:
I call the meeting to order.
Good morning, everyone, those online and those in person. It's always great to see people in person. It reminds us that we're all human beings.
This is meeting number 19 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.
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 places during proceedings.
I'd like to make a few comments for the benefit of witnesses and 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 audio. I would remind everyone that all comments should be addressed through me as the chair.
Pursuant to Standing Order 81(4), the committee is considering main estimates 2022-23, vote 1 under Canadian Commercial Corporation and vote 1 under Invest in Canada Hub, which were referred to the committee on March 1, 2022.
We have with us today, from the Department of Foreign Affairs, Trade and Development, Sara Wilshaw, chief trade commissioner and assistant deputy minister, international business development, investment and innovation; Bruce Christie, assistant deputy minister and chief trade negotiator; Arun Alexander, associate assistant deputy minister, trade policy and negotiations; Annie Boyer, director general and deputy chief financial officer, financial planning and management; Jay Allen, director general, trade negotiations; Doug Forsyth, director general, market access; Eric Walsh, director general, North America strategy bureau; Weldon Epp, director general, trade and diplomacy North Asia; Emmanuel Kamarianakis, director general, investment and innovation. From Investment in Canada Hub, we have Katie Curran, interim chief executive officer.
Welcome to everyone.
Ms. Wilshaw, I invite you to make an opening statement of up to five minutes, if you wish.
Please go ahead.
:
Thank you very much, Madam Chair. I am happy to be here with everyone today.
I want to acknowledge that I am speaking from the traditional and unceded territory of the Algonquin Anishinabe people.
I would also like to note that we're meeting at a time when the Russian illegal invasion of Ukraine is a really grave threat to world peace, and it's obviously well known that Canada stands with Ukraine and condemns the unjustifiable invasion, which has challenged the rules-based international order. This violence has devastated the Ukrainian people, has forced many to flee their homes and has disrupted economies and global supply chains.
The consequences of Russia's actions have extended well beyond Ukraine's borders and have serious repercussions around the world for human rights, global food security and energy security.
Since Russia's illegal invasion of Ukraine, Canada has responded with sanctions on more than 1,450 individuals and entities under the Special Economic Measures Act. These sanctions—many implemented with Canada's allies and partners—have a strong impact on the Russian economy, and they are a powerful symbol of Canada's commitment to Ukraine's sovereignty and territorial integrity, and to the international rules-based order.
Canada also implemented many other economic measures against Russia. We expanded export control restrictions; cancelled valid permits to prevent military, strategic and dual-use items from going to Russia; revoked Russia's most favoured nation trading status; and denied Russia access to Canadian ports and airspace.
Here at home, while the COVID-19 pandemic has affected the global trade landscape and the Canadian economy, the good news is that Canadian trade and the economy rebounded strongly in 2021. We've started to rebuild from the pandemic, with GDP rising by almost 5% in 2021. Our imports and exports combined rose by almost 14% to reach a record $1.5 trillion. Exports increased even more, growing by an unprecedented 18% to reach $766 billion, another record.
More exports to the United States, thanks to CUSMA, helped drive some of that growth. Since the agreement was signed in 2020, Canada-U.S. trade has grown almost 17%. We have a thriving bilateral trade and economic relationship with the United States, underscored by a recent visit to Canada by United States trade representative Katherine Tai.
To keep this momentum going with the U.S. and other countries around the world, the Canadian government is supporting businesses as they start up, scale up and export into new markets. Our free trade agreements are crucial for businesses looking to diversify their export markets, and we have made lots of progress on those trade agreements.
March was a particularly busy month. We relaunched negotiations with India for a comprehensive economic partnership agreement. We held the first round of negotiations towards a Canada-Indonesia comprehensive economic partnership agreement to secure our access to the large export market in Southeast Asia.
When the U.K.'s secretary of state for international trade, Anne-Marie Trevelyan, visited in March, negotiations were launched for a bilateral free trade agreement with the U.K.
The Government of Canada is also working hard to expand the benefits of CPTPP into new economies, beginning with the U.K., and started the accession process for that last June.
We expect to hold the first round of negotiations this summer towards a free trade agreement with ASEAN, working closely with all Canadian exporters to help them to take advantage of these free trade agreements and the preferential access that we have, now covering 1.5 billion people around the world.
Our work didn't stop, of course, with free trade agreements. We also have a mission to help create the conditions for Canadian businesses to pursue opportunities abroad and grow here at home. All of this support is particularly important for the small businesses that had to stop exporting during the pandemic. There is no doubt that COVID-19 brought significant disruption to international trade and forced businesses to adapt and put a strain on the international supply chain.
These challenges have compelled us to reflect on how we make our economy more resilient for the future, and that's where some of our trade tool kit comes in, which includes things like the trade commissioner service, or TCS. As the chief trade commissioner I am very proud to say that we have more than 160 offices worldwide, providing on-the-ground support, expert market knowledge and local contacts to take Canadian companies global.
Given that innovation plays a pretty vital role in our economy, we are very pleased to see that the TCS CanExport program received $35 million over five years in the 2022 budget. This will help Canadian businesses to protect their intellectual property assets as they pursue those new opportunities abroad.
We are promoting Canada also as a destination of choice for international investment. Invest in Canada's interim CEO, Katie Curran, is here today and will tell you all about the work her organization is doing to bring investment here.
However, I would highlight a figure that speaks volumes on what we have been able to accomplish, even during these challenging times. The OECD recently reported that international investment in Canada was up 158% in 2021 from the year before. New and enduring partnerships remain vital to restoring supply chains that are both efficient and resilient in the postpandemic world.
We've taken the lead within the WTO, as well, to promote a rules-based, predictable trading environment. It's one that supports long-term supply chain resiliency and can help us build back better with like-minded economies—
:
Thank you, Chair, and good morning, everyone.
It's important that we study the supplementary estimates. In Canada's parliamentary system, the federal government must seek Parliament's authority in order to spend taxpayers' money, and one of Parliament's fundamental roles is to review, approve and hold the government to account for its spending.
First and foremost, thank you to the officials present today. I believe we have nearly 10 witnesses with us. I'm disappointed that, unfortunately, we have only one hour of time dedicated to the study of these estimates and we were unable to have our come forward to appear.
What I find disappointing, Madam Chair, is the fact that today is May 30 and tomorrow, regardless of what we do today, these will be deemed adopted anyway. It's late that we're at this point, examining the spending of two organizations that account for $47 million. From my standpoint, that's disappointing.
I'd like to first talk about Invest in Canada's promotional efforts. I'm reviewing some of the briefing notes prepared by our staff. There is mention that promotional efforts have “reached over 54 million business decision-makers in over five countries and increased investor interest in Canada by 90%”.
What are the metrics used to measure investor interest?
:
Thank you, Madam Chair.
Madam Chair, at the outset, I would like to place on record my disappointment that the chief executive officer of the Canadian Commercial Corporation is not here. I have a number of questions, and I think he or she would have been the right person to address them to.
With no disrespect to Ms. Sara Wilshaw, what she stated in her opening statement is mostly known to us. I would have preferred to hear from these two corporations. I'm happy that Ms. Katie Curran is here. If she had made an opening statement, we could have gotten an overview of what the Invest in Canada organization is doing, and I would have expected the same thing from the Canadian Commercial Corporation.
For example, CCC is a very interesting and very underutilized agency of the Government of Canada. People may not know that, for U.S. defence acquisition or purchases, Canadian companies are considered to be U.S. domestic corporations, and CCC can help a lot of small and medium-sized businesses get business there.
On the operational side of CCC, if I remember what Ms. Wilshaw stated, Canadian export is $766 billion, and the amount of contracts CCC has signed is just around $1.5 billion. It's not even that, it's $1.35 billion. That is too small. We have been signing free trade agreements across the world. We need Canadians to start exporting to other parts of the world, because those markets are new and because we want to increase small and medium-sized enterprises for export. CCC must play an active role in promoting these exports into new markets, whether they are non-Western countries in Europe or countries in Africa or Asia. I don't see that.
CCC has been in existence for a long, long time, and even now, they're just doing $1.35 billion. It's not even a drop in the bucket. Even their targets.... I'm looking at their corporate plan. The target for next year does not go up even by 10%. I think it's less than 5%, and every year it is less than 5%. It is pathetic. I'm sorry to use this language, but a corporation growth rate.... When we want exponential growth rate in exports from Canadian businesses, the growth rate that CCC is projecting, even to 2025-26, is not even 10% of what they're doing today.
Another thing is that they mentioned that they helped 221 small and medium-sized firms out of 300 exports. It's a good thing, but I would like to know the number of contracts that the CCC did for these 221 SMEs and how many of the total contracts they've signed are outside of the U.S.
As for the U.S. and western Europe, we don't need organizations like CCC to make a breakthrough in these mature markets. We need CCC to hold hands with Canadian exporters when they tap into the new markets in Asia, Africa and other places.
I'm disappointed on that front, Madam Chair. I wish they were here, as I had questions for them. In any case, I'm glad that Ms. Katie Curran is here.
Ms. Curran, I was reading through your departmental plan. It was mentioned that the pandemic reduced FDI. I can understand that. It was reduced by about 50%, but what is the trend you have been seeing in the last, say, seven or 10 years? What is the trend you are seeing in the growth of foreign direct investment in Canada? I know that Canadian companies are aggressively investing in other parts of the world. Canadian pension funds, Canadian corporations and private corporations are doing it.
What is the trend we are seeing in the growth of foreign direct investments in Canada?
:
Madam Chair, we continue to work to fully implement the trade agreements that we've negotiated and brought into force over the past few years. As my colleague, Mr. Alexander, mentioned, those are the CUSMA and the CPTPP, which, as you know, is a very ambitious comprehensive free trade agreement with 11 countries in the Asia-Pacific region.
We're now, in that regard, looking to expand the agreement to accept new economies to join. Our focus right now is negotiations with the United Kingdom, which has expressed an interest in formally acceding to this trade agreement, and we're looking at those negotiations as providing more of a precedent and a model for future accessions from other parts of the world.
As I'm sure you know, we've also received heightened interest from other economies around the world, and we have received formal applications to join the CPTPP from Taiwan, China and, more recently, Ecuador. We know that other countries, specifically in the Asia-Pacific region, like Thailand, Indonesia and Korea, are also very interested.
On one front, we're continuing to implement that trade agreement to make sure Canadian producers and exporters take full advantage of the benefits provided to them through that agreement, while at the same time expanding the opportunities.
On top of that, Madam Chair, I would say that we continue to have a very active negotiating calendar. We're negotiating with the block of 10 ASEAN countries. We're negotiating a free trade agreement with Indonesia. We're also negotiating a more permanent free trade agreement with the United Kingdom, and negotiations continue with other important economies for Canada.
:
Thanks for your ongoing support of the trade commissioner service. They certainly appreciate that.
We have a network of 44 trade commissioners who are dedicated to foreign direct investment around the world in our missions abroad. They also work very closely with a lot of the provincial representatives, who are increasingly co-located in missions abroad and work very closely together.
We also have regional offices across the country. They stay very closely plugged into their provincial counterparts and economic development agencies, and meet with them regularly. We have very close co-operation across the board.
We also work, of course, with Ms. Curran and Invest in Canada. They have other means and mechanisms to stay coordinated with both provincial and municipal authorities to understand the opportunities and to help work out any challenges that arise.
First of all, in respect to something that was raised by Mr. Baldinelli in his intervention, I just want to note that the was already scheduled to be here, at this meeting, when it was originally scheduled for 3:30 p.m., as Mr. Baldinelli and his party know. The finance committee took precedence because of the important work that's being done at the finance committee, thus shifting today's meeting to 11:00 a.m. from the previously scheduled 3:30. That is the only reason Minister Ng is not here right now, and all parties, including the Conservative Party of Canada, agreed to that arrangement.
For my second point I'm going to direct a question to Mr. Christie.
You were asked, sir, in some questioning—I think it was by Mr. Martel—about the U.S.-led initiation of discussions about Indo-Pacific strategy and Canada's not being present. I think you accurately outlined some of the ways in which Canada is already present in the Indo-Pacific, and I'm just going to reiterate some of this as a reminder to all committee members.
First of all, we have a Korean free trade agreement. We are a part of the CPTPP, and indeed, that's something the United States actually stepped out of. We are pursuing ASEAN, as you noted, and Indonesia, and we have an early harvest agreement with India.
Going back to the issue with the CPTPP, I'll actually put to you, Mr. Christie, a quote from Jacinda Ardern, the Prime Minister of New Zealand. She said that if the U.S. wants more engagement in the Indo-Pacific, then the CPTPP is the table to sit at.
Given that Canada is already at that table, Mr. Christie, can you comment on Canada's state of engagement in the Indo-Pacific, and how that compares to engagement by the Americans?
:
As you pointed out yourself, we are very active in the region, not just through the CPTPP.
Let me just add here that we would welcome the United States back to the CPTPP. My sense is that the Indo-Pacific economic framework is another way that the United States are looking to expand their footprint in the Asia-Pacific region, making it clear—at this time, anyway—that they have no definitive plans to come back to the CPTPP.
In terms of Canada's engagement, yes, as you pointed out, and as I referenced earlier, we're looking to engage with all of the CPTPP parties to broaden that trade agreement to provide further, more expansive benefits to Canadian companies and producers. We're also looking at the ongoing trade negotiations with our ASEAN friends, as well as Indonesia. As you stated, we have recently re-engaged—under 's leadership—in a comprehensive free trade agreement with India. Ministers have asked us, as we proceed along those negotiations, to consider whether we would want to implement an early harvest agreement representing what has been accomplished so far.
I think it's fair to say we're really focused on that region.
:
Thank you very much, Mr. Christie.
This next question will be for Ms. Wilshaw.
I agree completely with Mr. Hoback in terms of the TCS and what it represents in 160 locations around the planet. I think these are definitely unsung heroes in terms of the work we're doing abroad, both promoting Canadian interests in locations outside of Canada and also promoting foreign direct investment here in Canada.
On my recent trip to Zambia and South Africa, I was actually quite taken with the incredible trade commissioner service. They were directly providing me with briefings on sub-Saharan African countries in which we are engaged.
Thank you for the work you're doing, Ms. Wilshaw, and thank you to all of the teams of trade commissioners around the planet.
I want to ask you specifically about something we championed in sub-Saharan Africa, which I know is something championed by the and by , and that is the role of women entrepreneurs, domestically and abroad. Can you give us a bit more detail with respect to the trade commissioner service and the work you're doing to promote entrepreneurial opportunities Canadian women-owned businesses abroad?
:
Thank you very much, Mr. Virani.
If I can, I will go forward on the votes that are required for these main estimates, and then we'll go back to Mr. Baldinelli.
Thank you very much to the witnesses for your time today. It was very valuable. I think we'll have to have you back a few more times to keep us updated on the great work you're all doing.
Shall the votes carry, less the amount voted in interim supply?
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CANADIAN COMMERCIAL CORPORATION
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Vote 1—Payments to the Corporation..........$13,000,000
(Vote 1 agreed to on division)
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Vote 1—Program expenditures..........$33,611,556
(Vote 1 agreed to on division)
The Chair: Shall I report the main estimates 2022-23 to the House?
Some hon. members: Agreed.
The Chair: Thanks. That's nice. I think it's kind of appropriate that I report it to the House.
Thank you very much, all of you.
Mr. Baldinelli, you moved a motion.
I'm just making sure that we have the procedures in place, Madam Clerk.
:
Thank you, Madam Chair.
Hopefully, this will help and we can move forward. I'll support the motion, because my understanding of the process for the Auditor General is that the Auditor General is independent and will make the decision to engage with whatever department or review they want to. I have done that as an individual member before on different issues. It's just advice that we can provide the Auditor General.
I think that, sometimes, when the notion of the Auditor General is raised, it creates heightened politics that aren't always necessarily there. For this, I don't think there is anything that we should spend a lot of time on in the sense that we're just asking for advice for a review, which the Auditor General will take under consideration.
Let's leave it at that and move on to other committee business. That's my opinion.
:
I would make three points. One is procedural. Notwithstanding the interventions made by Mr. Hoback, I think, as a matter of courtesy, it's generally beneficial to distribute things in both official languages in writing prior to.... I know that can't always be observed, but I think that's important.
The second point is that the first line of the text of the motion says “Given the committee had only one day to examine the estimates”. If the committee members, of whom the Liberals are not the majority, wanted more days to examine the estimates, I think that's incumbent upon us as committee members to arrange our scheduling such that more days were allocated for the study of the estimates. That should not be a backstop for addressing a motion that is coming at the 11th hour.
The third and last point is what I find to be the most important. We've heard from Mr. Masse, Mr. Arya, and I think we will hear from others about the institutional independence of the Office of the Auditor General. Mr. Masse went so far as to say the office will decide what to study, because it is independent, as it always has been and always should be.
That being said, there is something to be said about members of Parliament, elected officials who are partisan by nature, either directing or being seen or perceived to direct the Auditor General's office in terms of what it should study. Therefore, regardless of whether the Auditor General is bound by the terms of any motion that is passed by this committee, I think it is important as an issue of parliamentary procedure and in terms of safeguarding institutions that are independent and that oversee Parliament, that we not actually direct or be seen to be directing institutions such as the Office of the Auditor General. On that basis, I think there are serious concerns with this type of motion.
I'll leave it at that. Thank you.
First of all, I did follow procedure through and through. I talked to our only Frenchman, the Bloc member, before I came forward, to make sure he was comfortable that I was doing it in one language, the reason being that the motion came out of this meeting. It was not something that was prepared last night or this morning; it was actually prepared and handwritten to the clerk.
The reason we're asking for it is very clear. We just feel we didn't have enough time with what we heard today. This would be a good opportunity for the Auditor General, if he or she so chooses, to look at this. Every once in a while, the Auditor General will ask the members of Parliament about different departments or Crown corporations that they should actually do an audit on, so this is not out of the norm by any means. In fact, if the Auditor General chooses not to, that's up to her. She has full independence, but this is something the committee can request. I think it would be good for both the department and the committee to have that type of audit done. I think it's good value for taxpayers to understand what they're doing well, what they're doing wrong and what they can do better, because I remember that whenever an auditor general reports, you'll see recommendations; and most departments will take on those recommendations and make improvements to the department. This is with the intent of making a stronger department and making things more efficient for taxpayers.
I think a lot of people would criticize us if we didn't do this, because we had one only day to go through the estimates and that's the process that we follow on the estimates. It's a goofy process that Canadians don't understand, and even here, when you look at it, you wonder how in the heck we can approve so much money with one hour's notice.
In this situation, I think it would be prudent to have the Auditor General's office, if it so chooses, just take a quick peek at it.
:
Thank you very much for taking the time and sharing what you have proposed in writing for us to see.
I take a look at the last sentence and I think that's where the trepidation is. It seems like the last sentence is directing. Our friends across the aisle just mentioned they'd handwritten it, but when you read the last sentence, it seems to direct the AG. I don't know if there's any wordsmithing that could be done there to make it more of a suggestion, as people have been saying around the table.
When you look at that last sentence, to me it seems to be directing the AG. That's where my trepidation is. If there could be some kind of wordsmithing to deal with the wording.... It could be changed to “should she decide to examine”. It could be that kind of thing.
I think allowing that independent decision-making process that Arif has put so well to be reflected in the verbiage.... It could be in the last sentence, in particular.
:
The suggestion by Mr. Masse is an improvement.
I wouldn't mind something that reflects that the committee understands the institutional independence of the Office of the Auditor General. Right now, it says on line two, after the comma, “the committee requests that the Auditor General examine both agencies....” It could say something like “the committee understands the institutional independence of the Auditor General and requests....”
Madam Clerk, did you get that?
It would read, “the committee recognizes the institutional independence of the Auditor General and requests that the Auditor....” and then it follows, still deleting, as Mr. Masse suggested, the last line.