International Trade Committee on Feb. 1st, 2024

[The Clerk of the Committee, Ms. Sophia Nickel]

Mr. Montanti, if you would like to access interpretation, there should be a little button at the bottom of your screen, but you have to—

[Martin Montanti]

Yes, it's there. It says, “English”. Thank you.

Just to continue on the question, we talked about immigration in our papers. We talked about the current skills shortage in Canadians as well. We need to start recognizing the gaps that people have when they apply for these jobs, and then we need to fill those gaps in. This is predominant throughout, like Mr. Whelan said, all sectors of industry across Canada.

Thank you.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Thank you, Mr. Montanti.

We will now begin the second round.

Mr. Martel, you have the floor for five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you very much, Mr. Chair.

I thank the witnesses for being here with us today.

Ms. Campbell, in free trade agreements, reciprocity of standards is often put into question, which does not seem to suit everyone.

What are your thoughts on that? Are there any solutions?

[Kim Campbell]

I'm sorry. Can you rephrase the question?

Are you asking if we feel we're not getting the same equivalent benefits back on the free trade agreements that we are signing?

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

It's often said that the implementation of free trade agreements means that our exports can no longer enter countries that have different standards, whereas other countries are probably able to export a lot more goods there than we are.

Are you hearing the same thing?

[Kim Campbell]

I now understand the question.

Yes, I feel it could also go both ways. I'm sure we've also been told that in Canada as well. To me, it's a continued dialogue around the free trade agreements. That's why we are so interested in the CUSMA provision that encourages trade and facilitation committees. There are other committees around that, but the private sector is not participating in those committees. To me, that is where those things should be vetted and worked through, and we're just not party to those conversations.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Ms. Campbell, we hear that improving the customs system is a major challenge and that the system has become a slow down point in travel. It seems very complex and rigid. Is there anything that can be done to modernize it and make it more flexible?

[Kim Campbell]

I would agree.

There are two things to say. One, we used to have a world-class customs agency and were ranked quite high back in 2017. Over the years, we have digressed down that path. Again, it comes back to some of the discussions we've had earlier with my esteemed colleagues. We need overarching plans. We don't have one of those, even on the border processes. To me, that's part of it. We do not have a plan where we talk about an EVP to take Canada to the next level. It's the same with the border as well.

We've been asking senior leadership for quite a while to provide a strategic plan, but we don't have one. I personally asked for an EVP last year, and when we could expect to get one. He said, in 18 months. We're now at that 18-month marker.

To your point, the processes are very complicated and confusing. That is why we feel it's really important to have an inter-agency council that would include businesses in order to start wholly addressing these things.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you.

My next question is for Mr. Holmes or Mr. Guy.

The reason we use nearshoring is that we have a problem with our existing cross-border trade infrastructure. The Canada West Foundation even says that confidence levels in our transportation infrastructure systems have collapsed over the past decade.

Why has there been such a decline in confidence in our infrastructure?

[Robin Guy]

We need stable supply chains to get goods to market. When we look at what the Canada West Foundation...and we are very supportive of it. I'll stress that not only are we supportive of it, but we encourage premiers...who this summer actually mentioned that the federal government should be looking at this Canadian transportation infrastructure plan.

We need the ability to get those goods—such as critical minerals or as my colleague mentioned, the agricultural products—reliably to port and market. The issue we're seeing right now is that there isn't necessarily a climate or understanding from businesses as to what the government strategy is with some of its programs.

The national trade corridors fund was very supportive of them, and it ensured there was a vision that went along with those programs. This will help businesses understand the important pieces that they can invest in, because we as businesses are actually responsible for a lot of the infrastructure as well.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you.

Just out of curiosity, I'd like to ask you which aspect of our cross-border trade-related infrastructure you think needs the most improvement.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Unfortunately, we won't have time for an answer. I'm sorry about that, Mr. Martel. Thank you for your participation.

I now give the floor to Ms. Fortier for five minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chair.

Good afternoon, everyone. Thank you very much for being here. I appreciated your opening remarks.

I want to commend the Chamber of Commerce for mentioning that regulatory framework or regulatory modernization is really important in reducing the red tape. Funny enough, Bill S-6 is still on the table in the House. Hopefully, members will understand that we should be pushing this, as it would help businesses to continue to reduce the red tape.

I had the privilege of being the President of Treasury Board. That was a bill I presented. I think it's really important that we focus on solutions that are already on the table and continue on that. I just wanted to mention to my colleagues that, when it comes up, let's hope we can support businesses by applying this and voting for Bill S-6.

Currently, the second regulatory modernization has 45 amendments to 28 pieces of legislation. It really could help many of our businesses in the support of innovation and economic growth.

My next question would be for the Canadian Chamber of Commerce.

In a previous appearance, it was discussed that the Biden administration's Inflation Reduction Act presented both opportunities and challenges to Canadian companies, particularly in the clean-tech sector. It's obvious that pretending climate change doesn't exist is no longer a viable option for countries that want to remain economically competitive in the 21st century.

Could you please speak to how the investment tax credits provided to Canadian clean-tech firms are helping Canadian firms compete? How can we strengthen that?

[Matthew Holmes]

Thank you as well for the kind words.

On the investment tax credits, or ITCs, within budget 2023, I wouldn't say that they are currently helping. I think it's premature. What they're doing is helping to retain investment in Canada and putting some certainty in place for the business community.

These are major projects. If you're talking about carbon capture, utilization and storage projects, these are major builds. They will take an incredible amount of private sector investment. What the business community is looking for from the government is a sense that there is conviction and certainty ahead, and that there will be investments and tax credits that make this jurisdiction in Canada a competitive one.

The IRA in the United States has had an incredible sucking sound for investment. It has brought all kinds of projects to the U.S. territory. What follows that is talent. What follows that is research and investment. The cycle it creates could have a long-term and prohibitive or disastrous impact on us here in Canada in our energy sector and in our net-zero climate transition.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Great. Thank you very much.

This is for all of the witnesses. I will turn to French because I want to do both official languages.

Most of us agree that government has a role to play in helping provide Canadian businesses with the tools they need to grow, export and integrate into global supply chains. However, as you know, all levels of government provide a wide range of support programs.

How do you think we can ensure that the various levels of government are all working together to help exporters? How do we streamline the services that are available to those businesses and exporters?

I'll start with Mr. Whelan. If he answers briefly, everyone can have an opportunity to answer.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

There are only 35 seconds left.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Otherwise, you can submit your ideas later. We would appreciate that.

Go ahead, Mr. Whelan.

[Michael Whelan]

Yes, I'll answer very quickly.

For us, it is the skill set that's a vacuum across the country and across all sectors. Once the programs and so forth are in place, we can deliver on them. We can deliver the training for them.

[Robin Guy]

I think, keeping it short, that I would just say leadership. I think that plays a massive piece.

Take a look at the Asia-Pacific gateway strategy as an example. That brought together all levels of government, communities, provincial governments and indigenous populations in identifying what top projects we need to ensure we can grow our exports into the Indo-Pacific. I think that was a successful program.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Thank you, Mr. Guy.

It is now my turn to speak.

My question is for the Canadian Chamber of Commerce representatives.

In late 2020, the Industry Strategy Council of Canada submitted a report to the federal government. That report recommended the adoption of industrial policies, which was presented as a major shift. They even went so far as to call for an approach based on the planned strategies of industrial powers such as China and Germany. The aerospace sector, for example, has been identified as one of the four priority manufacturing sectors.

What do you see as the priority challenges for this critical sector?

[Matthew Holmes]

Is this a question for aerospace specifically? I think our friends at the Canadian Manufacturers and Exporters may have an opinion on that, but the critical piece for the aerospace sector right now, I think, is ensuring there is a robust ecosystem in place here in Canada.

These are very integrated markets. These are global markets. They are reliant on essential skills and talent here in Canada, and they need the supply chains. They're sending engines and component parts to various jurisdictions. They're supporting rigorous supply chains and value chains that are global in nature. Our domestic players here need to have a clear sense of what the rules of engagement are with the governments here so that they can have a fair shot at playing with this government and in procurement. They also need to have a free flow of goods and talent so that they can then take advantage of global opportunities.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Mr. Greer, you have 50 seconds.

[Ryan Greer]

Sure. Just very quickly, I know that our friends in the Aerospace Industries Association have been on the Hill recently and will be on the Hill talking about the need for a national aerospace strategy. I think they'll have some very strong recommendations for you and this committee to consider.

I would also echo what Mr. Holmes said about clarity around the procurement and purchasing decisions that are made by the Government of Canada. It is one of the most challenging files for any government and for industry to navigate, but I know that for the aerospace sector in particular it's about making sure that made-in-Canada products, components and parts can be effectively sold to support the Government of Canada's national security, commercial and other objectives.

[The Vice-Chair, Bloc, Simon-Pierre Savard-Tremblay]

Thank you.

Mr. Cannings, you now have the floor for two and a half minutes.