International Trade Committee on May 1st, 2023

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Harvey.

Mr. Christidis, I would like to talk about the social acceptability of nuclear energy. Nuclear energy is a clean energy. However, we are reluctant to accept projects related to this energy. People probably aren't properly informed about it. I would like to know what you think about this issue.

[George Christidis]

I think that's a little bit of a dated view of where the public is. I think you're seeing a significant increase in wanting to learn about how technologies like nuclear will address issues like the climate crisis. It's really this transformation of the realization that emissions need to be reduced, and therefore all technologies are having to relook at this.

You could look at a number of jurisdictions around the world. Whether it's the evolution of the inclusion of nuclear energy here in Canada, which was very explicit and very supported in the last federal budget, and also in the United States by the Biden administration, and in the U.K., France and Japan, everyone knows the history in terms of the technologies. Therefore, the inclusion of these technologies as part of a solution to those issues is really driving much more renewed interest in understanding and in looking at nuclear, which is transforming in increased support.

[The Chair, Liberal, Judy Sgro]

You have 40 seconds.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

You say that when agreements are negotiated, for example with regard to nuclear, there have to be requirements. Specifically, what requirements should be in place?

[George Christidis]

Yes, fundamentally, the message is—and I'll say it very quickly—the recognition that nuclear has an environmental benefit and an energy security benefit.

If you look at the world now, with the relationship vis-à-vis what's happened in Ukraine, this will intensify. There will be a lot more interest in having nuclear technologies as part of the solution. Therefore, trade agreements in general need to embed common definitions like “clean” and “green”, for example, that would include nuclear. That's across the board.

In parallel, because we require non-proliferation agreements, we need nuclear co-operation agreements, and the processes of government need to be resourced to enable those types of agreements to proceed. The government has done a very good job in doing that. We just need to be ready to maximize the opportunities as they present themselves.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Ms. Dhillon for five minutes.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Madam Chair.

Thank you to our witnesses for being here today.

Currently, Canada exports the majority of its mined uranium, around 75%. Could a potential Canada-Asia free trade agreement open new export opportunities by removing non-tariff trade barriers?

[George Christidis]

Canada is one of the top uranium producers and exporters. Therefore, there would be high interest in the industry to facilitate exporting more of the product. Yes, I think there's an opportunity in international trade discussions for robust discussions to be included, which they already are. The government supports that. I think there is a realization that there's a unique opportunity. Canadian nuclear uranium is now being seen in the context of displacing other resources, such as those from Russia, etc.

That is now a unique opportunity.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Are opportunities emerging to keep more of Canada's uranium at home through the development of medical isotopes? Do you expect opportunities to grow?

[George Christidis]

Yes, medical isotopes are obviously very important. Ontario Power Generation and Bruce Power, etc., are producing isotopes from CANDU reactors. They're used for medical purposes.

Yes, that is a unique product that will have international opportunities.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Are there any particular countries or regions where non-tariff trade barriers are particularly common or challenging for Canadian businesses?

Anyone can answer that question.

If so, what are some of the specific issues that arise in those countries or regions when it comes to that?

[George Christidis]

From a Canadian nuclear perspective, given they are nuclear technologies, you need nuclear co-operation agreements in place between Canada and those respective markets. Geopolitics will play a significant role in some of those discussions, whether it's about exporting more uranium or about nuclear technologies like CANDU, etc. We recognize that the government has to include nuclear as robustly as possible in its efforts, as part of its international trade program, as a way to address some of those issues of climate and energy security.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Do you want to add anything?

[Michael Harvey]

This would give me the opportunity to answer something I don't think I did earlier. It is about Mercosur.

I have a lot of experience in that region. I lived four years in Brazil and I worked a lot in Argentina over the years. It's not easy negotiating with Mercosur, but if we are able to get to a trade agreement that includes good regulatory co-operation, I think it is a context where we could improve the situation in terms of non-tariff trade barriers there.

[The Chair, Liberal, Judy Sgro]

Mr. Adams, I believe you had your hand up. You wanted to contribute to that conversation. Please go ahead.

[David Adams]

Yes, I did.

Very quickly, with respect to the automotive industry, I think it's very important that we keep something in mind in terms of trade barriers.

I think we are all aware of what happened with the Inflation Reduction Act. At least at first blush, we worked through it, but EVs that will be built in Canada were originally excluded from the tax credit in the United States. That's been rectified, but there are still other challenges we need to work through.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Mr. Adams, for adding that. I'd like to continue with you.

As we all know, Canada exports the vast majority of its manufactured vehicles to the U.S.

CUSMA came into force in Canada in July 2020. Can you tell us what benefits this free trade agreement provided to the auto sector, both overall and specifically in relation to the removal of non-tariff barriers?

[David Adams]

I think the biggest benefit that it provided to Canada was continued access to the U.S. market. As I said in my opening remarks, having that access to the American market is pivotal for the survival of the Canadian auto manufacturing sector, because 85% of our production goes to the United States.

The other benefits that arose from the CUSMA trade agreement were some of the provisions that.... If you look at it for Canada and the United States, the increased content provisions ensure that more work will be done, principally in the United States, but Canada is also a beneficiary of that.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Monsieur Savard-Tremblay for two and a half minutes, please.

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

Mr. Adams, negotiations are or will be underway with India, the Association of South-East Asian Nations and the United Kingdom. What non-tariff barriers do you think should be looked at closely or removed so that Canadian companies can benefit from the shift towards the electrification of transportation that seems to be underway around the world?

[David Adams]

I would respond in reference to my earlier comments in my opening remarks, which is that the manufacturing we have in Canada, whether it's parts or vehicle manufacturing.... Vehicle manufacturing is principally oriented around the United States, so we need to ensure that we don't have any regulatory barriers or non-tariff barriers with the United States. Likewise, our parts manufacturers are oriented around vehicle manufacturing in Canada.

I think the best thing we can do is create an environment in Canada for foreign direct investment. At this point—and it's always been the case with the Canadian automotive industry—it's not as much a platform to export to other jurisdictions as it is to service the integrated North American marketplace.

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

You talk about the integrated North American market. I asked you earlier what things should be looked at more closely in relation to the U.S. Inflation Reduction Act. Do you think we should be looking at putting in place the same type of measures in Canada? I'm not necessarily talking about emulating the U.S., but about creating an environment that might be attractive for business.

[David Adams]

I think Canada needs to seek out areas where it has a competitive advantage.

As we've talked about already, and as the committee heard today, some of those competitive advantages are in the areas of clean electricity. We have an abundance of critical minerals. Our real challenge is going to be getting those critical minerals out of the ground and processed so that we are able to utilize them in battery manufacturing and whatnot in Canada.

The more we can continue to ensure that our policies, regulations and rules are aligned with those in the United States with respect to the automotive industry, the better off we'll be.

I think one of the shortfalls of.... If NAFTA had been a success....

We didn't have very regular dialogue with the United States, and that became apparent in our CUSMA negotiations, so I would encourage that ongoing regular dialogue with our U.S. colleagues as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Cannings for two and a half minutes, please.

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

Thank you.

I'll turn to Mr. Adams as well to get some more detail on what the important non-tariff trade barriers facing the automotive manufacturers are.

You mentioned different standards and labelling. I wonder if you could provide some more detail on which of those are important and how they affect us here in Canada.