Evidence of meeting #130 for International Trade in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cbam.
A recording is available from Parliament.
Director, International Trade Policy Division, Department of Finance
I'd be happy to take that back and see what we can provide to the committee.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
Thank you. All right. I think we'll revisit that at some point, Madam Chair.
My next question is for Ms. Lamoureux, or maybe Mr. Morton, because his title is “senior adviser”.
Is it your advice to the minister right now not to move forward with CBAM?
Director General, International Economic Policy Planning and Horizontal Issues Division, Department of Foreign Affairs, Trade and Development
If you mean CBAM for Canada, being at Global Affairs, it would not be under our remit to make that recommendation. We are looking at the impact of foreign CBAMs on Canadian exports.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
It says that you're advisers, though. I suspect there's some advice to be given on this.
Liberal
The Chair Liberal Judy Sgro
I'm sorry. I tried to stretch the time.
We have Ms. Fortier next, please, for four minutes.
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
Thank you, Madam Chair.
I'd like to thank the witnesses for being with us today to help us better understand this issue.
I'd like to better understand the potential benefits and repercussions. I think you touched on it a bit, and perhaps my question is too simple.
We are looking at what is happening in the European Union right now. It's Canada's third-largest trading partner. What benefits would flow from aligning our climate policy with that of the European Union? What would be the major benefits for Canada?
Director General, International Economic Policy Planning and Horizontal Issues Division, Department of Foreign Affairs, Trade and Development
Are you talking about the benefits of a Canadian CBAM?
Director, International Trade Policy Division, Department of Finance
With respect to potential alignment.... I'm struggling because CBAMs are typically made to address the domestic market situation. To the extent that Canada would consider implementing a CBAM, it would ensure that, within the domestic market, Canadian producers' products would face the same charge on embedded carbon emissions as foreign producers.
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
Does doing so present an advantage for Canadian companies? For example, could it allow them to continue doing business with the European Union? Canada would like to try to see if it would be beneficial to businesses, because it wants to continue to prosper and wants its economy to continue to grow.
I would like to know whether adopting the European Union's approach would benefit Canadian businesses.
Director General, International Economic Policy Planning and Horizontal Issues Division, Department of Foreign Affairs, Trade and Development
Obviously, it is not my role to comment on a potential Canadian CBAM, but I can say that we will be watching the results of the border adjustments in Europe with great interest. It was the first jurisdiction in the world to adopt such measures. So that will help us understand the benefits a bit better, but also the potential pitfalls, as well as how to ensure that it's done in a way that respects international trade law.
So I think we can certainly learn from that on our end.
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
As we've said in other studies, there's a great deal of paperwork. That means there's a significant regulatory burden on Canadian businesses. We have to make sure we do things properly to avoid increasing that burden. If we consider the proposed measure to be beneficial and positive, I imagine we'll move forward and make sure that businesses come out ahead in this exercise.
Director, International Trade Policy Division, Department of Finance
To speak to the potential for an additional administrative burden and that sort of thing, and how that could impact companies, certainly, importers of products would be required to produce documents showing their embedded emissions.
There are still some open questions on how the CBAM would be designed for Canada if it was implemented. What we've seen in the EU, for example, is a lot of data gathering within the EU and EU companies on their products to set a baseline and understand the price they pay on their embedded emissions. If Canada followed the same approach, there would be an additional administrative data-gathering burden imposed on Canadian businesses to make sure that we understand that.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, colleagues.
Thank you, witnesses, for your valuable information. We appreciate your patience and your being here with us this morning.
For the committee's information, we will have committee business on Wednesday at the end, after we do some work on the draft from our studies on CUSMA and the supply chains. There will be three different things, including committee business.
The meeting is adjourned.