CIIT Committee Meeting

     I call the meeting to order.

    This is meeting number 16 of the House of Commons Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021.

    As per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during proceedings.

    I would like to make a few comments for the benefit of the witnesses and the members.

     Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. For those participating via Zoom, you have interpretation options at the bottom of your screen of floor, English or French. All questions have to be directed through the chair.

    I apologize to our witnesses. As you know, quite often on Mondays and Wednesdays the House has votes, which delays our getting the meeting under way. I apologize for that. Thank you all for being here.

    Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, March 21, 2022, the committee is resuming its study on trade opportunities for Canadian businesses in the Indo-Pacific.

    We have with us by video conference today, from the Business Council of Canada, Trevor Kennedy, vice-president of trade and international policy; from the Canadian Labour Congress, Lily Chang, secretary-treasurer, and Elizabeth Kwan, senior researcher; from Devinci Cycles, Maude Gauthier, strategic initiatives director; and from NioBay Metals, J.S. David, chief executive officer and president.

     Welcome to you all.

    We will start with opening remarks and then proceed with rounds of questions.

    Mr. Kennedy, I invite you to make an opening statement of up to five minutes, please.

     Thank you, Madam Chair and committee members, for the invitation to take part in this meeting on trade opportunities in the Indo-Pacific.

    Canada is an Indo-Pacific nation by virtue of its geography, history and strong people-to-people ties as well as business and trade ties. We must recognize that the Indo-Pacific region is critical to Canada's future economic growth, its economic security and its role as an advanced nation that is home to a range of leading international firms.

    Given how important trade is, we are pleased that the committee has undertaken this study on the Indo-Pacific region.

    I will first focus on growth. Most of the world's economic growth over the next several decades is projected to take place within the Indo-Pacific. The McKinsey Global Institute estimates that, by 2040, Asia will account for 50% of the global economy and become home to most of the world's middle-class consumers. Canada and Canadian companies cannot risk missing out on this enormous growth opportunity.

    On the issue of diversification, economic resiliency is a growing concern around the world. In some countries, this has given rise to calls for protectionism and nearshoring or onshoring. For a trading nation such as Canada, resiliency means something else entirely. Other than in a few critical areas, self-reliance is not a viable strategy for Canada. Our country must become more, not less, globally engaged with like-minded and fast-growing partners, including in the Indo-Pacific.

    On the issue of relevance, Canadian companies have a successful track record beyond our borders, especially in the United States. The United States will undoubtedly remain an attractive place to invest, but like Canada, its share of the global economy could shrink over the coming decades. It's worth questioning, therefore, whether continued success in America will be sufficient to be considered a global leader in the 21st century. Canada and Canadian companies must work harder to establish a meaningful presence where growth is occurring, principally in the Indo-Pacific.

    One way Canada can advance its regional interests is to release an Indo-Pacific strategy, and this should include a significant focus on trade and economic ties. Within that strategy, we believe that trade negotiations can play an important role in building a bridge between Canadian and Indo-Pacific markets.

    First, on the CPTPP, this has been a beneficial agreement for Canadian exporters, and we believe it can deliver even more opportunities through its expansion. We support ongoing accession talks to bring the U.K. into the framework and support the additional accession for any economy that can meet its high standards. Considering the potential value of new applicants, we see South Korea as a particularly important addition. We expect their application is imminent.

    On ASEAN, in our 2017 report “The ASEAN Advantage”, which we developed in partnership with the Canada-ASEAN Business Council and the Asia Pacific Foundation of Canada, modelling showed that a deal would result in significant trade growth and position Canadian firms to compete in this lucrative market of now nearly 700 million people. We welcome progress toward this goal.

    As far as a Canada-Indonesia CEPA is concerned, Indonesia will be one of the largest economies and most populous countries within a few decades. For now, however, it's an underdeveloped relationship. Just last week we had the opportunity to meet with representatives of the Indonesian business community, KADIN. I can say that both business communities were optimistic about the opportunities and believe a bilateral deal can enhance our growing relationship.

    Now I'll discuss India, the CEPA and early progress trade agreement. With growth exceeding 8% this year, India is projected to be one of the fastest-growing economies in the world. While it's been a challenge to advance trade talks in the past, India has recently shown openness toward a different approach in pursuing trade deals with advanced economies, including Australia, the U.K. and the EU. To ensure Canada has an advantage in the market, we welcomed the agreement to relaunch CEPA talks and to consider an early progress trade agreement to unlock opportunities in the near term.

    Looking to other frameworks, Canada should closely monitor and assess if its participation in other frameworks could be beneficial, including the Regional Comprehensive Economic Partnership.

    Canada should also closely follow the forthcoming U.S. Indo-Pacific economic framework. We understand that this initial framework will not include Canada or Mexico, both of which are Pacific nations and were part of the original TPP with the United States as well as now members of the USMCA. There could be a risk for Canada to remain on the sidelines of this potentially important regional economic framework that will include our key partners in the region, including many CPTPP countries and our most important trade partner, the United States.

    To conclude, the Business Council of Canada supports a comprehensive economic strategy with an ambitious trade agenda. It's critical that our country move quickly and in partnership with industry and other stakeholders to ensure that we don't miss out on opportunities.

     Thank you. I look forward to answering your questions.

    Thank you very much, Mr. Kennedy.

    Please go ahead, Ms. Chang.

     Good afternoon, Madam Chair and committee members. Thank you for the opportunity to speak today.

    My name is Lily Chang. I am the secretary-treasurer for the Canadian Labour Congress. I am joining you today from the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples, known as Toronto. My pronouns are she and her.

     The Canadian Labour Congress advocates on national issues on behalf of three million working people. We speak on behalf of workers in all sectors of the economy across Canada. These workers contribute directly to trade, from production to manufacturing to transportation, as well as at ports that ship and receive goods.

    Given that trade negotiations in the Indo-Pacific region only just recently started, my comments today will be general and will highlight labour's priorities for trade in the region.

    First, let me quickly lay out some thoughts on the context of the trade negotiations for the region. Globalization based on economic efficiencies has clearly made countries vulnerable and less resilient to major disruptions such as the pandemic, the war in the Ukraine and the zero-COVID lockdowns in China.

     The ongoing and cumulative effects of these global events have been profound. There have been disruptions of the global economy and global supply chains, increased isolationism, setbacks in labour standards resulting in immense human suffering, breakdowns in social cohesion and growing inequality, especially for the most marginalized and vulnerable in our societies.

    It is even more important now to have effective mechanisms in trade agreements and trade policies to enforce sustainable development commitments and to uphold and promote strong labour, social and environmental standards and protection. We need resilient and sustainable social, economic and cultural systems that foster social cohesion and collective prosperity through a human-centred recovery, in line with the ILO global call to action.

     Canada’s trade agreements must be coherent with domestic policy priorities and, at a minimum, contain a strong, enforceable labour chapter that includes but is not limited to the protection of the fundamental principles and rights at work in the ILO Declaration on Fundamental Principles and Rights at Work, 1998; as well as the eight fundamental ILO conventions that include Freedom of Association and Protection of the Right to Organise Convention; Right to Organise and Collective Bargaining Convention; Forced Labour Convention and its protocol; Abolition of Forced Labour Convention; Minimum Age Convention; Worst Forms of Child Labour Convention; Equal Remuneration Convention; and Discrimination (Employment and Occupation) Convention.

    Next month the ILC will discuss adding occupational health and safety to those fundamental principles and rights at work.

    This must also be central to Canada’s trade priorities: combatting forced and compulsory labour, and child labour in the supply chains; addressing violence against workers exercising their labour rights, including single instances of violence or threats; ensuring that migrant workers are protected under labour laws; ensuring non-discrimination in employment on the basis of sex, including sexual harassment, pregnancy, sexual orientation, gender identity or gender-based wage discrimination; and ensuring decent conditions of work with respect to minimum wages, hours of work and occupational health and safety.

    The CLC also supports other domestic policy priorities in trade negotiations including strong environment and equity commitments.

    We were heartened to see that the trade objectives for Indonesia and ASEAN included comprehensive and enforceable labour commitments, comprehensive and enforceable environment commitments, dedicated provisions on trade and gender, and dedicated provisions on trade and indigenous peoples.

    Trade agreements have real impacts and consequences for workers, their families and their communities. Workers must not be displaced from their jobs from increased labour mobility and outsourcing, local food security and production as well as local industries must not be undermined, and workers’ rights, including migrant workers’ rights, must be protected.

    Fundamental human and labour rights, equity and environmental protection must be integral in trade negotiations. Canada must model internationally fair and human-centred trade agreements that are strong, comprehensive and enforceable for our common prosperity.

    Thank you for this opportunity to present workers' views today. We look forward to questions from the members.

    Thank you very much, Ms. Chang.

    We go on to Ms. Gauthier for five minutes, please.

     Hi, everyone. Good afternoon.

    Thank you for giving us the chance to speak on this committee. I'm here today to present a situation that we think is unfair regarding customs tariffs in Canada.

    To give a bit of our background, we are Devinci Cycles, a proud Canadian bicycle manufacturer. In fact, I'm pretty sure we are one of the last big manufacturers in North America in terms of units made every year. We make over 20,000 bicycles per year here in Saguenay, Quebec. The biggest growth opportunity in our industry is the electrification of the bicycles. To give you an idea, they are actually around 10% to 15% of our sales this year, but in two or three years they will represent around 40% to 50% of our sales. The trend is clearly visible in Europe.

    For your information, a company that buys a complete bicycle made in a foreign country will pay import duties of about 13%, as planned in the Canadian harmonized system, which is the business model most of our competitors use and that we use, as well, for entry-level bicycles in order to stay competitive.

    However, we do more than that. We import bicycle parts and components that are used to make bicycles, like the brakes, wheels and carbon frames. We pay the duty on every single component according to the CBSA regulations, and we assemble these bicycles here in Quebec.

    We even go further. We buy aluminum extrusions from local providers in Canada or import some more complex hydroform extrusions. We make the bicycles from these raw tubes to an aluminum frame and then assemble it. If you've ever ridden a BIXI in Montreal, you've had a ride on a product that is 100% made in Quebec.

    Until now, all is a good and fair, but when we are making electric bicycles, the game changes. The company I spoke about, which only imports full bicycles from overseas, benefits from the preferential tariff of 0%, as stated in the harmonized system. On our side, we pay the duties on every single component we import, but because of some sentence constructions, we also pay duties on the second-most expensive part of our bicycle, which is the battery. We pay tariffs on it.

     For every other person or company, importing bicycles is duty-free, but for us, as we want to promote quality jobs in our area—and that is an important mission for us—we have to pay the duty on those batteries, which are benefiting from the preferential tariff as full bicycles. This situation is upon us because our main battery provider is Shimano, which is a company based in Japan, but they do make their bicycle batteries in those countries we are talking about today in southern Asia.

     Because we cannot have a certificate of origin, we cannot benefit from the preferential tariff. That directly impacts us. We think this kind of grey area between the preferential, the HS code and certification of origin is impacting us.

    I'm happy to answer your questions.

    Thank you very much, Ms. Gauthier.

    We're on to Mr. David, please, for five minutes.

    Thank you, Madam Chair.

    My name is Jean‑Sébastien David and I am the president of NioBay Metals. NioBay is a mining company listed on the Toronto Stock Exchange. We are recognized for our work on the extraction of two critical and strategic metals: niobium and tantalum.

    We have two projects in Ontario in the James Bay Lowlands, and another in Quebec, the Crevier project, where two metals, tantalum and niobium, are found in a single deposit. The deposit was discovered in 1974, and I am here today to tell you that this project will come to fruition purely because of developments in the battery industry. The advances that Toshiba and Echion Technologies have made in recent years have meant that, in the last two years, we have put time into resurrecting this project. The objective is to extract 1,500 metric tonnes of niobium oxide and 125 tonnes of tantalum oxide per year.

    The Philippines, which are included in your list, are interested in tantalum. I would point out that another country is interested as well, but it is not on the list: South Korea. That country has been a big consumer of niobium for several years now. It uses it in its steel mills. So it's important that you add South Korea to your list.

    Niobium is actually a relatively rare element. There are only three mining sites producing it on the planet. Two sites are located in Brazil and the third is in Canada. The entities in Brazil are China Molybdenum, which is 100% owned by China, and CBMM, a family corporation 25% of whose shares are owned by China. It is therefore logical for there to be a purely Canadian product.

    The considerable progress that has been made in respect of niobium batteries relates primarily to recharging capabilities, that is, charging speed. They can take a lot of recharge cycles and they can also function better at very low temperatures. We first saw these batteries on the market a few years ago now. For batteries made of niobium anodes, it was about three years ago. At this time, however, we are seeing the development of batteries made of niobium cathodes.

    For tantalum, as I mentioned, the Philippines would be buyers. The main production of tantalum is in the Democratic Republic of the Congo.

     Mr. David, excuse me for interrupting. Our translators are having some difficulties. Could you adjust your microphone?

    Please go ahead, Madam Clerk.

    Mr. David, the microphone icon has maybe not been selected.

    Can you check it?

    It should be working.

    I can continue in English, if you want.

    Can you hear me better?

     Try that again, please, Mr. David. You can start again with your time.

    Okay.

     Again, I am representing NioBay Metals, which is based in Montreal. We're playing with two special metals, which are niobium and tantalum. Those are critical metals for our economy. We call them green metals. Niobium in particular creates an alloy with steel. It allows the steel to be a lot more flexible. Adding niobium to your steel will allow you to have more capacity when you have different temperatures. That's why in new construction, new buildings, new skyscrapers, new bridges, everything other than pipelines, they're using steel with added niobium.

    We do have a few projects in Ontario and mainly one in Quebec. One was discovered in 1974 in Quebec, and it has critical—

    Madam Chair, the interpreters are saying it isn't any better. We have the reverse problem in the other language: we can't get the interpretation into French, or it is making it difficult.

    Mr. David, could you just hold on again.

    Mr. J.S. David: I didn't change anything.

    The Chair: Sometimes there are ghosts in the room that create things, but we have to ensure that we have accurate translation for all of the members.

    I understand that.

    We will suspend for a minute while the technician tries to sort this out.

     I'm calling the meeting back to order.

    I'm going to suggest we start with the questions from the members. When Mr. David's connection problems have been resolved, possibly we can go back to him and give him a couple of minutes to get him on the record.

    We will go to Mr. Martel for six minutes, please.

    I'd like to thank the witnesses for being with us today.

    Welcome to the committee, Ms. Gauthier.

    On a point of order, Madam Chair, are votes not being called?

    Yes, they are, but we can continue for 20 minutes if everybody is in agreement.

    Is everybody in agreement that we continue for 20 minutes? Then we can vote from our app here in committee or wherever you're stationed, so we don't lose too much time. The clerk will keep track of the time for us.

     Everybody's fine with that.

    Thanks for raising that, Mr. Masse.

    Mr. Martel, we'll go back to you.

    I'd like to welcome you to the committee, Ms. Gauthier. I'm very pleased to see you here and to shine the spotlight on a manufacturing company that is well known where I'm from.

    Does Devinci Bikes export bicycles or bicycle parts to the Indo-Pacific region?

    At present, we have business relations with countries in the Indo-Pacific region. They are suppliers to us, and have been for over 30 years. Because the bicycle industry is very specialized, it's a market that has developed there. The suppliers have now become very specialized.

    We don't really sell bicycles there, but we do business with a number of suppliers in those countries.

    Ms. Gauthier, can you tell us what the main countries you do business with are?

    Vietnam and Taiwan are the main countries. We also do business with small countries in that region, such as Myanmar and Cambodia.

    How do you think the government can facilitate exports?

    Are you talking about importing parts into Canada?

    That's right.

    The most important thing would be to do an analysis of the rules in the harmonized tariff code. At present, we run up against a law that was written several decades ago and has not really been updated. That causes us problems, particularly when it comes to SH codes.

    For bicycle electrification, which is projecting into the future a bit, we find that the law is not up to date. It hasn't been revised in quite a while.

    Thank you, Ms. Gauthier.

    Mr. David, I'm pleased to see you again.

    You have a promising project for extracting metals that are needed for the development of the battery industry, which the government is making so many promises about.

    Mr. David, if your projects come to fruition, would the main market for your metals be Canadian or would there be more opportunities for exporting to Asia?

    I understand it is difficult to carry out your projects at present.

    How do you explain the government investing so much money in the battery industry while we are still unable to get on with exploring natural resources, mining minerals, and manufacturing batteries in Canada?

    Exploration is feasible, actually. It isn't complicated to find critical and strategic metals like copper and nickel, and it's easy to produce them.

    For niobium or lithium, the difficulty lies in the metallurgy: the metal extraction stage and the oxidation stage. That difficulty is also present for several critical and strategic metals. So what we have to do is find an economic recipe for carrying out these processes. I would say that Canada may not be putting enough effort into it, in that regard. It is investing a lot of money overall, and there is assistance for exploration. But where there is almost no assistance is in refining. For the moment, no effort is being made on refining. It's an unoccupied market. I have been asking the Quebec government for assistance on this aspect for 12 years. I think the Canadian government could provide assistance.

    A few weeks ago, the government announced assistance for exploration. However, there is no assistance for design and innovation, and that is what battery suppliers need. For that, it's cold hard cash that has to be found on the market.

    Thank you, Mr. David.

    Ms. Gauthier, you talked about problems associated with the tariffs applied to batteries, which means that your bicycles are not very competitive in comparison with importing a complete electric bicycle.

    Have you received any assistance from the trade commissioner service or other government bodies?

    We haven't received any assistance.

    In fact, we have approached the MEQ, Manufacturiers et Exportateurs du Québec, and EDC, Export Development Canada, but they didn't really have the powers that are needed to change things.

    We run up against the Canada Border Services Agency. It refers us to the act, which, as I said, has not been updated for some time. So we don't have any assistance, and the current message—

     I'm sorry. I have to interrupt. I tried to get as much information as I could.

    We have Mr. Virani, please, for six minutes.

    Thank you very much, Madam Chair.

    There are a number of things I want to cover, but I want to start with Mr. David.

    I'm very pleased to hear your testimony, Mr. David. Please forgive our technical problems.

    With respect to critical minerals, you mentioned that niobium, in particular, provides longer recharge capacity than existing batteries, and that batteries with that type of critical mineral can have a longer life in colder temperatures.

    Have I understood that correctly?

    That's right.

    It's thanks to the progress made by Toshiba; it isn't science fiction. Toshiba already has three types of niobium batteries on the market. That company is taking the market by storm—a market that will probably be very specialized—because of the speed with which the batteries charge.

    It's a fast-charging battery that can be used, even if it's -30°C.

    As well, its popularity is also attributable to the battery's larger number of cycles. Echion is currently working with Amazon on the robots used in their warehouses; these robots have to be charged quickly and often. They use niobium batteries.

    If I could continue with Mr. David, you mentioned some of the investments that we announced in the last few weeks. Even today, the Prime Minister and Minister Champagne announced a venture with Stellantis of $3.6 billion for greater production of zero-emission vehicles here in Canada. That is undoubtedly a good sign for the environment and a good sign for the Canadian economy.

    What you were saying to Mr. Martel is that you see that we need to be involved in the end production of the cars and the exploration of the minerals, but also in the refinement of the minerals.

    Would you identify whether there are other nations that are leading the charge in investing in the refinement of the minerals? Are there any that you would identify as a best practice? Can you give us some input on that front?

     First of all, actually, I have people working on that, so they're doing some samples for Toshiba and Aecon, and what we're trying to do is perform and produce the oxide in the greenest way. We've been working on that for the last year and a half, and that's our money. We were not able to get anything from anybody, and that's fine.

     I will say that my competitors elsewhere in the States are getting subsidized or some help or a program, so I wish to apply for some of those new programs. I know Mr. Ford has made some announcements. Again, I think we have...and Quebec, Ontario and everybody has put a lot of money in at the beginning and the end, but in the middle, there was nothing. On the refinery side for the smelting and trying to find the best way to do it, there was no money. Again—

    Mr. David, can I ask you something very specific? I think there are around 30 critical minerals, and you were talking about two of them. Do all 30 of the critical minerals require the investments in the refinement that you're talking about, or is it only tantalum and niobium that require this refining?

    Big time. Lithium is a very good example as well. You need to spend a lot of time to find the right recipe because every rock is different. People think it's lithium, so it's easy. You know the recipe, but usually you cannot apply it. You can take, let's say, the main recipe to produce it, but you need to adapt, and every rock is different. That's why it's so complicated to try to find the right recipe and why you need to spend time and money on that.

    Thank you.

    I would ask some questions of Ms. Chang and Ms. Kwan in my remaining time.

     Thank you for your input from the Canadian Labour Congress. The former head of the Canadian Labour Congress is my constituent, Mr. Yussuff, who's now a senator. It's great to have you here. You mentioned your gratitude for the strong environmental, labour, trade and gender, and trade and indigenous rights enforceable chapters in terms of what we put on the table in our approach to negotiating with Indonesia, and that is obviously a springboard off of what we did successfully with CUSMA.

     Can you identify any potential areas that you would see as challenges on labour, on the environment, on trade and gender, and on trade and indigenous with respect to the various members of ASEAN? There are a number of nations among the ASEAN group. Do you see any obstacles or hurdles we should be aware of as we embark on that kind of approach with all of the members of the ASEAN group?

    It's over to you, Ms. Chang.

    Thank you very much.

    I'm going to ask our senior researcher, Elizabeth Kwan, to address your question.

    Thank you.

     Thank you very much for your question, Mr. Virani.

    Yes, there are some issues. We've had a first round debrief from the government on the negotiations with Indonesia, and the long and short of it is that the template of what we want in comprehensive trade agreements is very much North American or EU-centric, and many of the countries in the Indo-Pacific region do not negotiate strong labour, environment or inclusive trade chapters. That is basically the short answer to the question. It's not just Indonesia. It would be a lot of the other countries as well.

    Thank you very much.

    We go now to Mr. Savard-Tremblay for six minutes.

    Thank you, Madam Chair.

    Hello to all my colleagues.

    I'd like to thank the witnesses for their testimony, which will be of help to us as things progress on this potential agreement.

    My question is for Ms. Kwan and Ms. Chang from the Canadian Labour Congress.

    Some experts have said that since the beginning of this crisis, child labour has been increasing in Malaysia and Indonesia, two countries that are part of the Indo-Pacific region.

    Is your analysis the same?

    If so, what would the consequences be if there were to be a trade agreement?

     Certainly a number of the countries in this region are of concern to us. All kinds of workers' rights are not adhered to. Certainly the conventions of the ILO are not respected as well.

    I'll turn to Elizabeth, who can probably provide some more details.

    Thank you for your question.

    One thing we have to recall is the recent cancellation of PPE from Malaysia that Canada initiated due to severe concerns about the use of forced labour.

    There's also child labour involved in many agricultural endeavours, although it's always a to and fro. For instance, there are often discussions about how seed production uses a lot of child labour to produce seeds that actually get commissioned by big seed companies with headquarters in Europe or North America. That's an example.

    There are a good number of children who do perform a lot of labour, which would be unacceptable to us in Canada.

    What sectors are most affected by this dual scourge of forced labour and child labour?

    The sectors involved would be numerous. It really depends on the country. You're talking about a whole region, but I would say that in agriculture, in textiles, in mining.... There are all sorts of sectors that involve either forced labour or child labour. Of course, not every company does this, but definitely it's a lot more prevalent than in Canada.

    I think that the concerns in these sectors about forced labour and child labour are represented by the commissioner we have, who looks at these critical areas and sectors in trade.

    Some studies say we should even get ride of the famous “fair trade” label. Even in that case, it seems that child labour and forced labour are still widespread.

    Do you give the same warning?

    Yes, we do. The same would apply for not just child labour and forced labour, but also for the greenwashing of environmental labels as well.

    Supply chains are very complex and deep, so to actually be able to verify that there is no child or forced labour or greenwashing of environmental labelling is doable, but very difficult. It is something that Canada pursues as a policy.

    In the negotiations and talks regarding a potential trade agreement, which might be done, concretely, to impose requirements or establish adequate verification mechanisms to avoid doing business with companies that engage in greenwashing, as you said, or that put children to work, or force people to work?

    I certainly think that the first thing to do is, when we're negotiating those agreements, include in them that they are required to abide by the ILO conventions. Then of course there needs to be monitoring.

    What's in writing is not always what actually happens on the ground, but we need to start off with actually having the words in the contract.

    Thank you very much.

    We'll go on to Mr. Masse for six minutes.

    Thank you, Madam Chair.

    Thank you to the witnesses.

    Ms. Chang, maybe I could follow up on that. You're asking specifically that it be written into the agreement, similar to what we have in the new Canada-U.S.-Mexico agreement—the USMCA or NAFTA 2.0 or whatever you want to call it.

    One of the problems we've had in the past is that, when we've had environment and labour outside the agreement, they're separate chapters that aren't enforceable. Are you asking for it be written into the context of the agreement, so it's not like a satellite orbiting around, which is independent and unenforceable?

     Absolutely. If we think these things are important and important to Canadian workers, they're important to the workers in the countries that we are contracting with. We want them to be part of the main agreement, so that they're enforceable as well.

    We focus on the environment and labour, and part of labour has been child labour. Do you know if there's been any thought or consideration of having a separate chapter on child labour? That's one of the things that gets overlooked at times.

    I'm wondering at this point in time, especially with some of the countries we're dealing with here, whether having a separate agreement on child labour might bring more attention. I throw that out there as a possibility.

    If it's something that we are concerned about, and we think it might be stronger to have a separate chapter on child labour, then it's a good idea to do that. Definitely, whatever protections we can put in place.... We want to have these agreements with Indo-Pacific countries, and whatever is strongest in making sure that workers there are protected would be a good idea.

    I'd like to follow up with either Ms. Kwan or Ms. Chang on an issue I've raised that even with our own departments didn't have a good answer for, in my opinion. It's about the sales and agreements related to arms manufacturing. Some of these countries have some issues with regard to civilian populations and use. I don't like where some of Canada's small arms and larger arms have gone. I'm wondering if there's been any thought with regard to that.

    I've been trying to determine where in the process to flag this as an issue as we go down the road. It doesn't appear to be one that comes up independently.

    Do you know if any thought has been given to that? I'm really interested in that.

    Elizabeth, do you want to go ahead with that?

    Sure. Thank you for your question.

    Specifically, as far as I know, I don't believe that any of our trade agreements have that specific mention of arms or arms production. I know that sometimes—not arms production necessarily, but on a segue I'm adding a bit here—the production of goods gets, how shall I say, laundered. The country that has high emissions or poor labour standards would then export to another country that is acceptable under our rules, our trade agreements and that sort of thing.

    Again, it is something that Canada is very serious about in all of those respects. Whether it's arms or the production of other things, we have to be very diligent in terms of strong trade agreements, and we have to be able to follow up, monitor and enforce when we see that something is not in compliance.

    Really quickly, to Mr. David, I was at the Stellantis announcement today. It was a very good announcement. We've been after this for a while, so it's really positive.

    We haven't talked much about battery recycling and it's one of the things where there's an opportunity. Have you been involved in any of that? Do you have any suggestions for how we could advance on battery recycling? That seems to be something that is missing from the equation of the whole plan right now.

    I can tell you, sir, that it has to be part of the equation. In my presentation, I have the full cycle from exploration to recycling.

    For now, for us, what we know how to do is the exploration, producing the oxide and producing the precursor for the battery people. This is our field of expertise. There is no doubt we need the full cycle here in Canada.

    I'd hate for this to become what we have for plastics—exporting that to the Philippines and other places because of a lax following of treaties that we've signed. I don't want to be a producer of batteries and then dump them into third world countries. We have to get in front of this and not try to play catch-up.

    I fully agree.

    Thank you, Madam Chair.

    We have two minutes until the start of the vote. I'm asking for some direction from the committee. Do you want to suspend? We can all vote here with the vote app and then resume our meeting, or we can adjourn. What is the desire of the committee?

    We're certainly going to vote. Do you want to continue with our meeting after the vote? We can vote right here.

    I'll suspend the meeting, and then I'll resume the meeting. Is everybody okay with that?

    Are you, Mr. Savard-Tremblay?

    Personally, I agree with that, Madam Chair.

    If there is still a half-hour of meeting left after the vote, that will leave us time to conclude the discussions with these witnesses.

    Okay, I'll suspend the meeting, and we will resume after the vote.

    If we all want to vote right from here or wherever you are, as soon as everyone has voted, we don't have to wait the 10 minutes. We can resume as long as all of our members have been able to vote without any problem.

    I'm okay with that, Chair.

    The meeting is suspended.

     The meeting is resumed.

    We'll go to Mr. Martel for five minutes, please.

    Mr. Masse is not on yet.

    We're waiting for Mr. Masse for one moment. There you are.

    Okay, Monsieur Martel, you have five minutes, please.

    Thank you, Madam Chair.

    Mr. David, I believe that Canada absolutely has to secure Canadian supply of critical metals in order to limit China's and Russia's hold over this market.

    Can you tell us how competitive Canadian mines and Canada's mining potential are?

    I'll give you an example.

    At present, China is buying niobium oxide from Brazil, where one of the mines is actually 100% Chinese. China buys niobium oxide in the form of ferroniobium and converts it in order to obtain various products made of niobium. Those products then come back to North American markets.

    What we want to offer is an additional option, a completely North American option. That is our reason for being, if I can put it that way.

    Canada has adopted good environmental standards. I have always been very proud to work in the Canadian mining industry, because our methods, the way we do things, in terms of production and exploitation, are much better than those of a number of countries on the planet. In my opinion, we have to be proud of that. It is a trademark we absolutely have to promote. We need to put our money on what distinguishes us in this field.

    In my opinion, tantalum will be the first product we get to market. The fact that it is made in Canada is a demonstration that we do things very differently from Rwanda or the Democratic Republic of the Congo in terms of mining. It is very much in Canada's interest to promote what is done here, and how it is done.

    If Canada could start these projects faster, what do you think would be the impact if there were to be an Indo-Pacific free trade agreement?

    As I was saying, South Korea has been in touch. We know that that country has a strong interest in niobium produced here in Canada.

    For tantalum, I mentioned the Philippines. The Philippines would be a buyer for certain products.

    We mustn't forget that Canada also has know-how. It isn't just the product that we can sell, it's also our know-how. I think that has to be taken into account.

    As for the relative slowness in implementation, whether for us or for any other project, that is always a challenge. Previously, we said there was a gap of ten years between discovery and implementation. Today, we talk about 15 years.

    Throughout my career, I have seen the number of years it takes to implement a discovery. Getting to a discovery is exceptional in itself. But it's a big challenge to advance to the implementation stage. I can assure you that it takes hard work.

     I'm sorry, Mr. Martel. You have nine seconds left and you can't squeeze that one in.

    Mr. Miao.

    Thank you, Madam Chair.

    Thanks to the witnesses for attending today's session.

    I'd like to direct the following question through the chair to Mr. Kennedy.

    Considering a large percentage of the Canadian economy is comprised of SMEs currently, are Canadian small and medium-sized enterprises competitive in the ASEAN region, and to what degree would a signed free trade agreement improve Canadian industries' ability to compete?

    Although our members largely represent larger firms, we're obviously big supporters of Canada's SME economy. We work hand in hand, and many of the suppliers of our member companies are SMEs.

    One of the things we support—and I know it's a priority of the government—is finding ways to enhance opportunities for SMEs. Trade agreements do provide an opportunity, a bridge. It's where they can lean on the trade commissioner service. They have a lot of resources available, other tools to help navigate some of these markets and opportunities. Generally speaking, there is a lot of opportunity for firms of different sizes with different markets in the Indo-Pacific.

    To follow that question, how can Canada navigate the investment protectionist challenges in the Indo-Pacific region?

    It really depends on the agreement. We know that in the CPTPP we do have investor protection. We may see that in other agreements as well. It really depends on the partner—in the context of working with India—whether that's a separate agreement or a FIPA.

    I would just say that Canada is a major investor in the region, with varying levels of investment, and Canadian investors do benefit from those types of protections and using the new model that Canada has developed. I understand there has been quite a development in the way we approach our investor protections that takes into account concerns of the past. That certainly seems acceptable in a wide range of agreements, but it really does depend on the partner and the country.

    I just want to point out and raise, too, that in discussion about the Indo-Pacific, while we're discussing the region as a whole, we're dealing with a lot of different countries at different levels of development and different trade profiles, so it can be difficult to generalize at times. However, as a whole, we do see a lot of opportunity and it's worth noting that there are different markets with different opportunities for Canada.

    Thank you for your comments.

    Can you share a little bit more from the perspective of Canadian firms? What should their priorities be in a trade agreement with the ASEAN region or with other regions like South Korea or Taiwan?

    I'll start maybe with South Korea first, because it's a country that we've been more focused on recently, working with our partners in Korea. The Federation of Korean Industries and the Business Council will be releasing a report soon that highlights some of the mutual opportunities we see between Canadian and Korean industry.

    It's a really unique relationship where, rather than the case of our importing or exporting, we're looking at partnerships between our industries. There are great opportunities. There is a lot of opportunity in Japan. It's very similar.

    Looking at ASEAN, or India for that matter, we're looking at how Canada can compete with some of our peers in the world. Australia is very aggressive. The U.K. is very aggressive. The EU is very aggressive. We do need to look at what they've been able to accomplish in their trade agreements to apply some of the standards that we've updated through our more modern trade negotiations.

    Ultimately, it's to ensure that Canada has the footing it needs to compete, and there we need to be cognizant that there are other countries that are competing for those markets. We want to make sure that Canada is the best place to export from to that region.

    How would a trade agreement like this benefit Canadian firms and workers? Are there any particular sectors or provinces that would expect to benefit from this trade agreement?

    Looking at Canada's traditional trade flows, we do have a lot of agricultural exports. Certainly workers in those sectors and industries have benefited, and in Canadian natural resources as well. We've seen a lot of interest in Canadian manufactured products. In addition to that, we have a lot of services that Canada exports to the world. As a whole, the data generally shows that trade has been good for Canadians. Trade-exposed industries generally have higher incomes and there are a lot of opportunities for trade for Canadian workers.

    Just to touch upon some of the points that have been raised before about labour standards, we have been able to put in some high labour standards in modern trade agreements, including in the Indo-Pacific CPTPP, including some important additions to that agreement. Certainly in the USMCA we may be able to apply some of that to our trade agreements in the region, subject to certain partners, and certainly that can help to protect and lift standards for workers in that part of the world.

     We'll go to Mr. Savard-Tremblay for two and a half minutes, please.

    Thank you, Madam Chair.

    My question is for Ms. Gauthier from Devinci Bikes.

    Ms. Gauthier, Devinci Bikes promotes bicycles, which are an ecological mode of transportation. We know that some countries in the Indo-Pacific region have come on board when it comes to carbon neutrality and that Quebec has been able to promote its expertise in sustainable development to those countries. We already know that there will eventually be some opening, a market to exploit, over there.

    Do you position your products as being probably and potentially useful in the context of that kind of transition?

    If you didn't know, I would note that we are the bicycle producer for bicycle sharing company PBSC, which was recently sold to Lyft. Our bicycles fit with those values. We actually have nearly 100,000 bikes in bike-sharing systems in cities, to stimulate micromobility and reduce travel by car.

    For those 100,000 bicycles, we are asked to make sure that our product will last for at least ten years, if memory serves. In fact, no bikes have been returned during the warranty period. We guarantee the durability of our products. Of course, we have acquired expertise in this realm over the 12 years and more we have worked with PBSC.

    A little earlier, you also talked about the difficulties you have had over those years. And we thank you for that, because it will help us do our work for this study.

    Do you think you have received enough support, enough back‑up?

    Have you been kept well informed about business opportunities and ways of developing your market in that region of the world?

    We can develop our bike-sharing market, but that is not where the problem we are facing lies. We have not received any support from the government when it comes to batteries.

    The message we are sending the government is that we can manufacture our bicycles in Canada, but it won't help us with the tariffs on batteries. Without going into details or talking about the fine points of the problem, I can say that this is more or less the message we are getting from the government.

    Thank you very much.

    Mr. Masse, you have two and half minutes, please.

    Thank you, Madam Chair.

    Going back to some of the enforcement measures for the agreement, Ms. Kwan or Ms. Chang, do you have any examples of any other enforcement that has taken place? That's one thing that we are going to struggle with. I'm wondering, under the current agreements that are in place for oversight of labour, if child labour and other things have had some real marks of success to ensure that, when things are agreed upon and then broken later on, there's been a halting or a suspension of certain trade to ensure accountability.

    Elizabeth, go ahead, please.

     I would say that, with our biggest trade partner, the U.S.A. and the CUSMA, we've seen much of that enforceability at work. In fact, we've seen not only state-to-state dispute settlements, but we've also seen a number of the rapid response labour mechanisms come to play. Those are the real examples of what enforceable chapters in trade agreements look like.

    We don't have enforceability under CETA. For instance, we have very good standards under CETA for labour, for environment and for inclusive trade, but they're not enforceable. There's really no kind of ability to address non-compliance.

    In terms of what we're seeking, I'd like to just say that there are many things that are different now than they were when CETA was developed as an agreement. We have so many global, life-changing events that, in fact, we need to have a much more collaborative, much more resilient—not just sustainable but resilient—trade agreement between two countries and between Canada and ASEAN, for instance.

     I know that I'm running out of time here. The bottom line at the end of the day is that it has to be written into the agreement. Otherwise, it's just public shaming at the end of the day, which doesn't go very far.

    That's correct.

    It's written into the agreement. You just gave a perfect example of what we have “new” versus what we've had in the past.

    Thank you very much. I know I'm out of time, Madam Chair.

    Thank you, Mr. Masse.

    We have Mr. Baldinelli for five minutes.

    Thank you, Madam Chair, and through you I'd like to go to Mr. Kennedy.

    In terms of these negotiations, he alluded in his testimony to the nuances that are required as part of any different trade negotiation. In terms of the two negotiations that would be taking place with Indonesia and then the ASEAN countries, what areas would Canada be most sensitive to in terms of the impact that it would have on Canadian companies?

    Would it be certain areas, for example, like clothing or textiles? I'd like to get your opinion on that, and secondly, in the areas where we could most benefit.

    Thank you for the question.

    They're very important negotiations, where sometimes there is some overlap, but there are also unique elements to them as well. In the case of Indonesia, we were able to launch negotiations, and we certainly supported that process initially, because we were having difficulty launching our ASEAN talks. Both negotiations have a value, and Indonesia in its own right is a very important country. We can do things differently, as the Australians were able to do with their agreement with ASEAN and with Indonesia.

    As for sectors, truly I'm not as familiar with some of the sectors that would be affected. We've conducted some economic impact assessments in the past for ASEAN in our report, which now would be dated in 2017, so I do apologize that the data may no longer be up to date. We did see a lot of opportunity for a lot of our traditional sectors. As I noted as well, one of the areas where Canada's done really well is in the services sector in southeast Asia. We have a very strong presence of Canadian firms in the insurance industry, for instance—a long-standing presence and a very successful presence in some of these markets. That's something I'd like to point out.

     The opportunities are obviously quite broad as well. Looking at digital trade is one area that's growing, and there's another trade agreement that's also in place. It's more of a plurilateral negotiation with a digital economy partnership agreement based in Singapore. That's another opportunity to establish some standards for digital trade somewhere where Canada is well positioned to compete, and there's tremendous opportunity with the quickly emerging digital economy in southeast Asia.

    There are three different trade negotiations I referenced. The Indonesian negotiation is important. It's something we may be able to negotiate in a shorter time frame and more tailor-made for a very important relationship, but we should also be aware of the importance of ASEAN and the interconnected nature of that regional supply chain and the large amount of global interest in that supply chain there, ensuring that Canada can at least be plugged into it to a certain capacity.

    I'd like to take that same type of question to the representatives from the Canadian Labour Congress, Ms. Kwan and Ms. Chang. Again, in terms of these negotiations with these two countries, specifically Indonesia and the ASEAN countries, what areas would Canada be most sensitive to? In terms of the impact of labour standards and environmental standards, how might that impact or challenge these discussions in your view?

     Elizabeth, go ahead.

    Thank you very much for your question.

    I would say that, in many of these countries, they are still developing and many of their labour standards are not the same as in Canada, the U.S. or the EU. That is just the reality.

    We don't want to harm workers whether it's Canadian workers or workers in those countries. We also have to respect that there's a lot that happens in Indonesia, ASEAN, India, South Korea and Taiwan that we're not as aware of, because we don't consume the news as much as we would the North American or the EU news cycle.

     There's a lot that goes on, and it's very different because ASEAN is 10 countries. Indonesia is one of them. CPTPP has four of those countries from ASEAN, and then RCEP has 15 countries, of which there's another subgroup. There is a lot of complexity to it, but I don't think we should ever forgo lower labour standards for Canadians going into these trade agreements. What are we trading for, if not for the mutual prosperity of peoples from both those trading partners?

     Thank you very much.

    I'm sorry. You're 20 seconds over time.

    Ms. Dhillon will be our final speaker, please.

    Thank you, Madam Chair.

    Mr. Kennedy, have the members of the Business Council of Canada expressed their interest in a potential free trade agreement with Indonesia and ASEAN?

    If so, how would you summarize where you are in terms of investments?

    The investment climate in southeast Asia, I understand, is quite attractive. I know many large Canadian institutional investors have found a lot of opportunities there, and not exclusively in southeast Asia. Once again, there's quite a range in the individual countries within ASEAN.

     We're also seeing that a lot of businesses have a lot of interest in Singapore as one key hub for global growth. It's becoming a real magnet for investment and trade within the region, so broadly speaking, there's a lot of opportunity. There's some variation if you look at certain ASEAN economies.

     I had a chance to interact with the business community of Indonesia last week. There's a lot of mutual interest both from the Indonesian standpoint and the Canadian standpoint in investing and trading between our two countries.

    It's a very encouraging trend, and we think it will continue to grow with trade agreements and other tools to enhance those ties.

    Thank you.

    How could the potential free trade agreement with ASEAN eliminate certain tariff or non-tariff barriers that Canadian industries currently face in the region?

    One thing, certainly from a market access standpoint, is eliminating tariffs on certain Canadian exports, technical and non-tariff barriers as well. Just improving access for Canadian firms and ensuring that they have a level playing field is very important.

    Also, as I referenced before, on the digital trade side, it's important to ensure that there are important provisions around cross-border data flows and to ensure that our digital services firms have the ability to operate in the country to interact with our Canadian and regionally based industries.

     Trade agreements serve, I guess, an important role in that sense, but we've also seen with recent trade agreements something we refer to as the announcement effect. That's when a new trade agreement comes into force. We can actually generate additional interest and awareness for firms both in Canada and southeast Asia in doing business with each other based around a free trade agreement. That's something that we've been able to benefit from with recent agreements like the CPTPP and could benefit from with a Canada-ASEAN or Canada-Indonesia FTA.

    Thank you.

    To what extent would it contribute to diversifying Canadian supply chains if a free trade agreement were signed with ASEAN?

    Was that addressed to me?

    Yes.

    One thing we've witnessed is that there's a lot of movement towards southeast Asia right now, including in the context of the geopolitical uncertainty we're facing. There's a lot interest in operating in southeast Asia and a lot of global attention towards southeast Asia, so it's an opportunity for Canada to be plugged into those supply chains as they form.

    We believe that the path forward for Canada's trade diversification agenda is to champion trade growth and not diversion. Really, the extent that we can grow our trade and accelerate trade growth in parts of the world—and in southeast Asia principally—is beneficial for Canada. Trade agreements, once again, can assist in that process.

     Trade agreements are a bridge. It's up to businesses to cross that bridge, as our former trade minister used to say, but it's an important bridge for businesses to have.

    We're reaching 5:30. Does any member of the committee have any outstanding question that they must ask?

    All right. Thank you all very much.

    Thank you so much to the witnesses. We offer our apologies for the time that we lost.

    The meeting is adjourned.