Welcome to everyone. I'll call to order meeting number 26 of the House of Commons Standing Committee on International Trade. Today's meeting is webcast and is taking place in a hybrid format pursuant to the House order of January 25.
Pursuant to Standing Order 81(4), the committee will proceed with its study of the 2021-22 main estimates. As we have Minister Ng with us—which is great—the committee will also resume its study of investor-state dispute settlement mechanisms, pursuant to the motion adopted by the committee on October 23, 2020.
Welcome, Minister Ng, and your officials, back to see us again, as well as all of the officials from the Invest in Canada Hub.
Minister Ng, the floor is yours. Please go ahead.
Thank you, Madam Chair.
Good morning to everyone, the vice-chairs and all of the other members of the committee. It is a pleasure to be with you today and to assist the committee in its important work and an honour to speak, through you, to Canadians once again.
Thank you for giving me the opportunity to do both.
Throughout this past year, Canadians have stepped up and made sacrifices to help limit the spread of the COVID-19 virus and to support their communities.
In particular, business owners and workers have faced incredible hardship and uncertainty. They've persevered, showed historic resilience and adapted at every new turn. We've been supporting Canadians and their businesses from day one of this crisis. Our government's COVID-19 economic response plan has helped protect millions of jobs across the country and supported businesses to pay their bills.
Now, as we face renewed public health measures, many are being asked to sacrifice once again, and I want to reassure them that we are listening and that we continue to have their backs. This includes the emergency wage subsidy, emergency rent subsidy and the lockdown support, all of which we are extending until September, as we announced in last week's budget. Support also includes the Canada emergency business account, otherwise known as CEBA, and most recently HASCAP, which has further helped some of Canada's hardest hit businesses.
In budget 2021 our plan is to finish the fight against COVID-19 with significant investments in small businesses that will bring Canada's economy roaring back.
These measures are making a significant difference.
CEBA, for instance, delivered through Export Development Canada, has delivered nearly $47 billion in emergency credit to nearly 867,000 Canadian businesses since last April, with more than 530,000 businesses receiving the $20,000 expansion. These emergency supports are one part of our government's larger effort to help businesses bridge to the other side of the pandemic. We're also working hard to create opportunities for businesses to expand at home and abroad. For example, in 2020, EDC facilitated over $102 billion in business by working with nearly 25,000 companies.
As for Invest in Canada, in 2019 and 2020, they facilitated 18 investments, resulting in over 2,000 jobs and capital expenditures of $1.25 billion. In addition to EDC and Invest in Canada, other members of what I call “Canada's trade tool box” have been working hard throughout this pandemic to adapt and to create new opportunities for businesses to explore international markets. Take, for example, the Canadian Commercial Corporation, which, in 2019-20, generated $1.25 billion worth of contracts with foreign buyers for our Canadian exporters.
Also, take the trade commissioner service, which has pivoted to offer virtual tools and services to Canadian businesses, and also provided more than $33 million in supports through the CanExport program to help our businesses looking to diversify into other export markets.
It goes beyond these direct supports. Our government has been working to protect Canadian businesses as they bring their products and services to the global stage. For example, I've been working closely with the international community to seek investor-state dispute settlement protections for Canadian companies abroad while also maintaining our ability to regulate in the public interest here at home.
Our government has been doing this work since well before the pandemic, amid this pandemic, and we will continue to do so after the pandemic because we know that supporting Canada's businesses is the smartest thing we can do for our workers and our economy.
As we announced in budget 2021, we're taking even more decisive and responsible action to get Canadian businesses ready for long-term growth by investing in innovation, sustainability and inclusivity to get even more of our main streets and the 99% of small and medium-sized businesses that make up all our businesses to start up here at home, to scale up and to access the international markets. Whether it's new supports for digital adoption or to rehire workers, we will ensure that businesses of all sizes, and led by all peoples, can bring their made-in-Canada solutions to the world.
I'll end by saying this: In response to COVID-19, many have turned inward and looked to pursue protectionism, but we can't let the pandemic stop Canada from trading. That's why I've been working closely with my international partners from the G7, the G20, the WTO and APEC, and have led the Ottawa Group on WTO reform with our most recent meeting in March, to ensure that our supply chains remain open, our businesses continue their work and that crucial goods and services continue to flow.
We are shaping the modern future of the multilateral rules-based trading system, one that is increasingly digital and contributes to an inclusive future where everyone can benefit.
It's this kind of active work and meaningful international co-operation that is going to see us recover from COVID-19 and build back better together.
Thank you very much for your time.
I am looking forward to taking your questions.
Thank you, Madam Chair.
Thank you very much, Minister Ng.
The departmental officials we have with us, as well, today are, from the Department of Foreign Affairs, Trade and Development, John Hannaford, deputy minister, international trade; Steve Verheul, assistant deputy minister, trade policy and negotiations; Anick Ouellette, assistant deputy minister and chief financial officer, corporate planning, finance and information technology; Sara Wilshaw, chief trade commissioner, assistant deputy minister, international business development, investment and innovation; Bruce Christie, associate assistant deputy minister, trade policy and negotiations; Annie Boyer, director general and deputy chief financial officer, financial planning and management; Eric Walsh, director general, North America bureau; and Katie Curran, chief administrative officer, and Nathalie Béchamp, chief, investor services, both with Invest in Canada.
Thank you all very much for making the time to be here with the committee today. We very much appreciate it.
We will open up with Ms. Gray, for six minutes, please.
The forestry sector is so important to the Canadian economy. I'm so proud of the work that the Canada trade commissioner service does on behalf of all of our businesses, particularly for this sector.
The trade commissioner service has facilitated a range of business-to-business opportunities for members of the sector, particularly to help them diversity and look beyond the markets they have been in. This also applies to the small and medium-sized businesses that operate in the sector. It is facilitating those market opportunities and enabling those very companies that are looking to explore additional markets and helping them with CanExport funding so that they can indeed take advantage of some of the opportunities by attending trade shows. Frankly, during this pandemic, to do so virtually is something that our trade commissioner service continues to do. I always call them Canada's best business development and sales team all around the world.
Their job is to help our Canadian businesses access those markets, yield the subsequent contracts or businesses, and navigate through some of the issues that might exist in international markets. Ultimately the goal is to help our Canadian businesses grow and diversify into markets where, when they grow, they can create jobs, and they're great jobs for Canada.
I appreciate that very much.
I was talking about the $4 billion investment for digital adoption. That is in addition to the investment in the strategic innovation fund, which, of course, will invest in many companies that are growing and growing to be global. The investments here include another $450 million through venture capital, because we know that enabling enable more investment in our most innovative and growth-oriented companies will help them grow.
There is also an immediate $1.5 million in expenditures that businesses can expense starting right away, and it will be there for three years because this budget is about finishing the fight against COVID-19. It is setting up Canadian businesses to have the tools they need, including investing in themselves but with a really good incentive to be able to expense up to $1.5 million over the next three years. It's also to create a continued investment environment through venture capital that will invest in some of those most promising companies that are looking for venture capital, but also making changes to the small business financing program so that access to capital of up to half a million dollars is available to them, but in a wider range of categories like working capital, equipment including soft equipment that knowledge-based companies will....
I would venture to say this is the most small business friendly budget in Canadian history. These are investments for our entrepreneurs and for our Canadian businesses that operate domestically, and in doing so grow into those global Canadian companies that will create good jobs anchored in Canada.
Thank you very much, Madam Chair.
Thank you, Madam Minister, for being here today.
One of the things that struck me about the departmental plan for 2021-22 was the business-as-usual approach within that plan, in that the emphasis continues to be pretty much uniquely on trade liberalization and a laissez-faire approach to globalized trade in a time when....
At this committee we've heard.... And I don't think it's some sort of retrograde protectionism to talk about regional supply chains, whether these are understood as North American or as some kind of region composed of some of our longest-standing western allies for essential things, whether it's vaccines or personal protective equipment or other types of things that we've come to know in the course of this pandemic that are, first of all, really crucial either to public health or to our economy.
Unfortunately, in times of crisis, our trading partners aren't necessarily going to continue offering that free flow of goods as they put their emphasis on their own population. That basic fact of the pandemic, which can be responded to in a number of ways, doesn't really get addressed in the departmental plan, which I found kind of shocking, frankly.
In your opinion what are some of the lessons you've learned for Canada's trade policy in the pandemic? From reading your departmental plan, it seems that there are no lessons; there's just the attitude of, “Let's keep doing what we were doing before the pandemic”. We might offer some targeted financial support here and there to try to help people get through, but ultimately where we're going is maintaining the same uncoordinated emphasis on trade liberalization from before the pandemic.
If I'm mistaken in that, this is you opportunity to correct the record. I'd be interested to know how the government sees Canada's trade agenda changing in the next five to 10 years as a result of the pandemic, because the departmental plan sounds like, with the exception of the references to targeted supports for COVID, which tend to be spending, it could have been published in the years preceding the pandemic.
Do I have another 30 seconds to finish my response?
In terms of COVID, to answer your question, we have been working consistently with our multilateral trading partners through the WTO, for example, where we have been advocating not only for continued openness of critical supply chains, but also working on initiatives like trade and health to ensure that the multilateral trading system really will work at its core for people. At times like this during the pandemic it is not a theoretical exercise.
It is what we are doing and have been doing throughout this pandemic, and while it may be reflected in the departmental plan as continuing to work on the multilateral trading system through the leadership of the Ottawa Group, I would also point the member to the consistent communication of the work we have been doing with our partners to ensure that trade really will benefit a broader number of people, including small and medium-sized businesses, women and indigenous people.
—the conversation now is to say that trade agreements are intended to commodify everything. For instance, my father made efforts in the late nineties and early 2000s to try to make the point that water shouldn't be treated as a simple commodity under trade agreements. The NDP has argued in the past for certain things being more important than to be treated as a simple commodity on the market.
The language of the departmental plan, in the time of a pandemic, when we have seen that certain kinds of things are more important than just a commodity on the market, doesn't make any attempt to try to differentiate or single out those products and talk about a different kind of trade strategy for those particular kinds of goods, when we have a lot of experts and a lot of trading partners who are talking in those ways.
It's a very strong ideological position for Canada to adopt, to say we're not going to entertain those kinds of talks, but are just going to continue on as we did before the pandemic.
That's the issue I'm trying to get at.
Is there a list of particular goods or services that the government now thinks maybe shouldn't just be treated under general free trade agreements, but that we need more particular kinds of agreements or understandings or strategies for?
Absolutely. I wish I had more than 30 seconds.
The answer is that the approach that was taken well before the pandemic, and certainly during the pandemic, has continued to cause us to make sure we are trading in a way that is inclusive.
We are focused on supply chains that continue to be open, particularly in areas like food and critical medical supplies, working with our international partners to ensure that as we are building back, we are deliberately focused on tackling the environment, tackling a recovery that has to include many more people in our economy.
That is the work we have done before, and it's the work that continues to be extremely important because of this pandemic.
That's a really important question.
This budget really sets us all up—our Canadian businesses and the Canadian people—to finish this fight against COVID-19. At the same time, it makes targeted investments for those who have been particularly impacted by the COVID recession, be they women, racialized Canadians or young people, and makes significant investments so that we can get our economy not only into recovery, but into growth and competitiveness for years to come.
This is not 2009. We don't want to take 10 years to recover from this COVID recession. We want to make targeted investments, smart investments and strategic investments. That includes helping Canadian businesses scale up into international markets, including in the wonderful agri-food and agriculture sector, to take advantage of the 63% of the global economy to which Canada's trade agreements give our businesses access.
Thank you very much, Madam Chair.
Thank you to the minister for appearing once again at committee. It's always a pleasure to see her here.
I have a question that picks up on the previous conversation. Looking at the statistics over the last year, when we compare February 2020 with February 2021, we see exports have increased by 4%. We've actually seen a 57% increase in exports since April 2020.
Minister, as you pointed out earlier in a conversation, Canada is number two in foreign direct investment attractiveness, according to the most recent index from Kearney's, which was released a few weeks ago.
Perhaps, Minister, you can explain which industries you think are driving this impressive economic result, and if you think we need to continue along this same path. If so, how do you plan to do so in the short and medium term?
Those numbers are right. We are seeing that the work by team trade Canada to support our businesses and the agreements that we have around the globe is really providing the market access and enabling businesses.
We're creating the environment so that businesses can be competitive and prosper. We are seeing businesses grow in the knowledge economy and in exporting around the world. We are seeing an incredible number of clean-tech companies. The reason I keep using France is that it's just recent in my mind because that was a virtual trade mission that we just did a couple of weeks ago. It was completely focused on sustainable growth and on the environment. There, we're very proud that a Canadian company like Ballard is providing the first hydrogen buses for a city in France.
In looking at circular economy businesses that are able to grow, take a look at CarbonCure. It's a wonderful business based out of Atlantic Canada that is exporting its technology into the U.S. and into Singapore, for example, where those infrastructure projects are being done, but doing so in a way that is much less carbon intensive.
We have these incredible Canadian companies, and team trade Canada, the trade commissioner service, EDC and BDC, Invest in Canada and the Canadian Commercial Corporation are very focused and are really working to help our Canadian exporters grow, and to grow into those international markets. Canadian business growth means jobs for Canadian companies here at home.
EDC has certainly been very instrumental in helping small businesses through COVID, particularly in terms of the work that has been done in providing that very necessary liquidity through CEBA, some $46 million for over 850,000 businesses.
We've been working with EDC to be sure that it is also setting climate targets, and now I'm very proud to say that it is the largest clean-tech financier in Canada, facilitating over $4.5 billion in business in 2020. More recently, we instructed EDC to do even more by aligning its portfolio with the Paris Agreement commitments for 2030 as well as for net zero in 2050.
EDC is an important part of Canada's trade tool box, and we will continue to work with it to ensure that it continues to help businesses in this pandemic but certainly on the path to recovery as well, being the important agency that it is for helping Canadian exporters.
Thank you very much, Minister.
We knew you were here for the first hour. We thank you very much for the information. Certainly, if members have additional questions, they can send those questions to you, and I'm sure you would be pleased to answer them and provide them with additional information.
Thank you, again, Minister. We'll allow you to leave.
Your departmental officials will remain.
We'll now go to Mr. Arya, for five minutes.
Thank you, Madam Chair.
I want to recognize that the kinds of investments the Government of Canada has made to support businesses through this pandemic have already started paying off, from the Canada emergency business account to many other measures that support Canadian businesses.
The Bank of Canada has now revised its GDP growth forecast for the year to 6.5%. That is up from 4% it had forecast in January. We know that trade accounts for the bulk of our GDP. The last numbers I have are from Macrotrends, showing that trade accounted for about 65% of GDP in 2019. So there you go: the Bank of Canada is forecasting increased GDP growth of 6.5% against 4% it had predicted in January.
With regard to the other aspects, the minister mentioned the Canadian Commercial Corporation. In my view, that corporation has much more potential to help Canadian businesses, especially the SMEs.
The minister also mentioned that, unfortunately, this pandemic has increased the demand for protectionism from different countries, and Canada as a trading nation should be wary of this. We should be watchful.
We have already entered into many free trade agreements across the world. Can we move the resources that have been allocated in negotiating the free trade agreements in order to implement, and allow Canadian businesses to avail themselves of the benefits of, all of the free trade agreements we have signed?
Thank you for the question.
Madam Chair, certainly my team around the world has been deployed in a kind of reverse trade commissioner role, in some sense, in doing the sourcing from the very beginning. They developed a whole book of all the really excellent PPE that's out there, and they have been working diligently to make sure we have it.
They've also been doing a lot of work on the investment side to bring in investments in PPE manufacturing and medical devices manufacturing. Also, you would have seen, of course, the Sanofi win and also the Medicago investment over the last year.
In terms of the vaccine procurement itself, this is really a whole-of-our-network operation, working very closely with PSPC, PHAC and all kinds of others to make sure that we are getting the vaccines here and that the shipments are uninterrupted.
I'm from southwestern Ontario, about an hour and a half from the Sarnia-Port Huron border.
One thing I consistently hear from constituents in my area.... I'll give you an example. We have a business in my riding, and the parts they sell are almost all in the U.S. They're trying to get a technician across to commission the line, and they can't get this technician to cross. If they do cross, they have to quarantine for 14 days. This technician has both of his Pfizer shots, and a negative test.
I know I'm not the only person dealing with frustrating things like this, but we're trying to promote trade and do trade, and these businesses are trying to promote trade and do trade, and they can't get a technician across the border because the border crossing guy doesn't think they're essential.
What can we do to fix this very simple problem?
Thank you very much for your presentation today. It's been very informative in answering these questions on the main estimates.
Recently Sault Ste. Marie, the riding I represent, was declared a foreign trade zone, where there's an ability for the riding to coordinate and talk about a lot of things that would help businesses and the supply chain, or things of that nature, exporting to the United States.
Steve, there are a couple of them now in Ontario. Niagara has one and Windsor does. It's a broad question. How are you guys going to be coordinating the information to places that don't have foreign trade zones? I'm thinking of the economic development corporations, the virtual trade missions, the government initiative to create CORE and all these other initiatives that we're talking about today. What is the communication plan on getting that out to folks?
Virtual trade missions and actually a lot of the activities that the trade commissioner service is involved in, including the work that we do on responsible business conduct, are communicated out through a number of different channels. We have regional offices that are all across the country, as a matter of fact. They are engaged with their local partners, with the provinces and municipalities and the territories they're located in, and with a lot of the chambers. That is one channel through which we communicate what we're doing.
I'm in touch with my assistant deputy minister counterparts in the provinces and territories as well. The deputy minister and the minister have been engaged with their counterparts. I would add that we have CanadExport magazine, which goes out to—I'll probably get the number wrong—somewhere in the neighbourhood of 30,000 to 40,000 subscribers on a regular basis. We use that as another channel to make sure that information flows. We also have a lot of digital content on the trade commissioner service website that is constantly updated.
I'd be happy to elaborate on this a little bit.
Actually, I should correct the member that on PDAC and on Collision, my team has been very actively engaged. We've had delegations come in, virtually, from all over the world. We have facilitated hundreds of B2B meetings for these delegations to come in and connect with Canadian businesses in those different sectors. PDAC was different this year, but it was about as successful as it could be in a virtual environment. We did a lot of work on that.
On the virtual trade missions, there have been several. The most recent was to France. Before that there was one to South Korea. In both cases, we saw hundreds of participants, as a matter of fact, which is far more than we normally would for an in-person trade mission. We facilitated dozens of business-to-business meetings as well. We're starting to see some success stories coming out. We will continue to track those over time. Probably because of the numbers, it works no less than an in-person trade mission—just different.
I think there are a couple of issues related to that.
The circumstances of our ending up with a result where we don't have an investor-state dispute settlement mechanism with the U.S. under the new agreement comes out of the history we've had under NAFTA. We didn't think that was a particularly good path to follow, going forward.
It doesn't mean that investors may not have concerns in the U.S. It's quite possible they will. Similarly, U.S. investors may have continuing concerns in Canada. I think there was a unique circumstance there.
Going back to discussions we've had in the past, ideally we do like to have investor-state dispute settlement so that we don't just have it in markets where we have concerns about domestic courts or about the ability to enforce investor rights, but also look at a model that could apply more broadly. That is what we tried to do in the CETA negotiations.
I want to return to the original question I posed to the minister. I don't think we got much by way of a political response.
At the administrative level, has there been any direction, or are you looking at trying to assess, as you continue to have preliminary talks about possible trade agreements, whether there's a list of goods and services, or certain sectors where you think a different kind of approach is needed? Has there been any thought on how to structure those things into a trade agreement, or to ensure they're kept out of trade agreements?
One of the things we've heard recently at this committee for another study is the suggestion of trying to develop some kind of more regional supply chain for vaccine production and PPE, for instance.
How does that inform your work? Is your work effectively unchanged by the pandemic? Does the nature of the trade discussions you're having foresee exempting anything from a trade agreement, or treating it differently from just another commodity on the market?
It was wonderful to see so many women as witnesses today. We are making progress. Even if it seems slow, we are making progress. Congratulations to all of you and thank you so much.
I will now read the following motion: Pursuant to Standing Order 81(4), the committee will now dispose of the main estimates for the fiscal year ending March 31, 2022, minus the interim supply the House agreed to on March 25, 2021.
Vote 1—Program Expenditures..........$34,271,556
(Vote 1 agreed to on division)
The Chair: Shall I report the vote under Invest in Canada Hub to the House?
Some hon. members: Agreed.
The Chair: Thank you all very much.
I think it was an informative meeting. We appreciated having all of our great witnesses and the minister. Thank you very much.
I move adjournment of our meeting.