International Trade Committee on Feb. 7th, 2022

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

Welcome to meeting number four of the House of Commons Standing Committee on International Trade.

Today's meeting is televised and is taking place in a hybrid format pursuant to the House order of November 24, 2021. The Board of Internal Economy requires that committees adhere to the following health protocols, which are in effect until February 28, 2022.

Anyone with symptoms should participate by Zoom and not attend the meeting in person. Masks must be worn in committee rooms, except when members are at their place during parliamentary proceedings. However, it is strongly recommended that members wear a mask even when they're at their place during parliamentary proceedings. All those inside the committee room should follow best practices of maintaining a physical distance of at least two metres from others and maintaining proper hand hygiene by using the hand sanitizer provided in the committee room and regularly washing your hands well with soap.

As the chair, I will enforce these measures if necessary, and I thank all of you for your co-operation.

I need to outline a few other rules to follow.

Interpretation services are available for this meeting. You may speak in the official language of your choice. At the bottom of your screen, you have the choice of floor, English or French. If interpretation is lost, please inform me immediately and we will ensure interpretation is properly restored before resuming the proceedings.

The “raise hand” feature is on the main toolbar should you wish to speak. When speaking, please speak slowly and clearly. When you are not speaking, your microphone should be on mute. I will remind you that all comments should be addressed through the chair. The committee clerk and I will maintain a speaking list for all members.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, January 31, 2022, the committee is resuming its study on the Canada-United States relationship and its impacts on the electric vehicle, softwood lumber and other sectors.

We're very happy today to see that we have with us the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, and the officials who are also present with the minister.

From the Department of Foreign Affairs, Trade and Development, we have David Morrison, deputy minister, international trade; Michael Grant, assistant deputy minister, Americas; Arun Alexander, associate assistant deputy minister, trade policy and negotiations; Doug Forsyth, director general, market access; and Michael Cannon, director, softwood lumber division.

From the Department of Finance, we have Michèle Govier, director general, international trade policy division, and from the Department of Industry, we have Mary Gregory, associate assistant deputy minister, industry sector.

Thanks very much to all of you for coming.

Minister Ng and the deputy minister will be with us for an hour.

Minister Ng, the floor is yours.

[Mary Ng, Liberal, Minister of International Trade]

Thank you, Madam Chair.

Good afternoon to you, to the vice-chairs and, of course, to all the members of the committee.

I'm thrilled that I'm here with my officials. It's a pleasure to be here and to assist the committee in its important work.

Let me start by saying that the Canada-U.S. relationship is one of the closest in the world, and at the end of last year, Canada-U.S. trade hit an all-time high. This is a testament to the strength of our relationship, of our shared values and of CUSMA.

We also share mutual goals of climate action, innovation and North American competitiveness. We're the best partners to help one another reach these shared goals, and this was clear in my visits to Washington, D.C., in December, and in November with the Prime Minister to meet with congressional leaders and stakeholders.

By working together to strengthen our deeply integrated supply chains, we'll generate growth and create jobs, while fighting climate change.

Few supply chains are more integrated across our shared border than our automotive sector supply chains. For over a hundred years, Canada and the United States have been building autos together, and for over 50 years together we have intentionally pursued policies to integrate these supply chains.

You have heard me say this before. A vehicle and its parts can cross the border between Canada and the United States several times before being completed.

Now, as our governments are both committed to fighting climate change, we know that the future of our automotive sector and its workers is an electric and a sustainable future. Canada has already committed to reaching 100% zero emissions passenger vehicle sales by 2035.

Advocating for that future is a priority for me and for the government.

In a recently proposed Build Back Better bill, the United States proposed tax credits to incentivize the purchase of electric vehicles, EVs. Unfortunately, in the last draft of this proposal, these tax credits would only be for those produced in the United States. These tax credits would threaten the future of Canada's automotive sector and ignore our deeply integrated supply chains.

Canada and the U.S. are each other's number one market for auto exports, and these tax credits would harm businesses and hundreds of thousands of jobs and workers on both sides of the border. Not only are these tax credits inconsistent with CUSMA and the WTO, they would be a barrier to reaching our shared goals to accelerate climate ambition, as outlined in the road map for a renewed Canada-U.S. partnership.

We've worked at all levels to resolve this issue. Our ongoing commitment to this issue is clearly part of Canada's position.

The Prime Minister has conveyed this message directly to the President, the vice-president, congressional leadership and cabinet secretaries. We're working closely with industry on a team Canada approach, working with U.S. congressional leaders to ensure an outcome that will allow the future of our shared industries to thrive. On December 10, the Deputy Prime Minister and I sent a letter urging the United States to ensure that any EV tax credits do not discriminate against Canada, be it through CUSMA dispute resolution or other trade levers. In the letter, we sent a clear message that, if we aren't able to reach a resolution, Canada will defend its national interests as we always have.

That we have an avenue to pursue resolution through CUSMA is a sign of the strength of our relationship. For example, we announced just a few weeks ago that Canada will be challenging the United States' unjustified duties on Canadian softwood lumber under CUSMA. We have trade levers and a process to follow because our countries negotiated a strong and fair trade agreement that supports workers, industry and communities across North America through CUSMA.

In any relationship as significant as the one between Canada and the United States, there will always be challenges.

We have many. We have worked together and resolved many of these in the past, and our government will continue to defend our businesses and our workers across Canada until we reach an outcome that is acceptable to them. We're working with our partners in the United States, with businesses, with unions and with policy-makers across our shared border to reach a solution that supports businesses and workers in both of our countries.

This is my goal and a priority for this government.

I look forward to answering your questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister.

We appreciate that and the fact that you stayed within your five minutes, a little bit less than five minutes, which gives the committee a little bit of extra time, which is a great thing.

We'll start off with Mr. Hoback, please, for six minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

That's great, Chair. It's nice to know we have the minister for the full two hours, so I'm excited to hear—

[The Chair, Liberal, Judy Sgro]

No, the minister is here for one hour.

[Randy Hoback, Conservative, Prince Albert, SK]

I heard two hours, but Minister—

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

Nice try, Randy.

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, exactly. Thank you for being here.

I have a couple of quick questions I want to get off my chest here, because people have been asking me. One is related to the dairy working group in the U.S. After CUSMA was signed, there was a working group that was established that was kind of disbanded over COVID.

Do you have a timetable when that group would come back together and start getting back to the work that they were doing?

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

Yes. Following CUSMA, there were new working groups that were created. I understand that, with respect to this particular working group you are asking about, there were some discussions that took place and that the dairy farmers of Canada as well as the processors, the Canadian Dairy Commission and the Minister of Agriculture and Agri-Food decided to postpone some of these conversations. In the beginning of February, Minister Bibeau met with dairy representatives on a path forward—

[Randy Hoback, Conservative, Prince Albert, SK]

I'm going to have to—

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

—and they are working toward completing their work, or doing more work in the spring and summer of this year.

[Randy Hoback, Conservative, Prince Albert, SK]

I don't mean to be rude. I want to be respectful, but I do need your answers to be shorter, because I have many questions.

They are just looking for a guideline on when that is going to be.

I'll go on to the next one. You've been talking to India about doing a trade deal. It's very important for Saskatchewan that we get a negotiated trade deal with India.

Do you have a timetable of that? Again, quickly, just give us a quick time frame.

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

I met with my Indian trade minister counterpart in December. We are very interested in pursuing trade relations between the two countries. This is very much a part of the mandate given to me by the Prime Minister to expand trade into the Indo-Pacific region.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Minister. I look forward to seeing timetables, and your goals and objectives on that.

When it comes to the U.S. border, and border issues...We have it highlighted with all the truckers who are sitting here, and some of their complaints. We've seen the change of face on the original decision on unvaccinated truckers crossing the border or not. This past weekend, Dr. Tam has been in the media, talking about how we need to re-evaluate how we handle the border.

Does that fall into the trade portfolio under you, Minister? Are you willing to take Dr. Tam's advice, and actually start looking at ways to reopen the border, so that both vaccinated and unvaccinated truckers will have access across the border?

We're starting to see provinces removing mandates. My province of Saskatchewan has been very aggressive on that, to get things back to normal. Where does that fall in your government, and what is your timetable for doing such a removal of these barriers to allow the free flow of goods, like we had pre-COVID 19?

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

The issue we're talking about is indeed COVID-19. Following science, and the advice of medical professionals like Dr. Tam has been what our government has been doing from day one. We will not stop doing that. I'm working with my colleagues across cabinet, whether it be the transport minister around supply chains, or the health minister and public safety minister. We really are working on a whole-of-government approach here.

The Canada-U.S. supply chain, and moving goods back and forth in the country, has worked and has been successful. Goods are getting here. Critical supplies have been getting here. This is work that we will continue to do. Fighting and finishing COVID-19 with vaccinations is what we all need to be doing, so that we can get to, as you said, that level of normalcy again.

[Randy Hoback, Conservative, Prince Albert, SK]

Again, minister, we'll have to speed up our answers, please, if you don't mind.

If Dr. Tam were to say tomorrow, “You know what, the mandates aren't working. There's a better way to go about doing this.” Would you immediately talk to your counterpart in the U.S. and say that it's time to reopen that border?

Is that where we're going, and if that's the case, as we see provinces starting to lift the restrictions, how long will it take for the federal government to lay out a game plan, and what are the benchmarks that need to happen for you to say that these restrictions are going to be lifted?

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

What is incredibly important to the government is to make sure that we fight COVID-19. At the same time, you've seen us, throughout the pandemic, provide support to businesses and workers. That work will continue. My job as international trade minister is, of course, to make sure that we continue to keep doing the work to ensure that supply chains are fluid and working. Throughout this pandemic, we have done a very excellent job at making sure that supplies are moving across the border.

To the truckers in Canada I would say, “Thank you very much for your work.” Over 90% are vaccinated today.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm going to pivot here, Minister, quickly.

We've seen some threats coming out of the U.S.. There is a lot of discussion coming out on country-of-origin labelling. You were in meetings, that I also attended, with labour unions that were really upset with our lack of effectiveness on lobbying on Keystone, on getting that changed.

What is the game plan to head off those kinds of attacks on Canadian industries, and to make sure that we don't see something that happened to Keystone happen again? I find it really frustrating when I sit in the room with three labour leaders from the U.S. saying, “Where were you?” I get really frustrated when I'm talking to senators who are saying that you didn't show up at their doorstep to even talk about making sure Keystone was still in place.

Can you explain to me why we weren't there?

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

I'm glad that the honourable member has asked me a question about the level of work and activity between Canada and the United States, which is a really important relationship, given that the U.S. is our biggest trading partner.

Since President Biden has taken office, some 480 meetings have taken place at the most senior levels, at the cabinet level, between the President and the Prime Minister, but also between myself—

[Randy Hoback, Conservative, Prince Albert, SK]

These are two different things, though.

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

—and cabinet colleagues.

No. It's really important to keep working at this relationship, because of the importance of this relationship. If there are 365 days in a year, and we've done roughly 480 meetings between our officials and that administration, it would mean almost a meeting a day. This relationship is really important. We are absolutely there. We will continue to be there. This is work that we take very seriously, and will continue to work on.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Arya for six minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

Thank you, Minister, for being here. I'm glad to know that you're in touch with the Indian trade minister on the various things that need to be done for Canada and India trade and investments. Canadians are investing quite a bit in India and we need proper investment protection agreements and trade agreements.

Coming back to the main question here with respect to the U.S. relations, especially on the EV tax credit, let's take a step back. The EV tax credit is a small part of a bigger picture. We know the Canadian dollar transportation industry is moving from internal combustion engines to electric vehicles and this is a big change that is happening. China has taken the lead, some parts of Europe have also taken the lead, and the U.S. is catching up but we are just stepping in.

We have some strengths. In Canada and the U.S. we have a Canada-U.S. joint action plan on critical minerals collaboration. To increase the potential that is available within Canada, I know the last budget set up a battery minerals centre of excellence and we are also establishing a research centre to develop the technologies related to this.

I have long called for a task force to develop and implement a comprehensive strategy for the developments of mines, mineral processing technologies, battery manufacturing and ultimately electrical vehicle manufacturing.

You and your colleagues in cabinet and other levels of the government have taken a team Canada approach in dealing with the U.S. That is good but we also need a team Canada approach to develop our strengths within Canada from the development of mines, to the processing of minerals, to the manufacturing of batteries. I want to know what is it that you know that is happening on this front at the cabinet level and any interactions you may have with various provinces and territories.

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

We know that the future is a sustainable and green future. Our government is very committed to making investments and creating an economy that will be this green future that will tackle climate change but that will also create excellent, good-paying jobs in Canada.

You're absolutely right, critical minerals are a very important part of this. They are part of the global demand but certainly here, between Canada and the United States, there is tremendous opportunity to create greater advances and we've committed to doing this. There is work under way between Canada and U.S. specifically around critical minerals. Canada has 13 of the 35 minerals that the U.S. has identified as critical. Canada is one of the only countries in the western hemisphere that has all of the critical minerals that are required to manufacture EV batteries, from graphite to nickel, aluminum, lithium, cobalt and so on. That's really important.

This is work that, of course, I participate in as the trade minister but I do that with colleagues across the team. The industry minister is doing some terrific work here with the United States, with developing an ecosystem here across Canada that will enable those very companies and technologies to scale up and create great jobs and in doing so also tackle climate change.

My colleagues, the environment minister and the natural resources minister, are working on this as well. Again, they're working with their U.S. counterparts but also across our government team in an effort to work with sectors like the mining sector and the resources sector so that we can make this transition. We need to invest in and support the development of these critical industries and technologies in such a way that will promote a green future that is founded on Canadian innovation, expertise, entrepreneurship and excellence. We are very much working on a whole-of-government approach and certainly with partners like the United States.

I would also say that in the area of critical minerals we are also working with other allies and partners, like the European Union.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister.

Next is Monsieur Savard-Tremblay for six minutes.