International Trade Committee on May 1st, 2023

[David Adams]

I think the Inflation Reduction Act has proven to be a good example.

I mentioned the tax credit situation a moment ago. We were able, through negotiation and discussion with the Americans, to ensure that Canadian-built EVs would be included as part of the tax credit. I think what we fail to realize is that with the provisions of the IRA, unless we did something in Canada, there was going to be very minimal battery investment or electric vehicle investment in Canada because of the subsidies that were put on the table by the United States. I think that the subsidies, investment credits and investment mechanisms are all potentially non-tariff barriers to trade that we need to ensure that we're cognizant of and work to address. I think the government did probably as good a job as it could with the recent federal budget in ensuring that investments like the one that Volkswagen made won't be the last investment of that type in Canada.

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

Thank you very much.

[The Chair, Liberal, Judy Sgro]

We now go to Mr. Carrie for five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madam Chair.

Mr. Harvey, I think you mentioned in your opening that as long as people are not in bad faith and are in good faith when they're negotiating and working these things through....

I was wondering if you could comment on the national security test that's sometimes being used by different countries. My colleague brought up the steel and aluminum tariffs that were put on Canada. At the time, I didn't think we should have had that happen. The Americans were asking, because we build defence products together, that Canadian foundries have unique stamps so that they knew the steel and aluminum was coming from Canada, because there was a dumping by Turkey and China.

Mr. Adams talked about the importance of regular dialogue. I think it's being proactive.

I wonder if you could comment on how countries restrict access to their markets by using this national security test. Do you see it as a legitimate thing that we should be looking at, especially with our defence allies like the United States?

[Michael Harvey]

I would say that sometimes it's legitimate and sometimes it's not.

We have national security reasons for not letting certain investments into our country. We have a national security reason for not allowing certain products into our country or into our technological systems.

Then sometimes it's totally incorrect. The case in the U.S. a few years ago, I think, was an egregious case of not having a national security reason for preventing Canadian steel from going into the country. Agreements like CUSMA allow us to work through those disputes in a lot more productive way. Let's be thankful that we have these agreements to work through these things rather than doing them in thin air.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Seeback, I think, has a question.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I'm just going to ask Mr. Harvey again.

When you started, you said you were in Brussels when you first announced that you were going to be coming to testify about this issue.

In your role, do you hear from other countries that there are a lot of non-tariff barriers to bringing goods into Canada, or are we the innocent in this? Is it mostly Canadian companies that are having difficulty with non-tariff barriers?

[Michael Harvey]

I think the nature of my role is that people come to me to complain about non-tariff barriers abroad and not about non-tariff barriers in Canada. Ms. MacNeil is talking about a non-tariff barrier in Canada, but people don't come to me for that. To be frank, every once in a while they do, and I say that it's not my job to work on those issues. I'm in an unbalanced situation.

As a former Canadian diplomat, I can tell you that people bring it up with you when there's a barrier in Canada that they don't like.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I know this is a hard question to answer, but would you say in your experience that it's more Canadians dealing with non-tariff barriers abroad than foreign countries or businesses having to deal with similar things in Canada?

I know it's a hard question.

[Michael Harvey]

It comes and goes. It comes and goes.

What I would say is that I have generally been paid to look after the interests of Canadians abroad and have fought for those interests. Sometimes people had counter-arguments when I brought up the Canadian position, and I had to bring those counter-arguments back to my headquarters and say that they might have a point.

[The Chair, Liberal, Judy Sgro]

Mr. Adams wanted to contribute to that question.

[David Adams]

Thank you, Madam Chair, and thank you, Mr. Seeback.

I think the only comment I wanted to make there is that I know, in terms of irritants for vehicles coming into Canada, that the luxury tax has been flagged by my European members as being problematic, especially given the CETA that we've signed, so I would flag that for your consideration.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

We'll go to Mr. Miao, please.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair, and thank you to all of the witnesses for appearing today.

I'd like to direct my questions, through the chair, to Mr. Adams online.

In your opening remarks, you mentioned the trade of vehicles globally. How do you stay informed and updated on the new and changing non-tariff trade barriers when exporting vehicles, and have you used the trade commissioner service for registering any of the trade barriers?

[David Adams]

As I mentioned earlier, primarily I try to keep track of any non-tariff trade barriers between Canada and the United States, because 85% of the production of our manufacturing members—Toyota, Honda and any of the five manufacturers in Canada—goes into that jurisdiction, so keeping track of what's going on in the United States is of concern.

Then also, on the other side of the house, as I just mentioned a moment ago, I do get flags from time to time from some of our membership who are experiencing challenges in potentially bringing vehicles into Canada. We're not really utilizing the trade commissioner service as much as perhaps we could.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

Madam Chair, I think my colleague online, Arif, has more questions to ask. I will share my time with him. Thank you.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Virani.

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

Thank you very much, Mr. Miao.

I'm going to turn back to Mr. Christidis.

My colleague, Terry Sheehan, has been asking you a bit about northern and remote communities. I'll tell you that one thing we hear a lot about—and rightly so—is fossil fuel subsidies and bringing them to an end. One thing we're faced with is mobile diesel engines that provide power where there's no other source available for remote communities, which are often indigenous.

I appreciate your point that whatever happens in those communities has to be done on the terms indigenous people want and agree to. They have to lead it. That's critical in terms of reconciliation—

[The Chair, Liberal, Judy Sgro]

Excuse me, Mr. Virani. I'm sorry.

I just have to put a halt here for a second. The bells are ringing. It's the 30-minute bell. Is the wish of the committee to continue until one o'clock and then adjourn? Normally, we would still have sufficient time to get to the House or vote on our app here. Is there unanimous consent to continue with the meeting?

Am I getting yeses from everybody? I'm going to learn to say that if I don't hear a no, I'm going with yes.

[Some hon. members]

Agreed.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Virani, it's back over to you for two minutes and 54 seconds.

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

Mr. Christidis, what I was saying was that whatever happens in remote communities where there are indigenous people staying obviously needs to be done on their terms and led by the indigenous communities who are there. However, if the SMR potential is realized, would it not be a way of both curing the argument about fossil fuel subsidies—because SMRs would be a non-emitting source of energy—and also addressing the acute energy needs of some isolated locations in Canada? Could you comment on that?

[George Christidis]

Yes, indeed.

The very small reactors would provide an opportunity for those indigenous and northern communities to have a non-emitting, clean technology that would be able to displace diesel, and with the carbon pricing and the costs associated with emissions, as it were, placed on diesel, it would be an opportunity to transform away from those energy sources for sure.

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

If I could just stay with you in this last little bit, you mentioned Romania a couple of times. They're already a CANDU client. They want more reactors.

Do you see non-tariff trade barriers that we can remove to enhance our ability to export Canadian nuclear expertise so that it exemplifies and accentuates this great Canadian industry, great Canadian technology and great Canadian know-how?