Evidence of meeting #6 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ukraine.
A recording is available from Parliament.
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
Not that I'm aware of. We haven't heard anything about that.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay.
Will this agreement deal with money laundering and issues surrounding money laundering? Again, as we look at oligarchs trying to take advantage of what's going on in Ukraine, what are we doing for safeguards for that?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
We're looking to add a financial services chapter, which could have some tangential role to that.
I'll turn to my colleague Sven Linkruus, from the Department of Finance, who can talk more about money laundering and how we're fighting against that.
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
Sure.
Sven Linkruus Director, Department of Finance
Thanks, Mr. Allen.
The financial services chapter doesn't deal directly with it, but it does include a prudential carve-out that would allow all regulatory authorities to take measures to protect the integrity of the financial system, which would include measures against money laundering that agencies such as FINTRAC would implement in conjunction with Finance Canada and the government more broadly.
February 14th, 2022 / 4:10 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay, thank you.
As we look at the agreement now, and as we see what is happening in Ukraine, we know the Canadian government is not providing armaments to Ukraine at this point in time. If a company wanted to sell into Ukraine, or if the Ukrainian diaspora here wanted to purchase some armaments to ship to Ukraine, is there anything in the trade agreement that is restricting that?
Do we need to have any sign-off from the federal government, or can the private citizens just go ahead and do that?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
Do you mean armaments?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
We do have an export control regime for arms and dual-purpose goods. With respect to Ukraine in particular, we are following the situation very closely.
However, I'll turn it over to Mr. Turner to, again, very quickly, respond to the question generally.
Director, Eastern Europe and Eurasia Division, Department of Foreign Affairs, Trade and Development
It would go through the export control regime. However, Ukraine is a close partner. We have not had any significant concerns with issues, so it would go through the process normally.
Conservative
Randy Hoback Conservative Prince Albert, SK
So there's a process in place that's no different than that for any other ally of ours.
As far as EDC and CDC are concerned, what's happening there in regard to their activity in Ukraine?
I used to get really frustrated when we were doing business in Ukraine in the early 2000s. EDC would say they have this huge line of credit, but it was set up in such a way that nobody could ever access it. Whoever did use it wouldn't have needed it because a bank would have done the same type of deal. Have we seen more aggressiveness in the EDC?
In light of the environment that's going on in Ukraine, how much is at risk with EDC and CDC with the investments in Ukraine?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
My understanding is that EDC has changed its risk profile for Ukraine. Beyond that, I can't go into what's at risk there, what they have invested there. It's just beyond my scope.
Conservative
Conservative
Randy Hoback Conservative Prince Albert, SK
I'm going to take my 45 seconds.
Going back to money laundering and hard currency, that was one of the big issues in the early 2000s, trying to sell something and get paid for it in U.S. dollars. We were shipping sunflowers, for example, into Poland to get paid for our product we shipped into Ukraine.
Are we seeing the IMF involved in Ukraine? Are we seeing a very stable exchange in regard to currency exchanges and things like that?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
I'll turn to Mr. Turner.
Director, Eastern Europe and Eurasia Division, Department of Foreign Affairs, Trade and Development
The IMF has been supporting Ukraine through a standby arrangement, and we're continuing to see good progress.
Obviously, the current uncertainty is making things more challenging, but that's one of the reasons Canada has stepped up to provide economic support, as have more and more of our G7 and NATO allies.
Conservative
Randy Hoback Conservative Prince Albert, SK
I have one last quick question.
We've committed a certain amount of funds, a couple of hundred million dollars, into Ukraine. Does it actually go to Ukraine, or is it there to shore up EDC and investments that are at risk in Ukraine and make sure they're covered off?
Director, Eastern Europe and Eurasia Division, Department of Foreign Affairs, Trade and Development
The sovereign loan being negotiated right now will be directed to the areas that the Government of Ukraine requests. That's currently under discussion.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
We'll go on to Mr. Baker, for five minutes, please.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thanks very much, Madam Chair.
I'm not a regular member of this committee, so I thank the members of the committee for studying this important issue, which I think is a potential win for Ukraine, but also a great potential win for Canada as well.
I thank the officials who are here with us today and working on this really important issue and these negotiations. Thank you for all your work.
Mr. Virani led off from the government's side. I share Mr. Virani's views about what he said at the outset about Ukraine. Mr. Virani and I also share a border. Our ridings border each other, and both have very large Ukrainian Canadian communities. Thank you, MP Virani, for your comments at the outset. I echo those.
Mr. Allen, in response to a prior question, you spoke a bit about a more valuable type of export for us in terms of the mix of exports that are going from Canada to Ukraine and vice versa. Could you explain why you said that?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
It's about the type of export. It's not necessarily more valuable in terms of what is sold, because the dollar value tends to be roughly the same. We're moving more into a finished, processed product, as opposed to something like coal, which is still a very strong export for Canada. It's changing the mix and it's the value-add element that is really substantially going up.
As I said, non-coal exports went up by 28.5%. Not all of that is a manufactured product, but a significant portion is.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Sure.
There's a value-add component. Is it fair to say that this product mix offers greater long-term potential as well, in terms of just the volume of exports?
Director General, Trade Negotiations, Department of Foreign Affairs, Trade and Development
It's hard to say. There are obviously long-term prospects in being able to export commodities as well as finished products. We have major industries that are involved in that. Anything that increases our capacity to export, anything that increases our linkages, is going to be good for our long-term prosperity.
This agreement, as it stands, allows us to have really substantial market access for goods. The modernization is going to take the extra part, which is going to bring in the other part of our economy, the services side of things. I think overall it's going to be a very positive story for us.