Evidence of meeting #133 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 emissions.
A video is available from Parliament.
Principal Economist, Canadian Climate Institute
Our large-emitter trading programs are likely WTO-compliant, so we're okay from a protectionist perspective.
The design of these border tariffs is another story. We're not implementing one, so I can't comment there, but the WTO will have something to say about these things.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Arya.
We're going to Mr. Sauvé for two and a half minutes.
Bloc
Louis-Philippe Sauvé Bloc LaSalle—Émard—Verdun, QC
Thank you, Madam Chair.
I have two questions for Ms. Kwan from the Canadian Labour Congress.
Ms. Kwan, we've been talking a lot about the EU and the U.S. since the beginning of this study, but we also have other trading partners.
Do you have any thoughts on this that you'd like to share with committee members?
Senior Researcher, Canadian Labour Congress
Yes. The focus on the U.S. and the EU is obvious. They are trading partner number one and trading partner number two. However, I would urge the committee to consider the FTAs we have with other countries, like those in the global south, for instance. Every country has its own mechanisms. The FTAs we have with Chile, Colombia, Indonesia, Australia, Japan, Mexico and New Zealand have some type of mechanism in place. Whether the border carbon adjustment is in or out, the fact is that the basis of it is trending that way anyway.
Quite frankly, having a Canadian border carbon adjustment—and I'm not a hockey fan—is where the puck is going. Staring down the U.S. is not the only option.
Louis-Philippe Sauvé Bloc LaSalle—Émard—Verdun, QC
You talked earlier about the model which consists of ripping and shipping a product.
The Bloc Québécois, myself included, even though I represent an urban riding, care very much about regional economies. I think having processing operations in the regions can bolster Quebec's economy.
At the CLC, do you have any thoughts on that, particularly with regard to aluminum?
Senior Researcher, Canadian Labour Congress
I wouldn't say aluminum. I know that steel and aluminum, for instance, are very different given the nature of how they go back and forth between the U.S. and Canada, so that adds another character to the whole thing. In terms of “rip and ship”, if we're getting crude out of the ground and shipping it, that's one point of sale. If we have downstream activities to process it a bit more, to do something more with it, we're creating jobs. That's what I'm trying to refer to, instead of just shipping things raw.
Agricultural products are the same thing. Can we not at least add a few more things in the downstream economy so we can add value and good jobs before we ship them out? It's about thinking through an industrial policy that keeps adding to growth and good jobs to the equation.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Ms. Kwan.
We'll go on to Mr. Desjarlais for two and a half minutes.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
Thank you very much, Madam Chair.
Just to continue on my Bloc Québécois colleague's line of questioning regarding downstream value-added products, we know this will create good jobs. A good example of that—and Ms. Kwan, this will be for you—is forestry, one of the greatest industries in western Canada. We're seeing serious issues of supply chain resilience because of existing tariffs by the Americans, a dispute that's gone on forever.
Would it be important to see within an industrial strategy a target for softwood lumber, as an example in this discussion, to add value to products? This is for something like mass timber production, which can go into the construction of very high, dense residential buildings, for example? That's just a goal. If the goal is to build more housing in Canada and there's an industrial strategy to get there, it would involve softwood lumber and would involve making certain that those products could be built here.
Is that a good example of what you mean by a value-added industrial strategy?
Senior Researcher, Canadian Labour Congress
Yes, absolutely. I can give you an agricultural example, because it gets brought up but doesn't get much time in these discussions. We can grow a tomato and then put it in a box and ship it out, or we can grow a tomato and make it into something here and add more jobs. Then we can make even more products from that. This is the type of diversification, the type of downstream economy, that really needs to be part of the industrial strategy.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
In terms of job creation, we know that when you have value-added products, it creates good jobs here. If you don't do that, it means those jobs are going somewhere else. Isn't that correct?
Senior Researcher, Canadian Labour Congress
Absolutely. We're trying to forge ahead with a low-carbon economy in critical minerals, for instance, which is what our EU counterparts were interested in talking about.
I'll give you the example of Indonesia. I keep mixing up copper and nickel, but I think it's copper mining. They used to basically rip it out of the ground and ship it out, and then the government said, no, they were not going to do that; they were going to process it before they ship it out. They did that with a lot of investment, and it added tens of billions to the economy because they took one more step to add one more value.
Bloc
Louis-Philippe Sauvé Bloc LaSalle—Émard—Verdun, QC
I have a point of order, Madam Chair.
In light of the Amber Alert, I seek the committee's unanimous consent to grant an additional 30 seconds to my NDP colleague, who, like all of us, was distracted.
Liberal
The Chair Liberal Judy Sgro
We try to make sure you get all the time you can.
We have five minutes left and I have Mr. Baldinelli and Mr. Sidhu, who are the last two people.
Mr. Baldinelli, do you have a question for a minute?
Conservative
Liberal
The Chair Liberal Judy Sgro
You can do a minute and Mr. Sidhu can do a minute, and that will get us to 5:30 for the next panel.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
Sure. Thank you.
I'll just follow up with Ms. Kwan. We talked about the new reality, which is that the United States, in the next couple of weeks, will be swearing-in a new U.S. administration. There seems to be a different approach in the United States. We're already hearing of tariffs and discussions of CUSMA renegotiations.
The question of alignment is critical, I would suggest, to what's happening here in Canada policy-wise with our largest trading partner. We trade more with the United States than we do with the rest of the world combined. Some 31 states are the largest trading partners for Canada. It's incredible.
The regulatory harmony we shared in the auto sector allowed that sector to grow. We had three facilities in St. Catharines at one time, employing over 10,000 people. Now we're down to only one facility and it employs just under 1,000 people.
My concern is for those jobs in the future. My concern is that they continue. To Ms. Kwan's point, I'd like to see them grow and continue to grow. If we're out of step with what happens with our largest trading partner, how are we to compete?
Liberal
The Chair Liberal Judy Sgro
Ms. Kwan, if that's being directed to you, I have to ask for a one-word answer to a very long question that was more than the minute so I can get over to Mr. Sidhu.
Senior Researcher, Canadian Labour Congress
The answer is that we don't know what's going to happen. Look toward the other states that have mechanisms they're applying.