There's a framework I would start with. For the Chinese Communist Party, economic outcomes are geopolitical outcomes on a path to revising the international power hierarchy and to gain political and strategic advantages over Canada.
Where individual firms are looking to profit, maximize and seek opportunities, the role the government and civil society need to play is to really impose a net benefit test on any kind of significant investment or new trade deal. This requires calculating asymmetric costs and benefits, because the benefits are going to be concentrated in a few companies, communities and shareholders, but if to manage those benefits Canada then has to spend more on national defence, on security agencies and on preventing foreign espionage and influence, that's diffused across all taxpayers. This, first of all, needs to be part of the calculation.
Second, there are a number of different mechanisms to assess it. I'm not suggesting that there should be total decoupling or no trade with China. Trade with China can continue in non-sensitive sectors that don't touch on, for example, military technology, dual-use technologies, national security and other things. The improvements that ISED has made over the last several years in the investment-screening processes, for example, are a critical part of that. Canada needs to make sure that it has adequate outbound investment screening, as well as inbound investment screening.
The other key litmus test is not so much whether there is trade but the proportion of trade at the sectoral level. The top-line number is, of course, not that large. Canada is not that dependent on trade or investment with China. It's the second largest, but it's only around 4%. What matters is that certain sectors are particularly dependent. As we've seen multiple times now, the Chinese Communist Party will weaponize that interdependence for coercive purposes to change Canadian policy. Canada then loses sovereignty, political decision-making and autonomy.
We need to establish a ceiling for a particular sector, let's say canola, pork or seafood: What's the most that we are willing to sell to one buyer, particularly a large buyer with hostile foreign policies? Then, how do we manage to offset that by seeking other trade partners?
The role of the government would be to look at that given sector and incentivize more balancing trade with other and more trusted partners so that, if the Chinese Communist Party chooses to use that and close its market, Canada can shrug it off, survive and move on. In that way, we can maximize the potential economic benefits of trade with the national security and sovereignty concerns that we have.