invite your opening remarks for up to five minutes, please.

[Jay Allen, Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development]

Good afternoon, committee members. Thank you for the opportunity to provide an update on the status of the modernization of the Canada-Ukraine Free Trade Agreement, or CUFTA, as we call it, and to discuss other matters pertinent to the current crisis in Ukraine.

As you know, modernization negotiations were launched on January 27 of this year. Canadian and Ukrainian officials were prepared to hold the first round of negotiations; however, due to the Russian leadership's decision to invade Ukraine in late February, our trade talks were informally paused and are unlikely to resume in the near to mid term. When Ukraine is ready, we will be willing and able to engage with them.

In the meantime, Canada continues to demonstrate its support for and solidarity with Ukraine. Our priority is to provide Ukraine with military, humanitarian and financial assistance. Following Russia's invasion, Canada has authorized more than $160 million in military aid to Ukraine for lethal and non-lethal equipment. We have backstopped Ukraine's economic resilience with offers of up to $620 million in loans.

In addition, Canada has allocated $145 million to support the humanitarian response in Ukraine and regional countries, all of which has been allocated to experienced UN, Red Cross and NGO partners.

Canada calls on the Russian leadership to stop its brutal war against Ukraine, withdraw all military equipment and troops from Ukraine's sovereign territory and turn to good-faith diplomacy. We call on Russia to uphold its obligations under international humanitarian law.

We deplore the senseless murder of innocent civilians in Ukraine. The images and reports of what Russian forces carried out in Bucha are vile and deeply shameful. We strongly support efforts to ensure full accountability for those atrocities.

In early March, Canada and a number of our partners referred the situation in Ukraine to the International Criminal Court. This action followed numerous allegations that Russian forces had committed international crimes, including war crimes and crimes against humanity. Sadly, these allegations have only become more numerous since the referral.

Canada fully supports ongoing investigations at the United Nations Human Rights Council and the Organization for Security and Co-operation in Europe on the human rights and humanitarian impacts of Russia's invasion.

Since February 24, we have imposed a series of economic sanctions in close coordination with our allies and international partners. Among a wide range of measures, including those that target sectors of strategic importance to Russia, Canada has sanctioned over 700 individuals and entities in Russia, Belarus and Ukraine.

Canada has also stopped the issuance of new permits for the export and brokering of controlled military, strategic and dual-use goods and technology to Russia, and cancelled previously issued permits.

Canada has strongly decried Russia's military aggression and has committed to taking actions necessary to protect our essential security interests. At the WTO, for example, Canada was the first country to withdraw the most favoured nation treatment for imports from Russia and Belarus. Russia and Belarus no longer have preferential access to the Canadian market, and most imports from those countries are now subject to a general tariff rate of 35%. Canada has also supported a statement at the WTO, indicating that it considers the accession process of Belarus at the WTO to be terminated.

Further announcements are coming in the days ahead.

Canada supports the brave and resilient Ukrainian people who continue to defend an independent and sovereign Ukraine. They deserve to live in peace.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Allen. We'll now open the floor for questions.

Mr. Hoback, you have six minutes, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Chair, I think Mr. Martel was going to go first. I apologize.

[The Chair, Liberal, Judy Sgro]

That's fine.

Mr. Martel, go ahead, please.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Mr. Allen, thank you for joining us. We are happy to have you here.

How and to what extent has the war in Ukraine affected the ability of Canadian companies to engage in trade with that country or to take advantage of trade opportunities currently available under the Canada-Ukraine Free Trade Agreement, or that would be available under a modernized agreement?

[Jay Allen]

Madam Chair, war and trade don't go together very well. It's unfortunate, but trade with Ukraine has obviously dropped dramatically. Our companies are not, right now, largely able to benefit from the agreement.

We are in the position, unfortunately, of having to put an informal pause on our negotiations. We are not, and the Ukrainians simply are not, ready to negotiate a modernization at this point.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

After the war in Ukraine, if the country loses access to the Sea of Azov and the Black Sea, what will be the consequences for Canadian companies trading in Ukraine?

[Jay Allen]

Madam Chair, I'll turn to my colleague, François Rivest. He may be best placed to answer that question.

[François Rivest, Director General, Regional Trade Operations and Intergovernmental Relations, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Allen.

Mr. Martel, it is very difficult to predict how much international trade would be compromised if access to the Black Sea were lost. At this point, it is not clear what the impact will be or what the alternatives will be once trade returns to normal.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Is the Government of Canada already working to define the role our companies could play in a possible reconstruction of Ukraine?

[François Rivest]

Thank you for the question, Mr. Martel.

There is a humanitarian aspect to this question.

On the Canadian business side, the Trade Commissioner Service has a presence across Canada. There are also trade commissioners who are not necessarily on the scene, but who play a role in helping Canadian companies find ways to contribute. This is done on a regular basis.

Canadian companies that are, or were, doing business in Ukraine and Russia are in contact with us, and we talk to them. It's part of our job to keep them informed of the needs in the affected countries.

We communicate daily with Canadian companies that do business with the Trade Commissioner Service.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

To what extent are the sanctions and measures against Russia affecting Canada's economy?