International Trade Committee on May 2nd, 2022

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Masse is not on yet.

[The Chair, Liberal, Judy Sgro]

We're waiting for Mr. Masse for one moment. There you are.

Okay, Monsieur Martel, you have five minutes, please.

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

Thank you, Madam Chair.

Mr. David, I believe that Canada absolutely has to secure Canadian supply of critical metals in order to limit China's and Russia's hold over this market.

Can you tell us how competitive Canadian mines and Canada's mining potential are?

[J.S. David]

I'll give you an example.

At present, China is buying niobium oxide from Brazil, where one of the mines is actually 100% Chinese. China buys niobium oxide in the form of ferroniobium and converts it in order to obtain various products made of niobium. Those products then come back to North American markets.

What we want to offer is an additional option, a completely North American option. That is our reason for being, if I can put it that way.

Canada has adopted good environmental standards. I have always been very proud to work in the Canadian mining industry, because our methods, the way we do things, in terms of production and exploitation, are much better than those of a number of countries on the planet. In my opinion, we have to be proud of that. It is a trademark we absolutely have to promote. We need to put our money on what distinguishes us in this field.

In my opinion, tantalum will be the first product we get to market. The fact that it is made in Canada is a demonstration that we do things very differently from Rwanda or the Democratic Republic of the Congo in terms of mining. It is very much in Canada's interest to promote what is done here, and how it is done.

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

If Canada could start these projects faster, what do you think would be the impact if there were to be an Indo-Pacific free trade agreement?

[J.S. David]

As I was saying, South Korea has been in touch. We know that that country has a strong interest in niobium produced here in Canada.

For tantalum, I mentioned the Philippines. The Philippines would be a buyer for certain products.

We mustn't forget that Canada also has know-how. It isn't just the product that we can sell, it's also our know-how. I think that has to be taken into account.

As for the relative slowness in implementation, whether for us or for any other project, that is always a challenge. Previously, we said there was a gap of ten years between discovery and implementation. Today, we talk about 15 years.

Throughout my career, I have seen the number of years it takes to implement a discovery. Getting to a discovery is exceptional in itself. But it's a big challenge to advance to the implementation stage. I can assure you that it takes hard work.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Martel. You have nine seconds left and you can't squeeze that one in.

Mr. Miao.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair.

Thanks to the witnesses for attending today's session.

I'd like to direct the following question through the chair to Mr. Kennedy.

Considering a large percentage of the Canadian economy is comprised of SMEs currently, are Canadian small and medium-sized enterprises competitive in the ASEAN region, and to what degree would a signed free trade agreement improve Canadian industries' ability to compete?

[Trevor Kennedy]

Although our members largely represent larger firms, we're obviously big supporters of Canada's SME economy. We work hand in hand, and many of the suppliers of our member companies are SMEs.

One of the things we support—and I know it's a priority of the government—is finding ways to enhance opportunities for SMEs. Trade agreements do provide an opportunity, a bridge. It's where they can lean on the trade commissioner service. They have a lot of resources available, other tools to help navigate some of these markets and opportunities. Generally speaking, there is a lot of opportunity for firms of different sizes with different markets in the Indo-Pacific.

[Wilson Miao, Liberal, Richmond Centre, BC]

To follow that question, how can Canada navigate the investment protectionist challenges in the Indo-Pacific region?

[Trevor Kennedy]

It really depends on the agreement. We know that in the CPTPP we do have investor protection. We may see that in other agreements as well. It really depends on the partner—in the context of working with India—whether that's a separate agreement or a FIPA.

I would just say that Canada is a major investor in the region, with varying levels of investment, and Canadian investors do benefit from those types of protections and using the new model that Canada has developed. I understand there has been quite a development in the way we approach our investor protections that takes into account concerns of the past. That certainly seems acceptable in a wide range of agreements, but it really does depend on the partner and the country.

I just want to point out and raise, too, that in discussion about the Indo-Pacific, while we're discussing the region as a whole, we're dealing with a lot of different countries at different levels of development and different trade profiles, so it can be difficult to generalize at times. However, as a whole, we do see a lot of opportunity and it's worth noting that there are different markets with different opportunities for Canada.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you for your comments.

Can you share a little bit more from the perspective of Canadian firms? What should their priorities be in a trade agreement with the ASEAN region or with other regions like South Korea or Taiwan?

[Trevor Kennedy]

I'll start maybe with South Korea first, because it's a country that we've been more focused on recently, working with our partners in Korea. The Federation of Korean Industries and the Business Council will be releasing a report soon that highlights some of the mutual opportunities we see between Canadian and Korean industry.

It's a really unique relationship where, rather than the case of our importing or exporting, we're looking at partnerships between our industries. There are great opportunities. There is a lot of opportunity in Japan. It's very similar.

Looking at ASEAN, or India for that matter, we're looking at how Canada can compete with some of our peers in the world. Australia is very aggressive. The U.K. is very aggressive. The EU is very aggressive. We do need to look at what they've been able to accomplish in their trade agreements to apply some of the standards that we've updated through our more modern trade negotiations.

Ultimately, it's to ensure that Canada has the footing it needs to compete, and there we need to be cognizant that there are other countries that are competing for those markets. We want to make sure that Canada is the best place to export from to that region.

[Wilson Miao, Liberal, Richmond Centre, BC]

How would a trade agreement like this benefit Canadian firms and workers? Are there any particular sectors or provinces that would expect to benefit from this trade agreement?

[Trevor Kennedy]

Looking at Canada's traditional trade flows, we do have a lot of agricultural exports. Certainly workers in those sectors and industries have benefited, and in Canadian natural resources as well. We've seen a lot of interest in Canadian manufactured products. In addition to that, we have a lot of services that Canada exports to the world. As a whole, the data generally shows that trade has been good for Canadians. Trade-exposed industries generally have higher incomes and there are a lot of opportunities for trade for Canadian workers.

Just to touch upon some of the points that have been raised before about labour standards, we have been able to put in some high labour standards in modern trade agreements, including in the Indo-Pacific CPTPP, including some important additions to that agreement. Certainly in the USMCA we may be able to apply some of that to our trade agreements in the region, subject to certain partners, and certainly that can help to protect and lift standards for workers in that part of the world.

[The Chair, Liberal, Judy Sgro]

We'll go to Mr. Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

My question is for Ms. Gauthier from Devinci Bikes.

Ms. Gauthier, Devinci Bikes promotes bicycles, which are an ecological mode of transportation. We know that some countries in the Indo-Pacific region have come on board when it comes to carbon neutrality and that Quebec has been able to promote its expertise in sustainable development to those countries. We already know that there will eventually be some opening, a market to exploit, over there.

Do you position your products as being probably and potentially useful in the context of that kind of transition?

[Maude Gauthier]

If you didn't know, I would note that we are the bicycle producer for bicycle sharing company PBSC, which was recently sold to Lyft. Our bicycles fit with those values. We actually have nearly 100,000 bikes in bike-sharing systems in cities, to stimulate micromobility and reduce travel by car.

For those 100,000 bicycles, we are asked to make sure that our product will last for at least ten years, if memory serves. In fact, no bikes have been returned during the warranty period. We guarantee the durability of our products. Of course, we have acquired expertise in this realm over the 12 years and more we have worked with PBSC.

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

A little earlier, you also talked about the difficulties you have had over those years. And we thank you for that, because it will help us do our work for this study.

Do you think you have received enough support, enough back‑up?

Have you been kept well informed about business opportunities and ways of developing your market in that region of the world?

[Maude Gauthier]

We can develop our bike-sharing market, but that is not where the problem we are facing lies. We have not received any support from the government when it comes to batteries.

The message we are sending the government is that we can manufacture our bicycles in Canada, but it won't help us with the tariffs on batteries. Without going into details or talking about the fine points of the problem, I can say that this is more or less the message we are getting from the government.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Masse, you have two and half minutes, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Going back to some of the enforcement measures for the agreement, Ms. Kwan or Ms. Chang, do you have any examples of any other enforcement that has taken place? That's one thing that we are going to struggle with. I'm wondering, under the current agreements that are in place for oversight of labour, if child labour and other things have had some real marks of success to ensure that, when things are agreed upon and then broken later on, there's been a halting or a suspension of certain trade to ensure accountability.

[Lily Chang]

Elizabeth, go ahead, please.

[Elizabeth Kwan]

I would say that, with our biggest trade partner, the U.S.A. and the CUSMA, we've seen much of that enforceability at work. In fact, we've seen not only state-to-state dispute settlements, but we've also seen a number of the rapid response labour mechanisms come to play. Those are the real examples of what enforceable chapters in trade agreements look like.

We don't have enforceability under CETA. For instance, we have very good standards under CETA for labour, for environment and for inclusive trade, but they're not enforceable. There's really no kind of ability to address non-compliance.

In terms of what we're seeking, I'd like to just say that there are many things that are different now than they were when CETA was developed as an agreement. We have so many global, life-changing events that, in fact, we need to have a much more collaborative, much more resilient—not just sustainable but resilient—trade agreement between two countries and between Canada and ASEAN, for instance.

[Brian Masse, NDP, Windsor West, ON]

I know that I'm running out of time here. The bottom line at the end of the day is that it has to be written into the agreement. Otherwise, it's just public shaming at the end of the day, which doesn't go very far.