Evidence of meeting #25 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 kovrig.
A recording is available from Parliament.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you, sir.
I want to ask you about “China shocks”, something you've written about—China shock 1.0 and China shock 2.0. The example of the EVs that are now going to be imported to Canada perhaps dovetails directly into these subject areas. Could you explain the China shocks?
Executive Director, StrategicEffects (GNSE)
Sure. Some of these are natural processes. It's a growing Chinese economy, with Chinese producers moving up a value chain and gradually competing with industries in other countries. Some of that is a natural process that we also see in other developing countries. What's distinctive about the current China shock is that it's driven to a great extent by massive state subsidies and industrial policies that have deliberately, under banners including made in China 2025, dual circulation and others.... It's part of an explicit policy by China to dominate key sectors, such as biotechnology, robotics, advanced manufacturing and green technology, and to make China the dominant producer of those technologies, while at the same time making other countries dependent on China for those technologies and reducing China's dependence on others. It's leveraging productive capacity for geopolitical purposes.
This is ultimately driven by both ideological and domestic political economy dynamics. China heavily incentivizes production in manufacturing because the Chinese Communist Party views this as a source of comprehensive state power. It's a massive wealth transfer from Chinese citizens through low interest rates in their bank accounts, for example, in taxation, funnelled into Chinese industry, which then makes those Chinese companies much more competitive on an international market than any western company, because those companies, in many cases, don't have to worry about turning a profit. They're getting cheap land, low taxation, and a lot of credit and other resources, and they're plugging into vast, industrial-scale clusters. There are economies of scale, and there are advantages of learning by doing; a whole host of things pile up to make this an industrial juggernaut.
For countries like Germany, for example, this has become existential. The first China shock was a deindustrialization of somewhat lower value-added manufacturing in the U.S., southern Europe and other countries about 10 to 20 years ago. The current China shock is now decimating the most advanced manufacturing in the world. It's affecting, for example, American automakers, drones and battery makers. It's affecting every German car maker. There are massive layoffs in Germany.
The risk is both economic and strategic. If you deindustrialize a country, you lose a lot of quality jobs. You lose the ecosystem. You lose the process knowledge and expertise that make you capable of producing the advanced technologies of the 21st century. What happens if there's a war? Are you going to have the capacity to build the necessary materials for tanks, for armoured cars, for weapons? Are you still going to have the skilled labour that can produce those things? You're also ultimately going to suffer in terms of lost productivity, because it's much harder to drive productivity in service and agricultural sectors than it is in manufacturing.
There are a whole host of negative externalities that come along with a loss of a manufacturing base and industry, and those in turn accrue to China a further benefit of that much industrial gravity. We are talking about China alone, potentially, in the next few years, producing 40% of all global manufacturing. That provides massive economies of scale; it provides geopolitical leverage, and it ultimately puts China in a position to disseminate its own standards, norms and ideologies through that technology. It's an immensely powerful tool of influence.
Liberal
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you very much, Madam Chair.
Thank you, witnesses. It's very interesting to hear your perspectives, particularly what you just said, Mr. Kovrig, about geopolitical risks.
In his speech at Davos, our Prime Minister called for unity among countries of similar size. A little earlier, you alluded to deindustrialization and the risk of losing our entire specialized workforce and our entire high-tech sector. That's true for Germany, but it's not just Germany; it's us as well. What I understand is that, for the last 20 years, China has no longer been producing the same goods. It's been more high tech. So we're going to become vulnerable.
Earlier, you mentioned that, yes, we need to do business with China, but we also need to partner with other countries in the Indo-Pacific region. What are you proposing? Which ones should we favour?
Executive Director, StrategicEffects (GNSE)
It's worth recognizing that a key driver of the Trump administration's policies—and indeed, the Biden administration's policies before that—is to promote the reindustrialization of the United States. Some of that is because they are looking to restore quality jobs in manufacturing. Realistically, though, with automation, the effect on employment is limited.
What it's more about is strategic purpose: to identify the key industries that the United States, Canada or any country needs in order to source and produce things either by itself, domestically, or—in the case of Canada, which doesn't necessarily have the scale of the United States—through a reliable partner or multiple reliable partners, to ensure that it can have those goods. These may be protective equipment during a pandemic, for example, machine tools, critical technology or silicon chips. In the case of a Taiwan conflict, is Silicon Valley ready to suddenly lose access to that quantity of microprocessors? I don't think so.
Canada needs to ensure that it has multiple partnerships with other reliable countries. Certainly, for high technology, the Indo-Pacific is a key place to do this. Whether it's through South Korea, Japan or Australia for certain specialized things; Southeast Asia for the production of lower-cost items; or European countries for other specialized items, Canada needs to ensure that it has secure supply chains. This currently means diversifying away from the United States. It also means not newly becoming more dependent on China for the supply of those things.
The tragedy of this, of course, from an economic perspective, is that it's expensive. The reason China became so dominant and we had this China shock is that it was cheap and easy to make everything in China and ship it elsewhere. That's okay until you have geopolitical differences and discover that Beijing likes to weaponize interdependence. This, unfortunately, requires Canada and other countries to absorb certain costs by diversifying their supply chains for critical technologies and choosing which ones they want to cultivate at home.
It's about stepping back and thinking about what kind of economy Canada wants to have. Do we want to be the Argentina of the 21st century, primarily reliant on agricultural commodities and energy, or do we want to have the advanced manufacturing sector and technological capacity of a G7 country?
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you. That's very interesting.
Earlier, you said that we could do business and sell our pork or canola, but that we should put a cap on the sale of our products, so that we don't become vulnerable by having only one buyer. Our market could be undermined if we only sent our products to China.
What do you think the cap should be?
Executive Director, StrategicEffects (GNSE)
I think it would vary by product.
Ultimately, the question you have to ask a business is this: If you lost one-third of your business, could you survive? It's a bit like a stock market investor. If you have all your money in only three stocks and one of them goes to zero, are you going to be insolvent? Are you going to lose your house? That kind of calculation would need to be done at the individual firm level.
I think the government could help, in various ways, by developing frameworks, litmus tests and geopolitical guidance on how risky a market is and how to factor that kind of political risk into business decisions. To some extent, there may be ways of mitigating that through sectoral, regional or national insurance programs, for example, and so on. The agricultural sector already benefits from certain mechanisms to provide insurance against things like shifts in climate and weather or bad growing seasons. This is another risk that needs to be factored in with mechanisms, and by evaluating mechanisms.
As a ballpark, if I were running a company, I wouldn't want more than a third of my sales being dependent on China or any other market in a position to weaponize that geopolitically. You want to be able to survive, move on and diversify.
Liberal
The Chair Liberal Judy Sgro
Thank you very much to the witnesses, Mr. Ahmadi and Mr. Kovrig. It's very valuable information you provided to the committee today.
We will now suspend for two minutes so that the witnesses for our next panel can come up.
Liberal
The Chair Liberal Judy Sgro
I call the meeting back to order.
We now have with us, as an individual, Charles Burton, senior fellow, Sinopsis. From the Canadian Canola Growers Association, we have Dustin Pike, vice-president, government and industry relations, and Brittany Wood, senior manager, transportation and trade policy, by video conference. From the Uyghur Rights Advocacy Project, we have Mehmet Tohti, executive director.
Welcome to you all. We appreciate your being here.
Mr. Burton, I will turn the floor over to you for up to five minutes for an opening statement, if you like.
Charles Burton Senior Fellow, Sinopsis, As an Individual
Thank you, Madam Chair.
Last year, this government announced a recalibration of our relations with China. In practice, this meant bowing to Beijing's pressure and adopting the Chinese Communist Party's own terminology by labelling our relationship a “strategic partnership”.
What Canada has always wanted from China is straightforward: a greater share of its vast market for Canadian goods and services. Successive governments have chased this dream. Former prime minister Chrétien championed team Canada missions, prioritizing trade while downplaying serious concerns over human rights violations. Every leader up to Justin Trudeau has tied our economic future to increasing exports to China, yet we must face the reality of our failure in this endeavour.
In 2024, exports to China represented a mere 3.8% of our total global exports. That's $29.9 billion. This is a fraction of the windfall that Canadians could have reasonably expected when China's policies of opening and reform began four decades ago. To put this into perspective, our exports to the European Union stand at 4.8%, or $34.5 billion Canadian. We do better with Europe than we do with the much-touted economic miracle of China.
Now the government hopes that Mr. Carney can succeed where a generation of leaders has fallen short. He will not. The mercantilists in Beijing will never allow Canadian imports to compete fairly against Chinese domestic products, particularly now that China's economy is languishing under Xi Jinping's anti-market, statist policies.
We must stop treating China as a traditional nation-state. It is a conglomerate of state, industry and the military-security apparatus that is entirely unified under the Chinese Communist Party. At the 19th Party Congress last decade, Xi Jinping made this explicitly clear by stating: “Party, government, military, civilian, and academic; east, west, north, south, and centre, the Party leads everything.”
When Beijing demands a strategic partnership, it is demanding our collaboration in enabling its overall geostrategic purposes. Nothing illustrates this danger more than the recent agreement signed in Beijing: a memorandum of understanding on co-operation in combatting crimes. This entails an exchange between the RCMP and China's Ministry of Public Security of data, intelligence and best practices.
Canada gains almost nothing from this agreement. However, the data the Chinese now expect us to hand over poses a severe threat to our national security and to the diaspora communities within our borders, particularly Canadians of Uyghur and Tibetan origin. Furthermore, sharing our best practices simply hands Chinese security agencies the very information they need to understand the RCMP's techniques and exploit our vulnerabilities in countering foreign subversion from China.
What is the price of our compliance? It's a temporary canola tariff reduction that expires at the end of the year, vague MOUs on energy and clean tech and an upgraded bilateral joint economic and trade commission, with trade ministers meeting annually.
These are not diplomatic victories. They are economic leverage. The government is under immense pressure not to displease Beijing. This means turning a blind eye to espionage agents, permitting Chinese regime investment in our critical infrastructure and stalling effective measures like a robust foreign influence registry to expose Beijing's proxies operating on Canadian soil.
Handing over our security apparatus's data and remaining silent on foreign subversion in exchange for fleeting, fractional trade benefits is a profound miscalculation. I am deeply concerned that this government's recent memoranda and its so-called strategic relationship with China are not and will never be of net benefit to Canada.
Thank you, Madam Chair.
Thank you to the excellent interpreters of this committee for their work.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Burton.
Next is Mr. Pike and Ms. Wood for up to five minutes, please.
Dustin Pike Vice-President, Government and Industry Relations, Canadian Canola Growers Association
Thank you, Madam Chair.
Thank you for the invitation. It's great to see agriculture as a focus of the international trade committee.
My name is Dustin Pike. It's great to be here in person. I'm here with my colleague, Brittany Wood, who is attending virtually from Winnipeg.
The Canadian Canola Growers Association represents 40,000 canola farmers driving issues, policies and programs that impact their farms' success. Developed in Canada, canola is a Canadian success story of research and innovation.
Canola is a strong economic contributor to family farms and our rural communities. In 2024, canola continued to be the number one source of revenue for farmers, earning $12.9 billion and accounting for 25% of the total crop receipts, with 90% of the crop being exported as seed, oil or meal. Annually, the canola sector contributes $43.7 billion to the Canadian economy, and it provides over 200,000 jobs.
The United States and China are the number one and number two most important markets, representing 87% of total canola exports. However, in 2025, this number dropped to 61%, largely due to the tariffs put in place in March and August 2025. Japan, Mexico, the United Arab Emirates and the EU have made up much of the additional export opportunity in recent years, but there is no denying the buying power of the U.S.A. and China.
Canola farmers were very encouraged to receive news, on January 16, of the agreement reached between Canada and China to provide significant tariff relief for Canadian canola seed and meal. We greatly appreciate the efforts and results of PM Carney, his cabinet and government officials, as well as Premier Scott Moe, to re-establish trade with our second-largest export market.
Under the agreement reached, tariffs on Canadian canola seed imports are expected to be reduced to a combined rate of 15%, down from 75.8%, as of March 1, 2026. The current 100% tariffs on canola meal are expected to be completely removed until at least the end of the calendar year. While this is significant progress, there is still work to do. One hundred per cent tariffs on canola oil remain in place, and long-term, predictable tariff relief on all canola products is a must. In 2024, exports of canola to China were valued at $4.9 billion, compared to only $2 billion last year. With much of the 2025 crop stored on the farm and planting of the 2026 crop quickly approaching, canola farmers are looking for predictability and confidence in their ability to market their canola. Ultimately, the measure of success will be reliable resumption of canola movement to China this spring.
Beyond China, Canadian farmers continue to value the open trading relationship with a renewed CUSMA. This has allowed canola seed, oil and meal to continue to be exported tariff-free to the U.S. and Mexico while also allowing for the import of critical inputs to the industry.
While the U.S. and China are critical markets for canola, our best opportunity for market diversification and stability is right here at home in the advancement of a competitive, made-in-Canada biofuel industry, by supplying canola feedstock to an expanding biofuel sector. This is very important. Currently, canola makes up just over 20% of feedstock for the biofuels industry, but we can do better.
On September 5, the Prime Minister announced potential biofuel support measures related to tariff action to assist Canada's canola industry, and they need to be taken seriously at Environment and Climate Change Canada. At present, the proposed amendments fail to include concrete proposals that will help secure additional domestic demand for canola as biofuel feedstock. Additionally, concerns remain about potential compliance risks within the CFR related to having used cooking oil from Asia account for a significant portion of Canadian feedstock.
Biofuel is a marriage of energy and agriculture, and we do both well. All we need is a government that recognizes farmers as playing a vital role in strengthening our energy security, driving rural economic growth and building a more sustainable future for our country.
Again, thank you for the invitation to appear on this very important issue for farmers. I look forward to the committee's further recognizing canola as a vitally important commodity for farmers as we strengthen and expand our market access.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Pike.
We will go to Mr. Tohti for up to five minutes.
Mehmet Tohti Executive Director, Uyghur Rights Advocacy Project
Madam Chair and honourable members of this committee, thank you for the opportunity to appear before you today.
My name is Mehmet Tohti. I am the executive director of the Uyghur Rights Advocacy Project, which is based in Ottawa.
Canada stands at a critical moment in its trade policy. The choices we make are not only about exports or market access but about who we are as a democracy and how seriously we defend human rights. History shows that, when democracies set aside rights for short-term economic gain, there are long-term costs: vulnerability, lost credibility and weakened alliances.
Canada's trade diversification makes sense, but it must rest on evidence, enforceable standards and alliance realities—not political optimism. Expanding trade with China in particular carries substantial risk. Beijing continues to use commerce as leverage to divide allies and weaken unified positions on human rights. Without strong safeguards, deeper engagement could erode our alignment with the United States and other western alliances, and it could compromise our security.
Just a week ago, in February 2026, a Jamestown foundation report identified 575 Chinese Communist Party-linked United Front organizations in Canada, marking our country as a key hub for foreign interference. These networks influence policy-making, mobilize political support for Beijing's interests and target dissidents like me, Uyghur Canadians, Tibetans and Hong Kongers through transnational repression. Trade and policy decisions cannot be separated from this growing interference.
Canada's recent approval for BYD, a Chinese state-linked automaker, to expand operations illustrates the danger of narrow economic reasoning. Independent reports show BYD's involvement in high-risk regions, such as the east Turkestan Uyghur region and Tibet, where forced labour and state-imposed labour transfer programs operate under coercive conditions. Between 2017 and 2019, at least 80,000 Uyghurs were forcibly transferred to factories across China. This system now spans more than 17 global industries, including textiles, solar energy, electronics, mining and automotive supply chains. Engaging firms tied to those networks without strict due diligence risks complicity in forced labour, which is a practice the Canadian Parliament has recognized as a part of an ongoing genocide against Uyghurs.
Beyond human rights, this is a national security issue. Chinese electric vehicles and smart technologies integrate sensors and software connected to China-based infrastructure, creating real surveillance and data integrity concerns. Canada has already acted on similar risks, ordering Hikvision to end operations under the Investment Canada Act. The same logic must apply to BYD.
Enforcement remains a weak link. Since 2020, Canada has detained only 48 shipments suspected of using Uyghur forced labour, while U.S. enforcement blocked billions of dollars' worth of goods under the Uyghur Forced Labor Prevention Act. Without comparable action, Canada risks becoming a diversion market for banned products, undermining North American alignment.
Lastly, Canada cannot ignore hostage diplomacy. Huseyin Celil, a Canadian citizen and Uyghur activist, has been imprisoned in China since 2006—20 years. He's been denied consular access and denied the recognition of his citizenship. His ongoing detention exemplifies China's use of human beings as an instrument of state policy.
Madam Chair, engagement with China must not come at the cost of integrity or human dignity. Canada's trade policy must be guided by principles, accountability and security. To proceed otherwise would endanger our alliances, our values and Canadians, who expect their government to stand on the side of justice.
Thank you. I welcome your questions.
Liberal
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you to our witnesses.
As all of you describe the risks in doing business with China, I must admit that I'm more frightened than I was when I arrived this morning. It strikes me that we all see the allure of a large China market, but we must keep in mind what the risks are in dealing with China.
Mr. Burton, if I might start with you, you've talked about elite capture. When considering the new approach of our Prime Minister entering into a strategic relationship—a “strategic partnership”, as I believe he called it—and being mindful of the risks that you've described, are you concerned about a strategic partnership between Canada and China?
Senior Fellow, Sinopsis, As an Individual
Yes, I am very concerned that China understands the strategic partnership differently from the way it's been downplayed as simply “language” here in Canada. China sees our function as to support enabling their overall geostrategic purposes, which is, as Mr. Kovrig very articulately said this morning, the community of the common destiny of mankind. It's China's plan to achieve domination of the global order by 2050 in the context of China's assumption that the United States is a power in decline.
I'm concerned that our government would go along with this, that in the Great Hall of the People, facing Xi Jinping, our Prime Minister would make reference to the “new world order”, which—when you're saying it in the Great Hall of the People to Xi Jinping—clearly sends a signal to the Chinese that we are affirming their vision of the global future. That vision is a China-dominated global future, with enormous costs to our Canadian values and way of life, as Mr. Kovrig said earlier this morning.
February 26th, 2026 / 12:25 p.m.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Sir, the deal that was mentioned a bit earlier today was on the reduction of punitive tariff measures that were put in place on Canadian exports of canola, affecting Mr. Pike's clients, members and farmers. In return for that, China was successful—through an economic hostage-taking move—in obtaining access to Canada for electric vehicles.
Picking up on something that Mr. Kovrig talked about, China shocks, I want to underline what I understand to be the Chinese practice. We're not talking about China working conjunctively within China to obtain some market advantage or economies of scale. Indeed, it employs state subsidies in a very specific and targeted manner.
Now, those kinds of subsidies at that level are not intended to gain a slight advantage. They're intended not just to dominate but to decimate the importing country's domestic market. Moreover, they're not just intended to dominate and decimate but also to eliminate and hollow out, to use the words of Mr. Kovrig. I wonder if we understand that, particularly when there have been suggestions that these importations might now lead to Chinese manufacture here in Canada.
I see that as a pipe dream, and I wonder, sir, if you could comment.
Senior Fellow, Sinopsis, As an Individual
I don't think that China has an idea of state-to-state fair and reciprocal trade. One suspects that the massive Chinese state subsidies to the EV sector have a similar motivation to the massive subsidies to the Huawei company, which is that the investment pays back in the espionage and infrastructure information that would accrue.
In addition to the idea that they can listen to what you're saying in your car and that they can know a lot about the driver and so on, information is also provided about where the car goes. In the next conflict with China, that will be critically important in the sense that the next war we have with China will not be about Canada sending bombs to blow up buildings in faraway countries. The concerns that the CSE and other agencies have raised about China's products in Canada, including the TP-Link routers, will mean that they will impact us directly here. The bank machines won't work. There was a warning by an agency here about China's possible control of water filtration systems.
On the idea that Mr. Kovrig raised about the possibility of our being able to control the software on the EVs, I'm not sure how feasible that is in the sense that all of these things, as you know from your computers, are being updated continually by the manufacturer. We have the example of subway cars in Boston from a Chinese manufacturer a few years ago; it was found out that the doors could be controlled from Nanjing in China.
I don't think that China would agree to our having control over those EVs, because of what I said. They're subsidizing them heavily because they provide a benefit.
The other one that you talk about, the devastation of our own auto industry by these heavily subsidized things—and as Kovrig pointed out, the Chinese can afford to lose money for a long time—is another way for them to gain more economic leverage over us for their other purposes. In other words, we're not going to be expelling Chinese agents of espionage, tightening up on grey-area activities for the transfer of dual-use military technologies or exposing the Chinese proxies through an effective registry, if that would then lead to Chinese retaliation in trade aspects.
Liberal
The Chair Liberal Judy Sgro
I'm sorry, Mr. McKenzie. You've gone a bit over.
Mr. Naqvi, you have six minutes, please.
Liberal
Yasir Naqvi Liberal Ottawa Centre, ON
Thank you very much, Chair.
Thank you to the witnesses for being here. I want to thank the earlier witnesses as well. This has been a very thoughtful discussion. I sincerely appreciate it.
I want to put one thing on the record. I'd like to clarify that the agreement with China does not talk about EVs from a particular manufacturer. It just talks about 49,000 EVs. They could be from any manufacturer. I just want to make sure that we don't leave with the understanding that we had an agreement with one particular manufacturer in China.
As I listen to the conversation, one thing that's clear to me is what I think Mr. Kovrig was trying to say. He wasn't saying don't engage with China. I think what I heard him saying, and what he's been writing, was that having a strategic relationship with China is important, but we should do so with eyes wide open and make sure there are appropriate guardrails in place.
Do you agree, Mr. Burton and Mr. Tohti, with that sentiment?
Senior Fellow, Sinopsis, As an Individual
I'm sure Mehmet has a lot to say about this. Both of us, as you may know, have been sanctioned by the Chinese regime for no good reason.
You know, if trade occurs just for trade purposes, that's great. Take the example of Australia and China. When Australia started to make noises that China should be more forthcoming about the origins of COVID-19, China then put a number of arbitrary restrictions on the import of Australian commodities into China. This went on for a while, until China recognized that they really do need Australian iron ore—iron ore is by far the largest commodity sent from Australia—and took it off.
I think if China needs a Canadian product and is prepared to accept it without these non-trade strings attached—which are very big in the joint statement between Canada and China with respect to Mr. Carney's recent visit—great. As for pet food, does China need Canadian pet food and can it not get pet food elsewhere? If that's the case and they're prepared to pay for our pet food, more power to them. I think that China is typically trying to weaponize these trade relationships to achieve other aims. If that is the case, then I think we simply have to say that we'll sell our pet food elsewhere.
Executive Director, Uyghur Rights Advocacy Project
You might remember that when COVID started, China started to use PPE and weaponize PPE. We experienced that one as well. Any trade, when we become dependent on China, is dangerous. It can be used against our national interests.
Yes, we need to have trade. China is our trading partner. They're going to be our second-largest trading partner. In a lot of areas, we are a trading nation. We have commodities to sell. At the same time, we have to remember to have a basic humanitarian and compassionate basis. Twenty years have passed since the illegal detention of Huseyin Celil. The Chinese government that we are going to establish a security partnership with did not allow, a single time, consular access for Huseyin Celil. They did not allow a phone conversation between that gentleman under Chinese custody and Huseyin Celil's family members and children. We are talking about 20 years—just a single time. We still don't know if he's alive or dead. China did not recognize his Canadian citizenship.
China put a bounty on Canadians on Canadian soil. China expanded the transnational repression on Canadian soil. It expanded and installed police stations all across Canada. Just recently, the Jamestown foundation reported—this is important—that there are 575 direct links to the Chinese Communist Party's organizations operating in Canada. For that reason, we have to keep our eyes open. At the same time, we have to adopt measures to counter those direct attacks on Canada.