International Trade Committee on March 27th, 2023

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

Yes, I did.

Minister, if you don't mind, I'm going to draw a link between this topic and the other topic we discussed during the first hour of this meeting, namely mining firms, which receive financial support. You told us that they won't get funding unless they respect human rights, which we could understand to include things like social or environmental rights as well.

Could you briefly go over the requirements a company has to meet to be legally recognized as a Canadian mining company?

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

I'm afraid that question in that specificity I don't know the answer to, so I'm going to ask my officials if they might have an answer.

[The Chair, Liberal, Judy Sgro]

They're indicating that they don't have an answer either. Possibly you could get an answer back to the member in writing or to the clerk, so that everyone would have the answer.

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

Just to be clear, you can't confirm or deny that all it takes for a company to be considered a Canadian mining company is a mailbox in Canada.

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

On that issue, I am aware of that. That's not acceptable, so we're going to look into that. A company having a postal box and not operating in Canada is not a Canadian company. If that was a question, that's your answer.

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

Great, thanks. This is the first time I've heard a commitment to tackling the issue of companies operating under a “flag of convenience”, given that Canadian law confers diplomatic and financial support, speculative benefits and tax benefits on companies that are not actually Canadian. Right now, most of the world's mining companies are registered as Canadian.

I wonder if you could let the Committee know about any future steps taken to tighten up the legislation on this. Are you willing to do that, minister?

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

This issue has come to my attention, so we are going to get at it, for sure.

You heard my response earlier. Having just a postal box and pretending you're a Canadian company does not make you a Canadian company and therefore able to access all the range of services that the Canadian government provides to all these wonderful Canadian entrepreneurs and businesses that are working so hard to grow our economy and to create jobs in Canada.

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

Perfect, thank you. I'm really looking forward to seeing what actual changes are made.

During our study on the behaviour of mining companies abroad, our committee heard from representatives of Export Development Canada. They said there are really no stringent auditing or accountability mechanisms.

Is your department also planning to tighten the screws on companies by making sure their behaviour is rigorously audited for every dollar invested in operations abroad?

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

I'm trying to think how to respond to this. Canadian companies that operate abroad have an entire regime of legal obligations and others where they operate, but they certainly have them as Canadian companies as well. We expect Canadian companies, when they're operating here and abroad, to adhere to all of that, including responsible business conduct in some sectors like mining that require a duty of care and standard. I think my answer to you is that I expect Canadian companies to comply with the law.

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

That's what you expect, but is anyone making sure? Are there any conditions, mechanisms, inspectors or institutions checking on this?

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

If it's a digital company operating in another part of the world or in Canada, then is the Government of Canada supposed to monitor it? Is that what you're asking?

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

Yes. You said you expect them to comply with Canadian law, but your expectations may not line up with the way the laws are implemented in real life.

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

I think that, in terms of the legal regime of Canadian laws for Canadian companies, the range of reporting and due diligences that are required and their responsibility to meet those requirements, it's up to the company's to ensure that they do. There are regular mechanisms to ensure that companies are meeting their legal obligations.

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

Minister, when a law is passed, I don't think we say that it's the criminals' responsibility to comply with it.

[The Chair, Liberal, Judy Sgro]

Minister, give a brief answer, if possible.

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

I don't consider Canadian companies criminals.

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

That's not what I meant. What I meant was that, when a law is being implemented, you have to—

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Savard-Tremblay. I'm sorry. I have to move on.

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

Just a second. That was a pretty serious insinuation. I'd like to use my colleague's six seconds to clarify.

[The Chair, Liberal, Judy Sgro]

The six seconds disappeared.

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

I just want to clarify that I wasn't calling Canadian companies criminals. I was just saying that, when a law is passed, it's the government's responsibility to enforce it. We can't just expect people to miraculously comply with it.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, go ahead, please.

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

Thank you.

We've had a study that we've been looking at here in this committee. It's on the Inflation Reduction Act and its impact on Canadian companies and Canadian trade and investments with the United States.

I was talking to a constituent of mine who was involved in a small business. They have a patented process that takes forest waste and turns it into cleaner fuels, into renewable diesel, high carbon-content biochar, etc. They're opening a plant here in Canada. It's a private company.

The investors in the company are Bloomberg. It's a big American company. Bloomberg says it really loves the technology. The company wants to spread across Canada and open new plants across Canada, but Bloomberg was saying it can't afford to do that. With all of this money from the IRA and the United States, Bloomberg wants them to open up plants in the United States.

I'm just wondering if you can comment. Is there any good news coming for a company that works in this space to help combat this lure to move across the border into the United States because of the IRA, something that says we will support these companies here in Canada?

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

Thank you very much.

That is such an important question. Your question is actually at the very heart of my role as the small business minister and the international trade minister.

What you've seen our government do over the last number of years is support those most innovative companies, particularly those that are developing these technologies—or innovative solutions that have strong IP and so forth—to grow and create the necessary supports. That's so they are growing in Canada, creating those jobs and doing so with international partners.

Yes, there are investments that come in to support that. The strategic innovation fund and the range of supports in the.... I apologize I don't remember the name right off the top. The finance minister announced it along with the Minister of Innovation not that long ago in the fall economic statement or the budget around a clean-tech fund. That really is to support their growth, particularly in their getting that access to capital in Canada.

A lot of companies also make the choice to be here because of our strong education system, strong social supports and the strong support of the talent and skills that are here in Canada. We know that there is work and there continues to be work to be done to ensure that we are growing these Canadian companies to become the next Canadian giants. Whether it's the superclusters or the work that the various funds we have put out to incentivize for that growth, it is very much—

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

Minister, I'm sorry for interrupting.

Will there be something, either in the budget or in the near future, that will change this dynamic so that this company can build out its plants across Canada and not be forced by its investors, who see just the obvious advantage of taking the subsidies in the United States and building plants there instead? Will there be something different there?

I'll leave it at that. Hopefully, I'll have time for another question after this.