International Trade Committee on Feb. 8th, 2024

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

Yes.

[Doug Band]

—after CBSA recourse worked with the importer to determine that in fact the goods had not, on the balance of probabilities, been made with forced labour.

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

We'll get back to the balance of probabilities. You're aware that the United States has seized billions of dollars of goods that are suspected of being made with forced labour. Canada had one but then returned it. That is billions of dollars from the U.S. and zero from Canada.

You're aware that the United States has an entities list of companies that they have determined use forced labour. Do we have a similar entities list in Canada?

[Doug Band]

The CBSA, as a matter of course, does not proactively publish risking information. We do risking at a shipment-specific level in accordance with the ban that's administered, the customs tariff. We are able to use information and research provided by ESDC as well as information from the U.S. CBP and other public information sources.

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

Do you have a list of any companies that you suspect of using forced labour?

[Doug Band]

We are aware of entities associated with risks of forced labour, and that is in the public domain. The U.S. CBP list, for example—the withhold release order that you are referencing—is a publicly available list. As such, we are aware of that list as well.

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

Can you explain how the United States has seized billions of dollars and Canada has seized nothing?

I'm going to talk about World Vision's “Supply Chain Risk Report”, in which they say, “Canada is a significant contributor to [the] global problem”. They also say, “Canada imported nearly $48 billion [of] risky goods in 2021, representing over 7.5 per cent of our total imports”. They go on to say, “Risky imports increased by nearly 30 per cent since 2016.”

Canada's doing an absolutely terrible job of seizing goods made with forced labour. I mean, that's unequivocal. The United States has found billions. Canada has found nothing. World Vision's calling us out. The United States is calling us out.

Has CBSA just not been given the tools, like the U.S. border service has been, to seize these goods?

[Doug Band]

I think it's perhaps an understatement, but I'll state it anyway: Enforcement of forced labour-related goods is a significant and complex undertaking. It really, fundamentally involves connecting the dots between the labour practices associated with the production of a specific good in a specific area through a complex supply chain, which may or may not be invisible—or parts thereof may be invisible—to the Canadian importer itself.

Each jurisdiction—and there are only two presently that have a ban, which are ourselves and our U.S. colleagues—

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

Mexico does as well. They're part of CUSMA.

[Doug Band]

Yes. Thank you for the correction.

Fundamentally, the challenge is that the U.S. has a legal and policy architecture that is different from what we have in Canada. Each jurisdiction has to operate in an enforcement context that is governed by those laws and policies.

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

Canada has chosen a standard for enforcement that is different from the one in the United States. You guys have to prove on the balance of probabilities that the goods were made with forced labour; the United States has a reverse onus. If they suspect it, the importer has to prove they're not. Is that correct?

[Doug Band]

The U.S. system does operate on a rebuttable presumption, where the importer has the burden of proof to prove that the goods listed on the—

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

Why would we use a lower standard than the U.S. on such a serious issue? It's resulted in the U.S. seizing billions, but Canada has seized none.

[Doug Band]

It's a different standard that was available at the time of CUSMA. It's important to remember that the U.S. has been at this since the 1930s, so they have a deep experience base of practices, lessons learned—

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

We could just use their standards.

[Doug Band]

There is a significant difference in the experience base and the capability and expertise base in the U.S. They are different approaches that reflect the different jurisdictional realities and contexts. We have privacy and confidentiality laws that are different from those in the U.S. It's not atypical that things that occur in the U.S. are not easily replicable in a Canadian context. They're different.

The member is quite right, Madam Chair, that Canada operates on a different model under a balance of probabilities, where that burden of proof, if you will, is somewhat more shared between the enforcement agent and the importer.

When we detain goods—and we do—and the goods are moved off to the side, there's an opportunity for the importer, similar to what happens in the U.S., to provide additional information. It's not to prove that they aren't made with forced labour, but rather to inform the final determination by the CBSA officer as to whether or not, on the balance of probabilities, those goods have been made with forced labour.

It's a different model. I think there's a lot of experience, and we're very fortunate to have a very close relationship with the U.S. We have regular monthly calls. Their risking team was actually embedded with and visiting with my team last spring for two or three days, transferring that knowledge. We are committed to getting better in this space. As our information base broadens, we think we will be able to get after the risks more effectively.

The member asked about entity lists. In the last six months, we have been able to start to run a daily algorithm of risks that we can associate with specific shipments.

We're moving forward. We're not where we would like to be, but we are getting better.

[The Chair, Liberal, Judy Sgro]

Thank you very much. You're about two minutes over your time, Mr. Seeback, but I think it was valuable information.

Mr. Sidhu is next.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Madam Chair, and thanks to our officials for joining us here today for this very important study.

I represent Brampton East, which is a large agri-food processing community that supports thousands of jobs in our city. It's encouraging to hear about the Indo-Pacific strategy and how the new agriculture and agri-food office that's opening up in Manila in the Philippines is going to help our Canadian businesses access new export markets around the world.

In addition, I heard about the national trade corridors fund, which is going to enable more trade to flow to supply chains, and the $5-million investment we made at the Peace Bridge, where we see 1.1 million trucks cross every year. We see investments to our cargo terminals and ports across Canada, so that's very encouraging to hear.

I want to know more about the emerging markets in the Indo-Pacific. We did hear at the very beginning about the impacts this could have on Canadian businesses.

Maybe I can hear from agriculture first.

[Tom Rosser]

Perhaps I could get my colleague Kathleen Donohue to join. She may have some additional information.

As the member correctly referenced, we will shortly be opening a dedicated office in Manila to promote agri-food exports and trade investment in the Indo-Pacific region. There are some very fast-growing, dynamic economies there.

We are in active negotiations on a bilateral trade agreement with Indonesia as well as the ASEAN group of countries. Indonesia is already a billion-dollar-a-year market for us, and the Philippines, in its own right, is a very significant market.

The office will help us do more proactive outreach into new markets across the region as well as deal with the many market access irritants that we have in our trading relationship, those that are already impinging on trade, and it will allow us to be more proactive, such that we can hopefully work with authorities in importing countries to avoid problems before they become major.

My colleagues from transport may also have something to add on the supply chain element of the question.

Perhaps I'll turn the floor to Kathleen.

[Maninder Sidhu, Liberal, Brampton East, ON]

Before you do turn over the floor, you mentioned a number in your opening statement in terms of a 12% increase over the previous years. Was it $92 billion?

[Tom Rosser]

Madam Chair, that's correct. Canada's 2022 exports of agriculture and agri-food products reached $92.2 billion or $92.9 billion. That represented an increase of about 12.5% over the 2021 volumes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Maybe I can hear from Kathleen.

[Kathleen Donohue, Assistant Deputy Minister, Department of Agriculture and Agri-Food]

Thank you very much.

I am Kathleen Donohue with Agriculture Canada, and I am assistant deputy minister, international.

To build on my colleague Tom Rosser's point, he noted the work that's been done with regard to free trade agreements to set those frameworks. The other component of this is to set up an agriculture and agri-food office in the region, the hub being located in Manila in the Philippines. The idea is that the workforce will be mobile to strengthen our relationships in a fast-growing region of the world to better represent the sector and hopefully pave the way for greater market access in the region.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that.

I'll turn to the CBSA now.

You mentioned in your opening statement about CARM and digitizing trade and how it will help businesses access new markets and facilitate the flow of goods.

Can we expand on that a little bit? Can we hear more about how this would help?

[Mike Leahy, Director General, Commercial Projects, Canada Border Services Agency]

In today's process, we have, under CARM, to account for goods coming into Canada after goods are released into the economy. We have a process that's part digital and part paper. Someone can submit a declaration saying that they're going to pay duties and taxes, but if they want to change anything, they have to switch over to a paper process, come to an office and present paper to the CBSA. The CBSA has to administer that paper, and it's not that efficient.

The efficiency gain, in part, is in making that entire process digital. An importer can declare their duties and taxes and make changes to the declaration. If they want to make an adjustment to the declaration, it's all digital, and the automation is essentially the efficiency gain.

Other elements of CARM give importers insight into their account balances to see what's going on and to make payments. The visibility is directly provided to an importer, so they see what's going on with their CBSA account. Those are two big ones.