International Trade Committee on Feb. 16th, 2022

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you for that.

Building off that framework, I asked this question to departmental officials and I'd like to get your perspective: What about the certification process for manufacturers?

That's one of the requests from manufacturers in my riding that are exporting agricultural equipment to Ukraine. They're looking for some certainty on the certification required. Do you have any comments on that?

[Zenon Potoczny]

If we're looking at certification in Ukraine of Canadian equipment, I know myself, because I'm also in the energy and oil and gas business in Ukraine, when we tried to bring a Canadian-made rig into Ukraine, the process of getting it certified and approved was just incredible. It was impossible. Ukraine has—

[The Chair, Liberal, Judy Sgro]

You have 20 seconds remaining.

[Zenon Potoczny]

—really moved a lot into the area of definitely changing and improving the certification process. It still has some issues here and there, but it's definitely different from what it used to be in moving a lot of this bureaucratic paperwork to digital form, where you don't have bureaucrats along the way trying to make some money and take some bribes. If we can move it into that system, we can improve it very quickly and very nicely.

Ukraine is moving into the digital world very quickly, if you look at what they have already digitized in Ukraine.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Virani, go ahead, please, for five minutes.

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

I believe it's six minutes, Madam Chair.

[The Chair, Liberal, Judy Sgro]

I'm sorry. We started a half an hour late.

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

I'm sorry. Yes. I'll be a bit quicker.

First of all, welcome. It's great to see so many familiar faces.

The last time we were in session at this committee we were interrupted by an announcement of additional money for financing of $500 million in Ukraine, but also $7.8 million for weapons and armaments. We can't promise that the same will occur in the middle of this meeting, but who knows? Stay tuned.

I do think it's important to just underscore that kind of support. Whether it's renewing Operation Unifier, the $620 million thus far that Ihor mentioned, the lethal armaments that have been supplied or the humanitarian aid, I think it demonstrates a commitment, and you have a lot of strong advocates among all sides of the House for Ukraine.

Very politely and respectfully, Mr. Patzer, in terms of some of the comments you made, I'll agree to disagree with you. I think the entire approach toward the Canada-Ukraine free trade agreement 2.0 is about further liberalizing trade with western nations such as Canada and really helping Ukraine embrace the free market economy. I think that's just something prima facie that Vladimir Putin is not going to be happy with, but so be it. That would be my simple response.

Roman Waschuk, I want to put a question to you because, first of all, I appreciate your service as former ambassador. It's nice to see you again, sir. I appreciated your hospitality when I was able to visit Ukraine in 2018. I appreciated not just the fact that you were there on our behalf as an ambassador, but also some of the things that you were instrumental in terms of opening my eyes about: the omnipresent security and territorial threat of Russian aggression, which I saw in observing the troops on the Maidan and when you helped me tour the Maidan.

Also, you explained to me that there are economic levers we can use to our advantage to further close that gap between our two countries. I remember intense discussions about the film and TV industry, because I was there at the time in my role as parliamentary secretary to the heritage minister.

Can you comment on things such as the film and TV industry co-production agreements or other avenues of economic linkages that you see and that we can embrace via this renegotiation of the agreement?

It's over to you, former ambassador Waschuk.

[Roman Waschuk]

Yes, indeed. I would note that we have in fact signed a co-production agreement, so we have the respective taxation and content regulation regimes in place. Naturally, we've not been able to fully utilize it, as the pandemic put a bit of a damper on people travelling back and forth to engage in international co-productions. Certainly, we'll have an increased scope to work that out now.

I would also flag that Canada-Ukraine trade—for example, in 2021—is highly balanced. Both countries were exporting goods worth about $220 million to $225 million both ways. Maybe I'll flag again a point that Profession Roche was claiming: in other words, that the agreement has been entirely ineffective. In fact, Ukrainian exports to Canada have doubled since 2017—between 2017 and 2021—which was one of the policy goals of Canada in helping Ukraine in its diversification of trade internationally. That goal has certainly been achieved.

I think that through services—audiovisual being one of them—we can make it better.

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

Thank you, Mr. Waschuk.

I want to put a question to Ihor as well.

You mentioned some of the economic levers and listed five different recommendations. I thank you for them.

I want to focus in on one of them that you talked about in terms of our trade and investment. You mentioned IT. I know that telecoms are up for review, and I know that cybersecurity is also an area that is a burgeoning threat in terms of Russian aggression with respect to what's going on with Ukraine's integrity and sovereignty right now. Can you unpack some of the linkages there that might be formed between the cybersecurity assistance and telecoms investment, Ihor?

[Ihor Michalchyshyn]

Well, I'm not an expert on cybersecurity, but I think, as our previous witnesses have said, that IT is the growth industry. Even today and yesterday we saw that in Ukraine the defence ministry, major banks and others have been hit with intense cyber-attacks. Ukraine has certainly become expert in dealing with.... I don't know who would be attacking Ukraine via cyber at this time, but whatever country it might be, Ukraine has become an expert in dealing with them.

We know that Canada has a deficit of IT specialists and, as was mentioned, there's a natural linkage there. There are certainly other aspects, including artificial intelligence, financial technologies and analytics, but just by virtue of the geopolitical context, Ukraine is quickly becoming an expert in dealing with major cybersecurity threats.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir.

We'll go to Mr. Savard-Tremblay for five minutes, please.

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

Thank you, Madam Chair.

Good afternoon, everyone.

My question is for Mr. Roche.

I'm delighted to see you again, Mr. Roche. We knew each other when you were—and still are—a professor at the Université du Québec à Chicoutimi. We're pleased to have good experts on this part of the world in our Quebec universities. I once taught one of your courses during your sabbatical year. It concerned the political economy of international relations, the topic at hand today.

First, could we summarize the issue by saying that the Canadian position is to align with the United States?

[Michel Roche]

The Canadian position is to align itself in part with American foreign policy. This is also true for Great Britain. However, we can see nuances among the different member countries of the North Atlantic Treaty Organization, or NATO, that are taking a position on the conflict. Germany and France are much more nuanced. However, I believe that the position of the Department of Foreign Affairs is also based on very Canadian considerations.

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

Just before I ask you about these considerations, I want you to briefly comment on whether Canada has the most radical attitude towards Russia.

[Michel Roche]

In terms of the current situation, I would say that Canada is most certainly the country with the most uncompromising attitude towards Russia's demands. Don't misunderstand me. I'm still on the side of the people. I'm on the side of the Ukrainian people. I don't like it when people, both sovereign and non‑sovereign, are exploited in this way for foreign policy purposes.

From this perspective, the Ukrainian people have my complete sympathy. However, we must see the forest for the trees. When we look at things from a purely regional perspective, we miss some of the major processes changing international society today.

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

Mr. Roche, I think that we understand that you don't hold the Ukrainian people in contempt. Far from it. However, you believe that we shouldn't try to isolate Russia, since this would harm Canada's interests by bringing Russia closer to China.

I want to ask you now why, in your opinion, among the—

[The Chair, Liberal, Judy Sgro]

Let me interrupt for a moment, Mr. Savard-Tremblay. This is just a reminder that trade is the focus of our study. That's what we are focusing on.

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

Of course, and I was getting there. That's why we were talking about hydrocarbons earlier. I want to ask Mr. Roche to explain this position.

[Michel Roche]

I think one of the previous speakers explained this in part. We talk about trade even when we discuss security. We shouldn't separate things artificially. The key point here is that the trade relationship between Canada and Ukraine has an energy aspect. This aspect applies to people who want to sell gas, such as the Russians with Gazprom, but also to Canadian companies. It's legitimate from a trade perspective, but it's also part of strategic considerations.

There's a reason why Germany, France, the Netherlands and other countries, by importing a great deal of Russian gas, are helping to strengthen Russia.

Basically, one of the main drivers of Russian diplomacy is its hydrocarbons. That said, the worrying thing is that, although there are legitimate reasons for this, there's obviously an attempt to take advantage of the current situation to increase the intensity of the conflict and possibly find a way to stop the Nord Stream 2 gas pipeline project. In doing so, of course, Canada and the United States would be ready to take over the export of gas from Russia.

Even though this type of practice may be legitimate from a trade perspective, it helps push Russia's buttons, so that—

[The Chair, Liberal, Judy Sgro]

Sorry to interrupt, Mr. Roche, but the time is well in excess of Mr. Savard-Tremblay's time.

Mr. Masse, you have five minutes, please.

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

Thank you, Madam Chair.

Thank you, Mr. Roche.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I'll start with Mr. Waschuk, but I'll leave this open for other witnesses to chime in after, if they're interested.

One thing I've always had a great interest in is cybersecurity and fraud prevention. In fact, we did our first one ever at industry committee last session.

I'm wondering what we could do better to improve our telecommunications, trade and digital economy, not only for the financial sector, but also other components in the trading venue that would enhance that type of operation. I think Canada has a lot to offer in those elements, and I'd like to see encouragement going in that direction.

I mentioned last session that I've had Ukrainian interns for 12 of my 20 years here in the House, and they've been phenomenal at being ahead of the curve. Most of them are in those fields right now, after they go through the programs.

I'll start with Mr. Waschuk, and then if anybody else wants to chime in, I'd be happy to hear about that too. I find that really unique and really special, from what I've experienced.

[Roman Waschuk]

Certainly.

Well, the Ukrainians have been in sort of a lemons-to-lemonade mode here. A number of them have taken their frontline experience in this tech struggle and turned it into successful cybersecurity companies.

Similarly, they are very much interested in solutions that Canadian companies may offer. There are broader interests, as well, in the defence field. I think it is probably not a coincidence that our leading export in 2021 was optical equipment, given that the Ukrainians are literally looking through at what is facing them from the other side of the border.

I think there is considerable scope, not just for simple back and forth, but on joint development and creating teams that can crack innovation issues and move things forward for companies both in Canada and in Ukraine. Companies that have done that have certainly succeeded very well in the Canadian market.

[Brian Masse, NDP, Windsor West, ON]

I'll turn it over, if anyone else is interested in that.

I don't want to get deep into the military stuff, but the reality is that when you look back in history, the military has often led to a lot of civilian progress and peaceful progress in technology.

I'm close to the American border. If you look at the American Civil War, there were a lot of advancements, for medicines and a whole series of different things, just out of necessity.

At any rate, that's where I see some excitement about where we can cross-pollinate some of our businesses to be very successful.

Is there anyone else who'd like to comment on this sector?