International Trade Committee on May 15th, 2023

[Dave Carey]

Absolutely. Oftentimes, in the canola sector specifically, there are portions of regulations that should be under CETA. It says the EU “may”, and the interpretive EU “shall”, so they really take some liberties with some of the language choices there. It is incumbent upon Canada, as a trading nation, to really focus on the implementation of trade deals. The U.S. trade representative, for example, has an entire team dedicated to the implementation of its trade agreements, which Canada does not.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next, we have Ms. Rempel Garner for five minutes, please.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you, Chair.

I'll direct my questions to Ms. Greenwood.

I'll maybe take the conversation in just a slightly different turn. Lately, there's been a lot of discussion around the government's artificial intelligence and data bill. There's a lot of stuff in the news about how various players in the space are interacting with the Canadian market right now. Recent news out of Google said it was not allowing its large language model, ChatBot, to enter the Canadian market, due to regulatory uncertainty.

Are you hearing anything from your broader community and stakeholder group about concerns regarding either the lack of transparency or the lack of ability for industry to participate in the regulatory process around artificial intelligence? The artificial intelligence regulatory process in Canada is very opaque and lengthy in terms of how AIDA is currently structured.

If you are hearing that, how do you potentially see this emerging as a very significant non-tariff trade barrier for both Canada and the United States?

[Maryscott Greenwood]

Thank you very much for the observation and the question.

I would answer by saying this: In the run-up to President Biden's visit to Canada, we saw other parliamentary committees—I don't think it was this one—singling out large American technology firms and large foreign innovative pharmaceutical firms for various levels of scrutiny and various questions. That creates a question in the minds of a lot of companies about how open Canada really is to foreign investment and companies that employ a lot of Canadians and bring technology and innovation into Canada, and how they would be treated.

When we think about AI.... There is so much emerging that it is much better for the U.S. and Canada to figure out how to work together vis-à-vis challenges around the world—whether they are in artificial intelligence, cyber or anything else—rather than trying to figure out how to have some kind of tit-for-tat experience targeting successful American firms.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I will say that it's Parliament's right to scrutinize companies. I think that's important to put on the record.

I agree with the sentiment that, for something as important an emerging field to the Canadian and American economies as artificial intelligence, there should be some sort of collaboration on the regulatory process.

Some experts have been suggesting that a global regulatory body—perhaps not regulatory per se, but more like a standards council that looks something like the civil aviation administration—would be a more productive way to approach regulations regarding AI.

Is this something you are hearing support for in your stakeholder group? If so, what are you hearing?

[Maryscott Greenwood]

I'm not sure about a global regulatory body.

What I will say, with a great deal of respect to friends and colleagues in government, is that moving at the pace of government is not anywhere close to fast enough for what's happening in any emerging technology. I think it's very important for the private and public sectors to collaborate together and trust each other enough to work on cyber issues, AI issues, nano technology and all these things, because we can learn from each other.

Our observation on the Regulatory Cooperation Council, for example—we've shared this directly with the secretary; it's in the White House and the Treasury Board—is this: What tends to happen is that there will be a call for consultation, where you can email in your thoughts. Then, the governments go away and, by themselves, try to sort out the solutions. That's the kind of thing that doesn't really work.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I have just a few seconds left, and I'd like to get a recommendation on the record from you that's specific to this field.

Are you suggesting that, in terms of ensuring there aren't non-tariff trade barriers coming into play with AI, the Canadian government should take a collaborative approach with the American government and industry in public, in order to ensure nimbleness in the regulatory process, as well as transparency?

[Maryscott Greenwood]

Yes, but it doesn't have to be in public. Public-private collaboration across the Canada-U.S. border would be ideal.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Go ahead, Mr. Sheehan, for five minutes, please.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much, Madam Chair, and thank you to all the presenters for this very important information.

My first question will be for the council.

I'm also co-chair of the all-party steel caucus. I would be interested to hear what you think the opportunities are, from the council's point of view, for steel exports to the United States, using CUSMA as a model.

[Maryscott Greenwood]

The U.S. needs Canadian steel. The U.S. needs Canadian aluminum. I think there are large opportunities for us to collaborate together on that. Because Canada has clean, green, renewable hydro power, particularly in Quebec and British Columbia, there are all sorts of opportunities for steel and aluminum in the U.S. marketplace. I think Canada should lean into that.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Yes. Thank you very much.

In Sault Ste. Marie, we're changing from a coal process to an electric arc process, which is like taking a million cars off the road. It's anchoring Algoma Steel in the community for generations to come, and I really appreciate that as well. The other thing is that hydroelectricity is the reason the steel plant is where it is, and I like the point you highlighted on that. Hopefully, we can continue to work forward.

In terms of what you mentioned in your speech, you talked about a few things, including how you can get some things in Canada and you can get some things in the United States. Sault Ste. Marie is also a border town, so I know that full well. I went to university in Michigan. The students would be asking me for various things, like Smarties, and I didn't know at the time that you couldn't get them in the United States.

Could you expand a little on that in terms of what there could be some collaboration on—not using Smarties as an example, but other things as well—where we'd have opportunities for Canadian goods and products to get into the United States to satisfy the wants of American consumers?

[Maryscott Greenwood]

Absolutely, and first of all, Smarties are delicious.

The thing about steel and aluminum is that they're infinitely recyclable. You can recycle them forever and ever, over and over again, so the huge opportunity for Canada in the United States is really in recycling, and that's not only in the metals business but also in things like the lithium used in electric vehicle batteries. The more Canada can become a global leader in the circular economy, in recycling critical minerals and rare earths.... Canada has the engineering capacity. It has incredible standards on regulations in safety and environment.

Canada should absolutely displace, in my opinion, every other country in the world, both in the processing of these things and in recycling. I think that's a huge opportunity. Also, there's money from the United States government—a historic amount of investment—in things like the recycling of critical minerals and rare earths if Canada wishes to avail itself of it. Sault Ste. Marie is a perfect location to give as an example of that.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That's just an excellent recommendation. In the process of going from the coke ovens to electric arc, they need a lot of recycled material, so thank you very much for that recommendation. Hopefully, it will make it into our report.

For the canola growers and Mr. Carey with a “Y”, I'm also a Canada-Japan co-chair, and Japan loves a number of agricultural products, including canola, as you're well aware. Canada is going into value-added, in particular in the west—and I'm glad they are—with crushers for canola, I believe in Saskatchewan and some other areas, because the Japanese like to buy raw canola, crush it over there and then put it into bottles. It's all over the place.

As we're doing this right thing and moving to value-added with canola, have you had any feedback from the Japanese or any concerns that could result in any non-tariff barriers related to canola or other agricultural products that you're aware of?

[Dave Carey]

Yes, I think the Japanese are watching closely the investments in the crush plants in Saskatchewan that you alluded to. We have a long-standing relationship with the Japanese. It's a very stable and important market. The Japanese are certainly interested in importing raw seed, and I think that for Canada, even with our crush plants coming online, the market will dictate where that commodity goes. There will be more value-added jobs created here, but we have a strong relationship with the Japanese.

I see that the chair has her light on. Otherwise, I'd ask my colleague Chris Davison to go further.

It's a fine line to walk with our traditional export markets, certainly, as we look to get more into value-added, but I feel that there will always be a market for the export of raw seed as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Seeback, please, for five minutes.

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

Thank you very much, Madam Chair.

I missed your introductory statements. I was speaking to a bill, Bill C-282, on supply management, but I want to talk to the Canadian Pork Council about the non-tariff barriers that are going on within CETA.

We talk about robust dispute resolution mechanisms, but it seems to me that something's wrong. Either the dispute resolution mechanisms within CETA are not robust enough or the government has been too slow in getting those dispute resolution mechanisms up and running.

My understanding is that this has been going on for—I don't know—six years with respect to the phytosanitary issues with beef and pork. I'm wondering if you can let us know where you think the problem is.

[Stephen Heckbert]

Part of our challenge is that no one is surprised when the European Union has non-tariff trade barriers, yet they're not supposed to be intentional.

I want to clear up something for Mr. Arya. We're not seeking retaliatory tariffs. What we are seeking is that Canada join the non-tariff trade barrier game, that we have a mechanism where we would be able to say to our trading partners, if you continue to impose non-tariff trade barriers, it's possible that we will also have an analysis done about ways in which your system differs from ours.

We have some of the safest food inspection systems in the world, yet we don't have a blanket compartment—as we have granted Europe—from the EU indicating that our food inspection system en masse is sufficient for them to accept.

We run into challenges whereby they will basically suggest that certain animal welfare provisions that they want—which are simply different from ours, not necessarily superior—must be an exact match to theirs, and they move away from the World Organisation for Animal Health standards, which we more than exceed. They move away from those standards and have their own imposition of animal welfare standards that, as a grouping, simply become impossible to manage.

Their expertise at developing non-tariff trade barriers is not supposed to be something that everyone talks about and basically laughs about in the world. What we're seeking is that there be some mechanism whereby our trade negotiators have an understanding with them that if we're going to be shut out of a market as a result of non-tariff trade barriers, there's also the potential that we have a list of our own on which we could come back to them and have that discussion.

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

I understand. I agree. That's one thing that the government should be exploring.

I know this is a tough question. I really want to try to get an answer though.

What is the holdup? It's been six or seven years on these phytosanitary issues. Is the dispute resolution mechanism not robust enough within CETA? If so, do you have a recommendation on how we could fix it, or is it the fact that the government hasn't advanced this rapidly enough? There has to be a reason we're sitting at seven years with no progress.

[René Roy]

The industry had worked on other markets that were profitable, so when there is a contraction, this is when we see that these markets would be so beneficial to us, but we have neglected them in the past. Now it's really important that we find solutions. On the “how”, we are not the professionals on the details of the mechanism, but we would certainly have to go through the mechanism and test it, and if it doesn't work, then....

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

Do you have any idea, then, why it's been seven years and we haven't been able to remove this non-tariff barrier? Has the government told you why it's taken seven years? I'm sure you've talked to the government.

[René Roy]

I don't have the answer on this question.

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

Quickly, I wanted to speak to the Canadian American Business Council.

Bill C-282 is a supply management bill that is excluding supply management from trade agreements. Do you think that would make it easier or more difficult to resolve trade irritants with the United States, such as softwood lumber and potential COOL, country of origin labelling, on beef?

[Maryscott Greenwood]

It would make it more difficult.

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

Thank you.