International Trade Committee on March 27th, 2023

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

Thank you very much, Minister.

We have in the room with us Sara Wilshaw, the chief trade commissioner for the TCS here in Canada and abroad. I want to pivot my next question to what the TCS does.

When we talked about the mining sector, we talked about responsible mining and standards that are invoked. I know that, with the responsible business conduct strategy that was launched last April 2022, we took some very strong steps with respect to the incredible service provided by the trade commissioners, but we attached the notion of an attestation such that, if you want to avail yourself of trade commissioner services doing mining abroad in any of the various continents around the world, you need to attest that you will abide by the responsible business conduct strategy and the standards that we would seek to uphold.

Can you elaborate a bit for the committee on how that came to pass as a policy of the Government of Canada and how it dovetails with the important work that the TCS is doing by ensuring that an attestation is required before you avail yourself of the TCS services, Minister?

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

Yes, I appreciate this.

Because the chief trade commissioner is there, would she mind taking this? It's mostly because I have no voice.

[Sara Wilshaw, Chief Trade Commissioner, Department of Foreign Affairs, Trade and Development]

I'm happy to. Thank you.

In strengthening the responsible business conduct strategy that was reviewed and renewed in 2022—this is, I think, the third or fourth iteration of that strategy—we were looking for ways in which we could have a closer look at what the companies that we're engaging with overseas are doing and getting them to be better informed about the kinds of risks that are out there and the kinds of services we can help them with in order to mitigate those risks. This includes this integrity declaration for the Xinjiang region, in particular. There's also another integrity declaration to receive our services, which states that they understand the expectations of the government when it comes to their operations abroad and where they can get help and information about how to comply with those expectations.

That was the genesis of that.

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

Thank you very much, Ms. Wilshaw.

Minister, if you had perhaps 20 seconds, I know we've taken great strides with respect to trade agreements in recent memory and ensuring environmental and human rights standards are entrenched in those trade agreements. CUSMA comes to mind, in particular.

With respect to the trade agreements you are working on now with ASEAN, Indonesia, India and the U.K., are you working similarly to entrench environmental and human rights standards into those agreements, Minister?

[The Chair, Liberal, Judy Sgro]

Give a brief answer, please, Minister.

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

Yes.

[The Chair, Liberal, Judy Sgro]

That's very brief.

You have 10 seconds remaining and you can't do much with that.

We'll go on to Monsieur Savard-Tremblay for six minutes.

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

Thank you, Madam Chair.

Minister, thank you for being with us today. Hello to your team as well.

The 2023‑24 Invest in Canada departmental plan states that attraction efforts will be focused on the electric vehicle battery supply chain, among other things.

Friday, I was a little surprised to see the entire government stand up and applaud President Biden when he said he was including all North American production in the tax credits under the U.S. Inflation Reduction Act, because it is not true. In reality, the 45X credit for battery manufacturers only applies to batteries manufactured in the United States.

Were you aware of that? You did not seem to be Friday. Furthermore, how do you intend to counteract the investment appeal of this credit, in concrete terms?

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

Thank you to the member for that question.

I might just take a step back. You'll remember that before the Inflation Reduction Act was passed, Canada was not included at all in the credits for building electric vehicles and those batteries. That was through extreme advocacy and hard work by team Canada.

Here, I give credit to labour and to Canadian industry, and I give credit to our parliamentary colleagues. We all worked together—

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

Forgive me, Minister, but you are talking about the Build Back Better plan, which originally did include a credit that applied only to vehicles assembled in the United States but that was later expanded to all of North America. I applaud the efforts that led to this change.

However, my question is about batteries, and according to the U.S. Inflation Reduction Act, that credit still applies only to batteries manufactured in the United States.

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

What we're doing here—and I think you heard that through the President's visit—is that we are deepening and building out our supply chains.

I mentioned earlier the $250 million that the Americans invested through their Defense Production Act to include Canadian companies in the building out of critical minerals and that particular supply chain, as well as another $58 million for semiconductors. This is deliberately including Canadians working together with Americans, because our economies—and indeed the work we do together to innovate, build and sell together—have always benefited from this integrated relationship. That continues.

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

In that case, let's start from the bottom up: are you familiar with the 45X credit in the U.S. Inflation Reduction Act?

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

You've seen in our budget and our fall economic statement that we intend to be competitive.

I would like to remind the member that Volkswagen has just located their first-ever plant in North America in Canada. That is an indication that Canada is strong in the way in which we're going to build out the battery ecosystem.

I look forward to working with my colleague and all parliamentarians, as well as provinces, territories and indigenous peoples, to make sure we are building this ecosystem here in Canada, because it is going to be good not only for jobs and workers but also for the environment.

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

A simple yes or no would have sufficed. Since you didn't answer my question, I take it that you don't know that this credit exists.

If you don't mind, I'll change the subject. Let's go back to the Invest in Canada organization. How will its management team be composed, and how will it operate?

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

We have a terrific team at Invest in Canada, with a very strong board. Their mandate is to support the government in working with companies and investors who may wish to look at Canada as a place in which to invest, and of course, the battery ecosystem is such an example. They have been involved in all of the most recent transactions, which my good colleague Minister Champagne has been announcing, to attract investments.

Today Canada is number two in the battery ecosystem, whereas it was number five. This work and this investment and the work that Invest in Canada is doing are making progress, and we'll continue to do that work.

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

The Canadian Commercial Corporation's 2021–2022 to 2025–2026 Corporate Plan Summary highlights the impact of protectionism on the operating environment of this agency.

In your humble opinion, what is the consequence in Canada of the rise of protectionism?

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

We need to keep fighting against protectionism. We saw, during the pandemic, that many countries put up restrictions and that impeded the flow of really important things at that time.

It's a lesson for us to continue to be diligent and to work against protectionism for open and free trade, particularly with our partners with whom we have agreements. We must continually work to ensure that trade remains open and fair.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

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

In that case, Madam Chair, I will address the minister in the next round of questions.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Cannings, you have six minutes.

Go ahead, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, Minister, for being here, despite being under the weather. I appreciate that.

We're here to talk about Canadian mining companies abroad. Probably half the mining companies in the world are registered in Canada.

I recently had the opportunity to travel to South America with the Speaker, to Argentina and Chile. It was clear how important Canadian mining companies are to our trade with those countries—particularly to Chile, in the economy of which Canada is the largest investor.

Given all those companies, over the years some very serious allegations have been made against Canadian companies. That, I assume, led to the creation of the Canadian ombudsperson for responsible enterprise. Sheri Meyerhoffer is now in that position, and she was before this committee in February.

Despite the complaints we hear from other sources about some of these Canadian companies, she admitted that she had not heard any complaints at all from South America, from Central America or from Africa. When I talk to parliamentarians from Central America and South America, I hear those complaints.

When I asked her why she hadn't had any, she said it was because she didn't have the power to compel witnesses and documents, and that those indigenous communities and small communities had been told not to bother complaining to CORE because they wouldn't get anywhere, and that it would be better to go through the courts or to the UN.

In fact, at that committee meeting, she said:

Having the power to compel witnesses and documents would provide my office with the powers needed to require company participation and avoid the need for human rights allegations to go to courts, a process that is less accessible and is expensive.

I think we have some indication now that not all companies are going to engage. The only way we could move forward and do a true, thorough job would be to have those powers.

I'd like you to comment on why the ombudsperson has not been given those powers.

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

I want to thank the honourable member for that important question. In my earlier responses I talked about the importance of what mining will need to be for Canada in developing the green economy, ensuring that it's done in a sustainable way but also in a way that leads with Canadian values. Standing up for human rights and ensuring that communities are protected are also a part of that.

We work closely, of course, with Sheri Meyerhoffer in her role as CORE. I'm pleased that she has set up the office, has started and is doing that work and that work is progressing well in terms of fulfilling her mandate and taking on cases. I'm paying particular attention to the work that is being done here at this committee and the many witnesses who are coming forward with respect to this issue. I'm also taking a look at the work being done at the foreign affairs committee when it studied Senate Bill S-211. There is a lot of work that is being done.

We are going to have to take into account these various issues, as they come forward, in our thinking of the future. At the very heart of what we must do, Canadians must lead with the values that shore us up to be good responsible corporate citizens. I expect that of Canadian companies, and we have updated our rules to ensure that is the case.

I do applaud the mining association for its leadership, like I said, now working with 12 countries that have come on board on a way forward for the industry in terms of how it can do its work in a sustainable and responsible way.

However, I'm paying particular attention to this work that parliamentarians and civil society are doing. We will obviously take these into account as we are thinking about the future work of the CORE.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

The mining association and most, if not many, Canadian companies are doing the right thing. I talked to Teck when I was in Chile. It has a big mine at Quebrada Blanca that's developing desalination, so it won't be tapping into the precious water resources there.

Your predecessor, the late Jim Carr, commissioned a report to find out how best to structure CORE. The McIsaac report basically said that the ombudsperson should have the power to compel witnesses and documents or their effectiveness may be compromised. I'm just wondering why that wasn't followed.

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

I'm looking forward to being in Chile in about 10 days from now. I will have the opportunity to be on a trade mission there. Suffice it to say, the many voices that are coming forward and the information that is being provided by parliamentarians, and many others, is certainly going to inform our thinking about the future of CORE.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next, we have Mr. Carrie for five minutes, please.