Science and Research Committee on April 16th, 2026

[Guy Saint-Jacques]

I disagree with you. I think it's possible to do both and have relationships. We know exactly who we're dealing with. At the same time, the government makes the rules to ensure this trade is conducted in accordance with Canada's laws and regulations.

There was a time when Canada invited Japanese manufacturers to set up shop here because they had more advanced technology than North American manufacturers. That's what's happening with EVs. All of the American manufacturers are losing interest in the sector, even as we face a growing environmental problem with greenhouse gas emissions.

We have to acknowledge that China has made tremendous progress. We know it handed out subsidies left and right, but now Canada can build on China's progress while ensuring greater economic benefits for the country through job creation and the establishment of manufacturing companies here in Canada—and in Quebec as well, I hope.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

You mentioned Japan, but I don't think Japan and China are comparable.

We can talk about Europe, which, in my opinion, is a much more reliable partner. There are trade barriers with the Europeans. I wonder why the Prime Minister didn't remove certain barriers to bring in European vehicles instead of taking risks due to the potential Chinese security threat.

I'd like to hear your thoughts on strategic positioning. I get the impression that the government is sending mixed messages. It says one thing in public but makes deals behind closed doors. At the end of the day, lofty speeches don't amount to much anymore.

[Guy Saint-Jacques]

We have to acknowledge that Chinese EVs are better quality and much better value than any other vehicles in the world, including Japanese and European models.

In fact, Chinese EV exports increased by 77% during the first three months of the year. A huge number are being sold in the U.K. The EU has imposed tariffs. Chinese manufacturers are setting up facilities in Spain.

I think both North American and European automakers are a bit complacent and lazy. They haven't developed high-quality, low-cost vehicles. I drive a Volkswagen ID.4, and I can tell you that it cost much more than similar Chinese vehicles.

We have to stimulate competition, and we have to do it while trying to create as many jobs as possible in Canada.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

From what you're telling me, I understand that the government's stance is to prioritize profit over safety.

[Guy Saint-Jacques]

No, that's not it. We're the ones who make the security rules here.

That said, the federal government does need to take action on some issues to reassure Canadians. One of those issues is forced labour, particularly that of the Uyghurs in Xinjiang. We know that Uyghurs are also being sent to other Chinese provinces. That's an issue that needs clarification. Mr. Champagne said he discussed this when he was in Beijing a few weeks ago.

The government does have some work to do to ensure that Canada's security is not compromised.

[The Chair, Liberal, Salma Zahid]

Thank you.

Now we will start our second round of questioning. We will begin with MP Mahal for five minutes.

MP Mahal, please go ahead.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Thank you, Madam Chair.

Thank you to both witnesses for spending their time with us and for this testimony today.

I will start with Mr. Kovrig.

My question is this. Some Liberal voices, including Michael Ma, have downplayed credible reports of forced labour in Chinese supply chains. Based on what we know, is it responsible for elected officials to minimize those human rights concerns?

[Michael Kovrig]

No, it is not.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

When Liberal MPs downplay forced labour concerns, are they weakening Canada's ability to scrutinize these supply chains properly?

[Michael Kovrig]

A critical problem with minimizing documented human rights abuses across China, which are extensive and deeply annotated, is that it sends a signal to the Chinese Communist Party that such activities will be tolerated and are permissible. Indeed, if Canadian companies or Canadian consumers engage in supply chains, buying products from China that are made with forced labour, we are, in effect, becoming directly complicit in the continuance of those practices. It's not legal in Canada, so why should we tolerate it in our supply chains?

Incidentally, it is, of course, a critical factor for Canadian values, democracy and what holds this country together. It is also a direct economic implication, because that kind of low-rights economy, through forced labour, poor labour conditions and generally bad labour rights as well as environmental violations, in effect becomes a price advantage for Chinese producers. The forced labour is much cheaper than competing labour in Canada. It has direct implications for Canadian workers and for the competitiveness of Canadian firms.

Of course, it's not the only reason why Chinese producers are so cheap, but it is an important factor and one that we should not accept. We need to factor those risks into our customs and border regulations and our legislation, and mitigate them. It's a responsibility of the government to assure the Canadian consumer that the goods they buy are not supporting human rights violations.

[Jagsharan Singh Mahal, Conservative, Edmonton Southeast, AB]

Given the impression or position that we have globally that we are a country where human rights are protected, that we are the flag bearers when it comes to human rights and giving labourers their deserving wages and their rights, I think your answer definitely sends chills down the spine.

To touch a nerve, Canada banned Huawei over data and national security risks back in the day. Given your warnings that EVs are effectively two-toned cellphones, how can the Liberal government allow justifying Chinese EVs with similar or greater collection capabilities when it comes to data?

[Michael Kovrig]

That's a very significant risk that needs to be properly assessed and regulated by Transport Canada with the support of the relevant security agencies in Canada.

All electric vehicles and, in fact, all modern cars now have that capacity for gathering information and data. The issue is whether we can assure how that data is handled, where it is held, who is able to access it and how access to it can be used. The same goes for the capacity to potentially remotely control electric vehicles. Let's be realistic. Within a decade, it's likely that many of these vehicles will also be operating autonomously.

There is already evidence that, for example, some vehicles from some manufacturers can be remote-controlled and used in hazardous ways. It's a multivariate threat, potentially. The crux of the matter is whether or not you are able to trust the government that regulates the countries that are providing those vehicles. It is not possible to have that trust with the People's Republic of China's government. If you're going to admit vehicles of that sort into the Canadian economy and let Canadian consumers drive them around, you are going to have to have careful regulation of them. Most likely you're going to have to require that any software they are running is not Chinese software, but rather is software either from trusted domestic Canadian providers or from other trusted providers. There may be technical means of mitigating that. I think that may be what the government has in mind.

I always come back to two questions. Once you factor in the cost of doing that, does it still make economic sense? Do you still have a price advantage? If the whole point is to drive technological development in Canada and provide consumers with lower cost products, if those benefits are offset by the costs of all these security measures, what's the point?

[The Chair, Liberal, Salma Zahid]

Thank you.

With that, your time is up, MP Mahal.

We will now go to MP Rana for five minutes.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you, Madam Chair.

Thank you to all the witnesses for their time.

Mr. Saint-Jacques, Canada's trade relationship with China has undergone significant changes over the past few years. How do you see this arrangement fitting into the broader trajectory of that relationship? What opportunity does it open up that was not there before?

[Guy Saint-Jacques]

There is a growing middle class in China. We know that these people like to buy Canadian seafood, Canadian lobsters. They also like to buy health products. They want to buy good consumer goods. Companies like Lululemon are doing good business in China.

In many areas, it's possible to benefit from trade opportunities. Of course, we have to protect our intellectual property. We have to protect our technology. We have been, unfortunately, naive and complacent in previous years, and we have lost a lot. The demise of Nortel is something that is very sad and, of course, Huawei has benefited from that.

We know that China has made a switch. They are moving to make their economy as electric as possible. They want to reduce their dependency on foreign suppliers of oil and natural gas, and they want to reduce their use of coal. They are years ahead of us, so I think we can benefit from some of the advances they have made, including in solar energy. On the other hand, there are also products that we have that we can sell to them.

I would say that when you look at all the G7 countries, they all want to strike good deals with China. President Trump will be there in a month. Guess what: He will also want to increase the sale of American products. In fact, that could affect us because there are many products, especially in the agri-food sector, where we compete with the U.S. He will want to attract Chinese EV manufacturers to come to the United States. Again, it's for us to manage this trade in an intelligent, systematic way and explain to the Chinese that they have to abide by international rules. We have to work with partners to make sure that they will respect these rules.

China has a level of development where they can now start to respect those rules a lot more. They need an international system that works to achieve their objectives. They know that what President Trump is doing right now threatens this. Xi Jinping has talked of chaos and going back to the law of the jungle. By working with our partners—and I don't include, unfortunately, the Americans in that—we can force China to behave more properly.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Also one thing is that China opened their market for our farmers to export our canola oil.

[Guy Saint-Jacques]

Chinese consumers really like canola oil, and canola seed also is used in the agricultural sector in China. I think there are good possibilities there. You know, we were the first country to sell wheat to China under the Diefenbaker government against the wishes of President Kennedy in the U.S. I think there are other areas where we can export more of our products. The government should work on removing tariffs on pork from Quebec. Again, because there's a growing middle class, we could export more seafood and more good-quality Canadian agri-food.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

China is undergoing a shift in how it thinks about the domestic EV sector. How should Canada be reading those changes, and do they affect how attractive the joint venture opportunities under this arrangement are?

[Guy Saint-Jacques]

I said earlier that we have to look at the rules on Chinese investment in Canada. I think we are at the stage where we would benefit from attracting Chinese manufacturers to Canada, but we have to set the rules. We have to force them to gradually increase the Canadian content in their cars. For instance, after 10 years, they would have to have 100% Canadian content. This would ensure employment in Canada.

[The Chair, Liberal, Salma Zahid]

Thank you. The time is up.

We will now proceed to MP Blanchette-Joncas for two and a half minutes.

Please go ahead.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you.

Mr. Saint‑Jacques, on March 9, 2020, you told the Special Committee on Canada-China Relations that “no Chinese company can refuse a request from the Chinese government to provide information.” However, in 2024, the Communications Security Establishment Canada, the CSE, determined that China was the most active and sophisticated state-sponsored cyber-threat against Canada, particularly in terms of espionage and intellectual property theft.

As such, shouldn't we consider this arrangement to be a real risk—not only in terms of trade, but also in terms of security, data and technological dependence?

[Guy Saint-Jacques]

We make our own rules, but we also have to enforce them unequivocally. For example, when Huawei began exporting its products to Canada back in the 3G era, there was an arrangement with the CSE. It tested all Huawei products before they were put on the market to ensure that the Chinese government could not access the devices and, say, monitor conversations.

There are ways to prevent this kind of intrusion and data misuse. Canada has very sophisticated measures in place, but we must also be clear in our discussions with the Chinese and tell them that no threats or intrusions of this kind will be tolerated.

As I said earlier, more needs to be done to prevent Chinese interference and disinformation in Canada.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Mr. Saint‑Jacques, do you really believe that the government will get Chinese companies and the Chinese government to guarantee that they won't engage in espionage or data collection, particularly when people are using electric vehicles?

[Guy Saint-Jacques]

We know that China's success is largely due to the technology theft it has engaged in brazenly in virtually all sectors. However, I would reiterate that it's up to us to make the rules. I believe Canada is capable of preventing this kind of theft.

As Mr. Kovrig said, for EVs, we can impose conditions requiring that data centres hosting the data collected by Chinese EVs be located in Canada.

Here's something to keep in mind: My insurance company, Desjardins, knows exactly how I drive. I got a discount because I'm a good driver and I follow the rules. Telecommunications companies—

[The Chair, Liberal, Salma Zahid]

I'm sorry for interrupting. The time is up.