Minister of Small Business, Export Promotion and International Trade appearance before the Special Committee on the COVID-19 Pandemic

2020-06-18

Personal protection equipment (PPE) procurement from China and Canada-China trade relations

Issue

GAC continues to support procurement of medical supplies from China. Trade with China has been decreasing in 2020 due to COVID-19 but this decline is unrelated to failures in some procured PPE.

Responsive Lines

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• Global Affairs Canada is supporting Public Services and Procurement Canada (PSPC) in global procurement (pre-vetting, sourcing, issue management, shipping).
• PSPC is actively addressing quality issues.
• COVID-19 is partially to blame for the decrease in trade with China.

Releasable Background

PPE Procurement:

In addition to efforts to increase Canada's domestic capacity to manufacture medical supplies and personal protection equipment to combat COVID-19, the Government of Canada continues to source medical supplies internationally to meet the immediate needs of Canadians. Public Services and Procurement Canada (PSPC) is procuring medical supplies globally for the Government of Canada and is working closely with the Public Health Agency of Canada (PHAC) and Health Canada to ensure these purchase meet Canadian standards and requirements. Global Affairs Canada continues to work with PSPC and partners to identify and help resolve any international obstacles to Canada's required procurement.

Trade:

Jan-Apr 2020 year-on-year data indicates a 15.0% decrease of Canada-China bilateral merchandise trade, with exports to China falling by 10.5% to $7.0B, and imports from China falling by 16.5% to $20.1B. COVID-19 is partially to blame for the decrease as Canadian exports are impacted by the demand and supply chain disruptions, but the impact has been uneven.

The top 5 exporting Canadian provinces experienced a decline or stagnation in exports to China during this period: British Columbia's exports declined by 19.5% to $1.9B; Alberta by 10.9% to $1.4B; Saskatchewan by 4.5% to $1.1B; There was no change in Quebec's export levels ($1.1B); and Ontario by 20.7% to $732.0M.. However, Newfoundland's exports to China increased by 47.4% mainly due to $87.6M (152.5%) increase of iron ore exports, while Manitoba's exports to China increased by 33.6% mainly due to a $96.0M (167.4%) increase in pork exports.

From Jan-Apr 2020, pork exports to China totaled $529.2M, an increase of 122.5% from a year earlier. Beef exports declined by 42.8% to $34.5M. Pharmaceutical product exports increased by 89.8%, reaching $64.3M, motor vehicles declined by 47.4% to $263.8M, and wood exports declined by 48.2% to $277.4M. Canola seeds exports increased by 2.5%. Soybean exports increased to over $30M.

From Jan-Mar 2020, Chinese tourists visiting Canada decreased by 43.1% compared to the same period in 2019 while study permits issued to Chinese citizens reduced by 43.3.%.