International Trade Committee on Oct. 28th, 2022

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

I'm calling meeting number 33 of the Standing Committee on International Trade to order.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Therefore, members are attending in person in the room and remotely using the Zoom application.

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. When speaking, please speak slowly and clearly. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. With regard to interpretation, those on Zoom have the choice at the bottom of their screens of “Floor”, “English” or “French”. Those in the room can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair. To members in the room, if you wish to speak, please raise your hand. Members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we appreciate your patience and understanding in this regard.

Please also note that during the meeting it is not permitted to take pictures in the room or screenshots on Zoom.

Should any technical challenges arise, please advise me. Please note that we may need to suspend for a few minutes as we need to ensure that all members are able to participate fully.

Welcome to those who are online and attending virtually.

Ms. Collins and Mr. Sarai, I'm glad to see you. Thank you for joining our committee today.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, September 20, 2022, the committee is receiving a briefing on ministerial work completed in a very busy summer of 2022.

With us today, we have the Minister of International Trade, Export Promotion, Small Business and Economic Development, Minister Ng.

Welcome, Minister. We're very happy to have you.

From the Department of Foreign Affairs, Trade and Development, we have Rob Stewart, deputy minister of international trade; Sara Wilshaw, chief trade commissioner and assistant deputy minister, international business development, investment and innovation; Bruce Christie, assistant deputy minister and chief trade negotiator; and Aaron Fowler, associate assistant deputy minister.

From the Department of Industry, we have Charles Vincent, assistant deputy minister, small business and marketplace services.

I want to welcome back to our committee many of you who have been here before. We welcome you and we're happy to hear from you again today.

Minister Ng, we normally allot five minutes for whoever's presenting. I'm going to ask if it's okay with the committee members for the minister to have a few extra minutes, because she has a lot to tell us and we'd like to get that done. If that's okay with everyone, I'll turn the floor over to Minister Ng.

You have the floor.

[Mary Ng, Liberal, Minister of International Trade]

Thank you, Madam Chair.

Good afternoon to you, to the vice-chairs and to all of the committee members, both those returning and new members, both here in person.... It's wonderful to be here in person and to see everyone on the screen. It's terrific to get a chance to speak to the committee members directly. I always look forward to updating the committee on the work that I've been doing on trade.

This is a pivotal time for our economy and for Canada's approach to trade: how we trade, whom we trade with and who trades. Both the pandemic and Russia's illegal invasion of Ukraine have demonstrated the need to strengthen and diversify our supply chain so that Canadians can access the goods they rely on and so that Canadian businesses can continue to expand, contributing to our economic growth and creating good-paying jobs across the country.

My goal has always been, and continues to be, to deepen Canada's trade relationships all over the world by opening up new markets to business.

The United States remains Canada's largest trading partner, making up two-thirds of our international trade. Since our government negotiated CUSMA, we are seeing record levels of trade with the U.S., reaching over a trillion dollars in the last year. In May, I hosted my counterpart, the United States trade representative, Ambassador Katherine Tai, the first Biden cabinet official to visit Canada, a signal of the importance of the trade relationship.

In a relationship as broad and as diverse as our relationship is, we of course face challenges.

This past year, the Prime Minister and I led a team Canada effort to include Canadian vehicles in the United States' EV tax credits. The inclusion of Canadian auto in the Inflation Reduction Act will protect our auto industry and secure thousands of good-paying jobs. It is already attracting billions of dollars of investments into our EV supply chain.

In July I hosted the CUSMA free trade commission, meeting with the United States and Mexico in Vancouver and marking the success of CUSMA, a trade agreement our government signed that supports around two million Canadian jobs. A month later, Minister Champagne and I strengthened Canada's ties with Mexico through the inaugural Canada-Mexico high-level economic dialogue.

We're also growing ties with our European allies on the other side of the Atlantic. In March I launched negotiations towards a free trade agreement with the United Kingdom, our fourth-largest trading partner. In August I joined the Prime Minister to host German Chancellor Olaf Scholz. Our two countries signed a hydrogen agreement that will grow our economy and fight climate change. Just last month, I joined my EU counterpart to celebrate the fifth anniversary of CETA, which has boosted our trade with the EU by 30% since coming into force.

That said, Canada needs to expand its commercial ties beyond its historic partners, including in the Indo-Pacific region.

This year alone, I've been to the region to strengthen our relationships, and I'm heading back in two weeks. During my first trip to the Indo-Pacific this year, I launched negotiations towards an early progress trade agreement with India, a pragmatic and commercially relevant agreement that will give Canadian businesses preferential access to over a billion customers. On my second trip, I attended the APEC trade ministers meeting in Thailand, where I launched negotiations to accede to the digital economy partnership agreement, which would position Canadian businesses and workers at the forefront of the rapidly growing digital economy.

I also visited Singapore to establish an innovative Canadian trade gateway in Southeast Asia, a front door that will both support Canadian businesses and entrepreneurs to expand across the Indo-Pacific and bring investments and talent from Southeast Asia into Canada. That was followed by two trips to the ASEAN meetings in Cambodia, where I pushed for our FTA negotiation with the ASEAN and announced the creation of a new Canada-ASEAN trust fund to promote further collaboration and Canada's strategic objectives in the region.

I also made a stop in the Philippines, where I met with some of the most incredible entrepreneurs, specifically women entrepreneurs, many of whom were looking to Canada as their next export market. Earlier this year, we launched the Canada-Philippines joint partnership to create even more opportunities for these entrepreneurs. This summer I welcomed Vietnam to Vancouver to strengthen the economic partnership through the joint economic commission.

My latest trip to Asia was back to Singapore to enhance our ties with the comprehensive and progressive trans-Pacific partnership partners, with whom we have seen an over 8% increase in exports since the agreement came into force.

Before returning to Canada, I stopped by in Jakarta, where I met with a number of key government officials in Indonesia to advance the progress on the Canada-Indonesia comprehensive economic partnership agreement and the Canada-ASEAN collaboration.

Beyond the Indo-Pacific region, I have been promoting Canadian businesses, innovations and investments all over the world.

This included leading a trade mission to the Caribbean; expanding opportunities in Guyana, Jamaica, Barbados, Trinidad and Tobago and the wider CARICOM; and launching a virtual trade mission to Africa, with a focus on Botswana, Senegal, South Africa and Côte d'Ivoire. Over this week, I have been meeting with the African Union and chairperson Moussa Faki Mahamat in Ottawa to participate in the first-ever Canada-Africa high-level dialogue.

What do all of these countries I've just listed in the last few minutes have in common? They're all places where Canadians come from. I like to say that Canada is best positioned to trade in the world because we all come from around the world. Our government is ensuring that all Canadians, no matter their origin, no matter their agenda, and no matter the size of their business, can benefit from trade.

As the Minister of Small Business, I have a duty to ensure that our small business owners and entrepreneurs get the support they need to grow their businesses internationally.

Through resources like the trade commissioner service, our CanExport program and our trade accelerator program at Export Development Canada, our government is helping thousands of small businesses expand their global footprint. With our government's women entrepreneurship strategy, we're investing $6 billion into supporting women entrepreneurs, such as through the Asia Pacific Foundation of Canada's series of women-only trade missions to the Indo-Pacific.

We're also ensuring that indigenous peoples benefit from trade, for they are the first traders, entrepreneurs and innovators in the land we now call Canada. That is why Canada joined the indigenous peoples economic and trade co-operation arrangement, or IPECTA, which will establish a framework for co-operation among participating economies in order to remove barriers to indigenous peoples' economic empowerment and participation in trade.

We are doing all this work, not just because it’s the right thing to do, but also because it’s the smart thing to do.

Canadians can participate in and benefit from trade. They're growing our economy and creating good jobs, and this is why we negotiate strong and progressive gender, labour and SME provisions in our free trade agreements. It's also why in April I launched a new and expanded responsible business conduct strategy to ensure that Canadian companies abroad are contributing to local communities and upholding high environmental and ethical standards.

Rules are important, and Canada will continue to champion the rules-based international trading system, including through our work with the Ottawa Group at the WTO. At the WTO 12th ministerial conference in June, Canada played a role in reaching a historic multilateral agreement to advance vaccine equity around the world and renewed the moratorium on e-commerce, and we are working to restore the WTO's dispute settlement mechanism and to protect our oceans and fish stocks.

We all know the pandemic and Russia's invasion in Ukraine has taught us all an important lesson: We can no longer take our rules-based trading system for granted. That is why Canada will continue to be a world leader in championing progressive, sustainable and inclusive trade.

I can't do this work alone.

I want to thank all of you for your hard work and contributions.

You're all a core component of team Canada, and I look forward to continuing this work with all of you and to deliver for Canadians.

Thank you. I look forward to taking your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Ng.

It certainly sounded like you never completely stopped for those several months in touching base with all of those countries. Thank you for that work.

We go now to Mr. Seeback for six minutes, please.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you, Madam Chair.

Thank you, Minister, for coming to the committee.

In your comments you talked about it being a pivotal time and the need to strengthen and expand supply chains, etc. When we look around the world at what's happening, we see that whether it's the quadrilateral security dialogue or the IPEF, Canada's being left behind. I certainly don't fault you for the trips you're taking, but it seems to be delivering very limited progress. Being excluded from the IPEF is a significant setback for Canada and Canada's trade.

Can you explain why it's been such a failure?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I thank the honourable member for that wonderful question.

I would say to the contrary that there are the markets we are opening around the world, the work that we are doing in the Indo-Pacific, the high-standard and high-quality agreement that is the CPTPP, which includes a number of Pacific nations. Canada is a Pacific nation country and we are in the CPTPP. We've seen an 8% growth in exports since it has come into force, and it's a progressive and comprehensive agreement. We work with the United States as our largest trading partner and we do this work together.

Yesterday was really terrific, because Secretary Blinken was here in Canada...actually, he's still in Canada. He's just in Montreal today but was in Ottawa yesterday. Minister Joly did announce that we are going to join the Indo-Pacific Economic Partnership and Secretary Blinken, of course, in the United States has supported this.

This is work that we continue to do. Of course, there is always more work to do to deepen the partnerships in the region, but also with the United States we're very committed to making sure that we have good, resilient supply chains. We're negotiating good, strong frameworks for Canada to be a part in the Indo-Pacific, but we're also negotiating in other parts of the world where there are customers. We get to tout that we're the only G7 country with a free trade agreement with every other G7 country. That's customers. Supporting our Canadian businesses to enter into those markets, particularly small and medium-sized businesses, is what I love doing every single day, and I love doing it with all of you.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Minister, there are seven members of the CPTPP that are already members of the IPEF. Canada was clearly left out. To say we're now trying to join is exactly what the problem is. We weren't included when it was first going on, and that's a significant problem.

You also said that you want our trade to have high environmental and ethical standards. In April of 2021, you didn't answer questions with respect to whether imports from China's Xinjiang region are being intercepted at the border as a result of allegations of forced labour.

Can you update us on what progress Canada has made with respect to that, especially in light of your comments that we want to have high ethical standards when it comes to trade?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Let me begin by saying that in our trade, we lead with Canadian values. The CPTPP is a terrific example of that. The C and the P components were Canadian additions for high standards on labour and on the environment. We have updated and strengthened our responsible business conduct strategy, and I expect all Canadian companies operating anywhere in the world, including in China, to uphold those high standards.

We have supported Bill S-211. This is the Fighting Against Forced Labour and Child Labour in Supply Chains Act. Yes, we are taking action to make sure that when we have forced labour concerns, there will be contract suspensions and shipment interceptions, and we will withdraw the Canadian trade commissioner service.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Do we have any numbers on that? Are you tracking any of this so that we can talk about these results for Canadians, or is it just sort of general statements?

[Mary Ng, Liberal, Markham—Thornhill, ON]

They are not general statements.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Does the department have any numbers on that?

[Mary Ng, Liberal, Markham—Thornhill, ON]

They are not general statements at all. It is an absolute commitment through the new, updated RBC, the responsible business conduct. It is work we are doing with my partners, whether it is at labour or through the CBSA.

Absolutely, this is an issue we take seriously. Human rights are an issue that Canada resoundingly stands up for. It's an area that we're going to always keep working on.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Have any shipments been seized as a result of this at the Canadian border? Do you track that?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I believe that there have been.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Can the department give us those numbers? Can you report back to the committee back on that, please, with whatever data you have?

[Mary Ng, Liberal, Markham—Thornhill, ON]

As I said, the support of Bill S-211 is going to be really important. It is about getting rid of forced labour and child labour in supply chains.

We, of course, are concerned about the region. We are going to keep working with Canadian companies on the one hand, so that they understand their expectations abroad, and at the same time have the mechanisms necessary to live up to what Canadians expect of us in international trade.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I understand that, Minister, but is the department keeping track of any of this? Are there any numbers that the department can release to this committee?

As I only have a little time left, I would prefer yes or no, and if they have it, whether they can send it.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I can tell you that this is an area that we are absolutely committed to. In CUSMA, for example, it is actually built into our trade agreement that there will be no forced labour in our supply chain.

Absolutely, I am working very hard with the Minister of Labour and with my colleagues to ensure that we do have the mechanisms in place to live up to this important—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I'm going to guess that no data has been tracked. I've asked three times for the data and you're talking in generalities.

I will say that the department is not tracking any seizures with respect to goods alleged to have been made with forced labour from the Xinjiang region.

[Mary Ng, Liberal, Markham—Thornhill, ON]

What I am saying is that the commitment by the Canadian government to ensure that there is no forced labour in our supply chain is real and that we are working on it.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Commitment is one thing; results are another.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Virani, you have six minutes, please.

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

Thank you very much.

Minister, welcome to the committee. Thank you for being here with so many officials to answer our important questions.

I want to build on something that you mentioned at the tail end of your opening statement, which dovetails with the WTO and the importance of the rules-based multilateral trading system.

We know that there is an Ottawa Group and that you are the chair of that Ottawa Group. You hosted a virtual meeting recently with the WTO director-general. You were talking about continuing momentum toward achieving strong outcomes on trade and health. WTO reform was dealing with things such as negotiations on fisheries, subsidies and agriculture.

There was a WTO 12th ministerial conference, which I appreciate was delayed slightly but eventually took place in June. I was wondering if you could start by giving some information to the committee about what was accomplished at that WTO ministerial conference.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you very much for that question.

Let me start with the Ottawa Group. It is an incredibly effective group of countries working together to advance the international rules-based order and the multilateral trading system.

Who is part of the Ottawa Group? Well, it's countries like Japan, Korea, Australia, Singapore, New Zealand, Mexico, Kenya, Norway, Brazil, Chile, Switzerland, the European Union, and most recently, the United Kingdom. This is a formidable group of countries that work together to ensure that the work we are doing together will reinforce the work on the international trading order.

I would say that for almost every meeting that we hosted with the Ottawa Group, the director-general has been there. Of late, it has been Dr. Ngozi Okonjo-Iweala, who is a formidable leader as the director-general of the WTO.

The reason this group was formed was to strengthen and build upon those rules that we all depend on. It is called the Ottawa Group for WTO reform.

During the pandemic I was very proud of some of the work that ultimately made its way to the ministerial response to the pandemic. We saw, in the early part, that some 90 countries issued over 200 export restrictions during the pandemic. You can imagine what that would cause to the goods, the inputs that are needed to make very important things like PPE, protective gear, or critical food and medicines that needed to move around the world.

Making sure that there were some rules to deal with a response to the pandemic, this initiative, the response to the pandemic, started at the WTO through the Ottawa Group. It was the Ottawa Group that developed what ultimately ended up being adopted multilaterally by the over 100 members of the WTO to get the multilateral agreement.

We also committed at the ministerial conference to work on the dispute settlement system so that we have a functioning dispute settlement system for the WTO, for the international rules-based order. I'm very pleased. I know you've heard from our ambassador, who is in Geneva working with her colleagues at the WTO, including the United States and many others. This is about working multilaterally to ensure that we have solutions to fortify and strengthen the rules-based system.

I think about e-commerce and the negotiations that are taking place so that we have the kinds of rules that are going to help the digital economy. That is certainly the present and the future. Trade and the environment and the kinds of rules that are going to be necessary to ensure that both the economy and the environment go hand in hand globally is what we are working on there with our multilateral partners.

We're also looking at the negotiating function. Some of the innovations that we have been able to pursue are called joint statement initiatives, or JSIs. We passed one, which is a plurilateral initiative on domestic services regulation, which is making it easier in each of our economies. Those rules that facilitate trade with ease were started as a plurilateral, a JSI, that then went forward to the broader membership and were adopted.

Here's the thing that really was extraordinary: The multilateral rules-based trading system is something that we are committed to working on, and we achieved a ministerial outcome from the WTO membership. Remember it requires every single member to achieve a multilateral agreement, and we did that.

A negotiation in fisheries has been in negotiation for over 20 years. Finally, at this multilateral meeting we came to an agreement to protect our fish stock in the world. That work continues.

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

Thank you, Minister.

I think I have one minute left, so perhaps briefly you could just tell us about our important trading relationship with the United States, but also the important position that we took as a government vis-à-vis the EV tax credits and how that was resolved due to the advocacy of the Canadian government.

What is your perspective on the U.S. Inflation Reduction Act and the committee's study that's going to be forthcoming?

[Mary Ng, Liberal, Markham—Thornhill, ON]

How do I do that in a minute? Let me give it a try.

Let me begin by saying thank you to everyone here. You all played an instrumental role in achieving what I believe is an absolute win for the Canadian economy and the Canadian auto sector. We don't do this alone on just the government side; it took everyone. It took all orders of government. It took our colleagues on all sides of the aisle. It took our businesses and our labour leaders coming together and doing that team Canada advocacy to make sure that those automobiles and those critical minerals that are going to be produced in Canada are going to be a part of that very important Canada-U.S. supply chain. It is exceedingly important, and I see it as a win for Canada to be included. I see it as Canada's win and therefore a win for all of us.

North American competitiveness is ultimately what CUSMA is about. We have a trading relationship among Canada, the U.S. and Mexico that represents $1.9 trillion. That is not insignificant. It is very important, and making sure we are competitive as a North American region is what CUSMA is all about. It is what the CUSMA Free Trade Commission was all about in terms of taking stock and looking at how we continue to build on the competitiveness of our three countries.

I will highlight two things that I think are important. One is making sure that small and medium-sized businesses in all our economies get the benefit of trade. That was negotiated as an SME chapter in CUSMA. There is a committee that does that. There is deliberate work to make it easier for our businesses of all sizes. Every single one of our economies has micro, small and medium-sized businesses that need to grow. When they grow, it is good for our economy and good for our communities.

The second thing I will say is that this is the first time we've had a women's trade summit, a North American women's trade summit between Canada, Mexico and the United States. They came to Vancouver. If this first one is any indication, we are going to get growth, and we are going to get growth through those extraordinary women leaders of businesses of all sizes in all three of our countries.