International Trade Committee on Feb. 1st, 2024

[Kim Campbell]

Right, if you have signed on. Otherwise, you have to put in a paper entry and pay duties and taxes at the border.

[Maninder Sidhu, Liberal, Brampton East, ON]

Yes, signing on is a few steps, but I think we should encourage importers to sign on.

[Kim Campbell]

We 100% have. That's part of the journey as well. I have provided stats to the clerk.

We are only seeing 2,000 a month, so there's obviously a problem. As to why, I think it's twofold. One is how difficult it is to get on there. Number two is the lack of communication from CBSA.

I would encourage you or your staff to take a look at their website. Right now you would have no idea that's happening.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that. I've heard from members in terms of awareness. I think we need to continue working with industry partners to get more awareness out on this new system.

When I was in Washington for APEP, we were discussing supply chains and customs regulations. A lot of the folks there were looking to Canada saying, “How are you doing this so well?”, because there are countries in South America that cannot trade with each other as we do with our neighbours. People are looking to Canada and some of our regulations and some of our techniques, but there's always room for improvement. We all know that.

Turning to Ryan, would you like to speak to some of the regional challenges that you're seeing across the country?

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

Please answer in 50 seconds.

[Ryan Greer]

Sure. Just to echo some of what Mr. Guy said, we're hearing a lot around agri-food processing and energy. There are some concerns around grid and electricity. There are concerns out west around inputs from manufacturers.

What I'm actually struck by is the commonality of changes, despite the differences in industries and despite the differences in challenges among our different geographies. Some of the themes we've discussed here are around regulatory approvals, timeliness, reforms and transportation infrastructure. There's no part of the country where we're not hearing concerns about export, trade-enabling infrastructure and the need for sustained strategic investment.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

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

Thank you, Mr. Sidhu.

We will now begin the third round of questions.

Mr. Van Popta, you have the floor for five minutes.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here with us.

I have a question for the Chamber of Commerce. It's really a follow-up question to Mr. Cannings' about just-in-time inventory controls.

My riding is in the Lower Mainland, Langley, and there's a border crossing in Aldergrove between Aldergrove and Lynden, Washington. There's a lot of light manufacturing going on in my riding, and I talk to a lot of them. They have a problem with supply chain disruptions that are impacting their inventory management, and just-in-time inventory management is a challenge for them.

It's hitting these people in three ways. There's more working capital tied up in inventory. There's more working capital tied up in warehousing—and warehousing is very expensive in the Lower Mainland. Also, with high interest rates, there's a lot more money taken off the bottom line by financing all of this additional working capital.

My question to the chamber is this: Are you hearing this from your members, and what advice would you have for small and medium-sized operators?

[Matthew Holmes]

Yes, we are hearing about this.

I think that speaks to the statistics that were shared and that we've been seeing, the survey on business conditions. There's ongoing concern about inflation. There's then the cost of debt management for a lot of these companies, particularly small and medium-sized enterprises, but there's also this persistent lack of confidence in the supply chain itself, and that comes out of the long tail of the pandemic and the disruptions we saw throughout that period. It's still very much with them.

Even though we talk about the importance and the rigour of creating more ecosystems within the Canadian manufacturing sector and creating more integrated domestic supply chains, regardless, we need both. Those have a lot of benefits and knock-on effects that are positive for our economy, but we also will always, in our current frame, be reliant on components, on parts and sometimes even on talent that needs to come in and work with our Canadian manufacturers and suppliers.

We need both. We need borders that can be rigorous in their controls, but porous in their application for our business community here at home.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

One question that I'm hearing from small operators with these supply chain problems is whether they should be making long-term investments in more warehousing. A lot of them had become very efficient with their inventory management.

Early on in the pandemic, when we saw some inflation creeping in, the government was telling us that these are short-term, pandemic-related supply chain challenges. Today the government is saying that, no, maybe it's more deeply embedded than that.

Small business operators don't know, and they're getting these confused signals from the government. What advice would you have?

[Matthew Holmes]

There are a couple of things. First, we have a variety of ways we could approach this. There are benefits to automation, and artificial intelligence does provide some future options around increased productivity and the automation and the benefits that many businesses of various scales can introduce and benefit from quickly. The Chamber of Commerce is continuing to study that. We feel strongly that there's a lot of potential there, as we see a decline in the productivity rate in Canada. I think there are ways. From a warehousing perspective, that's an obvious place where we can improve.

I hear you on the cost of land and on the price pressures that are facing these businesses. In many cases, they can only grow up.

I think what we consistently see is that, for government, one of its main tools is regulation. We don't often see governments take back or repeal regulation or apply an economic lens. What we're calling for consistently across multiple sectors within our membership is that, when new regulations are introduced, they are put through an economic lens to see what the impacts are on businesses of all scales across the country amongst various sectors and whether that will be a net positive or negative for the Canadian economy.

We think that would make a profound difference.

[Robin Guy]

It's a simple thing. It can't take us 10 years to build projects in the country.

Figuring out that regulatory problem so that we can build the infrastructure that we need quickly so that.... Right now, we're looking at those near-term problems that are already taking place. We're already so far behind that's not good enough. We have to be looking 20 to 30 years out to make sure that, when we get to that, we have the infrastructure in place so that we can get those minerals to market and get goods reliably to market.

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

Thank you, Mr. Guy and Mr. Van Popta.

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

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today.

To the Chamber of Commerce, during your remarks you mentioned the national trade corridors fund. In my riding of Richmond Centre, it's really a first point of destination for air travel and goods coming from the Pacific. Many forwarder businesses are critical in this supply chain system.

I'd like to understand how an investment like the recent announcement by our Minister of Transport of approximately $74.3 million to integrate and expand the Vancouver International Airport would impact businesses and members of your organization across Canada.

[Robin Guy]

Significantly—I think that's the simple answer.

The projects that are being announced by the government are greatly needed. We have an infrastructure deficit in the country. More money going toward infrastructure from the private sector and from the government is all very positive. I think making sure we have a vision in place so that we understand how that is working, in addition to some other announcements that the government is working on, will allow us to stretch those dollars significantly further. It's a signal, then, to the private sector as to what is needed from both the government's vision and the private sector's vision.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you. I completely agree with your vision of how we plan for the future of Canada in economic growth especially. I personally feel there's a lot of potential for Canada, with made-in-Canada goods, to be a global player internationally.

Part of what you talked about, Ms. Campbell, is CARM, the new management system that we are implementing in May. Would you feel this is an approach our government is taking to modernize the current system? We talk about a lot of modernization in different areas. It is better when our technology in this generation allows us to really look at that approach and make the system more efficient and much more welcoming for all the exporters and importers to participate in.

[Kim Campbell]

That's a great question. Thank you so much.

I would 100% agree that it was an attempt to modernize, but I feel like it comes back a little bit to the infrastructure discussion too. There needs to be an overarching council or agency to make sure we're actually meeting the mandate. That's a great example of where we thought we were modernizing, but nobody's been overseeing it. We're years over-budget. Is it actually doing what it says it was supposed to do? As well, this is a third party. We've outsourced it. I think that's something we need to take a look at, and at keeping our assets within our own government, potentially.

It's a fair point. It's definitely an attempt at modernization. It's the execution of it and whether it actually meets or will meet its mandate is really the question.

[Wilson Miao, Liberal, Richmond Centre, BC]

I can imagine that in the initial stage there will be glitches. It's about how we'll be able to make that improvement over time. It's also about including the participation of businesses across Canada for their inputs and how we can really maximize the potential of this management system being put in place.

I understand that there has been consultation in the past. We're in the phase where it's being implemented right now. Do you feel there are certain areas in which our government can find better solutions in terms of the concerns you or your members may be experiencing?

[Kim Campbell]

Yes. That's a fair point. In fact, there have been two rounds of implementation already. One of them was importer-facing and the other one was not. We have seen some pieces of it.

I think the opportunity or lesson learned, as we talked about earlier, is why did we have to do a big bang approach? Why didn't we take an agile approach? Really, that's the lost opportunity. Most people around the table have done systems implementation, whether in government or in the private sector. Typically, you go through the design phase. You start the testing. You have your lessons learned. You rejig. Then you implement. Then you do your process improvement. That's not what we're experiencing here. That's what we've experienced on past projects, so that, I guess, is a lesson reinforced in this case.

We hope that once we move forward and get it in and stabilized, we will have those iterative processes. We're just very concerned at what cost that will be, at this point, since we're going to go big bang on May 13.

[Wilson Miao, Liberal, Richmond Centre, BC]

Great. Thank you for that.

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

Thank you, Mr. Miao. Your time is up.

It is now my turn to speak, and I would like to come back to the witnesses from the Canadian Chamber of Commerce.

When you appeared before this committee a short while ago, regarding the strike at the Port of Vancouver, you talked a bit about the need for government action to prevent and quickly resolve strikes in response to a question from Mr. Miao, in particular.

Can you come back to that and explain to us how important port facilities, infrastructure and establishments are in supply chains and can be extremely dynamic hubs?

[Robin Guy]

Business needs to have the stability and the reliability in the supply chains.

It's important to realize that.... Looking back, we obviously had our west coast port strike, which had a significant impact on our supply chains. Looking forward, there's the port of Montreal. This is more instability and uncertainty for business. It's possibly with both national railways. Again, if one of those were to happen, the economic consequences of something like that would be massive.

Keep in mind that, when we look at things like a strike, it means that there's a slowdown in production. For example, in the forestry or mining sector, leading potash company Canpotex announced that it was withdrawing all offers of new sales. In essence, 70% of their exports were about to stop.

These aren't things that necessarily just affect the port. These are things that affect workers throughout the economy and throughout Canada.

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

So you are confirming that the ports are currently being underutilized as extremely dynamic hubs in terms of supply chains.

[Robin Guy]

I think it's important to realize that our ports play a massive role in our export economy, but so do our airports and our bridges going down to the United States.

Maybe I'm misunderstanding the question, but we need to make sure that we get our goods to market and we need to make sure that we're looking at the future to ensure that we have the capacity to continue to get those goods out to market.