Evidence of meeting #27 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 market.
A recording is available from Parliament.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
I understand that the halal certification would increase our sales in the gulf, but that it's not in place. If necessary, that's something you might be interested in putting in place.
Chief Executive Officer, Canadian Cattle Association
Certification is in place. I can't speak to all the plants, and I would have to clarify that, but I think it's having consistency across the board, because different markets sometimes require different certification. Standardization is pretty important in ensuring that we can supply product consistently, but it is an area in which we want to make sure that we support the domestic market so that when we go to those markets, we can provide continuous volume.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much.
We'll go to Mr. Barsalou-Duval for our last round.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you, Mr. Chair.
Mr. Prybylski, I'd like to follow up on the question I asked Ms. McCuaig‑Johnston.
We know China can withdraw and apply sanctions without notice. That means we become dependent on a market, to a certain extent. How would you protect your industry from the fallouts of those decisions?
I imagine if you were to suddenly lose 30%, 25% or even 10% of your market share in a country in a specific area, there would certainly be fallouts. How can we protect ourselves in such an arm's-length relationship when we know China has a habit of doing that?
Director, Canadian Federation of Agriculture
Diversification is hugely important. China definitely represents a huge market for the products we grow here, but so does the United States and so does India. Developing those relationships with other countries and diversifying our market are the keys to providing security, because then we have alternatives. We would have ways we could offset disruptions in the market with China, and we would have other options to at least partially offset the market, so diversification is key.
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you.
I'd like to turn to Ms. McCuaig‑Johnston.
We recently learned that Canada and Taiwan had agreed on a free trade agreement. Taiwan seems to be a much more reliable partner than China. That said, it looks like Canada is not going to go through with this agreement. We wonder if it's not precisely because it wants to increase ties with China.
Here's my question. China is an unstable partner who doesn't respect our intellectual property and engages in foreign interference. Wouldn't increasing our ties with China undermine other partnerships that would be more beneficial to Canada?
Senior Fellow, University of Ottawa, As an Individual
China has often used either implicit or explicit threats to other countries if they improve their relations with Taiwan. In this example, we haven't heard overtly that this is happening, but there's no other explanation I can see for the fact that the investment agreement we've had with Taiwan for many months, which was all set to be signed, hasn't been signed. It's rather similar to when Canadian companies or western companies that are doing business in China do not mention things like the Uyghurs, because they're afraid of upsetting their Chinese counterparts.
This is very disappointing. We talk about having a principled and pragmatic foreign policy, but it's not principled if we can't sign a very straightforward agreement with all the i's dotted and t's crossed. It should be signed.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much. That was an excellent panel.
We are running a few minutes over, so we're going to suspend briefly. We'll come back and, just to manage your expectations, we will likely go to 1:10 because we have to do two committee business things at the end, which are just routine, on some things we need approval for.
We'll suspend and change over the panels.
Conservative
The Vice-Chair Conservative Adam Chambers
We will resume our meeting.
One witness needs to restart their computer. We'll sound check them when they're able to rejoin.
So that we don't waste any time, I will introduce our witnesses.
Mr. Garry Clement, president and chief executive officer of Clement Advisory Group and author, is appearing as an individual. From the Foundation for Defense of Democracies, we have Edmund Fitton-Brown. He will be restarting his computer momentarily. From the Lobster Council of Canada, we have Geoff Irvine, executive director.
I will ask each witness to provide opening statements of up to five minutes. Then we will open the floor to questions.
Mr. Clement, it's a pleasure to have you here. I welcome you to the committee. You have five minutes.
Garry W.G. Clement President and Chief Executive Officer, Clement Advisory Group, As an Individual
Good afternoon, Vice-Chairman and members of the committee. Thank you for the opportunity to appear before you today.
The impact of China on Canada economically, politically and strategically deserves far greater attention than it has historically received. I commend this committee for examining this important issue.
My perspective is shaped by more than 50 years of working in law enforcement, intelligence, financial crime investigations and private sector compliance. For 34 years I've focused on money laundering and transnational organized crime investigations. Over the past 16 years, I've advised financial institutions and corporations on financial crime risk, governance and geopolitical exposure. This experience has provided me with a unique vantage point on how governments, regulators, financial institutions and corporations assess risk when dealing with such complex international actors as the People's Republic of China.
Early in my career, while stationed in Hong Kong, I received advanced training on Asian organized crime and worked closely with foreign affairs officer Brian McAdam on risks associated with Canada's investor immigration program. Together we documented how individuals connected to Triad organizations were able to obtain Canadian immigration status and move significant capital into Vancouver and Toronto, often through investments from real estate and infrastructure. At the time, I warned that Vancouver would eventually replace Hong Kong as a major transshipment point into North America.
Much of my career has been focused on the intersection of organized crime, illicit finance and state-linked actors. Our work contributed to Project Sidewinder, an initiative examining the relationship between organized crime networks and Chinese state-linked influence. Although the project was ultimately shut down, many of its early warnings have proven prescient.
Today China remains a major trading partner for Canada. However, our relationship can no longer be viewed solely through an economic lens. Trade now intersects directly with national security, foreign interference, control of strategic infrastructure, technology transfer risks, Arctic sovereignty and supply chain vulnerabilities. Unlike western market economies, China operates within a system in which state authority, corporate activity, intelligence services and law enforcement institutions are deeply integrated. Under China's National Intelligence Law, organizations and citizens can be compelled to co-operate with the state's intelligence apparatus when requested, even when operating abroad. The reality has significant implications for technology partnerships, telecommunications infrastructure, foreign investment and research collaboration.
Canada has already experienced the consequence of failing to recognize these risks. The collapse of Nortel, once a global telecommunications leader employing nearly 95,000 people worldwide, remains one of the most significant corporate failures in Canadian history. Evidence later emerged of systemic intellectual property theft that undermined Nortel's competitive position. Canadian intelligence agencies have repeatedly warned that China is among the most active partners targeting Canadian institutions for economic and technological espionage, particularly in such areas as artificial intelligence, advanced manufacturing, telecommunications, early technologies and university research.
In a recent report published by the Jamestown foundation, Cheryl Yu noted the following:
The Chinese Communist Party (CCP) has created a global network of individuals and organizations as part of its united front system. In four democratic states—the United States, Canada, the United Kingdom, and Germany—this network includes more than 2,000 organizations.
These organizations often seek to influence political decision-making and shape public discourse by encouraging individuals and institutions to consider Beijing's interests and sensitivities. Where opposition arises, the united front system can function as a political tool to isolate, neutralize or counter critics of the Chinese government. Evidence of these dynamics surfaced at both the Cullen commission, for which I testified, and the Hogue commission examining foreign interference.
These issues have also been examined extensively in investigative journalism, including Sam Cooper's book, Wilful Blindness, and the book Canada Under Siege, which I co-authored with Michel Juneau Katsuya and Dean Baxendale.
Canada must therefore begin to treat economic security as national security.
China's belt and road initiative further illustrates how economic engagement can serve geopolitical objectives. Through large-scale investments in ports, telecommunications and energy infrastructure, China has gained strategic leverage in regions in which debt dependency has allowed Chinese firms to assume control of critical assets.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much, sir. We look forward to the rounds of questions.
Mr. Irvine, you have the floor for five minutes.
Geoff Irvine Executive Director, Lobster Council of Canada
Good afternoon. Greetings from Halifax. Thank you for having me appear today.
The Lobster Council of Canada represents the entire lobster value chain in Canada, with members in harvesting, buying, processing, live shipping and exporting Canadian lobster, which is the best in the world. We focus on the lobster market, managing marketing and promotion programs, and providing advocacy, education, market access and market intelligence. We work with all governments on trade development projects and managing the MSC program. Our members come from all five eastern Canadian provinces.
Lobster is the highest-value fishery and seafood sector in Canada, with an export value last year of almost $3 billion. It employs thousands of Canadians on about 9,500 fishing boats and in hundreds of shoreside processing and shipping companies. We are the world's largest producer of lobster, landing over 200 million pounds on an annual basis, with 40% by value exported live and 60% in processed forms.
Thank you for inviting me to speak about China and Qatar. First, I'll talk about China.
Our exports last year were down about 45% from the year before. Last year, we exported $308 million worth of lobster in both forms to China. The year before, it was $521 million. It was a dramatic drop, mostly due to the tariff situation, but also due to some other competition.
China buys both live and frozen lobster from Canada, with the vast majority in live form. Last year it was $284 million live and $24 million frozen. The market in China grew to be our largest live lobster market in 2024 from literally zero 12 years before that. This is a dramatic increase in our shipments to China.
Until April 2025, Canada had a 7% most-favoured-nation tariff in place, plus a 9% VAT that the Chinese importers pay. With the addition of the extra 25% tariff last year in April, our tariff went to 32% for this important market.
Our competitor with the same species, Homarus americanus, is the United States. It had a 15% tariff advantage throughout the summer and fall period last year, which led to a significant amount of our lobster being trucked to the U.S. and then shipped to China because it had the tariff advantage. We ended up selling the lobster, but we didn't have the export margin benefit.
On top of the tariff challenge, two competitors have re-emerged or entered the market in China for lobster. Australia, as is probably well known, had been cut out of the Chinese market for about four years. It came back into the market last year and has already regained the same market position it had before it was shut out in 2021.
In addition, Vietnamese lobster has entered the market in dramatic fashion. Vietnam now farms lobster in massive volumes. I've provided a graph that you can share with the group, showing the growth of Vietnamese lobster in the Chinese market in the last few years. It's dramatic.
Fortunately for us, but bad for the Vietnamese, vicious storms and typhoons wiped out their entire stock in November and December, which led to a dramatic increase in the demand for what Canadian lobster we had available at that time of year. It will take about another 10 months for them to grow back this volume of lobster, so we have a window to regain our market position in China.
We're making plans now on how to respond to the competitive environment there with some additional marketing activities.
Quickly, on Qatar, it's a very small market for lobster. Last year, we had only $674,000 in exports. The year before it was $619,000. It's a similar mix of live and frozen as with China. However, we see a large opportunity in the Middle East in general, notwithstanding the current situation. The U.A.E. has been buying significantly larger volumes as a percentage. We see Saudi Arabia as an opportunity, once we have the current geopolitical situation squared away.
That's all I have.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much, Mr. Irvine.
Mr. Edmund Fitton-Brown, you have the floor for five minutes.
Edmund Fitton-Brown Senior Fellow, Foundation for Defense of Democracies
Thank you very much for inviting us to provide testimony. It's a great honour to be with you.
Your original request was directed at my colleague Natalie Ecanow, our leading expert on Qatar. She had a time conflict. I am her supervisor and the one who leads our work on the Arabian Peninsula, so I am substituting.
Let me first briefly introduce the Foundation for Defense of Democracies. FDD is a non-partisan think tank dedicated to safeguarding America's national security and advancing U.S. interests. We combine rigorous research, strategic advocacy and legislative action to shape U.S. foreign policy on the main threats the U.S. faces, including Iran's nuclear ambitions, China's expanding influence, Russia's war of aggression, and cyber- and information warfare and extremist ideologies. FDD does not take any foreign government funding. This independence allows us to speak clearly, act boldly and influence policy at the highest levels of U.S. government—on Capitol Hill and within the executive branch.
My own background is mainly on the Middle East and counterterrorism, not on China, so I will not offer any introductory remarks on China—although if you ask me any questions on it, I will answer to the best of my ability. Having spent five years working for the United Nations Security Council, I am somewhat versed in Chinese objectives—at least in that forum.
On Qatar, there is one central point I would like to make. Qatar is a very small, extremely wealthy country with global political and ideological ambitions. If you look only at Qatari nationals, as opposed to the expatriates who make up nearly 90% of the population, it is by far the richest country on earth per capita. The Qatar Investment Authority manages a sovereign wealth fund of more than half a trillion U.S. dollars.
In a monarchy and tribal society totalling just one-third of a million Qatari nationals, there is a high degree of social and political cohesion behind the deployment of this national wealth, which has been used over decades to acquire massive strategic investments overseas. At the same time, Qatar has consistently pursued an Islamist agenda, sponsoring Hamas and the wider Muslim Brotherhood and playing host to Al Jazeera, a media empire that mimics independent journalism but actually promotes an Islamist agenda and never criticizes the Qatari state.
FDD is cataloguing total Qatari investments in the United States. Right now, it's hovering around $430 billion on our tracker. Now, that is only on our tracker, and the number itself is in peer review, but it's still climbing. At any rate, we're talking something in the order of half a trillion dollars there. To be safe, probably the best way to express this is to say that they certainly have made over $400 billion in investments, grants and pledges since the year 2000 in the United States of America. The money is spread across the country in nearly every sector, from defence and energy to real estate, education and sports.
My concluding point, inasmuch as there is advice to be given, is to beware of Qatari investment. If you welcome it, you'll be doing very much the same thing that many other countries have done. The Americans have done it, the Brits have done it, and the Qataris have successfully invested in so many other of the world's major economies that it's not as if Canada would be doing anything unusually reckless. Of course, it's extremely tempting on economic grounds, because it brings large amounts of capital into the country. It can be very good for the economy, but it does come with strings attached. It comes as part of a strategic campaign for influence. Your media, your schools and your universities will be targeted over time by the Qataris for Islamist purposes.
I'll close my remarks there.
Thank you.
Conservative
The Vice-Chair Conservative Adam Chambers
Thank you very much.
We'll now move to questions. The first round is a six-minute round.
Mr. Cooper, welcome to the committee.
Conservative
Michael Cooper Conservative St. Albert—Sturgeon River, AB
Thank you, Mr. Chair.
I'll direct my questions to Mr. Clement.
Mark Carney's so-called strategic partnership with the Beijing dictatorship includes an agreement on law enforcement co-operation between the RCMP and Beijing's Ministry of Public Security. For the record, this is the same Ministry of Public Security that was involved in operating several illegal police stations in Montreal, Toronto and Vancouver to spy on, harass, intimidate and coerce diaspora communities. Do I have that right?
President and Chief Executive Officer, Clement Advisory Group, As an Individual
Yes.
Conservative
Michael Cooper Conservative St. Albert—Sturgeon River, AB
Is it accurate to say that Beijing's overriding consideration for law enforcement is to advance the interests of the Chinese Communist Party?
President and Chief Executive Officer, Clement Advisory Group, As an Individual
Law enforcement in China is part of the PRC apparatus. You can't separate it from the government, and it does not operate under the rule of law.
I experienced it first-hand. I experienced it on one occasion when, probably a year before I took my retirement, I was tasked with meeting a delegation from China. This was the last time they came over to look for people under an alleged “economic offence”.
The four Chinese from the delegation sat down in the room and literally stated, “We expect you to identify where they are, and we'll look after it from there.”
Conservative
Michael Cooper Conservative St. Albert—Sturgeon River, AB
As you noted, we're not dealing with a regime that respects the rule of law, due process, judicial independence or other legal and ethical constraints that our law enforcement is bound by.
Is it fair to say that when Canada co-operates with such a regime, we're not an equal partner?
President and Chief Executive Officer, Clement Advisory Group, As an Individual
We're not even close. They have an agenda that is totally different from what we have. I don't see how the RCMP can operate under this secret agreement. I think that it's flawed and that it's dangerous to our security interests.
Conservative
Michael Cooper Conservative St. Albert—Sturgeon River, AB
Recently, 10 Hong Kong diaspora organizations sent an open letter to Mark Carney expressing deep fear and anxiety about this agreement. In essence, they are concerned that Beijing will use this agreement to target political opponents of the regime in Canada under the guise of law enforcement. You provided an example of this. Would you agree that the concerns are valid?
President and Chief Executive Officer, Clement Advisory Group, As an Individual
I would, absolutely. In fact, I believe it's the reason the police stations were set up here in the first place. It's to push their agenda.
We have to understand that they have a number of United Front Work Department organizations operating in this country that also support anything the alleged police stations would do.
Conservative
Michael Cooper Conservative St. Albert—Sturgeon River, AB
As you referenced, the Jamestown foundation report said that 575 united front cells are operating in Canada. That's more than just about any other western country. Is that right?