International Trade Committee on Nov. 7th, 2023

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

Welcome to meeting number 80 of the Standing Committee on International Trade. Today's meeting is taking place in a hybrid format pursuant to the Standing Orders; therefore, members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members.

Please wait until I recognize you by name before speaking. When speaking, please speak slowly and clearly. For those online, please mute yourself when you are not speaking. This is a reminder that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members online, please use the “raise hand” function.

For interpretation online, you have the choice at the bottom of the screen of floor, English or French. Those in the room can use the earpiece and select the desired channel. If interpretation is lost, please inform me immediately, and we will ensure that interpretation is properly restored before resuming the proceedings. I ask all participants to be careful when handling the earpieces in order to prevent feedback.

Before we start with the work of today, I think everyone was circulated a copy of the project budget for this prestudy. Is everybody in favour of the budget?

[Some hon. members]

Agreed.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I will be leaving the chair at 11:45 this morning, and Mr. Seeback will be assuming the chair.

Thank you, Mr. Seeback.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, October 17, 2023, the committee is beginning its study of the subject matter of Bill C-57. We have, appearing with us, the Honourable Mary Ng, Minister of Export Promotion, International Trade and Economic Development.

We are very happy to have you visiting us today.

From the Department of Foreign Affairs, Trade and Development, we have Bruce Christie, assistant deputy minister and chief trade negotiator; Karl Van Kessel, deputy director, investment trade policy; Kati Csaba, executive director, Ukraine bureau; and Dean Foster, director, trade negotiations—Africa, Americas, Europe, India, Middle East. We also have Adam Douglas, senior counsel and deputy director, investment and services law.

Welcome to all of you. We appreciate your finding the time to come in and share information with us.

We will start with opening remarks.

Minister Ng, I invite you to make an opening statement of up to five minutes, please.

[Mary Ng, Liberal, Minister of Export Promotion]

Thank you very much, Madam Chair.

Good morning, colleagues. It's really good to see you.

Let me begin by acknowledging that I appear before you today on the traditional and unceded territory of the Algonquin Anishinabe people.

I'm pleased to be here today to discuss Bill C-57, an act to implement the 2023 free trade agreement between Canada and Ukraine, or CUFTA.

As you know, Bill C‑57 continues to be considered by the House of Commons. I am pleased that the committee is beginning preliminary discussions on this important piece of government legislation.

I recently returned from the G7 trade ministers' meeting in Japan. Multilateral institutions like the G7 helped to establish an era of unprecedented global stability and prosperity. That stability, however, is now under threat from autocratic and illiberal regimes abroad. Of course, nowhere is the threat to liberal democracy more obvious than in Ukraine.

Let me be very clear. Our government will stand with Ukraine until they win this war, and we will be there to help Ukraine recover from the devastating impacts of Russia's illegal invasion. A modernized CUFTA will play a crucial role in that process. Canada and Ukraine have a unique and storied shared history. This modernized trade agreement represents a historic milestone in the Canada-Ukraine relationship. While the original CUFTA was comprehensive from a trade-in-goods perspective, it did not include chapters on services, investment, inclusive trade and other areas that Canada now often seeks in our comprehensive FTAs.

In July 2019, Prime Minister Trudeau and President Zelenskyy announced plans to modernize the agreement, and following the delays of COVID-19, my Ukrainian counterpart, First Deputy Prime Minister and Minister of the Economy Yuliia Svyrydenko, and I announced the launch of modernization negotiations in January 2022.

As we all know, less than a month later Russia began its illegal full-scale invasion of Ukraine. This caused another few months of delay until May 2022, when Minister Svyrydenko conveyed to me her government's readiness to initiate and indeed expedite negotiations to strengthen the bilateral relationship and support Ukraine's long-term economic and trade interests.

This is no minor detail, and I'm sure the committee is aware that the Conservative member for Cumberland-Colchester has suggested that Canada somehow took advantage of our Ukrainian allies as part of the FTA negotiations. In fact, this is precisely the opposite. It was our Ukrainian friends who set the pace for these negotiations. They did so with conviction, and they did so in the face of significant, even existential challenges and threats.

In conversation with my Ukrainian counterpart, she stressed time and again the value Ukraine places on its relationship with Canada and how important it was that Canada proceed with these negotiations as a sign of confidence to Ukraine. Canada will always be an unwavering ally to a sovereign and independent Ukraine.

In June of 2022, Canadian and Ukrainian officials set to work. The conclusion of these negotiations was announced on April 11, 2023, and recently this landmark initiative came full circle when Prime Minister Trudeau and President Zelenskyy signed the final modernized CUFTA in Ottawa in September.

This agreement will provide Canadian businesses with access to an important and dynamic market and it will support Ukraine's long-term recovery and trade interests.

Some members of the opposition have characterized this agreement as “woke”. Honestly, I don't know what they mean by that. This is a high-standard trade agreement that is good for Canadian businesses and for Ukrainian businesses.

For Ukraine, the agreement is much more than that. It is a manifestation of Ukrainian territorial and economic sovereignty. It's an expression of the values of openness and democracy, and it's made possible by an international rules-based order. Vladimir Putin, of course, despises all of these things and when members of the official opposition grasp at straws to criticize this agreement, I'm left to wonder if they realize that it's Putin's agenda that they're advancing when they do so.

In fact, by serving as a demonstration of Ukraine's ability to adhere to ambitious commitments in a range of areas, this agreement will serve as a model for Ukraine's efforts to advance economic integration with other partners around the world. This agreement will be a strategic advantage and show confidence in a free and democratic Ukraine. In two weeks' time, I will be participating in the second annual Rebuild Ukraine Business Conference in Toronto, where Minister Svyrydenko and I have both been invited to speak about a modernized CUFTA.

I have yet to write my remarks for that event, but I know, for sure, that those in attendance and those following the conference across Canada and Ukraine expect and deserve results. They don't want to hear me talk about partisan politics. They don't want to hear me talk about Conservative procedural games. They want to hear about our progress. They want to hear about how we're on track to pass this bill. They want to hear about what our Parliament can do when we work together and when we show our unwavering support for Ukraine. That's the message I want to deliver.

Colleagues, I'm confident we can meet the moment that is before us.

The incredible officials who are with me and I are ready to speak to the committee members and answer their questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Ng.

We move on to Mr. Seeback for six minutes, please.

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

Thank you, Madam Chair.

First of all, Minister, I find your comment in your opening remarks that criticizing or finding things to criticize within a trade agreement is somehow helping Vladimir Putin to be somewhat despicable. I think that's an unacceptable comment to make about other members of Parliament.

Secondly, Conservative members of Parliament unanimously support Ukraine and your insinuation that somehow we don't, I also find somewhat contemptuous.

Turning to the trade agreement itself, can you tell me which section in the Canada-EU free trade agreement has a mention of carbon pricing or a carbon tax?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Let me begin on your comments around my opening remarks.

To suggest that the Government of Canada took advantage of Ukraine, when exactly the opposite was done, is something I think I should put on record and clarify.

When a member calls this legislation “woke”, I would like to ask, “What would 'woke' mean?” Is it because there are progressive elements in it that protect the environment, because it provides opportunities for small and medium-sized businesses or because, for the very first time, it has a chapter for indigenous trade opportunities?

To your question around the EU free trade agreement, we're so proud of CETA because of its standards—

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

Minister, there's a proportional time for the question and response.

What section in CETA has a carbon tax or a carbon price?

[Mary Ng, Liberal, Markham—Thornhill, ON]

CETA has provisions that protect the environment.

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

It does not have anything in there on a carbon tax or a carbon price.

What section of CPTPP talks about a carbon tax or a carbon price?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I respect those questions, but I thought I was here talking about Canada-Ukraine free trade agreement.

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

If you don't know the answer to the question, you can just say that, Minister.

What section of CPTPP has a carbon price or a carbon tax in it?

[Mary Ng, Liberal, Markham—Thornhill, ON]

What I would say is that in those agreements, CPTPP and CETA, there are strong provisions to protect the environment. In fact, it's in those very provisions that you are seeing reports from the chief economist that exports by Canadian exporters, particularly around environmental goods, have actually increased, so there are good benefits for Canadian businesses.

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

But there's no actual section that mentions a carbon price or a carbon tax in either of those agreements. Is that correct?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Both of those agreements have strong environmental provisions, and we're really proud of that.

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

Okay. If you can't answer the question, that's fine.

What about in CUSMA? What section in CUSMA has a carbon tax or a carbon price in it? You can just tell us the section.

If you don't know, you can say, “I don't know,” rather than talking about other aspects of that agreement.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I like to talk about the other aspects of the agreement because they are really good for Canadian businesses. They provide us the strength of being able to build towards economies that are going to increasingly fight climate change but also create opportunities for those businesses.

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

No one's disputing the value of trade agreements. I'm asking you what sections in those trade agreements include a carbon price or a carbon tax. If you don't know the answer, which you seem not to, I will tell you. None of them have that in those trade agreements. Absolutely zero.

Therefore, why would you include a carbon tax in a trade agreement with a country in the midst of a war? How can that possibly help Ukraine?

You talked about aiding Vladimir Putin. Putting a carbon tax into a trade agreement absolutely aids Vladimir Putin.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Let me share with you, as I think you know and would agree, that the energy sector is really important to the Canadian economy. In fact, it was on the signing of the completion of this agreement by the two leaders of the countries that Aecon Group, here in Canada, along with Ukrhydroenergo signed a co-operation agreement to develop a partnership agreement on the construction of hydroelectric power plants in Ukraine.

It's an agreement like this that enables companies to do exactly that around providing energy security and to work with Ukraine as they are rebuilding so that they are not only fighting climate change but actually dealing with the energy security of the country.

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

That's interesting. You didn't answer my question, which is fine, but that's interesting on energy security.

You have absolutely nothing in this trade agreement on energy security—do you? There's no chapter on it, but there's a chapter that puts in a carbon tax. Am I correct there?

[Mary Ng, Liberal, Markham—Thornhill, ON]

This agreement is a terrific agreement because it provides the conditions for businesses to be a part of that rebuild effort in Ukraine. You saw that with this really important Canadian company that builds all around the world. Certainly to do a hydroelectric power plant in Ukraine, I think, is something quite remarkable, so I congratulate that company and the Ukraine company.

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

Where's the section in the agreement that talks about electrical capacity generation or natural gas development? Ukraine has some of the largest natural gas deposits in Europe. You talk about confronting Vladimir Putin. The best way to do that is to take away the energy money that he gets.

Where's the section to develop the LNG resources for Ukraine in this agreement?

[Mary Ng, Liberal, Markham—Thornhill, ON]

The agreement itself, which actually provides greater certainty, and the new chapters on services, which are engineering services that will come from the ancillary work for those companies to be in that space, are a good thing.

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

So there's no section on that.

Effectively, in Canada, you and the Prime Minister are pausing the carbon tax on certain parts of the Canadian population, while at the same time imposing a carbon tax in a trade agreement on a country in the middle of a war. I think your priorities on this trade agreement are absolutely wrong.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Seeback.

We're on to Mr. Miao, please, for six minutes.