Evidence of meeting #22 for International Trade in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was indonesia.
A recording is available from Parliament.
Liberal
The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro
I'm calling the meeting to order.
This is meeting number 22 of the Standing Committee on International Trade.
Welcome, everyone.
I need the committee to adopt the study budget for Bill C-18. You all received a copy of the study budget yesterday, which is for $4,250.
Could we adopt this motion before we start?
Liberal
The Chair Liberal Judy Sgro
Pursuant to the order of reference of Monday, February 2, the committee is resuming its study of Bill C-18, an act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia.
As witnesses today, we have, as an individual, Ian Lee, associate professor, Sprott School of Business, Carleton University, by video conference; Jason Easton, global head of government relations, AtkinsRéalis; and Michael Harvey, executive director, Canadian Agri-Food Trade Alliance.
Welcome to all of you, and welcome back to the committee, certainly, for some of you.
We will start with Mr. Lee, with a presentation of up to five minutes, please.
Ian Lee Associate Professor, Sprott School of Business, Carleton University, As an Individual
Thank you, Madam Chair, for the invitation on this extremely important subject.
First will be my disclosures.
Number one, I do not belong to or donate money to any political party.
Two, I am not a registered lobbyist, as I do not consult to any industry. The views I am presenting today and my media interviews are based on extensive analysis of the trade stats of the Canadian government, the American government and international government agencies such as the IMF and the WTO.
Three, I've taught the strategy and policy capstone course over 100 times in developing countries since 1990, in the former Soviet Union; in centre-east Europe, including multiple times in Russia, Ukraine and Poland since 1991; in Romania since 1993; and in the Czech Republic, as well as in China since 1997, 10 times over 10 years in Iran and in Cuba eight times.
Number four, I've been a member of the university faculty union for 38 years, meaning that I am unionized.
Over my entire career analyzing company and industry competitiveness, first as a banker for nine years, lending money to SMEs, and in the last 35 years teaching and researching strategy, I've studied trade theory and trade trend data extensively to understand what Adam Smith called “the wealth of nations”.
Those who examine trade theory and trade stats have known for 250 years, since Adam Smith, that the prosperity of a country is not due to a mercantilist belief in the amount of gold in the central bank vaults, nor is it because the gods of some religion or another decided that they liked one nationality or religion over another and made them wealthier. These were two of the dominant theories at the time of Adam Smith in the 1700s.
Smith argued that trade is essential to prosperity and that it's not an add-on. It is due to the production and exchange of goods and services within a country and with other countries. The trade theory of comparative advantage, which, put in my language, is simply make and trade what you're good at, was developed 250 years ago by Smith and refined by David Ricardo, but some critics argue that it's not relevant anymore.
This ignores the most important trade theorist of the last 75 years, Paul Krugman, who won a Nobel Prize for his work showing why trade is mutually advantageous due to specialization from scale economies, even when nations have similar advantages.
Today, these theories are under attack from both the extreme-right Trump and tariff advocates and some on the left who view Trump as the opportunity to promote protectionism and restrictive trade policies. However, evidence-based graphs from the WTO, the OECD, UNCTAD, the World Bank and other international bodies reveal that the 38 high-income countries—that's the World Bank's phrase, the OECD countries—trade substantially more as a percentage of GDP than most low- or middle-income countries. In other words, they're much wealthier, they're much more successful, and they trade a lot more.
Those who study empirical trends recognize that the autarchic policies of protectionism are designed to keep out foreign products and services in support of local industry and firms that consequentially drive down our productivity, stifle innovation and increase prices to consumers, as the brilliant economist Joseph Schumpeter showed us some 50 years ago.
Fortunately, starting in 1945, following the disastrous beggar-thy-neighbour depression and, of course, the ruinous Second World War, we developed the GATT, which was transformed into the WTO. Over the last 75 years, WTO countries have successively reduced tariffs and non-tariff barriers. What happened? OECD trade exploded. Prosperity exploded. GDP per person increased year after year. OECD countries today are vastly more prosperous in 2025 on a per person annual income basis than in 1960.
This brings us to the current urban legend of the death of globalization, seen in multiple op-eds in Canada, U.S. and the EU. One was in the Toronto Star only in these last five days, claiming globalization is “dead”, which means each country will stop trading with other countries.
Does anyone believe that Canada will become autarchic, like North Korea, and will start to grow blueberries in Ottawa in January, presumably in snowbanks? Why on earth do we care about the Chinese manufacturing $1.2-trillion export surplus or China's 60% world market share of EVs if globalization really is dead?
This is why I profoundly disagree with both Prime Minister Carney and former Prime Minister Harper—I respect both of them enormously—concerning a radical rupture in the world trade paradigm that has governed the world since 1950.
The very distinguished Christine Lagarde, president of the ECB and former managing director of the IMF, sharply disagreed with Prime Minister Carney, as did the current head of the IMF. Please read—
Liberal
The Chair Liberal Judy Sgro
I'm sorry, Mr. Lee. I'm very anxious for you to finish, but I have to go on to the other witnesses. Hopefully, you can complete that excellent presentation through some of our members, who will no doubt want to hear the next steps you have thought out better than some others, I'm sure.
I apologize, sir.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Okay. I understand.
Jason Easton Global Head of Government Relations, AtkinsRéalis
Madam Chair, vice-chairs and honourable members of the committee, thank you for the invitation to appear before you today.
My name is Jason Easton. I'm the global head of government relations at AtkinsRéalis, a Canadian engineering services and nuclear company with deep roots in this country and a strong global footprint.
AtkinsRéalis employs 41,000 people throughout the world, including 8,000 in Canada. We deliver complex infrastructure, energy and defence projects in over 50 countries. We have a long history of supporting Canada's trade, climate and policy objectives.
I appreciate the opportunity to contribute to your study of Bill C-18, which would implement the Canada-Indonesia Comprehensive Economic Partnership Agreement.
From our perspective, this agreement represents an important step forward to strengthen Canada's economic engagement in the Indo-Pacific region, a region that will drive global growth, infrastructure demand and energy transition for decades to come.
Indonesia is a particularly important partner. It's the world's fourth most populous country, a G20 member and a nation with ambitious plans for infrastructure expansion, industrial development, energy transition and energy security. Meeting those objectives will require trusted international partners, advanced technology and long-term collaboration—areas where Canadian firms are well positioned to contribute. From an industry standpoint, CEPA has the potential to improve market access, regulatory transparency and investment certainty for Canadian companies operating there.
These are not abstract concepts. For companies like AtkinsRéalis, clear rules, a predictable procurement framework and strong government-to-government relationships all directly influence whether Canadian expertise is brought to bear on major projects, or whether those opportunities are captured by competitors from other jurisdictions.
I would like to highlight one particular sector of strategic relevance: nuclear energy.
Indonesia has publicly signalled its interest in diversifying its energy mix, reducing emissions and strengthening long-term energy security. As electricity demand grows and considerations of energy security and net-zero objectives converge, nuclear energy is increasingly part of serious policy discussions across southeast Asia, where Indonesia is a leading voice.
Canada has a unique offering in that space through its own homegrown nuclear technology, CANDU. CANDU reactors are proven, safe and well suited to countries seeking a reliable baseload, strong non-proliferation credentials, and flexibility and security in fuel supply, given that they use natural, nonenriched uranium. They also offer significant opportunities for long-term partnerships in engineering services, life-cycle support, workforce training and regulatory co-operation—areas where Canadian expertise is globally recognized.
Finally, as Canada pursues ambitious export objectives like seeking to double overseas exports by $300 billion, the opportunities for Canada's nuclear supply chain are immense. The Conference Board of Canada forecasts that each new CANDU deployed overseas will increase Canadian GDP by about $5 billion, increase federal tax revenues by $1.6 billion and support 36,000 full-time jobs.
Trade agreements like CEPA do not, on their own, deliver projects, but they do create the enabling environment in which Canadian technology, such as CANDU, can be credibly advanced, supported by strong diplomatic relationships and clear commercial frameworks. In this sense, Bill C-18 should be viewed not only as a trade instrument but also as part of Canada's broader economic and strategic engagement in the Indo-Pacific.
I would also note that trade agreements are increasingly evaluated not only on commercial outcomes but also on how they advance broader public policy objectives. A well-implemented CEPA could support stronger labour standards by enabling Canadian companies to export practices rooted in safety, skills development and workforce training. It could reinforce environmental objectives by facilitating the deployment of low-carbon infrastructure and clean energy solutions. It would align with Canada's Indo-Pacific strategy by deepening long-term partnerships in a region of growing strategic importance based on rules, transparency and trusted collaboration.
In closing, AtkinsRéalis supports efforts to deepen Canada's trade and investment relationship with Indonesia in a way that is mutually beneficial, rules-based and forward-looking. We believe Bill C-18 could help strengthen Canadian companies as they compete, innovate and contribute to sustainable development in the region while creating high-value jobs and opportunities here at home.
On a personal basis, I've had the great privilege of having a front-row seat during the growth of Canada's bilateral relationship with Indonesia, and I am very pleased to support your consideration of this legislation to take Canada and Indonesia to the starting line of a new economic partnership.
Thanks for your time. I look forward to your questions.
Liberal
Michael Harvey Executive Director, Canadian Agri-Food Trade Alliance
Good morning. I thank the members of the committee for inviting me here today.
The Canadian Agri-Food Trade Alliance, or CAFTA, is a coalition of national organizations that advocate for a more open and fair international trade environment for the agriculture and agri-food sector.
CAFTA members include farmers, ranchers, processors, producers and exporters from major trade sectors such as beef, pork, cereals, oilseeds, sugar, pulses, plant sciences and soybeans.
In Canada, the agri-food sector accounts for one in nine jobs, and most of those jobs are export-related. Every year, Canada exports some $100 billion in agriculture and food products. Over half of our agricultural production is exported or processed for export. In addition, over 90% of Canadian farmers depend on trade.
CAFTA welcomed the signing of this CEPA, and we encourage this committee to report favourably and recommend swift ratification.
Indonesia represents one of the fastest-growing markets in Southeast Asia, and for Canada's agri-food exporters, this CEPA has the potential to open new doors in a dynamic country that values reliable suppliers of safe, high-quality food.
CAFTA has long advocated for trade agreements that provide predictable, rules-based access to high-growth markets. This agreement's commitments on agri-food, food security and trade facilitation reflect the strong complementarities between Canada and Indonesia, and we look forward to working with government and industry partners to ensure that these provisions translate into real opportunities for Canadian exporters.
This agreement also reinforces Canada's broader engagement in the Asia-Pacific, including the ongoing Canada-ASEAN FTA negotiations and Indonesia's interest in joining the CPTPP. Together, these efforts will help Canadian agri-food exporters diversify markets, strengthen supply chain resilience and contribute to economic growth.
CAFTA and its members stand ready to continue collaborating and engaging with Indonesia through the agreement's mechanisms to facilitate agri-food trade and to continue working with government to advance an ambitious, comprehensive trade strategy that ensures Canada places agri-food trade at the heart of our international agenda.
I look forward to answering any questions you may have.
Liberal
The Chair Liberal Judy Sgro
We will now move to questions from our members.
Mr. Chambers, please, you have six minutes.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you, Madam Chair.
Mr. Lee, you were on a roll, and I'll jog your memory. The Prime Minister gave a good speech in terms of it being well researched and well argued.
I don't want to put words in your mouth. What was your impression of the speech's point about there having been a rupture and that we'll never go back to rules-based trade? What say you?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
It was a very fine speech. My only disagreement is with this idea, which is very popular today, that we're not going back and that trading is going to diminish, or it's going to eventually die or maybe disappear.
The stats simply do not support that, and I'm not using 10- or 20-year-old stats. Bruegel, the very prestigious European think tank, put a publication out only seven days ago—I urge every member to read it—with the very latest graph showing that Chinese exports are up, Europe's exports are up and everyone's exports are up, as are imports. That denies or contradicts the claim that there has been this rupture.
Yes, there has been a shift in trade. We can see that trade from China to the U.S. is down, but Mexico's and Vietnam's trade to the U.S. is up. There are shifts going on, and yes, the great powers have become more mercantilist, but we are still going to have a world that is based profoundly on global trade—imports and exports—around the world. That is not going to come to an end.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you for that.
In terms of Canada's place in the world with our trading relationships, my sense is that you would agree that we need trading relationships, we need more than we have today, and we need to strengthen the ones we currently have.
Is it realistic, in your opinion, to believe that we would be able to move on in this world without the United States?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I cannot, under any analysis of any set of numbers, find that credible. I've looked at what I call pairs: Poland and Germany. They've been trading with each other for hundreds of years. Even though Germany did horrible things to Poland from 1939 to 1945, it's their largest trading partner today. You look at Argentina and Chile or Argentina and Brazil. It's the propinquity or the geographic advantage, that you're right next door, you're joined at the hip.
We have $800 billion in bilateral trade, and the idea that we can somehow pick that up and put it on a boat or an airplane and send it halfway around the world, I think, is naive in the extreme. It doesn't mean that a new CUSMA isn't going to be different. I think it's going to be a very different CUSMA.
I would remind everybody of Kissinger's great line on this. He said, “Nations do not have friends; they have interests”, and it's the role of the leadership of every country to determine the interests of their country.
Then it's like a Venn diagram. You look for where there are overlapping interests between the two. Canada and the U.S. will remain and continue to have very significant overlapping interests.
Conservative
Adam Chambers Conservative Simcoe North, ON
Would you like to offer an opinion on where you think those strongest interests overlap?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I think it's going to be natural resources and energy. I'm much more skeptical about automobiles. It's not because I'm anti-automobile at all, but that sector has been declining for a very long time. We do not have a competitive advantage against the United States, principally because—I know people in that industry will disagree—we are only 40 million people, smaller than California. When you look at the global R and D costs for that industry and the global capital expenditure, they're staggering: It costs 150 billion euros, which is over $200 billion annually, in R and D to play in that game. I can't see any Canadian company, only selling in the Canadian market, being successful because the scale economies are so huge. You have to have access to the U.S., the EU or China. The latter two have been protecting themselves for years, and the U.S., as we now know, are starting to protect themselves from us as well. It suggests we're going to have to pivot very strongly to resources, including energy, because the world—as the German chancellor, the Japanese premier, the South Korean premier and the Chinese have told us—wants our resources.
Conservative
Adam Chambers Conservative Simcoe North, ON
Do you think that it was a missed opportunity, when those individuals came to Canada and asked for our resources, that we sent them home empty-handed, saying there was no business case?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I was on the record. I did interviews on that. CBC and CTV contacted me, and I said I thought it was a horrible mistake, because we've been blessed by luck or nature or whatever, and we have trillions of dollars of resources in the ground, not just oil and gas. We have timber. We have potash. We have nuclear. We have just about everything going. We have an enormous comparative advantage in natural resources.
We do not have an enormous comparative advantage in automobile production. That's why we've been pouring billions into that sector from the beginning. You don't have to if you have a comparative advantage.
As the then prime minister was saying there was no business case, Biden, almost the very same day—you could juxtapose the two images—was approving LNG exports to Europe because of Putin's terrible invasion of Ukraine.
Conservative
Adam Chambers Conservative Simcoe North, ON
I agree, Professor Lee. I appreciate it. I want to leave some time for my fellow members. I'll have to audit one of your classes, but I could talk to you all day. Thank you.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Thank you.
Liberal
The Chair Liberal Judy Sgro
You had 16 seconds remaining. I was very happy to see you continue. I think it was fascinating to listen to Mr. Lee.
Mr. Naqvi is next, please.
Liberal
Yasir Naqvi Liberal Ottawa Centre, ON
Thank you very much, Chair.
Mr. Chambers, you and I can audit together. Professor Lee lives in my riding. I've had an opportunity to sit down with him and benefit from his expertise, so it's always good to see him.
He was talking of comparative advantage, and he also mentioned nuclear in his comments.
I want to pick up the conversation with Mr. Easton on the opportunities that exist for the Canadian nuclear industry and the expertise that we have developed, not just in actual reactors, but the entire supply chain that you were speaking of and what those opportunities look like in other countries, particularly in the Indo-Pacific.
You touched on Indonesia, but I'm sure there are other opportunities as well to make ourselves viable and create jobs here in Canada.
Global Head of Government Relations, AtkinsRéalis
It's a very good question. The importance of this CEPA with Indonesia is that Indonesia is one of the largest countries in Southeast Asia. In many ways, it is the gateway to the region and is a huge economic player. The region is not dissimilar to any other part of the world in terms of its focus on energy security and the energy transition to net zero. It is certainly at a stage of its economic development at which overall emissions are quite high but per capita emissions are quite low. From Indonesia's standpoint, it looks at the developed world, and it wants to see us do our part as well.
In terms of our expertise in nuclear energy and clean technologies, in Canada we have a supply chain of more than 250 companies. They employ over 90,000 people directly and indirectly. The opportunity in Indonesia and, more broadly, ASEAN, Southeast Asia, is immense. We have certainly seen interest from Indonesia in nuclear technology. We've seen interest from other countries, such as Malaysia and Philippines, all as part of their net-zero strategies. They look to countries like Canada because of how we're positioned geopolitically and how our technology actually allows for energy security and fuel flexibility, given that it doesn't require enriched uranium.
There are many opportunities that we're pursuing across the region. CANDU reactors also offer the advantage of medical isotope production, concurrent or at the same time as electricity generation. These are all opportunities that Canada can both export but support the development of locally, in terms of the in-region capabilities that they're seeking.
Liberal
Yasir Naqvi Liberal Ottawa Centre, ON
There are obviously potential benefits of a trade agreement, in terms of market access, regulatory harmonization and all of those things that you were referring to. What are the other ancillary benefits of having a trade agreement with a country like Indonesia, or what we're focused on right now, ASEAN countries? Does that help Canadian businesses, like AtkinsRéalis, have a competitive edge, so to speak, compared to the Russians or Chinese, who may also be vying for the same business?