International Trade Committee on Sept. 22nd, 2025

[Michael Harvey]

It is important to be on the ground. We really need the people on the ground working with those markets, understanding those markets and getting the intelligence that they gather back to Canadian agri-food exporters so they know what's going on in the local regulatory systems. Often, it's the people on the ground who will see an opportunity before the people back in Canada do, so it's really important to invest in that.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you.

You've been a champion for agri-food and the agriculture sector. You were down in Washington. Can you tell our committee about the delegation you took down there? What sort of feedback did you hear? What did you receive? What were your thoughts? How can you inform our committee with those meetings?

[Michael Harvey]

First of all, all CAFTA members joined us, and we're planning a new visit in November because we thought it was very helpful. I forget now if it was in April or May, but we were down there the day President Trump pressed pause on the tariffs.

There are difficult conversations. If you're an Ottawa lobbyist, you feel quite small when you go to Capitol Hill and you realize there are tens of thousands of people going down those corridors and meeting with these people for half an hour. You have to get your point across really quickly.

What it really brings home is how they're thinking about a lot of different things that aren't just the relationship with Canada. It really brings home how important it is for Canadians to work with Americans to bring our issues to their attention and help them understand how Canadian exports—in our case, agri-food exports—help the United States.

We concentrated on the messages that Canadian agri-food exports provide American consumers with better, higher-quality, cheaper food and provide American agri-food businesses with inputs that make them more competitive, both in the United States and worldwide. People were receptive, but it's a competitive environment down there to get your message across.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Savard-Tremblay for six minutes, please.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Thank you, Madam Chair.

I want to thank all the witnesses for their presentations. I hope that their remarks will contribute to the discussion in these uncertain times.

Ms. Lilly, you came here to speak in June 2024. At the time, you were quite critical of Canada's record when it comes to screening, shall we say, and seizing Chinese goods produced by forced labour.

This issue is making Americans wary. Yet the last thing that we need right now is for Americans to become wary. The Americans have an importer‑based legislative system that works quite well, whereas the Canadian system is based on customs law. In one case, the process has worked well, while in the other case, almost nothing has even been seized.

Obviously, I won't ask whether you think that enough has been done for now, since nothing in the legislation has changed. Relations with China were rather frosty towards the end of 2024. However, a rapprochement is now under way.

Are you concerned that this specific issue will be set aside or overlooked?

[Meredith Lilly]

Thank you for the question.

I'm sorry that I'll answer in English.

Yes, I was very critical at the time about forced labour and Canada's failure to uphold its commitments. That was in part because Canada was telling one story and then not monitoring and especially not enforcing. Unfortunately, I think it is a story that continues.

It is very easy to give speeches. It is very easy to make sweeping statements about the importance of eliminating forced labour from supply chains, but if we don't act on that by really focusing on shipments, monitoring and inspections, then it's all for naught.

I do worry that this issue has fallen off the radar almost entirely. I have not really heard any mention of it in quite some time. I think it continues to be very important, not just in terms of immediate shipments, but also if we think about some of Canada's own comparative advantage, for instance, in critical minerals. A lot of the world's critical minerals are mined in countries where children are enslaved. That is deplorable, and I think we would all condemn it. Canada also has a good story to tell in terms of the way it produces minerals.

I do worry about this issue, and I worry that it will fall off the radar with decision-makers.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

I've spoken about this issue in a number of places. I was in Washington last week, for example.

How do you think that Canada's negligence when it comes to these Chinese products might affect Canadian‑American relations?

[Meredith Lilly]

I do think that, unfortunately, it does require some political emphasis in the United States as well. If the United States is tabling this issue with Canada, then I think Canada will make gains. If this issue is not politically salient and important to lawmakers in the U.S., then it will not become an issue at the table between them. However, if U.S. lawmakers are concerned about this and raise it with Canada, then absolutely it's something that we should be doing more of.

We've been able to demonstrate our ability to really scrutinize the border in terms of false accusations about fentanyl in Canada. If we're able to do that for fentanyl, we should be able to do that for forced labour goods as well. It does take resources. It takes money and it takes commitment in order to constantly focus on it.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

In general, do you think that this is a good idea? In late 2024, trade and economic relations with China were still ongoing, of course. There will never be a day when the two countries don't trade with each other.

However, Canada stopped short of accepting everything. It seems that, a year earlier, it formally shelved the idea of a free trade agreement with China. Suddenly, we see an apparent desire to strengthen our relations, even though we know about the Chinese regime's practices when it comes to industrial espionage, data collection and insidious relations—so to speak—among the state, the Communist Party, the military and large corporations. We can talk about a state within a state within a state.

Are you concerned that we're reverting to the naivety of yesteryear simply as a knee‑jerk reaction to American tariffs? At the end of the day, President Trump will be in power for four years, whereas the Chinese Communist Party will be there forever.

[Meredith Lilly]

I think it would not be advisable for Canada to enter into free trade negotiations with China. I do hope that this isn't being pondered soon. I also think that regardless of who is U.S. president, it would be met extremely dimly by the Americans. It would jeopardize our trade relationship with the Americans if we were to do so.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Lilly.

I certainly haven't heard anything about a free trade agreement with China. We appreciate your comments.

Okay, we'll go on to Mr. Mantle for five minutes.

[Jacob Mantle, Conservative, York—Durham, ON]

Professor Lilly, in an article you wrote earlier this summer, you were commenting on your time working in the Harper government on free trade agreements with other allies. You said that Prime Minister Harper “recognized our overreliance on the U.S. and sought new footholds. His team began to pursue trade deals beyond North America, signing early agreements with South Korea, the European Union and countries across the Indo-Pacific. But in the decade since, that momentum has slowed.”

My question is this: Did we miss the boat here in the last decade? Did we not build upon that work of Prime Minister Harper?

[Meredith Lilly]

I would say that trade diversification, meaning trying to gain a greater foothold in these other markets, was not pursued as ambitiously as it should have been. I think that trade diversification should be an evergreen project for Canada. That is because, as I said earlier, it takes a while to build trade relationships, and you cannot just turn the Titanic on a dime. If we run into difficulties with our trading partners in the United States, we can't just flip a switch and now trade with another country. It is in Canada's interest to be building these relationships all the time, so that we have those other trading relationships even when times are tough with the Americans.

I would add that demonstrating to the Americans that we have other options increases our leverage with the Americans themselves. Even if our goal is to continue to trade with the United States, demonstrating that we have other customers increases our leverage to get good deals.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you.

You also mentioned Korea and Japan in that article, and you mentioned them in your remarks here as great potential export markets for our energy. In building on your comment, what effect do you think Canada's unilateral actions against those allies have in building those relationships?

[Meredith Lilly]

In terms of tariffs on products like steel, which in spirit violate our trade agreements with those countries, they continue to be allowed to export to Canada tariff-free, but they would be subject to tariffs if quota levels were beyond a certain amount.

Those kinds of measures do send worrying signals. They do wonder where it will end. We're starting with steel, and then what's next after that? These are our friends and allies. They are also great markets for our products. I think we have to be very careful in how we design policies to ensure that our allies and FTA partners are not targeted with a very broad brush.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you.

Mr. Herman, I have a few questions for you as well. It's nice to be able to chat with you. Your textbook, Canadian Trade Law: Practice and Procedure, was on my desk for many years when I was a lawyer, and there is an e-book now. Thank you for your work in educating lawyers.

This summer, you were quite prolific online talking about trade negotiations. With respect to the negotiations with the United States, you wrote, “almost nothing's been disclosed about the scope, content, timing or ultimate objectives of these talks, even though their outcome—whether success or failure—will be hugely significant for the country.”

Is it still your view that almost nothing has been disclosed by the Canadian government with respect to these talks?

[Lawrence Herman]

Yes, it is my view.

I fully accept the notion that you don't negotiate in public. I understand that, but that being said, we know very little about the state of talks with the United States, which is very unusual. It may be just the fact that we're dealing with a difficult administration and going public on anything, even the broad outline of the talks, could cause problems, but I'm concerned that we don't know exactly what is on the agenda.

There was talk about a broad security and economic relationship. Well, we know that's not going to come to be, but I would think we could have a little more clarity on the scope of these discussions in Washington, understanding that it is very difficult to deal with that administration.

I certainly understand the constraints, but I think we could use a little more clarity, Mr. Mantle.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Mr. Herman.

I'll leave it there. My time is over, but I agree with you on the last point, that we should assess and revise the Special Import Measures Act. It's in a sorry state, and it needs a tough study and a revision.

[The Chair, Liberal, Judy Sgro]

Ms. Lapointe, you have five minutes, please.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Madam Chair.

Ms. Lilly, you said that we need to diversify our exports and pull away from the United States. However, did you know that, from 2018 to 2024, we increased our exports by 50%? I assume that you know this.

You said that we were too focused on the United States. However, we're really active in other markets. We signed other agreements with Europe, including Mercosur, the Canada‑Ecuador Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership. We increased these exports.

What are your thoughts on this?

[Meredith Lilly]

Respectfully, growing an extremely tiny number by 50% still results in an extremely tiny number: 50% is a nice number, but going from 1% to 2% is still very small. I don't have the exact figures in front of me.

These are efforts that we should continually engage in, but there is something in international trade called the gravity model, which essentially says that countries are more likely to trade with each other based on the size of the economy and based on their distance from each other. In our case, our first and largest trading partner is always going to be the United States, because we can walk to it and it is the largest economy in the world. It is extremely difficult to grow trade with other countries. We should do so. We should continue to try to do so, but these efforts will always be incremental. They will always be at the margin.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Ms. Lilly.

Mr. Harvey, you said earlier that agri‑food accounted for one in nine jobs in Canada and that most jobs were in export‑oriented agri‑food. You welcomed the conclusion of the Canada‑Ecuador Free Trade Agreement negotiations and described Ecuador as a promising market for Canadian agri‑food.

What key agricultural sectors would potentially be most affected by the implementation of this agreement?

[Michael Harvey]

Ecuador is quite a good place for exporting cereals. This country mainly produces tropical fruits and flowers. It doesn't have vast areas of land, like in Canada, for producing cereals or, for example, pulses such as beans and fava beans.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

That's good.

You said that we should do better in Asia.

What do you suggest would be better?