International Trade Committee on Jan. 30th, 2024

[Mairead Lavery]

Absolutely, Madam Chair.

There are a few things that are very interesting to Canadian exporters. One is the presence on the ground, which gives them the visibility and the understanding of how business is done in those markets. The trade commissioner is a very important presence on the ground. Indeed, it's why we want to be there. That's together with the opportunity to identify companies that need specific support in the market itself and help them grow their presence in the region.

Specifically on agriculture, there is such a demand currently in the Indo-Pacific region and in the ASEAN region in particular, as many countries focus on food security. Anything we can do to make it easier to actually import into those countries—particularly agricultural products, because they generally have more regulations associated with them from a health and safety perspective—is incredibly important.

Again, it's about the ease of getting products to the market with the credibility that comes attached to that with the Canadian brand. Having our presence in those countries allows us to work with local authorities, local regulators and local companies to encourage them to import more from Canada.

Recent studies have shown that some of the growth opportunities are in those markets in Vietnam, Bangladesh and other countries that have different standards than Canada. We need to be ready to help our exporters get the products into those markets.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

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

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

Thank you, Madam Chair.

I would like to greet my colleagues once again, as we gather back together after a month.

I also want to thank the witnesses for being here and for their presentations.

My first question is for the Department of Foreign Affairs, Trade and Development officials, but I'll ask the Export Development Canada officials to respond as well.

We know that a number of countries are bankrupt and that some are autocracies or authoritarian regimes. How can we ensure government transparency with regard to supplies in these countries, or in countries that, for example, have poor working conditions?

[Sara Wilshaw]

Thanks for the question, Madam Chair. It gives me an opportunity to speak about responsible business conduct. I think that is the key element here. We're talking about the expectations we have of the Canadian companies when they're operating abroad. We expect Canadian companies to abide by all relevant laws, to respect human rights and to adopt best practices and international guidelines on responsible business conduct.

My organization, the trade commissioner service, provides advice to clients on how to mitigate risks in some of the conditions that the member was describing, to strengthen their responsible business conduct practices. We try to use that to make the companies more resilient by enhancing awareness of production and supply chain risks, as well as operational, financial and legal risks.

We also see it as a competitive advantage for Canada. If our companies are out there doing the right things around the world and are known to be responsible actors in the global marketplace, we believe that increases the brand value and customer retention. We see that as a positive for the Canadian economy.

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

Before asking the Export Development Canada officials to respond, I'd like to clarify something.

You said that you expect responsible business conduct. However, in addition to these expectations, is there any checking involved?

Can you tell us more about the current mechanisms?

[Sara Wilshaw]

Madam Chair, I'm happy to talk about how we handle allegations of misconduct.

When an allegation of misconduct is presented to us, when we hear about this, there are a number of different ways in which we can treat that. We start by reinforcing our expectations of the client, obviously. Then we have and can offer good offices under a couple of different avenues. There's the national contact point, which is established under the OECD guidelines for multinational enterprises. There is also a mechanism for the CORE, which is the Canadian ombudsperson for responsible enterprise, to have dialogues.

Actually, there are some legal mechanisms in place as well. There are several legal avenues, such as the Corruption of Foreign Public Officials Act, which is a process we have for alerting the RCMP. Then there are other legal avenues, such as the Extractive Sector Transparency Measures Act and the customs tariff, which makes it illegal to import products made with forced labour.

Those are a couple of different tools that exist.

[Mairead Lavery]

Madam Chair, I'll provide the answer for EDC.

It really starts with talking to the companies and ensuring they understand that the items you referenced can actually impact their long-term sustainability. It starts with the education of our Canadian companies and providing them the tools so they can understand the risks they might be getting into, whether that is providing them information on how to consider forced labour or child labour in supply chains, or giving them the tools to assess that. That's incredibly important. It starts with really trying to build up their knowledge and understanding.

When it comes to being in receipt of EDC support and asking EDC to participate, that triggers all of the due diligence where we consider risk factors that include the sector of operation and the country of operation, or where the buyer might be located, as well as the product itself.

We do quite an extensive set of due diligence that focuses on the environment and human rights. Again, some of the examples are forced labour or the impact on local communities, as well as financial crimes and all they entail. It's a very comprehensive due diligence based on risk factors that we might see, so that we can then go and investigate deeper if we see any of those risk indicators in place.

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

It would be good to hear the officials from both departments respond if there's time.

As we know, a bill was promised before the end of the year to eradicate forced labour from supply chains. This didn't happen. Our committee voted unanimously to remind the government of its commitment in this area.

Are there any comprehensive mechanisms of this kind? If so, why is a bill still needed? Have you heard that this will be done soon?

[Sara Wilshaw]

I'm not sure if you're referring to Bill S-211, which came into.... You're talking about perhaps some legislation that ESDC was asked to bring forward.

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

This commitment was set out in the 2023 budget, which stated that a bill of this nature would be created before the end of the year.

[Sara Wilshaw]

I know what you are referring to. Budget 2023 announced a commitment by the government to introduce legislation in 2024 to eradicate forced labour from supply chains. I think that's what you're referring to.

Employment and Social Development Canada is the lead on labour issues. It has the primary responsibility for this. It works closely with stakeholders and international partners to ensure a strengthened approach to tackling forced and child labour.

Minister Ng has, in her mandate letter, commitments to support ESDC in coming forward and developing this legislation. Our teams are working together to do that.

[The Chair, Liberal, Judy Sgro]

Next, we have Mr. Cannings for six minutes, please.

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

Thank you.

I'd like to follow along the same line of questioning as Mr. Savard-Tremblay.

We had a study in this committee a year or so ago about the responsible conduct of Canadian enterprises abroad. We had the minister, I believe, but we also had the ombudsperson for responsible enterprise here. One thing she clearly said, when she was here.... We were talking about our Canadian reputation abroad, which really affects our ability to export and import. When we asked how many cases she was working on, it was very few. The reason she gave was that nobody was bringing cases to the CORE, because it doesn't have powers. It doesn't have powers to bring in witnesses. It doesn't have powers to get documents, so the people interested in bringing these cases forward would go elsewhere. They would go to the UN or whatever.

Have you heard of any pressure from within government to give the ombudsperson those powers, so she can do the job that we all expect her to do and that she wants to do?

[Sara Wilshaw]

I do recall that study from this committee, and, of course, we paid close attention to it at the time. As you know, the CORE was appointed in 2019. Part of the early days of that office was setting up the procedures and so on. That may be part of the reason why perhaps there weren't many cases in the early days.

As I understand it, and it's public knowledge, the cases are always posted quarterly on the CORE's website. There are currently 21 active cases: five in the intake phase, six in an initial assessment, nine under investigation, and one where recommendations have been made to the company. I've spoken with the office of the CORE recently, and my understanding is that members of the group are very busy these days and are seeing some relatively good success with their efforts.

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

I'm heartened to hear that, because I believe they'd been going for four years when we talked to them and had literally a handful of cases. The reason given was this lack of powers. I'm hoping those powers are still coming, because I think it's so important for Canada's reputation abroad.

Now, to completely change gears and talk more about what you can do to help Canadian companies.... I know you're outward-facing, so I'm trying to find examples.

I have a riding with six small border crossings, so a lot of the companies in my riding do business with the United States, especially. I'm wondering what supports you provide to them. Hopefully, some of them will be here, testifying. I have a small graphite mine that produces the best graphite you can imagine but has difficulties exporting it because it faces competition from Chinese companies in Mozambique, for instance.

I'm just wondering what kind of help you provide to those companies.

[Sara Wilshaw]

I'm really grateful for the question.

The border cities and communities are incredibly important in this trade space. As you say, folks travel back and forth all the time.

I was posted in the United States, so I understand that market fairly well and how we work. I can tell you that across the U.S. last year, we served almost 3,000 clients and delivered over 8,000 services to them, and we saw more than a hundred successes.

As I said earlier, what we try to do is sit down and understand the client's needs and concerns. Whatever the product or service is that they're looking to export, we try to find them the right kinds of tools and supports to help them go internationally, whether that's referring them to our friends at EDC or some other organization that can give them that support, or advising them on local market conditions if we're concerned with risks, as Monsieur Savard-Tremblay mentioned, in certain jurisdictions. We really try to de-risk their approach to those markets by offering them tools, supports, alternatives, contacts and opportunities as they come to us, as well, from all the folks we have on the ground around the world.

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

Did you want to add something, Ms. Lavery?

[The Chair, Liberal, Judy Sgro]

Be quick. You have 26 seconds remaining.

[Mairead Lavery]

I think it's really important to address your point about the competition.

One of the things at EDC that we're very clear about is working with other ECAs and with the Department of Finance at the OECD level to ensure that there is a level playing field for our Canadian companies. That's particularly true in the financing space, which EDC would be more involved with, to ensure that our exporters have access to the same rates, the same tenors and the ability to get financing for their activities.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Seeback, you have five minutes, please.

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

Thanks very much, Madam Chair.

Mr. Sidhu brought up the Indo-Pacific strategy, so I thought I would ask a couple of questions related to that.

It was launched in November 2022. In March 2023, Professor Hugh Stephens wrote an article, saying:

While it is expected that some details will be lacking when a new comprehensive strategy is unveiled, the lack of specificity and details on the paths to implementation of many of the IPS’s elements is concerning.

It's almost a year later. I want to talk about some of these things that have been announced.

The Indo-Pacific agriculture and agri-food office component of market diversification is $31.8 million over five years. What's the status of that? How much money has been spent? How many people have been hired?

[Sara Wilshaw]

I believe the head of that office has been put in place. I spoke to her the other day, but this is an Agriculture and Agri-Food Canada responsibility and lead, so it will be rolling out that office and getting it set up.

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

To the best of your knowledge, it's one person so far.

[Sara Wilshaw]

I don't know, in fact, if there are more people on—

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

You know of only one person.