CIIT Committee Meeting

     I call the meeting to order.

    This is meeting 23 of the Standing Committee on International Trade.

    Welcome to all the members and to the guests who are with us today.

    Pursuant to the order of reference of Monday, February 2, 2026, the committee is resuming its study on Bill C-18, an act to implement the comprehensive economic partnership agreement between Canada and Indonesia.

    We have with us, from the Canada Border Services Agency, Meda-Cristina Horacsek, executive director, commercial and trade policy.

    From the Department of Finance, we have Cara Xie, analyst/economist, international trade policy division.

     From the Department of Foreign Affairs, Trade and Development we have Aaron Fowler, associate assistant deputy minister, international trade branch, and chief trade negotiator; and Raahool Watchmaker, deputy director and senior counsel, trade remedies law, trade law bureau; and Lewis McCall.

    From the Department of Industry, we have Mehmet Karman, senior policy analyst, foreign investment review and economic security branch.

     Thank you all for being with us today.

    This is a reminder to committee members that officials are present to answer questions that any of you may have in regard to the clause-by-clause consideration. Since we just did Bill C-13 last week, I am not going to read out all the instructions.

    I will read out each clause successively. You have a number on each clause. In addition to BQ-1, as an example, you also have another eight-digit number. I will reference that number to ensure that we are all referring to the same amendment being proposed. The amendments are going to appear as they were given to us.

    They have been properly drafted in the legal sense, so amendments must also be procedurally admissible. I will rule amendments inadmissible if they go against the principle of the bill or go beyond the scope of the bill, both of which were adopted by the House when it agreed to the bill at second reading.

    Pursuant to Standing Order 75(1), consideration of clause 1, which is the short title, is postponed.

    I therefore will call clause 2. There are no amendments proposed to clauses 2 to 15. Is there unanimous consent to group them for the vote?

    Some hon. members: Agreed.

    Madam Chair, I'm sorry to jump in like this, but you started a bit too quickly. First, I would like to ask the witnesses, who are experts, and especially counsel for the department—

    What's going on? Do you have access to the interpretation?

    Can you start that again?

    You went a bit too quickly, Madam Chair.

    Given the legal language used to describe many things and the fact that not all of us are experts in this field, I would like to ask the experts, in particular counsel, whether they can tell me in advance the specific clauses that establish or initiate the investor‑state dispute settlement mechanism.

    Madam Chair, I'm not certain I understood the question.

    Paragraphs of the bill, clauses that are being proposed for amendment....

    Could you elaborate, Mr. Savard-Tremblay?

    I don't know how to explain this further. I would like to know in advance the specific aspects or clauses of the bill that establish the investor‑state dispute settlement mechanism and that initiate its implementation in Canada.

     I understood the question to be about the investor-state dispute mechanism.

    The clauses of the bill that activate the investor-state mechanism for disputes under the Commercial Arbitration Act are the amendments in the bill that are specific to that act.

    Which clauses of the bill are involved?

     I believe it is clause 26.

    So it's clause 26 of the bill, which concerns the Commercial Arbitration Act. Is that right?

    Yes. That is the only clause in the bill that is related to ISDS.

     Okay. Clause 27, which concerns the Canadian International Trade Tribunal, covers something else. It must be the state‑to‑state settlement. Is that right?

     No. The clause that deals with the Canadian International Trade Tribunal principally implements the provisions in the agreement that deal with things like bilateral safeguards, safeguard exceptions and such. Those are matters that are normally considered by the Canadian International Trade Tribunal.

    Thank you.

    We can continue, Madam Chair.

    Thank you very much.

    (Clauses 2 to 15 agreed to)

    Monsieur Savard-Tremblay, we have a new clause presented by you, clause 15.1. Just so we're very clear, I'm referring to BQ-1. In the top left corner of your page, you have the number 13898243. Let's make sure we're all on the same page. There were some changes to it.

    Would you like to move that amendment, Monsieur Savard-Tremblay?

    Yes.

    Do you wish to speak to it at this time?

    I'm strongly in favour of trade, as are all the people who came to speak to us. However, I'm moving this amendment in light of considerations regarding the state of the environment and human rights in Indonesia, particularly in relation to a specific industry. It's serious enough that Switzerland and the European Union appointed a special group to monitor this industry. I think that it would be a good idea to appoint a group of experts who could monitor these issues and report back to us.

     Thank you very much.

     In reference to that particular amendment, Bill C-18 seeks to implement the Canada-Indonesia comprehensive economic partnership agreement by approving and enacting this agreement. The amendment attempts to force the minister to appoint an expert group responsible for the evaluation of compliance of Indonesian companies operating oil palm plantations whose products are imported into Canada.

    As per House of Commons Procedure and Practice:

     I therefore am ruling that amendment inadmissible, sir.

    I must challenge your ruling, Madam Chair.

    I have ruled the Bloc motion inadmissible. Shall the ruling of the chair be sustained?

    (Ruling of the chair overturned: nays 5; yeas 4)

    The Chair: Thank you all very much.

    For the next step, do you want to speak further to the amendment, or do we call for a vote?

    I believe that the amendment covers everything and that no further explanation is required.

    I'd like to speak on it.

    Go ahead.

    Actually, I just have a question for the panel.

    You've seen this amendment and other amendments from my Bloc colleague on a similar issue. Do you have any comments on the substance of this in terms of what Canada is or isn't doing with respect to environmental concerns, especially, palm deforestation in Indonesia, which is a well-documented concern worldwide?

    I think there are two or three elements that are relevant to the amendment that's been proposed. The first is the substantive provisions that are contained within the agreement with respect to the treatment of palm oil. Then there are the mechanisms that exist already both within the agreement and outside of the agreement to manage concerns of the nature that I think this amendment is intended to address.

    The agreement does not change the market access situation for Indonesian palm oil into the Canadian market. Canada has a 6% most-favoured-nation tariff rate on imports of crude palm oil. We are not reducing that tariff at all as a result of this agreement. That tariff line is excluded.

    Canada does not apply an MFN tariff on imports of refined palm oil from any source. That will not change as a result of this agreement. Even with that MFN zero rate on refined palm, I think it's important to note that in 2024, Canada imported only about 55 million dollars' worth of palm oil from Indonesia. That accounts for less than one-quarter of 1% of Indonesia's global exports of palm oil. We are a relatively small and marginal importer.

    The CEPA does nevertheless include strong mechanisms to address trade-related environmental and labour matters that may arise between Canada and Indonesia, including any that could be potentially related to bilateral trade in palm oil. The agreement's subcommittee on environment and the agreement's labour council allow Canada and Indonesia to advance the agreement's commitments on matters such as sustainable agriculture, sustainable forest management and the elimination of forced labour and child labour.

    The agreement contains robust consultation mechanisms to resolve any environmental or labour matters that may arise. If the parties continue to have divergences in position, there is a dispute settlement mechanism that would enforce the parties' commitments in this respect.

    We also have strong mechanisms outside of the CEPA that help to deal with any sorts of issues of this nature that would arise linked to the importation of palm oil. I'd be happy to elaborate on what some of those are, if it would be useful to the committee.

     Thank you. That's sufficient at this time.

    Is there further discussion?

    Mr. Savard-Tremblay.

    I believe that someone is here from the Canada Border Services Agency. Could this person remind us how many shipments Canada has seized in recent years because of human rights violations?

    I don't have this information, but I'll find it and send it to you.

    It's too bad. This could have shown us just how much the model in question doesn't work. We've already carried out studies on this. We have evidence that it doesn't work. We're told that only a little over $50 million worth of palm oil is involved and that we have mechanisms, agreements and deals in place. In short, everything's fine and dandy. Yet when we took a broader look at the method for screening goods produced by forced labour, we heard that this type of screening is virtually non‑existent.

    Go ahead, Mr. Mantle.

    Sorry, I'm taking advantage of the officials' being here.

    My Bloc colleague's question reminded me of another issue on information and data forthcoming from the CBSA. The committee will recall that other members of the CBSA were here and we had asked about goods that were detained because they were produced in whole or in part by forced labour. The written response to the committee was that they were sorry but they can't give that information to us.

    I'm wondering if you would comment on why the CBSA feels it's unable to provide the committee with details on goods that arguably, or at least by the CBSA's own admission, may violate Canadian law. Why can't that information be provided to the committee?

     I am not able to provide it immediately, but I will search for it and provide it.

     Excellent.

    I'm just going to say that I've been down this road before, where we get a response from the CBSA with some reference to either its privacy concerns or a piece of the Customs Act that they can rely on. I'll just say that if the information is not forthcoming, more production orders will be moved by me at this committee.

     Is there any further discussion on BQ-1?

    (Amendment negatived: nays 8; yeas 1 [See Minutes of Proceedings])

    The Chair: Next is BQ-2.

    Monsieur Savard-Tremblay, would you like to speak to BQ-2, please?

    I prepared an amendment that even you will no doubt find acceptable.

    This time, the amendment doesn't call for the appointment of a group of experts, but simply for the minister to conduct an annual follow‑up to ensure that none of these types of violations are taking place. It's all about transparency.

    I already moved somewhat similar amendments in the case of the agreement with Ukraine. As we'll see, a number of these amendments are along the same lines. At the time, I had the approval of our friends in the Liberal Party of Canada. I hope that I can get it this time too. It's just a requirement for transparency and monitoring. If everything is fine and dandy, as the senior officials told us, we'll be able to receive confirmation each year without any issues.

    It's an interesting amendment. I'm going to rule that it's admissible.

    Is there any discussion or debate on this before we call a vote on BQ-2?

    Mr. Naqvi.

     Thanks, Chair.

     I was going to go to Mr. Fowler, perhaps, to again get his thoughts on this particular recommendation.

    I noted that it relates to the palm oil industry. I'm assuming your rationale will be pretty close to what you outlined in your previous response in terms of the impact of that particular sector, that industry, on Canada and within the Canadian market.

    Yes, I can confirm that the information that I think is relevant to consideration of this amendment is the same as the information that I read into the record for the last proposed amendment.

     Thank you.

    Monsieur Savard-Tremblay.

    I'm simply saying that, if all goes well, we have nothing to fear from an annual report that should reassure us.

    Could you repeat that, please? We're having a bit of a problem with the translation here today.

    I'm simply pointing out that, if all goes well, as explained to us, we have absolutely nothing to lose by having the minister provide an annual report.

    I now call for a vote on BQ-2.

    (Amendment negatived: nays 8; yeas 1 [See Minutes of Proceedings])

    The Chair: Now we have proposed amendment BQ-3.

    Would you like to speak to it?

    Yes.

    This time, we're shifting our focus away from the only industry reported as having issues—although this doesn't seem to be keeping anyone here up at night—to talk more generally about human rights and the environment. Again, this amendment is more along the lines of the amendment that I had adopted for the agreement with Ukraine. I believe that it received unanimous support. I remember that it at least received the support of our friends in the government.

    The amendment calls for the appointment of a group of experts. However, since you'll no doubt rule the amendment out of order, Madam Chair, I can tell you right now that I'll be challenging your ruling. We'll be voting on this topic. We'll no doubt see our colleagues' lack of consideration. We can then move on to the next amendment.

     Is there any further discussion on BQ-3?

    Before you have any more discussion, just so you know, I'm ruling it inadmissible. You probably already know that. It imposes a charge on the public treasury, as it extends the objects or purposes, or relaxes the condition and qualifications specified in the royal recommendation. I have ruled it inadmissible.

    Thank you.

    I would like to challenge your ruling, Madam Chair.

    The chair's ruling has been challenged. Shall the decision of the chair be sustained?

    (Ruling of the chair overturned [See Minutes of Proceedings])

    The Chair: Is there further discussion or debate on this before we vote on it?

    Mr. Mantle.

     Thank you, Madam Chair.

    Again, I'm going to take this opportunity because we have our panel of experts here.

    I've referred to article 22.5 in the CEPA as full of a lot of hortatory language.

    Would you agree with that assessment?

    I'm just reading the text now.

    I think that is a fair characterization of the obligation.

    It creates no enforceable obligations subject to dispute resolution or requiring changes to Canada's domestic law.

     That's correct.

     Why did you agree to put these provisions in? They don't seem to mean anything.

     We put them in because they establish a set of expectations that both parties share with respect to how enterprises from the two parties carry out operations under the agreement. Because that agreement is trade liberalizing, it removes certain market protections that would otherwise have applied. We like to have a means by which to take up issues related to responsible business practices and, generally, to the business practices of enterprises of other parties operating in our territory.

    This creates an opportunity for us to do so through the various institutional bodies we will establish under this agreement. It creates the expectation and provides us with an opportunity to discuss any related issues within the institutional structure of the CEPA.

    I would suggest that those opportunities exist without writing out language that creates no obligation. In law, we say, “You have no right if there's no remedy”, and there's no right or remedy included in these provisions.

    Would you consider the inclusion of additional industries in the CORE to be a potential way to address these, at least domestically? The CORE is the Canadian Ombudsperson for Responsible Enterprise, which can investigate Canadian conduct abroad. Currently, this does not include agricultural sectors. It's only garments, mining, oil and gas, etc.

    I would need to consider that proposal in the context of how the CORE operates presently. Obviously, it's not a question directly linked to the bill before the committee today.

    Therefore, I will defer but consider the question.

    That's fair enough.

     Is there any further discussion or debate on BQ‑3?

    Just so everybody knows exactly which one this is, the number in the top left-hand corner is 13898120.

    (Amendment negatived [See Minutes of Proceedings])

    The Chair: We'll move on to BQ‑4.

    Would you like to speak to it, Mr. Savard-Tremblay?

    Given the refusal to appoint a group of experts, I would like to think that our friends will at least trust their minister to provide a proper report. Again, what was good for Ukraine should be good for Indonesia. If not, I would like an explanation. I would especially like to hear from my colleagues on the other side of the table, who are rather quiet today.

     All right.

    I don't know if any of our experts want to speak to BQ-4 in answer to Mr. Savard-Tremblay.

     Thank you, Madam Chair, for the opportunity.

    Again, I would simply draw the committee's attention to existing mechanisms outside the CEPA that are intended to address the issues that are related to the amendment that's been moved.

    I'll mention for awareness, although I'm sure the committee is already aware, that Canada does maintain a national contact point, which is a government-backed office that promotes responsible business conduct under the “OECD Guidelines for Multinational Enterprises on Responsible Business Conduct”. This is otherwise known as the OECD guidelines. These guidelines set clear international standards on issues like human rights, labour, the environment and anti-corruption.

    National contact points, NCPs, are part of a global network that provides a platform for collaboration and coordination between countries, including on cross-border cases with respect to these issues. NCPs provide a free, impartial, non-judicial dispute and complaint resolution mechanism where communities, workers or other stakeholders can raise concerns regarding potential non-observance of the OECD guidelines. Canada's national contact point could, for example, hear complaints regarding issues arising in Canada or from Canadian companies operating in Indonesia. The process follows internationally recognized principles of transparency, fairness and accountability.

     Thank you very much.

     Mr. Mantle.

     What action can the national contact point take if it receives a complaint about the conduct of a Canadian enterprise overseas?

     We're going to have to identify the specific actions that are within the remit of the national contact point. We will come back to you maybe as early as later in this session.

    I don't have that information immediately at hand, and I would hate to mislead the committee by speculating inaccurately about the actions that are within its authority.

    That's fair enough.

    In your response, it would be helpful if you could provide examples—anonymized or however you want to provide them—of what actions the national contact point has taken. I think you'll find that there have not been any.

    Mr. Savard-Tremblay.

    I want to summarize the previous responses. We don't need this type of amendment because we already have mechanisms and organizations in place, but we can't be told what they do. That's more or less what we just heard.

     Okay.

    Is there any further discussion on BQ-4? No.

    (Amendment agreed to: yeas 9; nays 0 [See Minutes of Proceedings])

     Congratulations. Thank you very much.

    Now we're on BQ-5—

    Thank you for abandoning your discretion.

    —which is number 13899223.

    Would you like to speak to BQ-5 as you enjoy your celebration there?

    I'll continue. I would like to thank my colleagues for remembering that what was good for Ukraine was good for Indonesia. I'll be inviting them to do again what we did just last week. What was good for the United Kingdom must be good for Indonesia as well. I would like to propose the introduction of a provision for a review every three years.

     Thank you very much.

    Let me remind you that, last week, my colleagues said that this was a good idea and that it set a precedent, but that we would do it again.

     That was me last week. I'm a different person.

     All those in favour of BQ-5?

    (Amendment agreed to [See Minutes of Proceedings])

    The Chair: Since there are no amendments proposed for clauses 16 to 36, is there unanimous consent to group them for the vote?

    Hold on, Madam Chair. Our valiant senior officials said something about clause 26.

     You have a proposed clause 36.1.

    Yes, but I was talking about clause 26. At the start, I asked for the number of a clause concerning a specific matter. I would like a recorded vote on this specific clause. I don't have any issue with adopting the others all at once. However, I would like a recorded vote on clause 26.

    Then I'll ask to group clauses 16 through 25.

    All those in favour?

    Some hon. members: Agreed.

    (Clauses 16 to 25 agreed to)

    The Chair: Do you want to speak to clause 26?

    I would like a recorded vote.

    Shall clause 26 carry?

    (Clause 26 agreed to: yeas 8; nays 1)

    Shall clauses 27 to 36 carry?

    (Clauses 27 to 36 agreed to)

    There's a new clause 36.1 being proposed by the Bloc, BQ-6, numbered 13899626.

    Would you like to speak to it, Mr. Savard-Tremblay?

    Yes. Again, I'm moving this amendment for the sake of transparency and reporting. It seeks to identify the costs associated with the results, meaning the costs generated by closed or ongoing investor‑state dispute settlement cases. The amendment calls for the preparation of this report on a yearly basis.

     Unfortunately, Mr. Savard-Tremblay, while your winning cycle is possibly continuing, I have to rule that the amendment is inadmissible. The Settlement of International Investment Disputes Act is not being amended by Bill C-18, and therefore it is, in my opinion, inadmissible.

    I would like to challenge your ruling. We can proceed to a recorded vote.

     I have ruled that it is inadmissible.

    (Ruling of the chair overturned: nays 5; yeas 4)

    The Chair: My ruling of inadmissibility has been overturned, which now means that it's admissible and subject to a vote.

    Mr. Chambers, go ahead.

     Madam Chair, I hope you don't take the “no” votes personally.

     Absolutely not.

    That's good, thank you.

    My read of the amendment is what I believe could be achieved through an Order Paper question within a quicker time frame than is proposed. I appreciate the desire for more transparency, but I think we can achieve it through other non-legislative means.

    Mr. Mantle.

     Thank you, Madam Chair.

     I have a question for our panel.

    In the first review of the NAFTA, which became the CUSMA/T-MEC/USMCA, Canada was quite happy to drop ISDS between Canada and the United States given our record of losing most of those cases.

    Why then were we eager to include it in the CEPA with Indonesia?

     The question of which provisions are important to include in any given free trade agreement is a function of the bilateral relationship with that country in question, the issues that are likely to arise in the context of that bilateral commercial relationship, and the legal and regulatory regime that exists within the trading partner in question.

    In the context of the CUSMA review, I think there was a collective degree of comfort between Mexico, Canada and the United States that North American legal and regulatory recourse was sufficient to deal with any issues that might arise with respect to the settlement of disputes related to investment. With respect to our other partners around the world, we make that evaluation on a case-by-case basis.

    In the case of Indonesia, there is significant Canadian investment in the Indonesian marketplace. Based on our consultations, those investors would appreciate having recourse to alternative dispute settlement, which can give them additional legal arguments to advance in a shorter time frame, in many cases, than domestic legal challenges would allow for. In the context of this agreement and in the context of the overall balance of concessions, we felt that this was a valuable provision to secure for Canadian investors operating in that economy.

    You are quite eloquent, Mr. Fowler. If I can translate, you had some concerns, perhaps, with the domestic rule of law or other avenues for Canadian companies to avail themselves of in Indonesia, and you wanted to maintain another option. Am I hearing that correctly?

     I think you've perhaps put some words into my mouth that weren't there when I stopped talking.

     That's why I'm asking.

     We spoke to stakeholders who told us that they would value having alternative options to pursue any investment-related disputes that arose. We try, through our negotiations, to address the specific interests and sensitivities our stakeholder community brings to our attention as negotiators. In the context of this negotiation, we felt that it was possible to secure outcomes that would address those. Because of the dynamics that were at play in these negotiations, we pushed for such an outcome.

     You thought those stakeholders' claims or requests were meritorious, and therefore you negotiated toward them.

     That's right. We had no reason to question the considerations that informed the position the stakeholders were giving us.

    Thanks.

    Not seeing any further discussion, we'll call for a vote on BQ-6.

    (Amendment negatived: nays 8; yeas 1 [See Minutes of Proceedings])

    The Chair: There are no amendments for clauses 37 to 45. Do I have unanimous consent to group them for the vote?

    Some hon. members: Agreed.

    (Clauses 37 to 45 agreed to)

    (Schedules 1 and 2 agreed to)

    The Chair: Shall the short title carry?

    Some hon. members: Agreed.

    The Chair: Shall the title carry?

    Some hon. members: Agreed.

    The Chair: Shall the bill as amended carry?

    Some hon. members: Agreed.

    On division.

    Shall the chair report the bill as amended to the House?

    Some hon. members: Agreed.

    The Chair: Shall the committee order a reprint of the bill as amended for the use of the House at report stage?

    Some hon. members: Agreed.

    The Chair: The bill has passed. Thank you all very much. Congratulations. You got a little bit through of the extra things you wanted.

    Witnesses, you may continue on with your other responsibilities. Thank you very much for your help in moving this forward.

    I believe there's been a request regarding the associate members motion from Mr. Chambers.

     Madam Chair, may I just request or look for consent—

    Why don't we have a brief suspension?

     Yes, a brief suspension, maybe until the top of the hour, and that would give us some opportunity to discuss our relevant motions.

     All right. Thank you.

    The meeting is suspended until noon.

     I'm calling the meeting back to order.

    We've all received a copy of a motion talking about adding up to three associate members per party at committees.

    Not seeing any objection, we will adopt that motion to add the three additional associate members when necessary to the committee.

    (Motion agreed to [See Minutes of Proceedings])

    Thank you.

    Mr. Naqvi.

     Thank you, Chair.

    We have a sort of programming motion, if I can call it that, to present. It brings together a few different motions that have been tabled at this committee and will allow us to do our work in a thoughtful way.

    Hold on, Mr. Naqvi.

    Yes, Mr. Savard-Tremblay.

    Sorry to interrupt you, but this concerns a motion recently distributed. Incidentally, I've had one pending since December and another one since early February.

     This is an updated motion; it's the same motion. They just changed the date.

    Yes, I know.

    Will we be able to proceed with the two motions that I submitted a long time ago? I would have preferred that they be handled first. However, that's okay, as long as you tell me that we'll be proceeding with them right afterwards.

    The motion adding associate members has already been adopted by everyone.

    Mr. Naqvi signalled that he wanted the floor.

    You have the floor, Mr. Naqvi. Please proceed.

     Thank you, Chair.

    This motion has been circulated. If you like, I can read the motion in its entirety as well. If not, everyone has an English and French version of this motion, which essentially adopts a work plan that puts in order—

    Has that been distributed to the committee members?

    Yes, it's been distributed to the clerk.

     We're going to suspend for a couple of minutes until we are sure that everybody has the motion in front of them.

     I call the meeting back to order.

    You had the floor, Mr. Naqvi. I go back to you.

    Chair, I think you probably will find agreement among all members to adopt a work plan for this committee. We've done some remarkable work, and I want to thank all of the members for the work we've done.

    This motion incorporates the priorities of all of the members.

    Go ahead, Mr. Chambers.

    I appreciate the work that's been done. I would just mention that we have the CUSMA study open.

    This work plan does not take us all the way to June or to the end of the session.

    My recommendation would be that we leave some time to include a meeting on CUSMA at a regular interval to keep that study going, but we're happy with the work plan as it appears.

    I'll seek some clarification. There's a section at the very end of the motion that indicates a proposed ordering. The paragraph after number six in the motion talks about the listed order of the studies. It would be my preference to leave scheduling open to your judgment. That's notwithstanding what it says in the motion. It's in order to ensure that we have meetings and witnesses so that you can start—

     It's a continuation of a different work plan.

    —a study at any time of your choosing. We can discuss that among the parties, but that would be a recommendation. The chair could use her discretion to deviate from that list as necessary.

    I'm so glad you have a little bit of confidence.

    Thank you all very much. I move adjournment.