International Trade Committee on May 8th, 2023

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I'm going to follow up with two questions to two of our witnesses, and I'll go to Mr. Kingston first.

In your comments to one of my colleagues here, you mentioned the requirement that we would need probably 300 mines—today, I think you said—to move forward with that goal of trying to get the 2035 EV mandate all in Canada, but here's the concern: It takes 10 to 12 years to build a mine in Canada and get regulatory approvals just for that.

The IRA down in the United States already has tax credits for production and the vehicles. They're certain that every year they're going to be going up, I think beginning next year, in terms of having North American content, 40% to 50% to 60%. Right now we don't qualify. How is it that we're going to be able to compete and qualify? My colleague has a production facility. I have an engine plant, which is just next door to my riding, that employs a thousand people right there.

How do we compete in that situation?

[Brian Kingston]

Thank you.

It's very challenging to compete, particularly with the Inflation Reduction Act and $370 billion U.S. dedicated to climate change. A huge portion of it is dedicated to retooling plants, battery production and critical minerals. It's a big challenge.

That said, we do have an advantage in the fact that we have critical minerals. To your point, and we've said this many times, this is a generational opportunity if we seize it. To seize it, we actually have to improve and speed up our regulatory approval process so that these mines get built, processing facilities are put in Canada and we become a global supplier of choice. Our track record on that front is not fantastic right now.

This is the moment. Companies are making big investment decisions. If we don't get the environment right, we'll miss the opportunity.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

To your point, is it realistic to think that we could meet that 2035 target?

In Ontario itself, the Ontario electricity system operator says that to get to a net-zero carbon grid in Ontario, it will cost us $400 billion over 25 years. Is that even achievable? That's to take us from 42,000 megawatts to 88,000 megawatts in 25 years. That will be a daunting task. I think they say that we'll need about six times the 14,000 workers that exist for infrastructure today to simply get there.

[Brian Kingston]

Huge investments need to be made in the electricity grid, and not just in the grid but also in the generation of clean electricity, if we're going to hit this target.

I'll give you an example of what Canada is doing compared with another jurisdiction with a similar target. The federal government wants about five million EVs on the road by 2030. California has the same target, yet the federal government's goal for charging infrastructure is half—195,000 chargers compared with 400,000.

These are the types of challenges we have to overcome. We have a rural population. A third of Canadians live in multi-unit residential buildings. We have an aging electricity system that needs to be massively upgraded—now.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Kingston.

If I could go to Mr. Laird, in your comments you mentioned our investment protections, that the dispute resolutions within free trade agreements are too defensive; they don't properly support our companies. For example, you mentioned that protection for foreign investment within CUSMA no longer exists, where it did under the NAFTA.

How key is it for Canada to get that back into a revised CUSMA? Will things such as passing Bill C-282, which protects supply management, make it more difficult for this to happen because our trading partners could see this as a trade irritant?

[Ian Laird]

If the opportunity did occur to renegotiate CUSMA, I think that would be something that certainly the mining industry would be interested in. However, it's probably unlikely that we'll be seeing that negotiation in the future.

To respond very briefly to that point about the idea that we're seeing these types of provisions taken out of treaties around the world, I think Canada ostensibly has a policy under its model FIPA of having these types of provisions.

My concern is mainly a caution that this does not become a trend, that the one example of CUSMA doesn't continue on in future negotiations. We seem to be addressing investment issues in treaties like CPTPP and other agreements, so I'm optimistic that we won't take the CUSMA route in the future.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Baldinelli.

Ms. Dhillon, please, you have five minutes.

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

Thank you, Madam Chair.

I'll start with Pulse Canada.

Pulse Canada does a lot of work to ensure both a green industry and a sustainable industry. Can you talk to us about some of these efforts? Have these efforts resulted in increased demand or the removal of non-tariff trade barriers?

[Mac Ross]

Sure. Thank you for the question.

At a high level, thanks to the work of Canadian growers and the entire value chain, our pulse industry is an environmental success story. Pulses, when grown as part of an agronomically responsible rotation, lower Canada's environmental footprint. We have a recent study that benchmarks that.

That is part of the discussions that we're having with our trading partners to increase demand. We've seen that yield some results in the EU and here in North America.

We're also trying to have these discussions with a market like India, which, as you know, right now is hosting the G20 presidency. Their slogan is “One Earth...One Future”. Not only do pulses play a role in ensuring nutritional security in food-deficit countries like India, but also in ensuring that food systems are sustainable. We feel that it could be a good fit for their sustainability and environmental objectives as well.

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

Thank you for that.

I have a follow-up question as well. Have non-tariff trade barriers prevented or held back Pulse Canada's efforts in creating a green and sustainable industry?

[Mac Ross]

I'd say, at this point in time, no.

However, I do think there's definitely potential in the future for the nexus of trade and climate to create more opportunity for non-tariff trade barriers. Specifically, when we look at a market like the EU, mirror clauses, for example, the signals that they want to begin applying EU health and environmental standards to imported product, could be troublesome moving forward. It is also likely against the spirit of the WTO and its free trade principle of non-discrimination in which countries cannot normally discriminate among their trading partners.

As Canada is involved and, in some cases, is leading reform efforts in institutions like the WTO—an effort that the EU is also involved in—we need to ensure that, while it's important to address climate change in the new era of trade policy, that the goalposts of this important framework aren't moved in a way that allows countries to unnecessarily restrict trade in the name of environmental stewardship.

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

I have a third question for you, but also for the Asia Pacific Foundation and the National Cattle Feeders' Association.

What do you hope Canada's Indo-Pacific strategy will accomplish in terms of eliminating non-tariff trade barriers?

These are questions for everybody on the panel. Thank you.

[Mac Ross]

I will just quickly note that the inclusion of an Indo-Pacific agriculture and agri-food office in the region is going to be extremely important in creating, as I touched on before, this long-term and sustained presence in the region to proactively address some of these irritants we face.

I'll let others comment, as well.

[Jeff Nankivell]

I will follow up on that. One of the things we haven't talked about yet is how we can address challenges posed by non-tariff barriers. For every Canadian export there is an importer. There are importing interests in all of these countries, whether they're distributors, retailers, consumers who benefit or businesses that need our products and services as inputs. One way to get better outcomes for Canada is to build relationships with those interest groups, those stakeholders within these countries with whom we trade.

A really important aspect of the Indo-Pacific strategy is going to be the reinforcement of the Canadian diplomatic, trade and commercial presence in the region. That's going to help, as was just noted, in the area of agriculture and agri-food, for instance. It's going to help to build those relationships with industry groups and others who can be allies in addressing non-tariff barriers where they are actually hurting the interests of people in those countries.

That's a really important pathway that the Indo-Pacific strategy promises resources to address.

[The Chair, Liberal, Judy Sgro]

Thank you.

I see Ms. Tranberg has her hand up.

Would you like to give a brief answer to that question as well?

[Janice Tranberg]

Yes, and I'll make it brief.

It was well said already. The only thing I wanted to add was that we have great potential to export beef into our Asia-Pacific countries. Japan, in particular, really likes Canadian beef. As we mentioned earlier with the U.S. being 70% of our exports, we're looking to diversify. Having an office in the Asia-Pacific is going to make a big difference in helping us to reach those goals of diversifying.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We're going to go to Monsieur Savard-Tremblay for two and a half minutes.

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

My question is for the representatives of the National Cattle Feeders' Association.

Last week, witnesses from the Canadian Cattlemen's Association told us they were disappointed that the United Kingdom is entering into the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership.

I imagine you share their disappointment and their concerns for the future.

[Janice Tranberg]

If it's okay, I'll start and then you can add to this. Yes, we do. When the U.K. separated from Europe, it agreed to take the CETA with them. In essence, the way we wash and disinfect our cattle is a scientifically proven process that is completely safe. It has been used and accepted globally. Europe has not accepted it, and basically that has really shut us out of the market.

By the numbers I cited, Europe and the U.K. have taken advantage of the tariff rate quotas and have been able to export into Canada, but we are essentially being shut out of being able to access our tariff rate quotas into the U.K. This was not addressed in the U.K. CPTPP agreement.

With that, maybe Will may want to add.

[Will Lowe]

We've had trade irritants before with Europe. Previous to this issue, it was on growth promotants and implants in our cattle. This particular one, on carcass wash and using a lactic acid bath, is a pretty standard procedure here in Canada and the U.S. It's a procedure that is recognized around the world.

The problem with that is that plants would have to spend more money on capital equipment to use a different wash system. They're just weighing the cost benefit of spending that kind of extra money on a market that we're not sure whether we're in or out of.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

You have 30 seconds remaining.

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

I thought you were signalling me that my time was up.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds if you want to use it.

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

I have no more questions. I will simply thank witnesses for their answers. It was quite interesting.

They are right, except when they condemn Bill C‑282. Everything else was quite relevant.

[The Chair, Liberal, Judy Sgro]

Okay. Thank you very much.

Mr. Cannings, go ahead for two and a half minutes, please.