International Trade Committee on April 6th, 2022

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

Thank you, Madam Chair.

I thank the witnesses for being with us today.

Ms. Walia, your comments on Canadian energy sources are interesting. You said that Canada should play an important role in this area. I'd like you to elaborate a little bit more on that.

Also, what are your thoughts on liquefied natural gas?

Ms. Walia, did you hear my question?

[Riva Walia]

I'm sorry. I can't hear anything. I'm not sure if you can hear me.

[The Clerk of the Committee, Ms. Dancella Boyi]

Madam Chair, if you don't mind, we'll perhaps ask IT to assist Ms. Walia.

[The Chair, Liberal, Judy Sgro]

Yes, please.

Mr. Martel, we need to have IT check Ms. Walia's connection. Would you like to ask someone else a question first while IT tries to fix her connection?

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

Yes, Madam Chair.

Mr. Markevych, since the Canada-Ukraine Free Trade Agreement came into effect in 2017, I have noticed that the value of Canadian exports to that country has dropped sharply.

Why do you think the renewal of this agreement is important for Canada?

[Markiyan Markevych]

I'll be honest with you; I'm not familiar with Canadian exports dropping. In contrast, since the start of the Canada-Ukraine Free Trade Agreement, I've seen Canadian companies picking up way more interest in Ukraine than ever before.

As I said, I think a very important part for this to work are the tools that Canadian companies need, and one of them is EDC. Export Development Canada needs to be working in both ways, in Canada and Ukraine, and I think that's one of the pillars we are missing.

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

Canada and Ukraine signed a Foreign Investment Promotion and Protection Agreement in 1995. Currently, the Canada-Ukraine Free Trade Agreement does not contain any investment-related commitments.

Does the Foreign Investment Promotion and Protection Agreement meet the needs of Canadian investors?

[Markiyan Markevych]

I think more can be done, to be honest. Ukraine is a developing country, and with every developing country there are obstacles and difficulties. I think the renewal of the CUFTA, the modernization of the free trade agreement, needs to be accounted for, as we've seen some instances of Canadian companies in Ukraine having a bit of a difficult time. I'm not talking about large international companies like Fairfax or the others. I'm talking on a smaller scale: entrepreneurs, private investors, etc.

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

Madam Chair, has Ms. Walia been able to log in? May I ask her a question?

[The Chair, Liberal, Judy Sgro]

It appears we haven't been able to correct that.

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

All right.

Mr. Markevych, why is it advantageous for Canadian companies to have an investment commitment as part of a trade agreement rather than a protection agreement?

[Markiyan Markevych]

I don't have an answer for you there.

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

All right.

My next questions are for Ms. Adenot-Owusu.

Ms. Adenot-Owusu, what role could Canadian companies play in a possible reconstruction of Ukraine?

What role does the European Union Chamber of Commerce in Canada play in preparing its members for the reconstruction of Ukraine?

[Delphine Adenot-Owusu]

Thank you for the question.

Our members include European companies based in Canada. Therefore, while we interact with Canadian companies, we are more likely to do business with European companies.

However, Canadian companies can play a role in the reconstruction of Ukraine, particularly with regard to the modernization of the Canada-Ukraine Free Trade Agreement. In parallel with what is being done on CETA, the government procurement aspect is very important. It would be important to open this chapter for the modernization of the agreement so that Canadian companies can participate in public contracts in Ukraine and thus participate in the reconstruction. I touched on this in my opening remarks.

[The Chair, Liberal, Judy Sgro]

I'm sorry, but I have to interrupt again. Time is up for the member.

We'll go on to Mr. Virani.

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

Thank you very much, Madam Chair.

Just by way of starting, I want to thank the witnesses. I obviously express complete solidarity with the efforts that everyone is making with respect to Ukraine. We stand in solidarity with Ukraine against this unjust and illegal invasion by Russia.

I also want to correct, for the record, a bit about sanctions, which came up during the previous hour. There was an implication made that sanctions haven't “slowed down” the Russian regime. The actual evidence we've heard at this committee shows that the Russian ruble is falling, inflation is soaring, interest rates are climbing and the entire economy is collapsing. I don't think we're seeing protests in the streets in Russia by Russian citizens because protests of that nature can result in jail time, based on Putin's authoritarianism.

I'm going to split my time with Mr. Sheehan, Madam Chair.

I want to put a question to Mr. Markevych.

Mr. Markevych, I want to ask you about the issue you raised about needing more investments. You talked about how CUFTA had been assisting you, in particular, in your work with your consulting operation.

We heard from the former ambassador of Ukraine to Canada at the last meeting about harnessing not just people-to-people ties, but specifically the IT capacity in Ukraine. I'm wondering if you have an opinion on that as part of the expansion in services trade that you mentioned, specifically in the area of cybersecurity.

I'll go over to you, Mr. Markevych. Thank you. Dyakuyu.

[Markiyan Markevych]

As you heard and you know, Ukraine is not only grains and hands, but, as I said, brains. We have humongous...and all these companies are now relocating and still functioning. A couple of my clients are companies that have offices in Canada and all over the world. They're Ukrainian businesses, and that part of the service can be included. They are functioning. They are operating in Ukraine under one regime, so if in the free trade agreement there can be something done for those companies to have trade services expanded, that would be fantastic.

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

Thank you, Madam Chair.

I'll cede my time to Mr. Sheehan.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Sheehan, you have the floor.

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

Thank you very much.

I'm going to stay on the theme of information technology.

It may not immediately come to mind about information technology in Sault Ste. Marie, but we have the Ontario Lottery Gaming Corporation, which is a multi-billion dollar corporation that relies heavily on IT. There are other small and medium-sized industries that have started that are related to it and have spun off, etc.

There are firms in Sault Ste. Marie that have people who work for them, and a lot of them are freelancers from Ukraine and Belarus as well. As we see this war unfolding, we're seeing a lot of the larger companies—I'm not talking about the Ontario lottery corporation, but in general—moving to safer spots in Ukraine. There are a lot of small, freelance individuals, who are very good, who are still working as freelancers—about 70% of them. We've seen a lot of people from Belarus, with their government and how it's changed, move to Ukraine.

My question, to the same witness, is this: Are you still finding that some of these IT people are shifting where they're working? How does it work, with Ukraine conscripting a lot of the men of 18-plus years of age to fight in this unjust war, and what kind of strain is happening in the IT industry in Ukraine?

[Markiyan Markevych]

A lot of the IT men have been conscripted, and some of them are putting a weapon in their hands, but they are also using their knowledge, brains and their hands on a computer. They are helping to stop all these hacker attacks with cybersecurity, which was ongoing even before Russia invaded. Everybody is volunteering, and 80% of companies have their workforce working. Three of my biggest clients have up to 80% of their people fulfilling their obligations and doing the actual work.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir. We're out of time again.

Before I go to the next member, Ms. Walia apparently has a connection now. She is now available for questions.

We'll move on to Mr. Savard-Tremblay, please.

You have five minutes.

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

This is good timing, as my questions were for Ms. Walia.

Ms. Walia, in your assessment, how soon do you think this transition would be possible? I am talking about the gradual withdrawal in Europe of Russian oil and gas in favour of North American or western sources, if I may use the latter term tentatively.

[Riva Walia]

I wish I had a magic wand to answer your question and say that it could be a couple of years, but certainly not. I think the whole world is working on that.

In particular, I work with a lot of French companies that are investing very heavily in this energy transition. For example, Air Liquide is a large French organization looking at hydrogen as a source of energy. In fact, Canada is host to the largest carbon capture hydrogen plant when it comes to Air Liquide.

These investments—capital expenditure by large organizations—coupled with the desire from countries like Canada, are going to make this happen. We're talking decades in terms of when everybody can truly transition into energy independence. Specifically, this needs to happen with urgency, and the Canadian government really needs to pay attention to this.

There are other governments, like the French, who are ready to participate and ready to partner so we can address this energy transition and accelerate the time frame.

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

Since we're talking about decades and we know that the environment is the issue that's getting most of the attention, are you advocating the replacement of fossil fuels from the Russian supplier with western North American suppliers, or are you talking about an energy transition to renewables instead?

These are two different things.