International Trade Committee on March 12th, 2026

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

I'm talking about private owners. I had the discussion with government officials, and the public can buy Chinese vehicles without a problem. They're given the choice of whether to buy them. Indeed, very few are sold. In fact, 99% of the vehicles sold last year in Norway were electric. These are quite popular in Norway, but there are very few Chinese vehicles.

Thank you for the clarification.

My next question is for Mr. Prybylski.

You talked about predictability in the agricultural sector. In all sectors, predictability is extremely important. Tell me about what that means. We're talking about seeds here, and I'm familiar with that reality, since I come from a dairy farm. How much will predictability make a difference in this type of agreement?

[Bill Prybylski]

In terms of predictability, from a farmer's perspective, our planting season is coming up. We producers need some type of assurance that, in the fall when we harvest our crops, there is going to be a stable market for our commodities.

We saw last year about this time, when the tariffs came on, about a $2-a-bushel decline in the value of our canola seeds. When we're forecasting our production levels and our return on investment, it's pretty hard to predict what the outcome of tariffs is going to be if we're faced with those types of commodity shifts in the prices as we make our plans.

I know that, on our farm, the $2-a-bushel hit that we took on canola last spring cost my farm somewhere in the neighbourhood of $350,000. This is something we can't plan for, and it has a significant impact on our farms.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

You talked about canola, diversification and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. Are we selling too many of our products to China right now? Should we continue to diversify and target markets such as those in the Indo‑Pacific, as seen in the CPTPP? Do you think this diversification is a step in the right direction? Is the goal to increase our production or simply diversify it?

[Bill Prybylski]

It's a combination of all those factors. We absolutely need to diversify our markets into areas, as you mentioned, such as the Indo-Pacific and other countries around the world. At the same time, we need to maintain or increase our trade with China.

On our farms, we've seen our productivity increase over the years for a number of reasons. If the world needs it, we'll grow it, but we need to have stable markets across the world for our products. If it means diversifying into other small markets, we need to do that, but China is still a huge market that can't easily be replaced in any short time. We need the Chinese market, the American market, the Indian market and all those other smaller markets as well.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you.

Ms. McCuaig‑Johnston, you said earlier that you had suggestions, ideas, for joint ventures between Canada and China. Could you briefly talk about those?

[The Vice-Chair, Conservative, Adam Chambers]

It will have to be a brief answer.

[Margaret McCuaig-Johnston]

Yes. If we're to do joint ventures in Canada, the Canadian partner should own more than 60%. There should be a Canadian CEO and Canadian managers of human resources and legal, Canadian suppliers of aluminum steel and QNX used if it's cars, and technology transfer to Canadian or western companies, although the Chinese government has a law that says it can't require companies to transfer to a foreign firm. There should be all Canadian workers in the factory. English should be the language of work, not Chinese.

We also need to be prepared to walk away from the table despite government announcements. Anything less will give us problems in the longer term.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you very much, Mr. Chair.

I'm going to start with Ms. McCuaig‑Johnston.

If I understand correctly, you identified cases of Canada-China joint ventures in your research that ended up leaving the country to set up in China out of frustration or desperation. Can you elaborate on that? How does that actually happen? Do you have any specific examples that might be of interest to the committee and could help us understand the modus operandi, the way it works?

[Margaret McCuaig-Johnston]

These are joint ventures between a Canadian firm and a Chinese partner in China. The Canadian firm often finds that their technology, their intellectual property, is taken. There's a requirement to transfer it to the Chinese partner. The branding is usually in the Chinese name, not the Canadian name. The quality has a reputational risk, because the parts are often of lower quality than the parts the Canadian firm would use in Canada. There's usually an R and D centre in China as well as in Canada. This gravitates the intellectual property away into China.

The Chinese company can compete with a joint venture in China. It's in its own joint venture with Canada, and then it competes in the Chinese market with the joint venture. Often the Chinese joint venture can sell to third countries in competition with the Canadian company; they sit on their hands and don't distribute or find sales for the products as they're supposed to. When the Canadian company asks them to please get more active on that, they say they will—but they want a bigger share of the ratio.

With tactics like that, eventually, after spending years trying to develop the product in China, the Canadian company will just abandon the factory equipment, go back and say they'll cut their losses.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

What you're saying is quite concerning. Is that in general or is it specific to certain sectors?

[Margaret McCuaig-Johnston]

It's specific to certain companies. The companies I've looked at are primarily small and medium-sized companies. I've looked at about three dozen of them. We've seen a lot of discussion about this issue of stealing intellectual property. The U.S. trade representative's office had me come down during Trump 1.0 to describe to them what happens on a firm-by-firm basis. They only get roll-ups by industry associations of these types of problems. I was able to take them through, firm by firm, what happens. I didn't name the firms, because they've already been victimized enough.

As an example, an Internet of things firm had a 50% ratio. I visited the CEO to see how he did so well in getting such a high ratio. He said it disappears over time. In the meantime, he was going across the country finding AI labs, researchers and small AI companies from which he could take the technology and give it to his Chinese partner, which was a humongous, multi-billion dollar state-owned enterprise. His ratio, his share of the ownership, depleted over time.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

What would be the best ways to protect ourselves against intellectual property theft?

Would it simply be a matter of not doing business with China in the high-tech sector, or could we find ways to protect ourselves? I know there are concerns about intellectual property compliance on the Chinese side.

[Margaret McCuaig-Johnston]

I would suggest never taking your newest intellectual property to China. Frankly, I've seen so many problems across so many companies that, in my view, we shouldn't be doing joint ventures in China anymore.

If we are going to do joint ventures with them, they should be here. The Canadian company should be in control of the joint venture, and there should be a requirement for technology transfer from the Chinese partner to the Canadian partner.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

You also said in some of your research that Canadian researchers were partnering with Chinese military and surveillance technology companies.

Are those researchers aware of what they're doing? Do they know what's happening? To what extent is the Canadian government regulating that?

[Margaret McCuaig-Johnston]

You talked about the military. I'm not clear on the question.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Some Canadian researchers are partnering with Chinese military and surveillance technology companies.

To what extent are they aware of the risks and dangers involved? Are they aware and still going ahead, or are they not aware? If not, how is the Canadian government monitoring that, and is that monitoring adequate?

[Margaret McCuaig-Johnston]

As it involves university researchers, we're doing an excellent job. Over the last five years, I would say, Canada has put in place a tiered system for research security, and we are now a model for the world in this. However, the companies themselves, the Canadian companies, usually aren't aware of the risks. There's a requirement, if requested, that Chinese companies partner with the Chinese military, and the Canadian company wouldn't be aware that its innovations are going out the back door to the PLA. It's a real risk.

[The Vice-Chair, Conservative, Adam Chambers]

Thank you very much.

We will now move to the second round.

Mr. Bezan, welcome to the committee.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair.

I'm glad to join you all in this important conversation. I bring a unique perspective. I still consider myself a cattle producer, and I have a strong background in national defence and, of course, national security.

I want to start with my questions for Ms. McCuaig-Johnston.

I appreciate your testimony on the risk factors that are here.

You're aware, of course, of how Huawei was able to infiltrate and steal IP in Canada from Nortel. Is that correct?

[Margaret McCuaig-Johnston]

That's correct.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

You are aware that they were able to develop their 5G networks based upon taking down and destroying a Canadian company because of the insidious spying devices they put into Nortel's headquarters.

[Margaret McCuaig-Johnston]

That's correct.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

It started off as hardware, and then it turned into software and stealing IP.

You're also familiar with the stealth fighter jet that the Chinese have and for which they were able to steal the technology of the F-35. They used an LG smart fridge to hack into a subcontractor's laptop to steal the stealth technology and airframe information in order to build their J-32 stealth fighter.

[Margaret McCuaig-Johnston]

Yes.