Evidence of meeting #35 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 beef.
A recording is available from Parliament.
President and Chief Executive Officer, Forest Products Association of Canada
Thanks for the question. I'm going to be in Castlegar in a few weeks.
Conservative
President and Chief Executive Officer, Forest Products Association of Canada
I look forward to chatting with you about that, and getting to visit Kalesnikoff, Interfor and Mercer, which are important. It's an important hub for us in that part of B.C.
There are a couple of things. Softwood lumber duties and the section 232 tariffs are, right now, at a pretty high point, at a combined 45%. We don't want to rush into a bad deal, but we do need to move to some certainty. I'd say that the section 232 tariffs, which can be increased or whatnot at the stroke of the president's pen, continue to be quite a wild card. The softwood lumber dispute does have a process, as painful as it is. The section 232 piece is a bit more unpredictable.
I think we have a couple of issues specific to B.C. We have a lot of challenges with provincial permitting. As I travel the country, that's very unique to British Columbia. The industry is challenged across the country, but there are some unique issues in terms of legacy, fire and pine beetle impacts in B.C., as well as provincial regulation. Our hope is that liquidity supports will continue to flow to support mills and to keep them running. We've lost a few thousand jobs. I've been impressed with the resilience of the industry broadly, but as this drags out, that risk gets greater. The employee supports are critical as well—
Conservative
Helena Konanz Conservative Similkameen—South Okanagan—West Kootenay, BC
Thank you, Mr. Nighbor. I have to interrupt you. I'm sorry. It sounds like this is a dire situation, but I need to hand over my time to my colleague. However, I'm looking forward to speaking with you more about this.
President and Chief Executive Officer, Forest Products Association of Canada
Thank you.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you.
Mr. Nankivell, I want to ask you specifically about things that we can do domestically to support our trade opportunities abroad. Each of you has mentioned, to one degree or another, words like “security” and “reliability.” Obviously, global events have put tremendous focus on that. However, in order for Canada to be a good partner to our trading partners, and specifically with Japan, what types of things do we have to work on domestically?
President and Chief Executive Officer, Asia Pacific Foundation of Canada
It's an excellent question, Madam Chair. It's really central to the task ahead of us.
On the Japan side, and from our contacts with various partners and in working with the business communities on both sides, I think Japan is looking for, on the one hand, reliability of supply. We all have work to do on that. We heard from the port in the earlier session. There are physical infrastructure constraints that need to be addressed, urgently, for us to meet our objectives with regard to the trade in physical goods.
When it comes to investment, which is an essential part of the potential gains that we have with Japan, we again really need to move with urgency to create the conditions in which Japanese investors—who have deep pockets and an appetite for resources, particularly in areas like critical minerals, which are geostrategically important—are ready to move forward, but we need to assure them that they will have the conditions to do that. They have had the experience. They have seen Japanese companies, like Mitsubishi, playing a leading role in LNG Canada. I'm happy to say that's now a success story, but it was a long road to get to where we are today.
I think this comes to the general question of what we need to do to make the overall investment environment for major projects much more appealing, and to present ourselves as a reliable partner. I should say, at the same time, that when Japanese business leaders look at Canada, they are concerned about our access to the U.S. market. What's going to happen with our access to the U.S. market remains high in their decision-making, and the ambassador of Japan has made that quite clear.
However, at the same time, they also look at what's happening in the U.S. and, privately, they tell us that they are interested in potentially shifting some things from the U.S. to Canada because of our reliability and predictability. They look at the long term, so the more we can present ourselves as that reliable, stable partner, and be seen to be working on the issues that are of greatest importance to them, the sooner we'll be able to unlock those investments.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Do you have any information respecting crude oil imports to Japan? I have a figure of $80 billion in 2023, but 95% of that is from the Gulf states in the world. Do we have an opportunity there for crude oil exports to Japan?
President and Chief Executive Officer, Asia Pacific Foundation of Canada
Okay: Yes.
Liberal
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
Thank you, Madam Chair.
Thank you to the witnesses for being here today.
I've been listening to you from the beginning. You're convinced that we need to expand our trade with Japan.
I'm going to ask Mr. Nankivell a question, and I think Mr. Holmes could add to it, or vice versa. While preparing my questions, I thought either one of you could answer them.
The answer to my first question could be very brief. Do you think we have enough trade representatives in Japan, and vice versa, to speed things up? We're talking about supporting businesses, we want to open new markets, we want to diversify markets.
Do you think there are enough representatives right now?
President and Chief Executive Officer, Asia Pacific Foundation of Canada
In my opinion, it would be a very good idea to establish consulates in Japan, or to re-establish consulates outside of Tokyo, because it's not exactly a small country and the regions hold opportunities for Canadians. We have to develop long-term relationships and become familiar with the culture, among other things. The more representation we have elsewhere in the country, the better our chances of success.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
Mr. Holmes, do you think Japan is doing the same thing? Is it increasing the number of its representatives?
Executive Vice President, International and Chief of Public Policy, Canadian Chamber of Commerce
I have to respond in English, but thank you for your question.
Executive Vice President, International and Chief of Public Policy, Canadian Chamber of Commerce
Relatively speaking, we have approximately 40 trade commissioners situated in Japan, so it's a pretty strong representative body. However, it is, again, a high market for us. There are provincial representatives as well, including the délégation générale, I think since the 1970s, from the Province of Quebec. It is a strong market.
We have historically had some consulate presence in other cities. That has retracted in recent years, to a certain degree. Relationships, as Mr. Nankivell has described, are incredibly important to the business relationship over the long term. As we build this relationship, it's important that we show up but also that we continue to be there. We have good representation there on the ground.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
Does Japan have the potential to absorb twice what it currently receives?
We want to double exports, but does it have the potential to expand the market? We may well want to do it, but if it doesn't have the potential to do so, we're just talking to ourselves. I'd like to know a little about their potential.
Executive Vice President, International and Chief of Public Policy, Canadian Chamber of Commerce
I can respond first.
They have very incredibly sophisticated logistics and shipping bases there. They have advanced manufacturers. They are also global traders in their own right. They are quite ready to import and export and also add value within Japan.
Just quickly, yes, I would say they do have the capacity and the interest to expand their trade. Certain areas have been described where we need to both build into their current supply chain and maybe create some more value chain relationships. We spoke of agri-food earlier. They're our third-largest market for canola, for example. They buy the raw commodity. They have a very advanced crushing facility and they sell to other world markets. They buy the commodity and add the value there. It's a very important relationship for our producers.
Liberal
Steeve Lavoie Liberal Beauport—Limoilou, QC
I see time flying by. Let's move quickly.
If I gave you a magic wand, Mr. Nankivell, and asked you to do one or two quick things in the short term to accelerate trade growth, what would you do? Could some things be done quickly and perhaps in the medium and long term afterward? What would you do if, today, you had to choose what to do?
I may also ask you to respond, Mr. Holmes, if we have time.
President and Chief Executive Officer, Asia Pacific Foundation of Canada
This may not be the most exciting answer, but it would be to speed up the things that are already under way. For example, there's a road map with concrete measures for reaching a strategic partnership agreement. We need to follow up on all of that. It takes time, it requires travel by deputy ministers, assistant deputy ministers, provincial representatives and representatives from organizations like the Canadian Chamber of Commerce to ensure this follow-up and to demonstrate that, this time, we're really serious about reaching a long-term agreement.
Liberal
Executive Vice President, International and Chief of Public Policy, Canadian Chamber of Commerce
First, on energy security, they are extremely exposed. They were reliant on Russian energy before the Ukraine war, so we have a real opportunity. Our LNG exports out of the west have already found a willing audience.
In the medium term, in my conversations with some of the Japanese big houses, they are absolutely confused by our jurisdictional chaos in Canada and internal barriers to trade. They don't understand why we can't get out of our own way, so we need to deal with that.
In the long term, our relationship with the U.S. and our CUSMA arrangement is very important to investors.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Holmes. Those were priceless comments.
Mr. Savard-Tremblay, go ahead for six minutes, please.