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View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Michael. Thank you, everyone.
Good morning, everyone.
I would like to begin by acknowledging that we are gathered on the traditional unceded territory of the Anishinabe Algonquin people.
Mr. Chair, honourable colleagues, thank you for inviting me to appear before the Standing Committee on Foreign Affairs and International Development to briefly review some of our government's foreign policy priorities, as well as the important work that we are continuing to do to address the challenges facing Canada and the world.
As we approach the end of this parliamentary session, I would also like to express my gratitude to all members of the committee for the work they have undertaken in recent years in support of Canada's foreign policy.
Let me also introduce the extremely able team of public servants who are here serving all of us today.
Marta Morgan is the newly appointed deputy minister of foreign affairs.
I think this is your first public outing.
View Chrystia Freeland Profile
Lib. (ON)
Marta is, I believe, the first woman deputy minister of global affairs. Congratulations. It's great.
Arun Thangaraj is our Chief Financial Officer. He is the guy who keeps the trains running on time. It's a huge department. You do a great job, Arun. Thank you also.
Here's a man who needs no introduction: Steve Verheul, our chief NAFTA negotiator and CETA and section 232.
Having recently attended meetings of the Arctic Council in Finland, I would also like to take the opportunity to publicly thank the members of this committee for their shared, collective, cross-party leadership on the Arctic and for the excellent report and recommendations.
The most pressing issues facing the Arctic, such as climate change and advancing the interests of indigenous people in the north, require broader public attention, and your work has helped to advance these important issues. Thank you very much. It's very impressive.
Around the world we see a growing trend of leaders and voters who question the value of the rules-based international order and, indeed, of liberal democracy itself. That's why countries, like Canada, who believe in liberal democracy and the rules-based international order now need to fight back. Doing so is vitally important to our national interest. Canada, with just 36 million Canadians, can never thrive in a great power world where might makes right. That's why Canada today is one of the most ardent defenders in the world of liberal democracy and the rules-based international order.
Earlier this spring I represented Canada at ministerial meetings of two of the most important multilateral institutions of which Canada is a member: NATO and the G7. These gatherings offered the opportunity to reiterate Canada's strong support for the rules-based international order; to discuss how we can further work together to defend this order from maligned foreign interference and the rise of authoritarianism; and to discuss how, working together, we can solve some of the greatest global challenges of our time, like climate change, the hollowing out of the western industrial middle class, and global refugee crises.
Allow me to highlight some of the key areas in which Canada is working concretely to defend and maintain rules-based international order, starting with trade.
Rules-based trade doesn't guarantee peace between nations and doesn't make the multilateral system infallible, but it does help.
That is why working together for free trade is essential. Last fall, Canada concluded negotiations on the new NAFTA with the U.S. and Mexico. In November, we signed the agreement on the margins of the G20 summit in Argentina.
Throughout our intense negotiations, we stayed focused on what really matters to Canadians: jobs, growth and expanding the middle class. We held out for a good deal and that's what we got. We guaranteed continued access to our largest export market for Canadian workers and Canadian businesses, and we succeeded in preserving key elements of NAFTA, including chapter 19, the all-important dispute settlement mechanism, and the cultural exemption.
We addressed important bread and butter issues by cutting red tape to make it easier for Canadian businesses to export to the U.S. market. Despite this success, one major hurdle remained. The U.S. section 232 “national security” tariffs on steel and aluminum.
When the U.S. imposed tariffs, Canada retaliated, imposing dollar-for-dollar countermeasures. We stood firm in our position that these tariffs were not appropriate between two countries which, in addition to being important national security partners and allies, also had a free trade agreement. This was a point we made clearly to the U.S. administration, to members of Congress and to labour and business leaders south of the border.
As a result, just over a week ago, Canada successfully negotiated the complete lifting of U.S. tariffs. As I said last week when I visited Canadian steel and aluminum workers in Regina and Saguenay, that is why we succeeded. We knew that the facts were on our side. We knew we were not a risk to the national security of the United States. We knew that our steel trade with the United States was balanced. We remained united. We have been patient. We have been persistent.
The result was that Canada successfully negotiated a full lift of the tariffs just over a week ago. Here is why we succeeded. We knew the facts were on our side. We know that we are not a national security risk to the United States. We know that our trade in steel with the United States is balanced. We stayed united. We were patient. We were persistent. I think persistence and unity are some great Canadian values, and I'm really proud of the way our whole country came together in this effort.
Our government's position was that it would be difficult to move ahead with the ratification of the new NAFTA while the tariffs were in place. Now that the tariffs have been lifted, our government intends to move ahead with ratification. We know that having the new NAFTA ratified will provide economic certainty for Canadians.
Elsewhere in the world, Canada is using its voice to advocate for the rules-based international order. I recently travelled to Kiev, following the presidential elections in Ukraine. This was an opportunity for me to meet with the newly elected president, Volodymyr Zelensky. I reiterated Canada's continued support for Ukraine sovereignty and territorial integrity as well as our commitment to continue working with the international community to maintain pressure on Russia.
To support elections and democracy in Ukraine, our government contributed short-term and long-term election observers as part of the Canadian election observation mission. It has been very ably led by former foreign affairs minister Lloyd Axworthy. Our observers will be back for the parliamentary elections in July. We have also provided a $2.8-million assistance package to counter foreign disinformation in the Ukrainian parliamentary elections and presidential elections now past.
In another important show of support for Ukraine, on March 15, Canada, the EU and the U.S. announced new sanctions in response to Russia's aggressive actions in the Black Sea and the Kerch Strait and Russia's illegal annexation and ongoing occupation of Crimea.
I was also pleased to announce a three-year extension of our training mission to Ukraine, Operation Unifier, through which Canadian soldiers have helped to train more than 11,000 Ukrainian troops. I've heard first-hand about how valuable that training has been.
Russian aggression to Crimea and eastern Ukraine poses an existential threat to Ukraine. At the same time, Ukraine faces serious domestic challenges, particularly the need to reform its post-Soviet economy. To support this work, Canada will host the third annual international Ukraine reform conference early this summer in Toronto.
Last year, Canada deployed about 1,000 Canadian soldiers to provide NATO and Euro-Atlantic security, including under the leadership of the NATO mission in Iraq and NATO's enhanced Forward Presence battlegroup in Latvia, the air force in Romania and our military support to Ukraine.
Canada is proud to lead the NATO mission in Iraq. As part of this non-combat-oriented training and capacity-building mission, NATO supports efforts to train Iraqi security forces in their efforts to prevent the re-emergence of Daesh and other terrorist groups.
In terms of peacekeeping, the United Nations and partner countries strongly and publicly support Canada's work. At the recent UN Peacekeeping Ministerial, the Secretary-General praised Canada's contribution, in particular the Elsie Initiative, which aims to increase the meaningful participation of women in peace operations.
In our own hemisphere, the world has watched with great concern as Venezuela, under Nicolas Maduro's rule, has systematically dismantled democratic institutions and violated human rights. The Maduro regime has created a political, economic and humanitarian crisis. As a result, millions have fled the country and millions more are suffering due to severe shortages of food, medicine and the necessities of life.
Canada has been leading on this issue alongside our partners, the other members of the Lima Group, which has met 13 times since its formation in August 2017. The members of the Lima Group are Argentina, Brazil, Chile, Colombia, Costa Rica, Guatemala, Guyana, Honduras, Panama, Paraguay, Peru and St. Lucia. These countries joined—indeed, led—almost 50 others around the world in recognizing Juan Guaido as interim president, in line with the Venezuelan constitution.
Two weeks ago, I was at a meeting in Havana, Cuba, to discuss the economic, political and humanitarian crisis in Venezuela and the work we can undertake together to address it. We will continue to support the path forward as outlined by the national assembly and interim President Guaido and to oppose outside military intervention. A peaceful transition of power needs to be led by Venezuelans themselves.
Last fall, the House of Commons recognized that the violence perpetrated against the Rohingya by Myanmar's security forces constitutes genocide. I commend many members of this committee for your leadership on this issue. I would also like to recognize the work of Bob Rae, who was appointed as Canada's special envoy to Myanmar. He published an important report on his work and findings there.
The atrocities committed against the Rohingya, including terrible sexual violence, have led nearly one million Rohingya to flee the country into neighbouring Bangladesh. Canada has committed $300 million over three years for humanitarian assistance, development, and peace and stabilization efforts. We will continue to work with our allies and partners, very much including Bangladesh, to resolve the crisis and ensure justice for the survivors of this genocide.
In our work to support liberal democracy and the rules-based international order, we recognize that we are most effective when we work with like-minded partners. That is why we are so pleased that Canada will join the U.K. in co-hosting the first global conference for media freedom. The conference will take place in the U.K. in July. We will be working together to further advance the cause of a free and independent press globally. This is such an important pillar of liberal democracy.
Mr. Chair, I would like to end on a difficult but important note. I am sure members of this committee, like all Canadians, are concerned by the arbitrary detentions of Canadians in China. This is indeed a difficult time in our relationship with China.
Chinese officials have been clear that from their perspective, these difficulties began with an extradition request from the United States. We complied, as we are committed to doing under our extradition treaty with the United States in place since 1976. I am confident that was the right thing to do, and I am confident Canadians know that. We are a rule-of-law country, and we are a country that honours our treaty commitments.
This was not a political decision. It was not a political message, and there has been no political involvement.
We strongly condemn the arbitrary arrest of Michael Kovrig and Michael Spavor. The Government of Canada continues to call for their immediate release. I want to assure everyone here and everyone listening that this is a top priority for the Prime Minister, for our whole government and for me personally.
Many countries share our concern, and we have rallied an unprecedented number of partners around the world in support of Canada's position. Canada continues to express its appreciation to those who have spoken in support of these detained Canadians and the rule of law, including: Australia, Denmark, Estonia, France, Germany, Latvia, Lithuania, the Netherlands, Spain, the United Kingdom and the United States, as well as the EU, the G7 and NATO.
Our government is seized of these cases and is using any and every opportunity to raise them with our allies and partners. Here and in China, we have made our position clear to the Chinese authorities. Just last week, my parliamentary secretary, Rob Oliphant, was in China as part of a parliamentary delegation, where he raised this issue directly with the officials he met.
Thank you for doing that, Rob.
We will continue to advocate on behalf of these brave Canadians.
In conclusion, I do want to express how much sympathy I have for the Spavor and Kovrig families. They are supporting both Michaels with incredible grace and determination.
With that, I will be happy to answer your questions.
Thank you.
View Chrystia Freeland Profile
Lib. (ON)
Thank you for the question, Erin. I'm very glad that we're starting with that issue.
The consular access is limited, but it exists. I have reports immediately after the consular visits. I would like to say that one of the things we do that Mr. Kovrig and Mr. Spavor both ask for is for them to hear about the continued efforts we're making on their behalf. I hear after every visit that it makes a real difference to them to know that we are fighting for them and standing up for them and to know what we are doing.
I would also like to say—and really pay tribute to both of them—that the situation is very difficult. Both of them are incredibly resourceful and incredibly brave and are handling themselves under highly inappropriate circumstances very, very well.
Finally, I do want to thank the Canadian diplomats in China who are providing very strong consular support for the two Michaels in what are also difficult circumstances for our diplomats.
View Chrystia Freeland Profile
Lib. (ON)
I'm going to speak for a moment about the extradition process, because that's a very important point for our Chinese interlocutors also. I'd like to take the opportunity again to point out—and this has a very important bearing on the circumstances of the two Canadians—that as everyone on this committee knows, it is not a political process. It is a question of the rule of law. It is a question of Canada honouring its treaty commitments. As has been said clearly—but I think it's really important for our Chinese interlocutors to understand this—this was not a political decision and there was no political interference.
We immediately ensured that Ms. Meng had consular access provided to her. That was a very important point. It was important for the Chinese authorities to be able to have access to her, just as it is important for us to have access to our detained Canadians, so there was an immediate outreach and contact with the Chinese authorities.
When it comes to my contacts with my Chinese counterparts, I have spoken on a few occasions directly with the Chinese ambassador to Canada. I would be happy at any time to have a direct conversation with Wang Yi, the Chinese foreign minister. We have been clear with the Chinese authorities that we are prepared for that conversation at any time. I'm happy to offer that invitation at another time—
View Chrystia Freeland Profile
Lib. (ON)
In fact, our outreach to China happened before the detention of the Canadians. Our outreach to China happened immediately upon the detention of Ms. Meng, as is appropriate.
View Chrystia Freeland Profile
Lib. (ON)
Probably it's not very appropriate to talk about in camera conversations, but at any rate, I wasn't present for those.
Let me simply say, as is best practice and as Canada always does, upon the detention of Ms. Meng, Chinese authorities were immediately engaged because they were offered consular access to her. That is how we expect Canadians to be treated when they are detained abroad, and that is what we do for all detained foreign nationals in our country.
Hon. Erin O'Toole: So—
Hon. Chrystia Freeland: Hang on, Erin.
Chinese authorities were immediately engaged in that way. When it comes to engagement at other levels, let me be very clear with Canadians and also to reiterate to the Chinese authorities—
View Chrystia Freeland Profile
Lib. (ON)
View Chrystia Freeland Profile
Lib. (ON)
Hang on, Erin. It is our understanding that in these situations the Chinese practice tends to be—and Canada is not the only country that has found itself in this situation—to hold off on meetings at the highest level.
View Chrystia Freeland Profile
Lib. (ON)
Thank you for that important question, Mr. Baylis.
Again, I would like to publicly thank Steve Verheul and the entire Canadian negotiating team. Our negotiators are really the best in the world. I think I can tell you what one of the negotiators working with Mr. Verheul told me during the negotiations. He said,
You know, we're like the navy seals of Canada.
It was in Washington, after a very long day. All Canadians should be proud of the professionalism and patriotism shown by our negotiators. It is a privilege and an honour to work with Mr. Verheul and his team.
With respect to the new NAFTA, I would like to highlight two points that are important to Canadians. Our priority has always been to maintain access to the American market. We have access to it right now because we have NAFTA. This agreement is now in effect and offers us very significant economic opportunities. As everyone knows, this access was threatened. Indeed, the Americans wanted to hold new negotiations and modernize the agreement. However, we have been able to negotiate a new agreement that will allow us to maintain our access to the American market, which is so important to us.
As I said in my remarks, the following two elements were very important to us during the negotiations. We wanted to maintain chapter 19, which is very important for all Canadian industries, perhaps especially for the softwood lumber industry. We also wanted to maintain the cultural exception, which is also very important for all Canadians.
View Chrystia Freeland Profile
Lib. (ON)
I certainly can, Frank. I would be happy to do so.
Steve and I spent quite a lot of time on that side letter, as did a much broader group. Maybe this is an opportunity for me to single out Martin Thornell, for his extremely hard work on the car issue. He is our rules of origin negotiator. He is a really brilliant person and he is very committed.
On the car sector in general, I also want to take this opportunity to thank Flavio Volpe, the Canadian car companies and car parts manufacturers and the union leaders, all of whom we worked with very closely on this effort. In fact, as the final details of the side letter were being negotiated, Steve and I were on the phone constantly, hour by hour, with these people. They really helped us shape the final agreement.
Another important thing for people to understand is that the side letter has entered into force already. It was signed on November 30 in Argentina by me and Ambassador Lighthizer. It now applies.
That's a very important point for—
View Chrystia Freeland Profile
Lib. (ON)
Yes, I think that's what you're getting at, Frank. It's a really important point because as the United States has said publicly, the U.S. section 232 investigation on cars is now complete and the U.S. has said that over the next six months they want to have negotiations with Japan and the European Union.
The Canadian car sector is safe because that side letter is essentially an insurance policy, which means that in the event of section 232 action, our industry would not be affected.
View Chrystia Freeland Profile
Lib. (ON)
Thank you for this question.
Welcome to the committee. I think this is the first time we've spoken here, you and I.
I can assure you that after Mr. Khashoggi's murder, no new arms export permits to Saudi Arabia were granted. That's what we have announced, that's what we have done and continue to do. It's a matter we take very seriously. We are looking at the situation.
I would like to highlight something important. Agnès Callamard, the UN Special Rapporteur, is currently investigating the murder of Jamal Khashoggi. I spoke with Ms. Callamard on the phone, and I have also met with her at the UN. We fully support her work.
View Chrystia Freeland Profile
Lib. (ON)
That's an important question. One of the elements of this revision is the investigation into the death of Jamal Khashoggi. That's why I talked about Agnès Callamard's work. The death of Jamal Khashoggi is one of the causes that inspired the press rights conference in England, which I have already mentioned. Jeremy Hunt, the British Secretary of State for Foreign and Commonwealth Affairs, and I announced the conference in France during the G7 meeting. We mentioned that the death of Jamal Khashoggi was one of the elements that inspired the conference.
You know, from speaking in the House, that the war in Yemen is one of the issues we're working very hard on. This is a significant part of this big issue. A few weeks ago, I had a conversation with Martin Griffiths. Canada is strongly committed to the process. With Mr. Griffiths, we are looking for a way to reach a ceasefire, to find peace in Yemen.
View Chrystia Freeland Profile
Lib. (ON)
You said there were 30 seconds left?
View Chrystia Freeland Profile
Lib. (ON)
Okay.
So I'll raise two points. I share your concerns about the war in Yemen. I think this is a crucial issue and a very important part of this discussion. For that reason, Canada is very committed to this. I would like to stress something, because it's important—
View Chrystia Freeland Profile
Lib. (ON)
May I finish my intervention?
From the moment Jamal Khashoggi died, new export permits were not granted. This is an important fact.
View Chrystia Freeland Profile
Lib. (ON)
I am very happy to talk about this.
Maybe I'll start with a phone conversation I had this morning before coming to the committee, where I had a chance to speak to Mike Pompeo, the U.S. Secretary of State.
Because the section 232 tariffs are on national security grounds, this was an issue that was appropriate to raise with the Secretary of State. Also, I do want to thank my colleague Harjit Sajjan who raised the issue very effectively with the Pentagon.
This morning I had a chance to thank Secretary Pompeo for the work he did on this, which I think was considerable.
I think this is really a story of our country being united, of our country being persistent, of our country understanding that facts matter and of our country being resolute.
You guys should talk to Steve afterwards, because I'll be interested in his view, but I think the lifting of the tariffs actually started on July 1, when our retaliatory measures took effect. It was the largest trade action that Canada had taken since the Second World War. It was a clear sign that Canada would act in response.
It was also important that we took that action, as I believe the Prime Minister put it at the time, more in sorrow than in anger, that we understood that this action was harmful to everybody, that having tariffs between Canada and the U.S. just made no sense and hurt people on both sides of the border, and that—
View Chrystia Freeland Profile
Lib. (ON)
The fact that we acted strongly from the outset was absolutely essential. I know there were voices in Canada that called on us publicly to drop the retaliation. I'm glad we didn't listen to those voices.
The retaliation was difficult. It was difficult to stay the course, but that was absolutely essential.
I do want to thank another person and I'd like to just mention a couple of other things.
We were able to work very closely with the leaders of the steel and aluminum sectors, both industry and unions. We had a meeting of the steel CEOs last Friday in Toronto. Steve was there, as was Ambassador MacNaughton. The steel CEOs said to me and Steve that they would miss our sometimes nearly weekly Friday get-togethers. I do really want to commend both of those sectors for doing the homework that was necessary for us to support them. They worked hard. They got together.
I'll also mention Catherine Cobden. She is the head of the steel association and she did a really good job of bringing those people together.
A final person who I think it's worth mentioning is Senator Chuck Grassley, the chair of the U.S. Senate finance committee. He has been very clear about his view that the section 232 tariffs needed to be lifted. He wrote an important op-ed in the Wall Street Journal on April 29, where he said explicitly that NAFTA could not be ratified in the U.S. Senate as long as the tariffs were in place.
I have been in close touch with Senator Grassley. I've met him twice in person and spoken to him often on the phone. Our ambassador, David MacNaughton, and our embassy have been working closely with him and his staff. His strong work and his strong credibility really also made an important difference.
I emphasize that because it's important for us to recognize a good trade deal—
View Chrystia Freeland Profile
Lib. (ON)
Sorry for letting my enthusiasm about section 232 take over.
Yes, the Columbia River Treaty is obviously an important treaty for B.C. in particular, but also for all of Canada. I was recently in Castlegar in the Columbia River basin.
View Chrystia Freeland Profile
Lib. (ON)
One important thing we were able to do and announce there is that, for the first time in a Canadian treaty negotiation, the indigenous people will be represented at the table, sitting on the Canadian side—
View Chrystia Freeland Profile
Lib. (ON)
Yes. Thank you for the question. It's a really important issue.
The situation in Venezuela is a tragedy. Venezuela not so long ago was among the richest countries in our hemisphere, and it has now been reduced to a terrible state of human misery. There has been, by the Maduro regime, a systematic and intentional dismantling of Venezuelan democracy. That is why we, the hemispheric partners of Venezuela, had to act, and we are acting.
On a few specifics, I can announce a few things that are happening. Next Monday, June 3, we will have a meeting in New York of three countries of the Lima Group—Canada, Chile and Peru—with the European-led ICG, led by Federica Mogherini. The foreign minister of Portugal will also be there. That's an effort to continue our work with international partners.
It's important because I think one of the really central positive facts in a tragic situation over the past few months has been the very wide international recognition of Juan Guaido as the legitimate interim president of Venezuela. The European Union and the European Union countries have been central in that, so it's an important meeting.
We will also be having a meeting of the Lima Group in Guatemala on Thursday, June 6, which I will be attending, to continue the conversation.
Obviously one of the issues I discussed with Secretary Pompeo this morning was the situation in Venezuela, and we continue to be working closely with our American partners.
I'd like to mention for Canadians two other aspects of this. I spoke about—and it is really an overwhelming concern of mine—the threat to liberal democracy in the world today and the rise of authoritarianism. In a world that is facing that challenge, our hemisphere has been doing pretty well. You could even describe our hemisphere as one of the refuges for liberal democracy in the world. I think that's one of the reasons it is so important for Canada and for our hemispheric partners to stand up in support of democracy and human rights in Venezuela.
The second element of the Lima Group I want to quickly mention is that I really think a key tool of diplomacy and foreign policy today and in the years to come is assembling multilateral coalitions of like-minded countries to work on pressing issues. The Lima Group is a fantastic example of that, and I am really proud of the countries of our hemisphere coming together to do that work, so I really thank our Lima Group partners.
View Chrystia Freeland Profile
Lib. (ON)
Thank you for the question.
I do know about the Rohingya community in your riding. It is a small but mighty Canadian community. I've met with leaders of that community.
I'm glad you mentioned their specific work, because I think a strength of Canada is the fact that we have many Canadians who are personally connected and engaged with so many parts of the world. I have learned a lot about the Rohingya—
View Chrystia Freeland Profile
Lib. (ON)
—from Canadian Rohingyas.
I'm also really glad—and I'd like to say this to everyone on the committee—that our country and our Parliament were able to acknowledge what has happened to the Rohingya as a genocide. It's a very important step, and I'm glad for us, as a country, that we did it.
View Chrystia Freeland Profile
Lib. (ON)
You may find it difficult to believe, but it is absolutely the case that the issue was not raised with me by anyone. My own position on the importance of speaking up for human rights is well known, and let me also add, that's the right thing.
I really want to say that our relationship with Saudi Arabia is long-standing and has many different elements, and that is a relationship which is ongoing. Having said that, particularly today, when human rights are under attack in so many parts of the world, when fewer countries are prepared to raise their voice and speak up for human rights, I strongly believe that is something Canada needs to do. We need to speak out for human rights activists who are under pressure, including women activists. That is something we have done and we will continue to do. I strongly believe that is something Canadians think is the right thing and they support.
Specifically—
View Chrystia Freeland Profile
Lib. (ON)
View Chrystia Freeland Profile
Lib. (ON)
Hang on, hang on.
Subsequent events have shown—
View Chrystia Freeland Profile
Lib. (ON)
No, that's not what I'm trying—
Hon. Erin O'Toole: If we have no relationships—
Hon. Chrystia Freeland: Erin, that is not what I'm trying to do. I—
View Chrystia Freeland Profile
Lib. (ON)
Let me just say that I think the Canadian position—and really, the strength and power of our voice when it comes to defending human rights—has been recognized by the fact that Great Britain chose Canada as its partner for the international media freedom conference. That was very much inspired by the appropriate outrage that people feel about the terrible murder of Jamal Khashoggi.
Frankly, I'm rather surprised that the Conservative Party would not be supportive of speaking up for human rights.
View Chrystia Freeland Profile
Lib. (ON)
Let me strongly disagree with that characterization of Canada's position in the world. You've mentioned a number of unrelated cases. When it comes to the Philippines specifically, I spoke on Sunday in a very positive conversation with the foreign secretary of the Philippines. We are working effectively and constructively with the Philippines to resolve that situation.
More broadly, let me just say this. The world—
View Chrystia Freeland Profile
Lib. (ON)
I didn't interrupt you, Erin. I'd like you to listen to me and pay me that courtesy, please.
More broadly, I meant what I said. The world is at a worrying inflection point. We are at a time when authoritarian regimes are on the rise, when liberal democracy is under assault and when the rules-based international order is under threat. Canada has a couple—
View Chrystia Freeland Profile
Lib. (ON)
I'm going to say two more sentences, Michael.
View Chrystia Freeland Profile
Lib. (ON)
Canada is doing a lot in that environment. First of all, in the most protectionist climate since the Second World War we have secured not one, not two, but three global trade deals. That is astonishing and meaningful for Canadians.
Second of all, we are building new, original and effective multilateral alliances to speak up for the rules-based international order, as we discussed with the Lima Group, as we will be doing in Britain over the summer to support media freedom.
Third, I will never apologize for our speaking out in defence of human rights, even when sometimes some people don't like it. You have to have the courage of your convictions, and I believe that's something Canadians believe in.
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Mark. Thank you, everyone. It has been a busy year for all of us, and I would like to join Mark in thanking the people who work so hard to make the work of this committee possible.
I am joined here by two people well known to the committee and to Canadians: Tim Sargent, Deputy Minister for International Trade, and Steve Verheul, who, as I think people know, is our chief NAFTA negotiator.
I'll make some opening remarks and then I'll be happy to answer questions.
I'd like to begin by acknowledging that we're gathered on the traditional territory of the Algonquins.
I'm here today to speak about anything people ask me about, but chiefly about the Canada-U.S. trade relationship. It is that part of my set of responsibilities that is of specific interest, I think, to this committee.
I want to start by taking this opportunity to thank Canadians and leaders from across the country for our unified Team Canada approach to this specific issue. I am very humbled and very appreciative of this effort, and I want to specifically recognize Canada's premiers, labour leaders, business leaders, and members of the NAFTA Council for their tremendous work to date. I do want to acknowledge the work of members of Parliament from all parties, very much including the members of this committee, mayors, civil society, and frankly, many Canadians who have been personally involved and engaged in this effort.
I think there is a broad national recognition that this is a consequential issue for our country. I certainly feel that when I talk to my constituents—or really, I should say, when my constituents talk to me—and I imagine that all of you have had the same experience.
The Canada-U.S. economic relationship is an essential one. One of the things that has been so valuable to Canada is the fact that we are playing as a united team. That is essential. It sends a powerful message to all Canadians and a very powerful message to the United States.
Mr. Chair, dear colleagues, thank you for giving me this opportunity to address the committee today.
I will do my best to explain point of view of the government on the tariffs imposed by the United States on Canadian steel and aluminum, and more generally on the status of NAFTA negotiations.
Allow me to begin with tariffs.
Canada is a friend and ally of the United States, and its closest neighbour. We share the longest non-militarized border in the world. Our soldiers fought together and died side by side during the First World War, the Second World War, the Korean War, and in Afghanistan and Iraq. As I have said on several occasions, the idea that we might constitute a threat to American national security—the pretext invoked by our neighbours to impose these tariffs on Canadian steel and aluminum exports—is not only absurd, it is hurtful.
These section 232 tariffs, Mr. Chair, are illegal under WTO and NAFTA rules. In fact, we have initiated a case at the WTO and have raised a case under chapter 20 of NAFTA.
As a supporter of the rules-based international order, very much including in trade, it was important for Canada to take this legal action, and I'd like to take this opportunity also to thank the very hard-working, committed, and creative Government of Canada trade lawyers who've been working very hard on this file.
Now Canada has no choice but to retaliate with a measured, perfectly reciprocal, dollar-for-dollar response, and we will do so. On May 31, the Prime Minister and I announced that Canada intends to impose tariffs on imports of steel and aluminum and other products from the United States, representing the total value of 2017 Canadian exports affected by the U.S. measures. That is $16.6 billion, Mr. Chair, Canada's strongest trade action since the Second World War.
Since we made that announcement, we have published two lists, one list that will be subject to a 25% tariff and a second list that will be subject to a 10% tariff. These countermeasures will only apply to goods originating from the United States. They will take effect on July 1 and will remain in place until the United States eliminates its trade-restrictive measures against Canada.
Consultations on these lists concluded on June 15.
I'd like to make a particular point, Mr. Chair, that in putting together these lists, the government and our fine officials have worked really hard to find lists that have the minimal impact on Canadians. Where possible we have sought to avoid intermediate goods and to put products on the list that can be easily sourced from either Canadian or other non-U.S. suppliers.
I'd like to take this opportunity to thank all the Canadians who have been very actively engaged in the consultations on these lists, including through their members of Parliament. I've heard directly from many MPs, including members of this committee, about feedback you've had from your constituents and your stakeholders about what should be on the lists. That has been very useful.
Although the formal consultation period is finished, we are still interested in feedback from Canadians. They should be in touch with the government, with Steve and his team, with the Department of Finance, and of course people can always be directly in touch with me. As we take these steps in response to the section 232 tariffs, we act in close collaboration with our like-minded partners in the European Union and Mexico. It's important to point out that these countries, also subject to the section 232 tariffs from June 1, are also allies of the United States.
Mr. Chair and colleagues, we know that no one will benefit from this beggar-thy-neighbour approach to trade. The price will be paid in part by American consumers and by American businesses. I think we all agree that it is important for Canada to stand in defence of the international rules-based order, and we will do so. Canada's policy will be that we will not escalate and we will not back down. Judging by the feedback I have received in the past few weeks, countless Canadians of all political points of view agree. Very many have come out in support of our decision to defend Canadian workers, and I would like to thank all members of the House of Commons, particularly Tracey Ramsey, for the unanimous consent motion that we all passed supporting this action. I think that was a very strong measure; I have shared it with our counterparts in the United States. I'm glad we were able to do it. It's a testament to Canadian unity on this issue, and I'd like to thank provincial and territorial leaders, including Premier-designate Ford, Premier Moe, and Premier Horgan, as well as the CLC and so many others for their support.
One thing I do want to point out, Mr. Chair, is that this unjustified section 232 action by the United States is quite separate from the ongoing negotiations between Canada, the United States, and Mexico to modernize NAFTA. As far as Canada is concerned, these are entirely separate issues, and I'd like to point out this is also the case under U.S. law, given that section 232 is a national security provision.
We know that NAFTA is very much to the advantage of all three NAFTA countries. When it comes to trade between Canada and the United States, our relationship is balanced and mutually beneficial. In fact, in goods and services overall, the U.S. has a slight trade surplus with Canada. The U.S. also has a surplus in trade in manufactured goods, in agricultural goods, and perhaps particularly relevant today, in trade in steel. As I know all of us are very well aware, Canada is the largest market for the United States—larger than China, Japan, and the U.K. combined.
A modernized win-win-win deal that benefits all three NAFTA partners is possible, Mr. Chair, and we continue to work hard and patiently to achieve this outcome. That was the point I made last Thursday when I met with Ambassador Lighthizer in Washington and again when I spoke to him over the telephone yesterday.
I also had a constructive conversation with U.S. Secretary of State Mike Pompeo on Saturday, which included a discussion of NAFTA and the section 232 tariffs. I remain convinced that there is goodwill and a desire to move forward on the NAFTA negotiations, and we have heard that publicly from Secretary Pompeo as recently as yesterday.
Our government feels that now we can continue working on the NAFTA negotiations. We will be working hard over the summer.
Thank you very much.
I'm happy to answer people's questions now.
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much for the question.
Thank you, Dean, if I may. Can we be on a first-name basis? I'm happy for people to call me by my first name. Thank you for your hard work on this issue and for working so closely with stakeholders.
As I said, the formal consultation period closed on June 15. We are now taking in all of the very detailed, extensive feedback we've had from stakeholders. We will be using that feedback to modify the list. That is why the consultation period is so essential. It is a period that we use to hear directly from affected stakeholders and to get the best possible list for Canadians.
Like you, I have heard from people in the boating sector, and that is feedback that we are taking very seriously.
I know it's clear to you, but I do want to reiterate so that it's clear to Canadians. What we published on May 31 was a preliminary set of lists. The consultation period is real and meaningful. It has been important for us to hear from Canadians about what they want to see on the lists and what they don't want to see on the lists. Steve and the team and I and our colleagues in the Department of Finance are now working very hard to integrate that feedback from stakeholders and to modify the lists accordingly.
View Chrystia Freeland Profile
Lib. (ON)
Canada began our conversation with the United States about section 232 on steel and aluminum as soon as this issue was raised in the United States. It was an issue that was raised by Secretary Ross. It was a Department of Commerce investigation. I had many conversations with him, beginning as soon as this investigation was launched last spring.
The Prime Minister discussed this directly—
View Chrystia Freeland Profile
Lib. (ON)
No, I haven't finished my answer.
View Chrystia Freeland Profile
Lib. (ON)
I haven't finished my answer, though, if I may.
The Prime Minister discussed this directly with the President of the United States. I was present at that discussion at the G7 summit in Taormina, Italy. That was in June 2017.
I want to be very clear. There were many subsequent conversations.
View Chrystia Freeland Profile
Lib. (ON)
I want to be clear with Canadians that this issue has been raised by our government at the highest levels. It was also an issue that I raised with Secretary Tillerson and with Ambassador Lighthizer, and it was raised by many other ministers and MPs—
View Chrystia Freeland Profile
Lib. (ON)
I can't talk about safeguards?
View Chrystia Freeland Profile
Lib. (ON)
Okay. I'll do that with somebody else.
View Chrystia Freeland Profile
Lib. (ON)
Ms. Lapointe, thank you for your question, and for your hard work.
As I said in my comments, we work closely with all of the provinces, including Quebec of course. Mr. Verheul and his team speak directly with Quebec government officials. For my part, I had many discussions with ministers St-Pierre and Anglade, and even spoke directly with Premier Couillard.
The Province of Quebec has very effective representation in the United States. It is a pleasure to work with that province, and it's very important to do so. We also worked with Quebec unions and businesses such as forestry companies, and enterprises in the aerospace and aluminum sectors.
As you know very well, there are very strong economic ties between Quebec and the United States. It was very helpful for the federal government to work with all of the provinces, including Quebec.
View Chrystia Freeland Profile
Lib. (ON)
That is a very good question. I see that Mr. Verheul is very happy that you asked it.
The team of negotiators and I consider that these chapters are about modernization. As you said quite rightly, these chapters are not as interesting as others to journalists, but they are very important to Canadians who do business with the United States. Before the negotiations began, we consulted enterprises and workers. To them, the most important issues are trade-related. We have made progress on these issues. That is one of the reasons why I am finally optimistic with regard to the NAFTA negotiations.
It is worth pointing out that NAFTA is a good agreement, but it has been in effect for close to 25 years. We are taking advantage of this precious opportunity to modernize it and adapt it to the 21st century. There is good co-operation among the three countries' negotiators on the modernization chapters.
View Chrystia Freeland Profile
Lib. (ON)
Fine.
To date, negotiators have concluded discussions on nine chapters: technical and commercial barriers; North American competitiveness; good regulatory practices; sanitary and phytosanitary measures; publications and administration; small and medium businesses; the fight against corruption; telecommunications; and competition policies.
View Chrystia Freeland Profile
Lib. (ON)
Again let me thank you for the work we did together on the unanimous consent motion. Thank you for taking such a leading role there.
I agree with you that it is very important for our steel and aluminum workers to know that they have the full support not only of parliamentarians, which I know they have, but also of the Government of Canada.
I, in consultation with my colleagues Navdeep Bains and Bill Morneau, am currently working on ways to support those workers and those industries. I would like to say to this committee and to all Canadians that we absolutely believe those workers, those industries, need our support. I want to point out that the imposition of the retaliatory tariffs is one part of that support. When Canadian workers and Canadian companies now face tariffs selling their steel and aluminum to the United States, it is not fair that their U.S. competitors would not face parallel tariffs selling it to Canada. They will.
The actions that we're taking at the WTO and NAFTA are an important part of the defence. I agree that we need to work on ways to directly support workers and industry, and that work is under way. I would be very interested in ideas you have on the best way to do that.
View Chrystia Freeland Profile
Lib. (ON)
Okay. It's another really good question.
Just at the end, you said you hoped that anything that we're doing on the steel and aluminium industry includes talking to workers, talking to unions. I agree that this is absolutely necessary. That is something we are doing, and I'm committed to continuing to do it.
When it comes to the car sector and the investigation that the U.S. Commerce Department has begun on section 232 tariffs on autos, this is frankly even more absurd than the notion that Canadian steel and aluminum would pose a national security threat. I have raised the issue with Secretaries Ross and Pompeo, and also with Ambassador Lighthizer. We have made clear the Canadian view, and the Prime Minister has raised the issue directly with the President.
We believe, as has been our motto since the beginning of the NAFTA negotiations, that we need to hope for the best and work for the best possible outcome, but always be prepared for every eventuality. As you heard in the House of Commons yesterday from my colleague Navdeep Bains, that very much includes a comprehensive strategy of working with and supporting our automotive sector. I would also point out that just as we have worked closely with our allies in a response to section 232 tariffs on steel and aluminum, this is an issue that we are also discussing with our allies, including the European Union, Japan, and Mexico.
In terms of support for industries under the impact of tariffs, it is worth thinking for a moment about our forestry sector, another sector that has been affected by U.S. tariffs. The Government of Canada, I think with support of all parliamentarians, has stepped up to support those industries.
I'd like to point out, as I have—
View Chrystia Freeland Profile
Lib. (ON)
—in the United States, that the price of the tariffs have been passed on to U.S. consumers. That's an important point to make.
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much for the question, Sukh, and thank you for your hard work on trade in general and also on this issue, which I know is extremely relevant for your own constituents and for your own riding. I think it is really important for Canadian steel and aluminium workers to see their MPs stepping up and playing such a strong role.
When it comes to the lists and the consultation, the first point that bears emphasis is that work on these lists was going on very intensively far ahead of May 31, and I would like again to thank Steve Verheul and his team and the Department of Finance. The fact that we were able to come out immediately on May 31 is due to preparation done by very many people. I think it was a strong action on the part of Canada, and I'm glad we were in a position to do it.
The consultation period has also been very valuable and important, and I'd like to thank all Canadians who've provided feedback. It is led by the Department of Finance, which is directly responsible for this particular area. We've received a total of 1,108 submissions. We've received them from industry associations, from large corporations, from small and medium-sized enterprises, from provinces, from private citizens, and from workers.
We are currently hard at work looking at the lists, talking to people who made submissions, and working on refining the final lists. I think it is really important for us to get those lists right, and that is what we are committed to doing. I've heard from members of this committee directly, but I welcome continuing feedback from members of the committee, from all MPs, and from all Canadian stakeholders. The formal consultation period came to an end on June 15, but we are ready to continue hearing from people. It is really important for us to get this right, and that's what we're committed to doing.
View Chrystia Freeland Profile
Lib. (ON)
Canada is a trading nation. We believe in trade, and we know that trade is a win-win relationship and that both partners benefit when trade happens. When we talk about the section 232 tariffs on steel and aluminum, we make the point about the national security justification being both illegal and absurd, because those are the grounds on which these tariffs are being levied, and it's really important to remind people that facts matter. The law matters. That is why that is where we start.
View Chrystia Freeland Profile
Lib. (ON)
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