Minister of Small Business, Export Promotion and International Trade appearance before the Special Committee on the Economic Relationship between Canada and the United States (CAAM) – Briefing material

2021-04-01

Table of contents

• CAAM Committee Overview
  • CAAM Scenario Note
  • CAAM Committee Bios
  • CAAM Motion
• Issue Briefs
  • Bilateral Economic Overview
  • Buy America(n)
  • Buy America 2009
  • Keeping supply chains open
  • Canada-US bilateral relationship
  • Canada-US trade promotion
  • Canada-US solar tariffs and trade remedy issues
  • Canada-US border
  • Canada-US cooperation (China)
  • CUSMA implementation and reinforcing the Canada-US economic partnership
  • Softwood Lumber – dispute angle and lumber litigation
  • Softwood Lumber – forestry sector support and trade diversification
  • Softwood Lumber – Ongoing U.S. trade remedy proceedings
  • Softwood Lumber – Negotiations for a future agreement and advocacy efforts
  • Canada-US oil and gas pipelines & support
  • Commitment to a green recovery (Canada-US Roadmap)
  • Climate change and border carbon adjustment
  • Clean Energy (Hydro) Exports
  • Vaccines (Defence Production Act/Executive Orders, vaccine cooperation)
• List of stakeholder interactions, including public consultations and reach out to US officials
• Forest Sector Investments

Appearance before the special committee on the economic relationship between Canada and the United States (CAAM), April 1, 2021

Meeting scenario

• Your virtual one-hour appearance before the special committee on the economic relationship between canada and the united states (caam) begins at 3:00 p.m. Your appearance will last one hour, and the committee has asked supporting officials to stay behind for a second hour. In addition to questions on buy america and softwood lumber, committee members typically ask questions on a broad range of topics related to the economic relationship between canada and the united states.
• The following officials are accompanying you virtually during the appearance and may be called upon to respond to questions:
  • John hannaford, deputy minister of international trade
  • Steve verheul, assistant deputy minister, trade policy and negotiations
  • Arun alexander , director general, north america trade policy bureau
  • Doug forsyth, director general, market access
  • Eric walsh, director general, north america strategy bureau

Committee context

• Witnesses have 5 minutes each for their opening statements; the Chair is authorized to adjust the time of the opening statements, in consultations with the vice-chairs.
• After opening remarks, the committee will move to rounds of questions. Time may allow for two complete rounds as follows:

First Round 

• Conservative (6 minutes)
• Liberal (6 minutes)
• Bloc Québécois (6 minutes)
• NDP (6 minutes)

Second Round

• Conservative (5 minutes)
• Liberal (5 minutes)
• Bloc Québécois (two and a half (2.5) minutes)
• NDP (two and a half (2.5) minutes)
• Conservative (5 minutes)
• Liberal (5 minutes)

• Subsequent rounds of questioning follow the order and timing of the second round.
• For further information on committee membership, please see Tab A2.

Motion inviting you to appear

The motion to create caam indicated the intention to invite the minister of small business, export promotion and international trade (tab a3). The committee did not pass an additional motion to invite minister ng.

Committee membership & interests

• Committee membership includes some members you will recognize from the house international trade committee: mp savard-tremblay, mp blaikie, mp hoback, mp sarai, and mp bendayan.
• Committee members’ questions during committee meetings have focused on the following related issues:
  • Conservative members – line 5, keystone xl, energy infrastructure, supply chain security, the softwood lumber agreement, impacts of buy america, canada-u.s. border, sourcing vaccines from the u.s., canada- us roadmap, and canada-u.s. dialogue on the uyghur situation.
  • Liberal members – line 5, buy america provisions, sourcing vaccines from the u.s., the canadian and american electrical grid, and canada-u.s. dialogue on forced labour in supply chains.
  • Bloc quebecois member –line 5, vaccine procurement from the u.s., buy canada policy, decision making on energy infrastructure projects, and the cost of construction of line 3.
  • Ndp member – line 5, value-added work in the oil and gas sector, exemptions from buy american policies on the basis of north american climate change strategies, relationship with the biden administration, cooperation on combating climate change and processing rare earth minerals.

Committee work

• On March 2, 2021, departmental officials Steve Verheul and Michael Grant appeared to discuss the economic relationship between Canada and the U.S. with a focus on the Canada-US Roadmap.
• On March 4, 2021, Ambassador Hillman, Minister O’Regan, and NRCan officials appeared to discuss the economic relationship between Canada and the U.S. with a focus on Line 5.
• On March 16, 2021, witnesses from Enbridge, the Canadian Chamber of Commerce, and the Canadian American Business Council appeared to discuss the economic relationship between Canada and the U.S. with a focus on Line 5.
• On March 18, 2021, Canada’s Building Trades Unions, Laborers’ International Union of North America, Bad River Band of Lake Superior Chippewa, Pierre- Olivier Pineau, the Canadian Propane Association, and the Explorers and Producers Association of Canada appeared to discuss the economic relationship between Canada and the U.S. with a focus on Line 5.
• On March 18, 2021, the committee agreed to invite representatives from the Michigan Legislature to address the committee on the topic of Enbridge’s Line 5. The meeting has not yet been confirmed.
• On April 8, 2021, Minister Garneau is scheduled to appear before the committee on Buy America.
• April 15, 2021, is the deadline for the committee to produce its first interim report on Line 5.
• June 17, 2021, is the deadline for the committee to produce its second interim report on Buy America.

Raj Saini (IPC—Kitchener Centre, ON) Chair

Key interests

• Environment and Climate-change
• Pharmacare
• Employment opportunities

Parliamentary roles

Raj Saini has served as the Member of Parliament for Kitchener Centre since 2015.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on Environment and Sustainable Development (ENVI), February 2020-present
• Member, Standing Committee on Natural Resources (RNNR), February 2020
• Member, Standing Committee on Access to Information, Privacy and Ethics (ETHI), January 2016- September 2019
• Member, Standing Committee on Foreign Affairs and International Development (FAAE), January 2016-September 2019

Background

Saini completed a Bachelor of Science Degree at the University of Toronto and later completed a Bachelor of Science in Pharmacy at Boston’s Northeastern University. Prior to serving as a Member of Parliament, Saini was a pharmacist, having moved to Kitchener to start Greenbrook Pharmacy, a local independent business, which he has co-owned and operated for more than 20 years. As a pharmacist, Saini has been a long-time advocate of a national pharmacare program. He was President and Vice- President of the Kitchener Center Liberal Association, a Rotarian, and has served as a member of the Canadian International Council in Waterloo.

Statements about the United States

MP Saini is knowledgeable on the auto sector relations with Canada and the United States and has highlighted the importance of a working relationship between the two countries. Upon the announcement of his membership on this committee, he expressed his plan to work on a shared vision of a just and green recovery.

Questions asked at CAAM

March 2, 2021

• I'm just wondering what we can do in the interim to support the process while this is going through the legal process. Could you give me a short answer to that?

March 4, 2021

• What are we doing to encourage the closeness, especially with the new administration, especially given the fact that a lot of us have friends and relatives in the United States? Is there a place for civil society going forward?

Mark Strahl (CPC—Chilliwack-Hope, BC) Vice-Chair

Key interests

• Firearms
• Steelworkers
• Small and medium sized business
• Line 5

Parliamentary roles

Mark Strahl was first elected in 2011, re-elected in 2015 and again in 2019. He is currently that Shadow Minister for Labour. He was the Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development from September 2013 to August 2015.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on Natural Resources (RNNR), September 2016-September 2017
• Member, Standing Committee on Fisheries and Oceans (FOPO), September 2016- September 2017

Background

Stahl is an Honourary Member of the Rotary Club of Chilliwack, and a member of the Royal Canadian Legion Vedder Branch 280, the Hope and Distract Chamber of Commers, the Chilliwack Healthier Community Group and the Chilliwack Housing First Task Team.

Statements about the United States

During Question Period in 2018 MP Strahl commented on CUSMA negotiations, specifically on supply management, stating that Canada’s farming families are worried about compromises the Government was making with the United States. MP Strahl has often used examples in the United States to contrast Canada’s management of its energy sector and natural resources. For example, when criticizing the Government’s budget in 2017 he stated “our biggest competitor, the United States, is cutting red tape and taxes and making its energy sector more attractive to job creators.”

Questions asked at CAAM

March 2, 2021

• Referring to Softwood lumber, asked; Are we once again putting that on the back burner, or do you have a mandate to negotiate a new softwood lumber agreement for Canadians?
• Are either of you aware of whether the Prime Minister raised the issue of softwood lumber with President Biden on either his initial call or during the bilateral meetings?
• Do you agree that if they were to shut down or severely limit the ability of Canadian products or producers to engage in U.S. infrastructure, it could have an even greater impact than some of the trade actions taken by the previous administration?
• Have you been given a mandate to fight back against buy America at the officials' level, or would it be similar to Keystone XL, where, once the U.S. administration makes a decision, the Canadian government just throws in the towel and accepts that resultÉ

March 4, 2021

• Are there opportunities for Canada to be selling our oil and gas into the States more, based on what we're seeing in the early days out of the Biden administration?
• Why would the nearly 30,000 workers in Sarnia, southern Ontario and Quebec who are affected by this have any confidence that your government would fight for Line 5 jobs when Keystone XL jobs were written off as being a decision that the U.S. administration had made and were no longer worth fighting for?
• If you're doing the same thing to advocate for the jobs impacted by Line 5, why are you expecting a result that will be different from what you got with Keystone XL?
• Do we anticipate that there will be a contraction in the U.S. oil and gas exploration market that may be beneficial to Canadian oil and gas producers, if they are no longer producing as much? He's talked about a ban on fracking and that sort of thing. Are there opportunities for Canada to be selling our oil and gas into the States more, based on what we're seeing in the early days out of the Biden administration?
• Did the issue of the Uighur genocide and Canada's failure to declare it such come up at the bilateral meetings? Did the U.S. administration raise the issue of Canada's failure to exclude the Huawei company from Canadian 5G networks, as it has done?
• Does our government's approach to China on things like Huawei or the much closer alignment with China that our government has impede our ability to be part of that new alliance that the Biden administration is proposing to counter China's influence around the world?

March 16, 2021

N/A

March 18, 2021

• What do you see as the government's role here in ensuring that Line 5 continues to operate. Is there anything more the government should be doing? From a union perspective, how do you see the efforts that have been made by our government, both on Keystone and now to protect these good-paying union jobs for Line 5?

Daniel Blaikie (NDP—Elmwood-Transcona, NL) Critic for export promotion and International Trade, Vice-Chair

Key interests

• Impacts of Buy America
• Labour Protections
• Aerospace manufacturing

Parliamentary roles

Blaikie was first elected in 2015. Blaikie is currently the NDP Critic for Democratic Reform, Employment, Workforce Development and Disability Inclusion, Export Promotion and International Trade and Western Economic Diversification, as well as the deputy critic for Finance. He has previously served as the Critic for Public Services and Procurement, Deputy Critic for Ethics, and as NDP Caucus Chair.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on Canadian Heritage (CHPC), February 2021-present

Background

Prior to entering politics, Blaikie worked as an electrician. He has served on the Manitoba Apprenticeship and Certification Board and the Winnipeg Labour Council.

Statements about the United States

MP Blaikie recognizes the importance of the Canada-US relationship, noting how many Canadians work in business where they either cross the border or have goods crossing the border every day. During his speech on the opposition debate to implement the CAAM, Blaikie noted the impact of the previous US administration over the last four years, especially impacts to the softwood lumber industry. He has also noted his support for workers in steel and aluminum industry. MP Blaikie stated that while Buy America is important at this time, “the emphasis on it is rightly a worry to many Canadians who depend on access to the U.S. market in order to earn their livelihoods”.

Questions asked at CAAM March 2, 2021

March 2, 2021

• On the climate change front, what do you think are some of the ways in which Canada, in the context of a larger North American energy strategy, can be advocating to have those kinds of value-added jobs so that Canada isn't simply the supplier of raw resource to the United States, where the upgrading and refining occurs? What are the opportunities for Canada to ensure that we're doing value-added work here and getting the benefit of the employment that comes with that secondary kind of work?
• Referring to climate-friendly initiatives, asked; do you see those as being an avenue for securing certain types of exemptions from buy America by way of climate, if we're not able to do it across the board? Has there been any discussion along those lines to date?
• Are we actually talking about sitting down at the table to have a strategy to ensure that a sufficient amount of those things is actually being produced in Canada, as part of a strategy to ensure that we have adequate supply on the continent but each partner is actually producing some of what's needed?

March 4, 2021

• Could [Minister O’Regan] share with the committee what Canada's current greenhouse gas emissions are and what they have to be in order for Canada to meet its commitments under the Paris accord by 2030.
• When [will NRCan] be talking about presumably some kind of continental energy strategy with the United States
• By how much do we have to reduce our emissions by 2030, and what are you doing to put Canada on a track to get there?
• What is your government's strategy for ensuring that more of the value-added work in the oil and gas industry happens in Canada rather than continuing the trend of taking more out of the ground and sending it elsewhere to be refined and upgraded?
• What investments have you made in value-added work in Canada?
• Can you name a project for increased value-added work right here in Canada today?
• I'm wondering if you've done an analysis of the ways in which the new Buy America proposals might affect Canada's natural resource industry
• Do you think there's an inherent conflict between being a capitalist country and doing industrial planning?
• Referring to a strategy for the airline industry, including aerospace manufacturing, the MP stated that the government should have a plan and policy approach for these industries
• What (indigenous) communities has the Department of Natural Resources consulted with in respect to Line 5?
• What kinds of opportunities for resolution [with the U.S. do ] you think may exist, and what steps [does] the government plan to take in order to try to get fair treatment for Canadian softwood lumber at the border
• Referring to climate change and economic opportunites, the MP asked what some of those opportunities are and what Canada is planning to actively pursue with the new Biden administration.
• Is there any concern about buy America specifically, or the posture of buy America, interfering with the ability to develop that value-added work in Canada and sell finished product into the United States?
• I’m curious….[if] we might gain exemptions to the buy America policy on the basis of a North American climate change strategy.

March 16, 2021

• Is there anything this committee ought to be doing, or could do in order to impact a decision that is ultimately clearly within the jurisdiction of the United States at whatever level whether that ends up being at the federal level or state level?
• Are you concerned that there's any particular government that isn't undertaking to advocate in the way you suggest?
• In terms of things that the committee might be able to recommend above and beyond what has already been committed, are there any extant initiatives that provincial or the federal government might take from within Canada in order to try and arrive at an outcome that would see Line 5 continue to operate until a replacement pipeline is built?
• Am I to understand then that the decision about whether or not this pipeline would continue to operate will come down to an application by the State of Michigan for an injunction, and it will be a judge in Michigan that decides whether or not the pipeline would continue to operate or not?
• What kind of standing do they have and what kind of positions have they taken in respect of what Enbridge is asking for?
• I'm wondering if there has been any change in tone or tenor around this issue by the federal government since the election and how you think the change in administration might impact this case.
• Referring to the agreement concerning transit pipelines, MP Blaikie asked what extent of it is strategy, and if it is likely to be resolved earlier.
• I'm wondering if you might like to take it in turns to speak a little bit to what some of the opportunities your membership is contemplating and what kinds of public policy might encourage better collaboration and better results in respect of reducing our carbon footprints.
• What kind of frame work do you think might help prevent that kind of model recurring when it comes to something like rare earth minerals so that we're ensuring that while we want to have a North American strategy, that there's fair share of value-added work being done in Canada, as opposed to us just becoming the source material provider for the value-added work that's happening elsewhere?
• What do you think are some of the opportunities for companies that, say, manufacture electric buses or have different kinds of green technologies that would serve a public policy interest in many American municipalities or state governments and could use that as a way in to certain kinds of U.S. procurement that Canadian companies might otherwise be blocked from accessing?

March 18, 2021

N/A

Simon-Pierre Savard-Tremblay (BQ—Saint-Hyacinthe-Bagot, QC) Vice-Chair

Key interests

• Aluminum Provisions in CUSMA (impact on Quebec)
• Job loss in Quebec related to Line 5
• Green hydrogen
• Protection of supply management
• Aerospace strategy
• Support for Small to medium-sized businesses

Parliamentary roles

Savard-Tremblay currently serves as the Bloc Quebecois critic for International Trade and Industry.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on International Trade (CIIT), January 2020-present

Background

Prior to entering politics, Savard-Tremblay worked as an academic, author and columnist. His publications have touched on Quebec sovereignty and free trade. He has a Bachelor's degree in political science from the University of Montreal, a Masters in Sociology from the University of Quebec at Montreal, and a doctorate in the social economy of development from the École des hautes études en sciences sociales in Paris. He was heavily involved in the youth forum of the BQ and has been a frequent commentator in Quebec on economic and sovereignty-related issues. In his academic work, he is critical of neoliberalism and globalization.

Statements about the United States

MP Tremblay is supportive of the creation of the CAAM and has stated this committee will be an opportunity for the Government to answer for various items, such as using “farmers under supply management as a bargaining chip”, and softwood lumber, the aluminum industry, and COVID-19 vaccines. MP Tremblay also suggested in February 2021 that the United States should not only be Canada’s first trading partner, but also the first health partner. MP Tremblay has been critical of CUSMA.

Questions asked at CAAM

March 2, 2021

• Referring to the State of Michigan’s actions may violate the 1977 agreement between Canada and the U.S. asked if witness agreed with that view.
• How can the federal government have any real leverage, in this case, if the company is slow to fix certain flaws?
• The company has been slow to fix some leaks in its infrastructure. In a number of cases, these leaks end up directly in the waterways. Shouldn't the measures focus on this area?
• Given that Michigan is unlikely to succeed in shutting down the line, I wonder whether the company should fix some of the flaws. What's the urgency right now, given that the odds of the line actually being shut down are slim?
• Referring to COVID vaccines and how most were not coming from the U.S., asked; Have we made any progress on that front? Have there been any developments? Do you know whether any steps have been taken in this area, at least for instances when it's harder to obtain supplies from Europe or other countries?

March 4, 2021

• As you know, there's currently a dispute with the governor of Michigan. Is there a strategy to allay the governor of Michigan's fears and anxieties regarding Line 5?
• What is your estimate of the potential job losses in Quebec should Line 5 be shut down, which is highly unlikely, based on a number of indicators?
• Don't you think that energy, money, funding, subsidies and development or industrial plans should be more about hydrogen made from truly clean sources that we could then sell to the U.S.?
• In your opinion, how likely is the State of Michigan to succeed in its efforts?
• Has an impact study been done on job losses in each province?
• Do you think Suncor and Valero would be unable to obtain their supplies from other sources?
• How do you rate the real chances of this line being shut down?
• Referring to maintaining Line 5, asked; I would like to know if that has been done. If so, what was the approach? If not, what will it be? What is the government's strategy for Michigan representatives?
• We know that the citizens of Michigan have a very real environmental concern. Do you think the governor's fears are completely unfounded?
• What is your estimate of the potential job losses in Quebec should Line 5 be shut down, which is highly unlikely, based on a number of indicators?
• Should the different deregulations of oil transport by train and ship be perceived as errors made along the way?
• Don't you think that energy, money, funding, subsidies and development or industrial plans should be more about hydrogen made from truly clean sources that we could then sell to the U.S.?
• If the Biden plan were strictly enforced, what would you suggest as an alternative?
• For example, one suggestion concerned piecemeal solutions on a state-by-state basis. Is this a possible approach? If the act were strictly and uncompromisingly enforced, what would be plan B?
• Can we work more with the states themselves, and not just with the federal government? Is there a strategy to allay the governor of Michigan's fears and anxieties regarding Line 5?
• In light of your discussions with the United States government, is similar legislation expected here? Will Canada respond with legislation that could prioritize Canadian companies? Is this a widespread fear? How often do you hear about it?

March 16, 2021

March 18, 2021

Leona Alleslev (CPC—Aurora-Oak Ridges-Richmond Hill, ON)

Key interests

• Human rights
• Freedom of expression
• Democracy and rule of law
• Energy security
• Small businesses
• Canada’s competitiveness
• Export permits

Parliamentary Roles

Leona Alleslev was first elected to the House of Commons in 2015 and was re-elected in 2019.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Vice-Chair, Standing Committee on Foreign Affairs and International Development (FAAE), February 2020-August 2020
• Member, Standing Committee on Foreign Affairs and International Development (FAAE), September 2018-September 2019, February 2020-August 2020
• Member, Special Committee on Canada-China relationship (CACN), January 2020-August 2020
• Member, Standing Committee on Citizenship and Immigration (CIMM), February 2018- September 2018.

Background

Alleslev earned a B.A. (Honours) in History and Political Science from the Royal Military College of Canada in Kingston and received her Queen’s Commission to serve as an Air Force Logistic Officer. Prior to serving as a Member of Parliament, Alleslev was a Canadian Air Force Officer, Senior Manager, and entrepreneur. Alleslev has held leadership positions in the Department of National Defence, as well as senior managerial roles with IBM Canada and Bombardier Aerospace. She served on the Aerospace Industry Association of Canada, the Ontario Aerospace Council and the Women in Aerospace Association joint government/industry change initiatives. Alleslev has also owned and operated two small businesses’ an eco-tourism business in Temagami, and a custom closet and home organization company in Aurora.

Statements about the United States

MP Alleslev has been supportive of the motion for a Special committee on Canada-US Economic relations, and has spoken to how crucial bilateral trade is between the two countries, noting that 70% of Canada’s trade is done with the US, and stated it is “not a free trade agreement; it is a managed trade agreement”. MP Alleslev has spoken to the tariffs on steel and aluminum, blueberries, strawberries, and red peppers, and protecting the exporters of these items. On August 12^th, 2020, MP Alleslev stated “the new NAFTA is an abject failure when it comes to protecting Canada’s economy”.

Questions asked at CAAM

March 2, 2021

• I'm wondering whether the conversation has begun around how we might secure some of the vaccines that are currently being produced in the U.S. Could you share the progress on that conversation?
• What will the criteria be in terms of your conversations with the U.S. about when and how the border will open up? What are the conversations and what are the criteria that we'll use? What kinds of things need to be in place, be they numbers of vaccines or numbers of infections?
• Could I talk quickly about the strategy to strengthen supply chain security? Could you give us some insight into how you define supply chain security and, therefore, what some of the key elements would be around that strategy?

March 4, 2021

• Referring to Line 5, asked; What possible outcome and what probability do we have of being able to turn this around before May?
• Why is it more in the best interests of the U.S. to keep Line 5 going underwater than it is to cancel that and go through with what the Michigan governor has said?
• What is Canada's plan B? What is the government looking at for a plan B?
• Could you share with us where Canada's critical mineral list is and where Canada's strategy for self-sufficiency is in this area?
• In order for people to plan, we absolutely need to understand what the American criteria will be for it to open, and also the Canadian criteria. What are the specifics that need to be met in order to be open? When will we know what their criteria are so that we can get there as quickly as possible?
• Could you give me some of the U.S. priorities that didn't make it into the road map, so that we're aware of what they would like that perhaps might be more controversial?

March 16, 2021

• MP Alleslev asked about Canada’s leverage.
• Referring to issues with pipelines in the United States, questioned why the Government has let it get to this point, and what can be done to prevent it in the future.
• How would you argue that still having dependency on a line that is outside of our country is actually the longer-term best interest of Canada after we've watched vaccines and other things in a crisis that we don't look after ourselves have a detrimental impact on Canadians?
• Is this perhaps the beginning of a longer trend as the U.S. becomes more self-sufficient and able to produce more in oil and gas, to be able to repatriate that and be more self-sufficient on this front?
• Referring to critical minerals, the Northwest passage, asked if Canada should be looking at better understanding that negotiating on one thing is never in isolation but that other areas may also need to be looked into at the same time, and to leverage our conversation between that whole landscape and not just, as in this case, Line 5?

March 18, 2021

• Can you shed some light on whether or not there have been discussions or conversations around an alternate mechanism so that essentially, we don't have all of our eggs in one basket?

Randy Hoback (CPC—Prince Albert, SK)

Key interests

• Trade of agricultural products (focus on canola)
• Softwood Lumber
• Impact of CUSMA on Canadian ability to negotiate trade deals with non- market economy

Parliamentary roles

Hoback was first elected in 2008, and has been re-elected in his Prince Albert riding in each of the 2011, 2015 and 2019 elections. Hoback currently chairs the Conservative Saskatchewan Caucus. He has served previously as the critic for International Trade and the critic for Canada-US Relations. He also served as President of the Canadian Section of ParlAmericas starting in 2010, and as President of ParlAmericas at the hemispheric level from 2011 to 2014.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on International Trade (CIIT), January 2018 – present
• Vice Chair, Standing Committee on International Trade (CIIT), February 2016-September 2017
• Chair, Standing Committee on International Trade (CIIT), September 2014-August 2015
• Member, Standing Committee on Agriculture and Agri-Food (AGRI), October 2013 to January 2015

Background

Prior to entering politics, Hoback worked in the farm equipment manufacturing industry before taking over his family farm. He has a business administration certificate from the University of Saskatchewan and a Chartered Director’s designation from McMaster University.

Statements about the United States

When debating the creation of CAAM in February 2021, MP Hoback raised the issue of regulatory differences between Canada and the United States, particularly as they apply to the agricultural sector. He also characterized Buy American and the cancellation of Keystone XL as “disturbing”, suggesting that Canadians might adopt a similar approach, buying only Canadian goods. MP Hoback has been critical of CUSMA, claiming that Canada has made too many concessions to the United States.

Questions asked at CAAM

March 2, 2021

• Referring to the relationship between the U.S. and Canada asked; what was the process in developing this road map? What did you go through? Whom did you consult with? Who was involved in this process as you put it together?
• Is there anything in our international agreements going back to 1977, the treaty between Canada and the U.S. concerning pipelines, that makes sure the State of Michigan can't unilaterally shut down this pipeline?
• If one state is allowed to do this to Line 5, what's preventing another sector being at the mercy of a state that is doing that to their sector? Let's say that for cattlemen in North Dakota, suddenly North Dakota says, “We don't want Canadian cattle.” Does that mean they can unilaterally do that? Under CUSMA, did we put any measures in place to even enhance the 1977 agreement? What are those options you're looking at in regard to ensuring that we do everything we can to protect our interests?
• You talked about energy infrastructure and putting in place new energy infrastructure. Of course, we've seen things like Keystone being shut down in the U.S., so what does this new infrastructure look like? Who's involved with it and what's the intent behind it?

March 4, 2021

• Are you putting any efforts into working with those allies to see if we can revive and change the decision on Keystone?
• As you talk about the road map with the U.S., are you seeing the U.S. then changing their regulations on, for example, flaring? Will they match Canadian regulations on things like that? Will they match the processes that Canadian companies have to go through to build things like pipelines? Will that be consistent in the U.S. now as it is in Canada?
• If we see the standards are consistent and we see the cost here in North America go up because of these new standards, are we going to do something to make sure other countries around the world would come up to those standards? What does that look like? I know there's been talk about a border adjustment type of tax on pollution. Do you see us doing that in harmonization with the U.S.? If that's the case, what does that mean for Ontario, Quebec and eastern Canada, which bring in so much oil outside of Canada?
• If the U.S. is going to go down the same path we've had over the last four years, that means Texas won't be developing anything either. What does that mean for North America? Does that mean we're going to allow cheap oil from other countries with no environmental regulations at all into Canada and North America? What are we going to do for supply?
• What are you going to do to make sure it's a level playing field? Are you going to bring the U.S. regulations up? Are you going to make sure there's a process in place to keep that un- environmentally friendly oil out of North America? What are you going to do?

March 16, 2021

• One of the concerns I have is if they do win this court case, what does this look like? What are the precedent settings in regard to how it will impact other pipelines that go through other states? Do you see that possibly being a problem if they're allowed to do this?]
• So, it's fair to say that Canada's, Sarnia and that area, future is dependent on a U.S. court. Is that fair to say?
• If they do come back...you did talk about this briefly, about trucks, trains and tankers and all the challenges that come with that. If we are to start putting trains with oil inside them, where would they go? Would they go from Superior to Sarnia? Would they go from Chicago to Sarnia? Is there more capacity in the line from Chicago to Superior? Can we put more oil on a [Inaudible] through Chicago and back up to Sarnia? Is that even feasible or are we at full capacity on the lines that are existing right now?
• Let's say we get an injunction against us—us meaning Enbridge—what does that really mean for Sarnia and that whole area? Not only Sarnia, what about Wisconsin, Illinois and Ohio?
• If Line 5 was shut down, how would the U.S. ever go alone on “buy American”? How would it be able to actually accomplish that? It's going to be tough enough for them to accomplish it on their own with Line 5 operating, but if it's not operating that whole area of the U.S. is not functioning. So, how can they move forward?

March 18, 2021

• How do you see something like what Ms. Alleslev is talking about in regard to Canadian security and making sure that we could actually always have our product flowing within Canada so we always have that ability to make sure that we're taking care of ourselves and not being reliant on a U.S. court in this case for our future. How do you react to that?
• How do we take something that's become unchecked populistic where politicians use pipelines as a battering ram to basically say, hey, I'm an environmentalist, I'm against pipelines, even though they're actually doing more harm to the environment in regard to...you can see the example right now—we're going to throw stuff on rail and trucks instead of using it through a pipeline. How do we depoliticalize it? How do we actually get back to science and regulatory making decisions on whether pipelines should go forward or not?

Chris Lewis (CPC—Essex, ON)

Key interests

• Steel Imports
• Autos
• Canada-US Border

Parliamentary roles

Chris Lewis was first elected in 2019.

Notable committee memberships

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on International Trade (CIIT), January 2020-present

Background

Before entering politics, Lewis served as a member on the Kingsville Town Council and was heavily involved in 13 Standing Committees for the Town. He was a member of the Kingsville Fire Department 7.5  years and chaired the Master Fire Planning Committee. Lewis was a member of his family business since 1995, specializing in non-intrusive sewer and water repair.

Statements about the United States

As a former deputy shadow minister for Canada-U.S. relations, MP Lewis supported the motion for a Special committee on Canada-US Economic relations. His arguments primarily on supporting workers by building a strong economy and creating secure jobs, stating that “Canada cannot afford to be a junior partner at the table and have our economy dictated by the stroke of a pen”. MP Lewis understands the importance of being a strong partner in working with the United States of America as a close ally and neighbouring country of Canada to continue seeking solutions for vaccines, Line 5, the Keystone XL pipeline, steel and aluminum tariffs, and softwood lumber agreements.

Questions asked at CAAM

March 2, 2021

• Has there been any discussion between the Canadian and the U.S. governments with regard to broadening the definition of “contractual obligation”?

March 4, 2021

• My question, specifically, is who do we need to contact in the U.S. to get this done once and for all? Is there a specific person? Is there a specific agency? What can we do? What can this committee do to create magic to really get this resolved? Without that, we are going to be losing. We've already lost, by the way, friends, many fantastic manufacturing jobs and businesses. People don't know where to go. We can move product but we cannot move people across the border. Who do we have to get to as fast as we possibly can to get that job done?
• Referring to the U.S. border, asked; have there been discussions as to how we can come up with a solution so people don't have to be afraid to cross the border and then be quarantined for 14 days?

March 16, 2021

• Could just give me a response with regard to what economic impact you see with regard to jobs and with regard to losing jobs, specifically Canada bleeding and haemorrhaging jobs, out of our economy. What impact do you see?
• When referring to shipments of barrels going by railcar, ship, and/or truck, MP Lewis asked how this could affect production and manufacturing and the supply chain with the border closed.

March 18, 2021

• Referring to union jobs in Michigan, MP Lewis asked; What, specifically, has the Michigan union done to help the cause, going forward? Are they lobbying the governor as well?

(LPC—Outremont, QC) Parliamentary secretary to the minister of small business, export promotion and International Trade

Key interests

• Natural resources
• U.S. bilateral relations
• Support for small and medium-sized businesses

Parliamentary roles

Bendayan was first elected in a by-election in February 2019. She is currently the Parliamentary Secretary to the Minister of Small Business, Export Promotion and International Trade.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on International Trade (CIIT), January 2020-present
• Member, Standing Committee on Finance (FINA), May 2019-September 2019
• Member, Standing Committee on Status of Women (FEWO), April 2019-September 2019

Background

Before entering politics, Bendayan was a lawyer with Norton Rose Canada in Montreal in the fields of litigation and international arbitration, specializing in international trade law. While in private practice, Bendayan also taught at the Université de Montréal’s Faculty of Law. She ran for the Liberal Party in Montreal in 2015, losing to Thomas Mulcair. After the election, she was hired as the Chief of Staff to the former Minister of Small Business and Tourism Bardish Chagger.

Statements about the United States

In regard to the Canada-United States Economic Relationship, Bendayan is largely supportive of the relationship between the two countries, “We (Canada and the US) are stronger together, and our two countries share so much more than the most deeply integrated economies. We share the values of democracy, freedom and human rights, and a deep and strong North American culture.” (February 4^th, 2021). In the past (October 2020) Bendayan has mentioned her concern about the decision of the United States to investigate the export of blueberries and stated her party will advocate for exporters. Bendayan has expressed interest in tariffs, exports, and bilateral trade with the United States.

Questions asked at CAAM

March 2, 2021

• Referring to Premier Kenny’s statement on anyone who wants to cut-off Alberta oil and gas exports would be “brain-dead”, asked; In your experience—your obviously extensive experience and expertise in Canada-U.S. relations—was a statement like that by Premier Kenney helpful?
• Perhaps you or Mr. Verheul can expand a little bit on the engagement strategy, through different layers of government, between Canada and the United States in order to make sure that Canada's position is well known and that we are making every effort in order to engage the United States on Line 5.
• Referring to the meeting between President Biden, and Prime Minister Trudeau, asked; Can you speak a little bit to the uniqueness of that meeting and the synergies between our two countries with this new administration?

March 4, 2021

• I wonder if you can identify some of the things that make you hopeful about our future relationship with the United States, some of the opportunities that would be presented to our small and medium-sized businesses here in Canada, and how you think we can move forward from here.
• In addition to some of the dangers and security issues that are involved with transporting crude in that way, would there not also be increased emissions were we to move by rail and by truck rather than through the pipeline?
• Referring to electricity, MP Bendayan asked if we have new opportunities in the United States under President Biden.
• Are today's investors looking for greener opportunities?

March 16, 2021

• How can you as a chamber of commerce work hand in glove with American chambers of commerce in order to achieve a successful negotiated diplomatic solution between our two countries?
• Referring to the number of railcars going between the U.S. and Canada each day, MP Bendayan questioned where the statistics came from, emissions targets, and what impact it has on passenger rail.
• Referring to CUSMA, and NAFTA, asked if there were any lessons learned.

March 18, 2021

• Referring to Line 5, MP Bendayan asked: je vais vous laisser la parole pour développer votre raisonnement davantage sur ce sujet.

Anthony Housefather (IPC—Mount Royal, QC) Parliamentary secretary to the minister of labour

Key interests

• Labour
• Foreign Affairs
• Culture and Heritage
• Pay Equity

Parliamentary roles

Anthony Housefather was first elected in 2015. From 2015 to 2019, he was Chairman of the Standing Committee on Justice and Human Rights. Following his re-election in 2019, he was appointed to serve as the Parliamentary Secretary to the Minister of Labour

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on Canadian Heritage (CHPC), February 2020-present
• Chair, Standing Committee on Justice and Human Rights (JUST), February 2016-September 2019

Background

Housefather has two Law Degrees (B.C.L and LL.B.) from McGill University and an MBA from Concordia University’s John Molson School of Business. Prior to being elected as a Member of Parliament, was served as Executive Vice President Corporate Affairs and General Counsel at a multinational technological company. Housefather was first elected to office in 1994. He was initially elected as a municipal councillor in Hampstead, then elected in Côte Saint-Luc /Hampstead/Montreal West and served as Mayor of Côte Saint-Luc between 2005 and 2015.

Statements about the United States

In a Human Resources committee MP Housefather has stated that he is passionate about trade relationship with the United States, and noted “They are our biggest trading partner, the partner that we need the most to be onside with”, and he believes in a “team North America” approach. He has previously commented on the number of jobs directly linked to free trade with the United States and, when CUSMA was being debated, stated that the impact of Canada not having a trade agreement would be “disastrous”.

Questions asked at CAAM

March 2, 2021

• Referring to the U.S. not shipping out vaccines until all its residents are vaccinated, asked; Am I incorrect that it's an executive order prohibiting vaccine shipments from the United States? Is it merely exclusivity agreements between the government of the United States and Pfizer and Moderna related to domestic shipments from their U.S. plants? Is there indeed some executive order related to vaccine shipments from the United States that we need to worry about?
• Is there an executive order that we're seeking an exemption from related to AstraZeneca, or is there no [Technical difficulty—Editor] able to somehow come to an agreement with Pfizer and Moderna to ship from the United States that we could do so, or is there a contract between the United States and Pfizer and Moderna for exclusivity, which means we need United States approval to get Pfizer and Moderna but not AstraZeneca? Would you be able to get back to the committee with that in writing so that I can go to my next question?
• When it comes to Line 5, who is advising the Government of Canada from a legal vantage point? If this committee wants a witness to advise us as to the Government of Canada's legal position— not Enbridge's, but the Government of Canada's—who would be the best witness for that? Who is advising us?
• Are we engaging with the Michigan legislature? Are we engaging with the Republican majorities in both chambers of the Michigan legislature that have not agreed with the governor's decision?
• Is it Canada's position that the Michigan legislature has the power to override the executive decision in Michigan, or do we take no position on that?
• Would you recommend that this committee seek to develop some relationship with and engage with counterparts in the legislature in the state of Michigan in order to advance directly to them our position on Line 5? Is that something the Government of Canada would support?

March 4, 2021

• Did President Biden commit, during the campaign, that he would end Keystone XL? Did President Biden commit, during the campaign, that he would end Line 5?
• Could you talk to me a little bit about whether or not you discussed climate change with former Governor Granholm, and whether or not you see some ways we can work together with the United States to achieve our Paris objectives?
• Does the Government of Canada believe that, given bilateral agreements or international treaties with the United States, the attempt by Michigan to remove the easement on Line 5 is a violation of either those international treaties or domestic agreements with the United States that we have signed?
• Is it the opinion of the Government of Canada that the PHMSA, the federal government's Department of Transportation, has the authority to overrule the State of Michigan's decision to end the easement?
• Is it our opinion that the legislature of the State of Michigan has the ability to overrule the decision of the executive of the State of Michigan if the Senate and the reps of Michigan vote that way?
• If none of that happens, does the Government of Canada believe that, either through bilateral agreements with the United States or international treaties that we're parties to, we have the ability, as Canada, to be a party to stop Michigan from ending the easement?

March 16, 2021

• Mr. Yu, Line 5 is 645 miles that runs from Wisconsin to Michigan's upper peninsula to the lower peninsula to Ontario, but the only area that is covered by the disputed easement is the four-mile dual pipeline stretch running under the Straits of Mackinac. Is that correct?
• The easement, as Ms. Gladu has said, has been in place since 1953, and there has never been any product released into the Straits of Mackinac. Is that correct?
• Would it be correct to say that the action taken by Michigan to terminate the easement would be purely on speculative fears not concrete evidence of any product that ever was released?
• Would it be correct to say that a study was done showing the dual structure pipeline has a risk of failure of less than 0.05% per year, less that 1 in 2,000 times?
• Would it also be correct that since the easement was granted the U.S. Congress adopted the Natural Gas Pipeline Safety Act, which is administered by PHIMSA and should be responsible for safety standards for interstate and international pipelines such as this one?
• As such, to clarify, would it be Enbridge's position that the State of Michigan lacks authority to shut down this structured pipeline as that would be a matter of exclusive federal authority?
• In addition to what was already raised, I believe and I think you would agree, sir, that there would be a significant constitutional question of jurisdiction under the commerce clause and the foreign commerce clause of the U.S. Constitution.
• So, what Enbridge has done is you have gone to the federal court and you've asked for a declaratory judgment, correct, to say that until the Great Lakes tunnel project is complete, Line 5 should be able to continue to run uninterrupted?
• What is the state right now of that case? Where is that case in terms of filings?
• Is it correct to say that a joint mediator has been appointed?
• Has that mediation process begun?
• Can I ask if it was positive?
• Could you also speak to this? We talked a bit about the Michigan executive. We know the house and senate in the State of Michigan are controlled by the other party. Is there any possibility of an intervention that you are aware of by the Michigan legislature?
• Another question is this. Enbridge has stated pretty confidently that you intend to continue operations past the May 12 deadline the state has provided. How does Enbridge believe it will do so? Would it be the state that would need to secure an injunction to stop the pipeline from operating or would Enbridge need to secure an injunction to stop the state's action to revoke the easement?
• My main question now, based on all of these facts and evidence, is this. What can the committee and its membership—not the Government of Canada now, but the committee and its membership—best do to help Enbridge in its desire to continue operating the line? How can our membership be useful with respect to talking to reps and Michigan? Just let us know.

March 18, 2021

• Does the Michigan Legislature itself consider that it has the power to step in to override the governor's revocation of the easement?
• Wouldn't many of them [U.S. workers] lose their health care and their benefits in the event that they lost their jobs?
• My second question is Enbridge had mentioned they were recommending that the Government of Canada, and the government of Ontario and other provinces intervene in the Enbridge lawsuit. Do you guys have a position on that?

Sherry Romanado (IPC—Longueuil-Charles-Lemoyne, QC)

Key interests

• Women and Gender Equality

Parliamentary roles

Sherry Romanado was first elected in 2015 and re-elected in 2019. During her first term as Member of Parliament for Longueuil-Charles-LeMoyne Romanado was Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defense.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Chair, Standing Committee on Industry, Science and Technology (INDU), February 2020-present
• Member, Standing Committee on National Defence (NDDN), January 2016-January 2017
• Member, Standing Committee on Veterans Affairs (ACVA), January 2016-September 2016

Background

Romanado has a certificate in Public Relations from McGill University and a Master’s degree in Business Administration from Concordia University. A faculty lecturer for the Public Relations program at McGill University’s School of Continuing Studies, she is a former member of the Board of Directors of the Charted Institute for Transport and Logistics and a past chair of the Education Committee for North America. Romanado has served as Vice President and later as Director of Communications in the CGG 1979 Centennial Cadet Corps at Greenfield Park. She is a long-time member of the Royal Canadian Legion (Branch 94) as well as the Lions Club of Greenfield Park.

Statements about the United States

MP Romanado has noted during CUSMA debate that many people from her riding were concerned about tariffs, culture and protection of industry in Quebec, and that she was content with CUSMA. MP Romanado has previously expressed concerns over vulnerabilities created by shared cyber spaces with the United States.

Questions asked at CAAM

March 2, 2021

• Referring to excess vaccines in the U.S., asked; can we anticipate that given this new information regarding vaccine rollouts in the United States there is a possibility of increased collaboration with respect to procuring vaccines from the United States as of the end of May? I would anticipate that this will be a conversation between Canada and the United States with respect to increasing access to vaccines. Is it safe to assume this?
• Could you could elaborate a little more on the importance of defence, our continental defence, and also on the importance of looking at that from a holistic point of view with the relationship with the United States?
• What are some of those possible provisions in the event that this agreement between the Michigan governor and Enbridge for Line 5 doesn't, unfortunately, happen? What are the provisions that Canada is looking at in terms of making sure supply is not cut off?

March 4, 2021

• Is it possible that we will end up having to import oil from other countries rather than getting it from Alberta and Saskatchewan because of that closure? Is it also possible that we will have a lot more oil and gas being transported by rail?
• Could you perhaps elaborate on whether it is, in fact, a possibility that the closure of Line 5 will have a major impact not only in terms of the safety of transport of oil but also in terms of where we get our oil?
• Can we also talk a little bit about whether it would be possible for us to use the 1977 transit pipeline treaty if necessary? Can you explain a little bit to the committee what it would look like if we were to go that route?
• Referring to electric vehicles asked; This was something that was discussed in the conversation with the President last week in terms of the importance of a continental grid. Could you talk a bit about that?

March 16, 2021

• I want to get a better understanding of the urgency and the motivation behind the Michigan governor. Why now?
• Asked witnesses to discuss Buy American.

March 18, 2021

• Quebec, my home province, has just crossed the 300,000 threshold in cases of COVID, and the idea of hospitals lacking supply is very concerning in the middle of the pandemic. Could you please clarify that for me?
• Would it be safe to say that citizens in remote communities who maybe not being able to get health care in a pandemic, could be a real reality.

Randeep Sarai (IPC—Surrey Centre, BC)

Key interests

• Labour mobility

Parliamentary roles

Sarai was first elected in 2015. In the previous parliament, he served as the chair of the Liberal Pacific and Northern Caucus. He has also been a member of many interparliamentary associations.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Member, Standing Committee on International Trade (CIIT) – January 2020 – present
• Member, Standing Committee on Public Accounts (PACP) – September 2018-September 2019
• Member, Standing Committee on Citizenship and Immigration (CIMM) – January 2016- September 2019

Background

Sarai is a lawyer by training, with experience in real estate development and urban planning. He has a Bachelors degree from the University of British Columbia, majoring in political science, and a Bachelor of Laws degree from Queen’s University. He has served on the boards of a number of community organizations dedicated to combatting youth violence in Surrey.

Statements about the United States

In 2020, during the debates for Bill C-4, Sarai stated his support and noted that the United States is Canada’s largest trading partner. During meetings of the International Trade Committee, Sarai has been vocal of the opportunities with not only the bilateral trade between the United States and Canada, but the opportunity to become a hub for trade, being the only North American nation with free trade agreements in so many regions that reach over 1.5 billion people around the world.

Questions asked at CAAM

March 2, 2021

• My curiosity, when it comes to Line 5, is whether the Governor of Michigan is more concerned with just that one particular area, the Straits of Mackinac component. I understand there's a permit that the state has given for tunnels underneath to have it more protected there. Is her attitude on this that if that is done, she's okay? Is she forcing this decision to get the replacement in place—and if that is done in a satisfactory manner, she doesn't have an objection to the line overall—or is her objection to the complete line and fossil fuels in general?
• What is the dollar figure that is at risk for Canadians and Canadian businesses that are already doing procurement or infrastructure building in the U.S.? What's the risk we're facing, so we can quantify it and know how much energy to put into this?
• Referring to Buy American and materials such as contrete, steel, asked; if Canada can get an exemption so that we're probably providing more services in that regard, is that something we're looking at?

March 4, 2021

• What are your conversations like with officials in Michigan, as well as the officials federally in the U.S., your counterparts there? How is their optimism for working on a solution for that or perhaps accelerating permits to have that short length built so that we can resolve this issue?
• What is their [Enbridge executives] feeling on getting this resolved, getting a solution and also having an interim solution in terms of monitoring that length of the pipe? I understand that there are divers that regularly check it, and there are other means by which they check it regularly, but what are they doing and how have their dialogue and their correspondence been?
• Has Michigan hinted at or stated anything about how they would manage their energy needs if they shut down Line 5?
• How has the embassy been involved in this conversation around Line 5 with the Governor of Michigan and other state levels?

March 16, 2021

• Have you been getting the full assistance from the federal government, especially on the embassy side, on anything that you need from them?
• How are you gaining U.S. consumer groups or U.S. industry groups to support you on this because obviously you're a conduit literally to a lot of industries, whether it's natural gas, oil, heating or utilities. How are they supportive in your case to give you some political backing so that people of Michigan and other areas surrounding know the consequences of their governor's actions?
• Have you been able to do a greenhouse gas emission analysis on how much more greenhouse gases, GHG emissions would be out there, as a result of this pipeline's shutting down, if those hundreds of railcars a day have to go, the thousands of trucks have to carry this? What would the resulting increase in cost be in, ultimately, the consumers' paying extra? In those areas you have stronger winters and stronger summers, so energy costs are year-round. Has there been any work done in that regard?

Hon. John Mckay (IPC—Scarborough-Guildwood, ON)

Key interests

• Child Benefits
• Climate Change

Parliamentary roles

John McKay was first elected as Member of Parliament in 1997. He was re- elected in October 2019 to serve his eighth term in the House of Commons. He was Parliamentary Secretary to then Minister of Finance Ralph Goodale, from 2003 to 2006 during the government of Paul Martin. In 2006 He was the Official Opposition Critic for Crown Corporations. In 2008 he was the Official Opposition Critic for Small Business and Tourism. From 2011 to 2013 he was the Critic for Defence. He then served as a Critic for Environment until November 2015.

Notable committee membership

• Member, Special Committee on the Economic Relationship between Canada and the United States (CAAM), February 2021-present
• Chair, Standing Committee on Public Safety and National Security (SECU), October 2020-present
• Member, Standing Committee on Public Safety and National Security (SECU), September 2017- present
• Member, Standing Committee on Foreign Affairs and International Development (FAAE), January 2017-September 2017
• Vice-chair, Canada-United States Inter-Parliamentary Group (CEUS)

Background

McKay has a Bachelor of Arts degree from the University of Toronto at Scarborough and a Bachelor of Laws degree from Queen’s University. Prior to serving as a Member of Parliament, he practiced private law as a real estate attorney, assuming positions of leadership in the legal community. Most notably, he was the President of the Durham as Association, an Executive Member of County and District Law Association, Real Estate Executive of the Canadian Bar Association, and a member of the Law Society of Upper Canada’s Committee on Title Insurance.

McKay has successfully sponsored two Private Members Bills during his tenure as a Member of Parliament: C-260, passed in 2003, requiring cigarette manufacturers to produce ‘fire-safe’ cigarettes, and C-293, passed in 2008, outlining specific requirements for the disbursement of Canadian foreign aid.

Statements about the United States

At the time of CUSMA negotiations, MP McKay was very supportive, citing endorsements from the Business Council of Canada, and various premiers. MP McKay specifically noted the security benefits of CUSMA, stating “the two are mutually reinforcing, because security creates trade and trade creates security”. He also stated that “the Government has done a magnificent job of protecting the supply chains” in particular its critical protection of the dairy industry. During NAFTA negotiations McKay noted that the deal had to be well received by White House, otherwise Canada would suffer.

Questions asked at CAAM

March 2, 2021

• Are we defining, for the purposes of the trade arrangements between Canada and the U.S., security in too narrow a fashion, in that in fact our economies are so intimately integrated that the security exemption should not merely be related to items that are clearly defence-oriented?

March 4, 2021

• Is there an active conversation between the Government of Canada and the Government of the United States as to how to align our interests in that sort of discussion?

March 16, 2021

• Can you make for the committee the governor's argument as to why this is a good idea?
• But what's a reasonable outcome, from your vantage point, for the governor in a situation such as this?

March 18, 2021

• Surely the people who are really pro-environment don't really believe that shutting down this pipeline actually is an environmentally sensible thing to do, or are we living in a different atmosphere?
• Even if there are people on this call from various parties who are very pro-environment, this particular decision is not an environmentally favourable decision, so are we just into an unfathomable well of ignorance on the part of the Michigan legislature and those who are purporting to close this pipeline down?

Motion to create CAAM

February 2, 2021 — Mr. O’Toole (Durham) — That, given that trade between Canada and the United States of America exceeds $1.5-billion per day, more than 300,000 persons normally cross the common border monthly, the two countries have enjoyed one of the world's largest open trading blocs for the free movement of goods, services and people since 1989, the economic challenges caused by COVID-19, and the need for a serious plan for the economic recovery that recognizes the integration of the North American economy, the House appoint a special committee with the mandate to conduct hearings to examine and review all aspects of the economic relationship between Canada and the United States, including, but not limited to:

1. the expressed bilateral economic priorities of the governments of Canada and the United States;
2. natural resources issues, including oil and gas exports and transportation, softwood lumber exports, and related jobs;
3. "Buy America" procurement rules, requirements and policies;
4. the government's efforts with the United States' administration to ensure a stable and predictable supply of COVID-19 vaccine doses for Canada as a major border and trading partner;
5. provided that: the committee be composed of 12 members, of which six shall be from the government party, four shall be from the official opposition, one shall be from the Bloc Québécois, and one shall be from the New Democratic Party;
6. the members shall be named by their respective whip by depositing with the Clerk of the House the list of their members to serve on the committee no later than Thursday, February 18, 2021;
7. membership substitutions be permitted, if required, in the manner provided for in Standing Order 114(2);
8. changes to the membership of the committee shall be effective immediately after notification by the relevant whip has been filed with the Clerk of the House;
9. the Clerk of the House shall convene an organization meeting of the committee on Tuesday, February 23, 2021;
10. the committee be chaired by a member of the government party and, notwithstanding Standing Order 106(2), there shall be one vice-chair from each of the other recognized parties;
11. quorum of the committee be as provided for in Standing Order 118 and that the Chair be authorized to hold meetings to receive evidence and to have that evidence printed when a quorum is not present, provided that at least four members are present, including one member of the opposition and one member of the government party;
12. the committee be granted all of the powers of a standing committee, as provided in the Standing Orders, provided that (i) the provisions of Standing Order 106(4) shall also extend to the committee, (ii) until Sunday, April 11, 2021, the committee shall not meet on a day when the House is sitting, except for (A) the meeting required by paragraph (i), (B) the committee's subcommittee on agenda, if one is appointed;
13. the committee have the power to authorize video and audio broadcasting of any or all of its proceedings;
14. the Deputy Prime Minister and Minister of Finance, the Minister of Foreign Affairs, the Minister of Small Business, Export Promotion and International Trade, the Ambassador of Canada to the United States of America, and other ministers and senior officials be invited to appear as witnesses from time to time as the committee sees fit;
15. the committee be instructed to present an interim report, concerning an analysis of the importance of the Enbridge Line 5 pipeline to both countries' economies and the consequences of its possible closure, including the labour market implications caused by layoffs of unionized and other workers, together with recommendations to address and safeguard Canadian interests, no later than Thursday, April 15, 2021;
16. the committee be instructed to present a second interim report, concerning current and proposed "Buy America" procurement rules, requirements and policies, together with recommendations to address and safeguard Canadian interests, no later than Thursday, June 17, 2021; and
17. the provisions of the order adopted on Monday, January 25, 2021, authorizing virtual and hybrid committee proceedings, shall continue to apply to the committee and any of its subcommittees until Sunday, September 19, 2021.

Canada – U.S. bilateral economic overview

• The 2020 economic decline in the u.s. was milder than in many other advanced economies.
• The canada – u.s. trade and investment relationship is one of the largest in the world, providing many mutual benefits.
• Despite the struggles in 2020, many aspects of canada – u.s. trade have recovered to pre-pandemic levels.

Supplementary messages

• Economic sectors and trade in products and services that rely on social gathering and face-to-face interaction continue to remain depressed in Canada and the U.S.
• Full recovery and future growth, however, can only be achieved with widespread vaccinations, in both home countries as well as globally.

Supporting facts and figures

• In 2020, the U.S. economy contracted by 3.5% and the Canadian economy contracted by 5.4%, the largest declines in decades. However, the U.S. economic performance in 2020 was better than many other advanced economies, and was the best in the G7 economies.
• In 2020, Canada saw significant decline in trade with the U.S. with notable weaknesses in energy, automotive, and travel. Goods and services exports declined 15% and imports declined 13%. However, as of January 2021, Canadian goods exports to the U.S. have surpassed pre-pandemic levels.
• The U.S. is an important first destination for Canadian entrepreneurs serviced by the Trade Commissioner Service. In 2020, 47% of all registered Canadian companies seeking service from the TCS expressed interest in the U.S. market.

Background

The U.S. economy saw a milder decline (3.5%) in economic performance in 2020 than many other advanced economies and is now closer to its pre-pandemic GDP level (-2.4%) than most other major advanced economies. The Canadian economy shrank 5.4% in 2020, the steepest decline since comparable data was first recorded in 1961. A notable feature of the Covid-19 economic recession is the uneven nature of the recovery, with sectors that rely on social gathering and face-to-face interactions such as accommodation and food services continuing to struggle.

Canada and the U.S. have one of the most important trading relationships in the world. In 2019, bilateral trade in goods and services between the U.S. and Canada totaled $1 trillion, or $2.7 billion per day. In 2020, Canadian trade with the U.S. declined significantly with notable weaknesses in energy, automotive, and travel. Exports declined 15% and imports declined 13%. However, as of January 2021, Canadian goods exports to the U.S. have surpassed pre-pandemic levels. On the other hand, services trade continues to struggle as travel and passenger transportation services remain depressed. Commercial services however, many of which can potentially be delivered remotely, actually managed to grow (5.6%) in 2020.

The Canada-U.S. trade relationship is built on long-standing binational supply chains. About three-quarters of U.S. imports from Canada are related to supply chains and are used for domestic U.S. production. When sold to the U.S., Canadian goods contain on average 20% American content and, in some sectors like machinery and automobiles, it is significantly higher. At the sub-national level, 32 states count Canada as their top customer.

Investment is also an important part of the Canada –U.S. commercial relationship. In 2019 alone there was over $600 billion in FDI stock from Canada in the United States and over $455 billion in FDI stock from the U.S. in Canada. Importantly, over a quarter of Canada’s exports to the U.S. come from U.S. majority-owned enterprises.

Canada – U.S. economic relations remain important for both economies as 7.8 million jobs in the U.S. are supported by trade with Canada, more than from any other single trading partner. Canada’s investment in the US is important for generating U.S. jobs, including employment at Canadian affiliates (nearly 726,000 jobs in 2018).

Going forward, on-going accommodative monetary policy and the newly approved $US1.9 trillion fiscal stimulus should provide solid supports for economic recovery in both the U.S. and Canada, and is expected to increase Canadian GDP by 1.2% in the first full year. Full recovery and future growth, however, can only be achieved with widespread vaccinations, in both home countries as well as globally. The U.S. vaccination effort is going much better than the global average, and the U.S. now expects to have vaccines available for all adults by the end of May.

Buy american and buy America

• Canada is exempt from buy american requirements.
• Long-standing concerns with buy america requirements as canada does not have an exemption.
• Federal government engaging the u.s. administration, members of congress, allies at the sub-national level and u.s. business and labour communities, to advocate for a canada-u.s. approach to the U.S. infrastructure package.

Supplementary messages

• Canada's engagement with U.S. stakeholders is most effective with targeted information that makes clear – and real – the negative impact that applying Buy America on Canada-U.S. supply chains may have on U.S. interests.
• As we have seen in the past, applying Buy America against Canada can have negative impacts on U.S. manufacturers and workers, increase costs, delay projects, and result in negative environmental or safety impacts.
• Canada must continue to demonstrate the value that our suppliers bring to the U.S. marketplace and we must use all the tools we have at our disposal to protect the security and resilience of our cross-border supply chains.

Background

Buy American requirements were first established during the U.S. Great Depression and are set out in the Buy American Act of 1933, which mandates that all federal government departments purchase only U.S. goods. Canada is exempt from Buy American requirements as a result of our respective obligations under the revised WTO Agreement on Government Procurement (GPA).

However, Canada is not exempt from Buy America requirements. Since 1982, Buy America requirements have applied to the purchase of iron, steel and manufactured goods used in state/local infrastructure projects funded – in whole or in part – by certain U.S. federal departments and agencies (mainly the Department of Transportation and the Environmental Protection Agency). In addition, procurement of rolling stock (e.g. buses, subway cars, vehicles) requires 70% U.S. domestic content and final assembly in the U.S. to be considered Buy America compliant. As federal transfers or grants to lower levels of government are not covered by the U.S. under the GPA, imposing Buy America requirements is consistent with U.S. trade obligations.

There is broad bipartisan support for Buy America policies in the U.S. and President Biden has pledged to attach existing, or potentially expanded, Buy America requirements to the upcoming U.S. infrastructure package, which is expected to be in the range of US$1-2 trillion. This initiative, which would be the subject of new legislation, could particularly impact Canadian companies supplying products for:

• transportation infrastructure projects (e.g. roads and highways, bridges, rail, charging stations for electric vehicles, port facilities, and airports);
• transportation goods (e.g. trains, subway cars, buses, vehicles, including electric vehicles);
• water and wastewater infrastructure;
• power sector infrastructure; and
• social infrastructure projects (e.g. school upgrades).

The federal government is engaging the U.S. Administration, members of Congress, allies at the sub-national level and in the U.S. business and labour communities, to advocate for a Canada-U.S. approach to the U.S. infrastructure package. A strong Team Canada approach will be required to advance Canada’s interests.

Canada’s response to the 2009 american recovery and reinvestment act (ARRA)

• Canada faced challenges when the U.S. applied Buy America requirements to its economic stimulus plan in 2009.
• Advocacy efforts and certain procurement commitments by Canada helped secure a “carve-in” for several U.S. infrastructure stimulus programs.
• Need to take a strong Team Canada approach to help achieve a similar outcome.

Supplementary messages

• Following significant engagement with a wide range of industry and labour groups in Canada and the U.S. as well as Canada’s commitment to cover provincial/territorial procurement under the WTO Agreement on Government Procurement, Canada secured a “carve-in” for certain infrastructure projects.
• Opportunities exist to engage U.S. stakeholders to make clear the negative impact that applying Buy America requirements against Canada may have on U.S. interests, including to the upcoming U.S. infrastructure package.

Background

The American Recovery and Reinvestment Act of 2009 (ARRA) was economic stimulus legislation passed by the U.S. Congress in February 2009 as part of the Obama Administration’s response to the economic downturn of 2008-09. The ARRA funding was distributed by various federal departments and agencies, such as the Department of Transportation, Environmental Protection Agency and the Department of Energy to states and local governments or non-federal entities (e.g. transit authorities, development organizations). Entities that received ARRA funding for infrastructure and energy projects were required to use U.S. iron, steel and manufactured products in infrastructure projects (e.g. construction of public buildings and highways and bridges; energy, public transit, water and wastewater projects). Canadian goods and suppliers were unable to access these procurement opportunities given the lack of U.S. international obligations at the sub-federal level and the fact that much of the ARRA’s infrastructure spending would be transfers to states and local governments.

Following significant engagement by a wide range of Canadian stakeholders – from all levels of government, industry and civil society as well as Canada’s commitment to cover provincial/territorial procurement under the WTO Agreement on Government Procurement, Canada secured a “carve-in” for certain ARRA-funded infrastructure projects under the 2010 Canada-U.S. Agreement on Government Procurement (CUSGPA). However, by the time the CUSGPA was signed in February 2010, a significant portion of ARRA-funding had already been allocated, which limited Canadian suppliers overall opportunities. Canada will focus on trying to secure a carve-in at an earlier stage with respect to the development of the current infrastructure package.

Keeping supply chains open

• Our deeply integrated supply chains strengthen North American security and competitiveness and support jobs, workers, and industry on both sides of the border.
• We have consistently conveyed this message to the United States.
• As Prime Minister Justin Trudeau and President Joe Biden announced in the Roadmap for a Renewed U.S.-Canada Partnership, Canada and the U.S. will also work closely together to develop a strategy to enhance Canada-United States supply chain security and to reinforce our deeply interconnected and mutually beneficial economic relationship.

Supporting facts and figures

• More than three-quarters of U.S. imports from Canada are related to supply chains and either used as inputs or capital goods for domestic U.S. production.
• When sold to the U.S., Canadian goods contain on average 20% American content and in some sectors, like machinery and automobiles, it is significantly higher.
• Canada is the United States’ largest customer and buys more goods from the United States than do China, Japan and the United Kingdom combined.

Background

Keeping supply chains open is a priority for the Government of Canada and is being raised at all levels with the Biden administration.

Since the beginning of the pandemic, Canada has closely collaborated with its partners in the U.S. to maintain the two-way flow of medical supplies and critical inputs. The export of certain medical products is restricted under the Federal Emergency Management Agency (“FEMA“). Canada has an exemption valid until June 30, 2021. The list of restricted items does not include COVID-19 vaccines.

On January 21^st, President Biden signed an Executive Order on a Sustainable Public Health Supply Chain directing federal authorities to secure supplies necessary to respond to domestic needs related to COVID-19, including through the authorities of the Defense Production Act. There is no evidence to date that Canada’s vaccine orders are being held up as a result.

No country supplies more unique imported products to the U.S. than Canada – not even China. This includes products used in construction and manufacturing, like metal presses, specialized steel and iron, road surfacing material and rail cars.

The U.S.-Canada trading relationship is essential for the stability and security of both of our nations. Through cross-border defense trade and the National Technological and Industrial Base, we collaborate to produce the world’s best defense materiel.

Supply chain security and resilience were recognized as a key element of the new Roadmap for a Renewed U.S.-Canada Partnership. Leaders launched a strategy to strengthen Canada-U.S. supply chain security, recognizing the opportunity to work together on clean growth, building the necessary supply chains for all aspects of battery development and production and strengthening the Canada-U.S. Critical Minerals Action Plan to target a net-zero industrial transformation, batteries for zero- emissions vehicles, and renewable energy storage. Prime Minister Trudeau and President Biden will meet in the spring of 2021, while the similar themes of Build Back Better and climate change will be priorities for the G7 meeting in June of 2021.

Canada-U.S. relations

• Canada is a key U.S. ally. No two nations depend more on each other for their prosperity and security.
• The Biden administration presents us with renewed opportunities for collaboration. On February 23, PM Trudeau and President Biden launched a Roadmap for a Renewed U.S.-Canada Partnership to revitalize and expand our historic relationship and realize its full potential.
• This roadmap will be the cornerstone of a whole-of-government approach to Canada-U.S. relations and includes the creation of a High-level Ministerial Dialogue on Climate, the revival of the North American Leader`s Summit, and expansion of the U.S.-Canada Arctic Dialogue, among other initiatives.
• We continue to work with the U.S. including on border issues, trade, and the ongoing implementation of the Canada-United States- Mexico Agreement, as well as addressing important foreign policy and global issues.

Supplementary messages

Trade

• Millions of U.S. jobs are supported by trade and investment with Canada. The U.S. sells more goods to Canada than to any other country - more than it sells to China, Japan and the UK combined.
• Canada is committed to working with the U.S. and Mexico to implement the USMCA, which is particularly important for post-pandemic economic recovery. Economic recovery and growth will require greater coordination, innovation and strong partnerships across North America.
• Buy America-style proposals negatively affect our cross-border trade. Let’s build on the USMCA by using government procurement to further strengthen North American supply chains and competitiveness.

Climate and energy

• Canada committed to Paris Agreement, net-zero targets and mobilizing on climate action.
• We welcome the new Canada-U.S. High-level ministerial dialogue on Climate, which will provide a valuable platform to discuss efforts to limit global temperature increase to 1.5 degrees C. We will work in tandem with the U.S. to encourage others to achieve net zero emissions by no later than 2050.
• Canada is the United States’ #1 energy supplier and #1 partner in energy security.
• We are disappointed but acknowledge the President’s decision to fulfil his election campaign promise to cancel the Keystone XL permit.
• Canada supports the continued safe operation of Enbridge Line 5, which is a critical economic and energy security link between Canada and the United States. The people of northern Michigan rely on Line 5 to heat their homes and businesses, and to deliver the oil that the state’s refineries need to produce transportation fuel.
• Integrated energy grids will expand renewable energy supplies from Canada to New England and New York.

Border and pandemic

• Evidence and science have informed Canada’s approach to the pandemic.
• The temporary border arrangement between Canada and the United States is working well, reflecting the open and effective communications between our two governments.
• As vaccination is rolled out and the pandemic becomes better controlled, we are working to find a consensus for a gradual reopening of the Canada-U.S. border.

Arctic

• The U.S. is Canada’s premier partner in the Arctic and we look forward to continuing to work together on Arctic issues, including safety, security, and sustainable development.
• There is strong alignment between Canada’s Arctic and Northern Policy Framework and President Biden’s vision for the Arctic, which is evidenced by the expansion of the Canada-U.S. Arctic Dialogue as part of the Roadmap for a Renewed Canada-U.S. Partnership.

International security and foreign policy

• Canada is the U.S. most important ally and defence/national security partner: NORAD, NATO, Five Eyes. We look forward to closer collaboration with the U.S. on our responses to global security challenges.
• There is a recognition from the Biden administration that the U.S. will have more of a lasting and consequential impact on regional and global challenges when it works in concert with partners. The challenges identified include building back from COVID, global migration, democracy vs. authoritarianism, China, Russia and Iran.
• Canada is strongly committed to constructive engagement in a rules-based multilateral system and institutions. Global challenges require global solutions: addressing climate change, threats to rules-based trade, mass migration, and the difficulties facing the middle class.
• We should ensure multilateral institutions address today’s realities. Canada is strongly committed to constructive engagement in a rules-based multilateral system.
• We look forward to working with the U.S. on the Biden administration proposed Summit for Democracies. Secretary Blinken indicated the U.S. could host at the end of this year.
• We share many of the U.S. concerns about China (human rights, security, economic). We deplore China’s arbitrary detention of Canadians Michael Kovrig and Michael Spavor. We thank the U.S. for its continued support on this issue.

Inclusion and respect for diversity

• Canada and the U.S. share a commitment to greater equality. Canada works to advance inclusion and respect for diversity, to help us become a more just and prosperous society.

Supporting facts and figures

• In 2020, bilateral trade in goods and services was $612.3 billion. While overall bilateral flows were down significantly for the year as a whole (84% of 2019 levels), trade had recovered to 95% of 2019 levels by the fourth quarter of 2020.
• 7.8 million U.S. jobs are related to trade with Canada, which works out to 3.9% of U.S. employment or roughly one in 25 jobs—more than from any other single trading partner.
• Canada is the largest, most secure, foreign source of energy for the U.S. supplying 56% of its crude oil imports, 98% of natural gas imports, 88% of electricity imports, and 24% of uranium imports in 2019. In 2019, the Canada-U.S. bilateral energy trade totaled $151.7 billion, including a $86.3 billion surplus for Canada. Canada exported 91% (by value) of its global energy exports to the United States.

Background

On February 26, Secretary Blinken undertook a virtual visit to Canada during which he had a bilateral meeting with MINA and a courtesy call with PM Trudeau. MINA and Sec. Blinken discussed issues in the Americas (Venezuela, Cuba, Nicaragua, Haiti), China, Iran, Saudi Arabia, as well as multilateralism, democracy and migration.

Political context: Joe Biden was inaugurated U.S. President on January 20, 2021. He has nominated all Cabinet members, and their Senate confirmation processes are almost completed. Biden’s cabinet is the most diverse in U.S. history with almost as many women as men, a non-white majority, and multiple historic nominations, including Deb Haaland, the first Native American in a president's Cabinet.

The new administration inherited significant domestic challenges – including tense partisan and racial relations, the impact of the COVID-19 pandemic, immigration pressures and a fragile economic recovery – which are expected to focus the Biden administration and Congress on domestic matters rather than foreign affairs. Nevertheless, President Biden has consistently expressed an intention to rebuild alliances with foreign partners and renew U.S. leadership internationally.

Canada-U.S. Roadmap: PM Trudeau and President Biden had their first virtual meeting on February 23. The two leaders committed to a Roadmap for a Renewed U.S.-Canada Partnership, which is intended to be the cornerstone of a whole-of-government approach to Canada-U.S. relations. It includes the creation of a High-Level Ministerial Dialogue on Climate, the revival of the North American Leaders’ Summit, and expansion of the U.S.- Canada Arctic Dialogue, among other initiatives. In particular, the Roadmap prioritizes:

• Combating COVID-19, including support for relevant multilateral organizations such as the WHO and the UN;
• Building back better with our shared vision for a sustainable economic recovery;
• Accelerating our climate ambitions, including through a new High-Level Ministerial Dialogue on Climate;
• Advancing diversity and inclusion through combatting systemic racism and gender- based discrimination;
• Bolstering security and defense by modernizing NORAD and supporting our shared commitment to transatlantic security; and,
• Building global alliances by reviving the North American Leaders’ Summit and working through multilateral organizations, including the UN, the G7, G20, WTO, NATO, and FVEY.

PM Trudeau and President Biden also discussed a wide range of bilateral issues, including an inclusive and sustainable economic recovery, fighting against all form of discrimination, and protecting energy infrastructure. The leaders also considered ways to address key global challenges, such as climate change, NATO, China, digital economy and cybersecurity, and priorities in multilateral forums.

The U.S. administration signalled its interest in hosting the North American Leaders’ Summit (NALS) around April 22, 2021.

Trade: Canada and the U.S. enjoy the largest trading relationship in the world. Canada’s efforts are focused on ensuring the effective implementation of the CUSMA and defending Canadian trade interests in the U.S., and collaborating closely to address global trade challenges, including with respect to China and the WTO.

The CUSMA entered into force on July 1, 2020, reinforcing the strong economic ties between the three parties and enhancing North American competitiveness. More recently, the parties have focused on the implementation of the rules of origin for automotive trade and standing- up CUSMA committees, including those on Small and Medium-Sized Enterprises and North American Competitiveness.

While implementation is proceeding well overall, certain bilateral irritants exist. For example, the U.S. has pursued dispute settlement consultations with Canada regarding tariff rate quota administration policies for dairy, and Canada has requested consultations with the U.S. regarding its continued illegal global safeguards on imports of Canadian solar products. U.S. trade policy continues to be closely linked to domestic priorities and a tendency towards protectionism will remain.

President Biden is moving forward on his campaign promise to expand Buy America and Buy American requirements. On January 25, President Biden signed an Executive Order (EO) on ‘Ensuring the Future Is Made in All of America by All of America’s Workers’, which is largely focused on streamlining process, increasing transparency and oversight, and re-enforcing existing commitments for Buy American requirements. As such, it will have limited impact for Canada.

Climate and energy: New U.S. policies and overall approach on climate change and environmental protection are aligned with Canada’s views. As part of the Roadmap, PM Trudeau and President Biden pledged to explore opportunities to align policies and approaches to create jobs, while tackling climate change and inequality, and enhancing adaptation and resilience to climate impacts. They also agreed to protect businesses, workers and communities in both countries from unfair trade by countries failing to take strong climate action, and to reduce oil and gas methane emissions to protect public health and the environment.

There is also local and national opposition in the U.S., including court actions, against Enbridge Line 5 and Line 3 pipelines. The Biden administration has not pronounced on these two projects yet. The renegotiation of the 1964 Columbia River Treaty, a bilateral flood control and hydropower Canada-U.S. agreement, is currently underway and remain a priority.

Border management: On March 17, the temporary border arrangement between Canada and the U.S. was extended through April 21, 2021. In the Roadmap for a Renewed U.S.- Canada Partnership, Prime Minister Trudeau and President Biden recognized that coordinated border policies remain central to controlling COVID-19 and new variants while promoting economic growth and recovery. Both leaders agreed to take a coordinated approach based on science and public health criteria when considering measures to ease Canada-U.S. border restrictions in the future.

International security and foreign policy: As part of the U.S.-Canada Roadmap, PM Trudeau and President Biden reaffirmed the importance of investment in modern, ready, and capable forces in line with their commitments to NATO, and agreed to expand cooperation with respect to the promotion of democracy, human rights, and media freedom in our hemisphere and around the world. President Biden also condemned the arbitrary detention of Michael Kovrig and Michael Spavor and his commitment to work for their release.

The Biden administration has expressed its commitment to a rules-based international system and multilateral co-operation, notably by cancelling plans to withdraw from the World Health Organization and rejoining the Paris Climate Agreement. There is a recognition from the Biden administration that the U.S. will have more of a lasting and consequential impact on regional and global challenges when it works in concert with partners. The foreign policy challenges identified by the U.S. include building back from COVID, global migration, democracy vs. authoritarianism, China, Russia and Iran.

COVID-19: As of March 18, there have been more than 29.4 million cases and over 530,000 deaths in the United States. About 113 million people have received at least one dose of a COVID-19 vaccine, including about 40 million people who have been fully vaccinated. On March 11, President Biden signed a new COVID economic relief package totaling US $1.9 trillion into law.

Representation: Canadian Ambassador to the U.S., Kirsten Hillman. U.S. Chargé d’affaires to Canada, Katherine Brucker.

Canada-U.S. trade promotion

• The United States remains a priority trade promotion market, where the Trade Commissioner Service (TCS) delivers a range of client- facing trade promotion programs to secure market access and reinforce integrated supply chains.
• In keeping with the Government’s policies on Diversity, Equality and Inclusion and Responsible Business Conduct (RBC), TCS trade promotion programs focus support on SMEs, under-represented exporters (women, Indigenous, racialized peoples, LGBTQ2, youth) and RBC clients in resource extraction and manufacturing industries.
• Investment attraction and innovation partnerships are supported by investment outreach and retention efforts, as well as innovation programs, including Canadian Technology Accelerator initiatives.

Supplementary messages

• Utilizing a network of the Embassy in Washington, D.C., 13 Consulates General and 3 trade offices, the TCS in the U.S. delivers High-touch Accelerated Growth Service support to key clients. Program funding for exporters comes from CanExport for SMEs and CanExport Innovation for technology partnerships and associations.
• A network of Investment officers works with the wider TCS trade promotion team on FDI retention and attraction, focusing on Fortune 500 global entities, as well as targeting Venture Capital investment in support of our technology start- up ecosystem through the Canadian Technology Accelerator (CTA) program.
• Ensuring our companies conduct business in a responsible manner, and respect human rights, is a shared priority between our countries, in particular as it relates to the prohibition of goods mined, manufactured or produced by forced or compulsory labour, including child labour.

Supporting facts and figures

• Canada and the U.S. have the largest trading relationship in the world. In 2019, bilateral trade in goods and services totalled $1 trillion, more than $2.7 billion in trade every single day. In 2020, bilateral trade in goods and services was $612.3 billion. While overall bilateral flows were down significantly for the year as a whole (84% of 2019 levels), trade had recovered to 95% of 2019 levels by the fourth quarter of 2020.
• Our level of economic integration is unique: approximately 77% of Canadian exports to the U.S. are inputs used to make goods in the U.S.; in addition, what we sell to the U.S. contains on average roughly 21% American content. We make things together and add value together.
• Canada is the number one export market for most U.S. states (32 in 2019). Over 74% of Canada’s goods exports go to the U.S. The U.S. is the single greatest investor in Canada with $455 billion stock investment in 2019, nearly half of all investment in Canada.
• CanExport SMEs has approved more than $62.8 million in funding for 859 projects targeting the U.S. since 2016 (over $26.7 million in funding for 815 projects in 2020- 21).

Background

Approximately 80% of new exporters are SMEs that export to a single market and almost 70% of new exporters choose the U.S. as their first export destination. The U.S. is a proven testing ground both for new exporters, and for established ones piloting a new product or service. Canada is the United States’ largest customer and buys more goods from the United States than do China, Japan and the United Kingdom combined.

Solar tariffs and other trade remedy issues

Solar Tariffs

• We will work with the Biden administration to remove the solar safeguard tariff on Canadian products.
• Canada is ready to launch CUSMA panel proceedings if necessary; consultations were held in January.

Fact-Finding Investigations on Seasonal Produce

• Canada has actively defended Canadian farmers in the U.S. fact– finding investigations into bell peppers, strawberries, cucumbers and squash and is closely following developments.

Supplementary messages

• Resolving the solar tariff presents an additional opportunity for Canada and the United States to closely collaborate on approaches that both strengthen North America competiveness and support broader international work to combat climate change.

Supporting facts and figures

• Since early 2018, the U.S. solar safeguard tariffs have caused Canada’s exports of solar products to the United States to decline by as much as 82%
• Canada now accounts for less than 1 percent of U.S. imports.

Background

Solar Tariffs

In 2018, the Trump administration purposely ignored NAFTA global safeguard rules and imposed a 30% safeguard tariff on solar modules from Canada. The U.S. also blocked Canada’s attempt to launch NAFTA dispute settlement proceedings. Despite a high level of engagement with the Trump Administration since the tariff was illegally imposed in 2018, the tariff has remained in place. On December 22, 2020, Canada launched CUSMA dispute settlement proceedings and held consultations on January 28, 2021, with the goal of convincing the Biden Administration to respect NAFTA and CUSMA rules and exempt Canada from the solar tariff.

Fact-Finding Investigations on Seasonal Produce

The Trump Administration also launched various investigations on seasonal produce. Although Canada was successful in preventing the imposition of a safeguard duty on blueberries, the threat of new safeguard investigations on bell peppers and strawberries remain, and any resulting tariffs could disrupt Canadian exports of these products (fact-finding investigations can lead to safeguard investigations). It will be important to ensure that the Biden Administration adheres to CUSMA safeguard rules, which require the United States to exempt Canada from the application of these tariffs, subject to certain conditions.

Section 232 Investigations on Transformers and Vanadium

The U.S. 232 National Security investigations on Vanadium and Transformers and parts that were launched by the Department of Commerce in 2020 remain without final decision or closure by the President. In both cases, there is no indication that the Commerce Secretary submitted a final report to the President. Although the tariff threat appears to have diminished greatly with the new Administration, the Embassy in Washington continues to seek clarity on the status of these investigations.

Canada-U.S. border

• Canada and the United States have extended the temporary border arrangement until April 21, 2021.
• We will continue to base our decisions on the best public health advice available to keep Canadians safe from COVID-19.
• Our Embassy in Washington, D.C. continues its close contact with American interlocutors about the future of these measures.

Supplementary messages

• On March 18, 2021, Minister Blair issued a tweet to announce the extension of the Canada-U.S temporary border arrangement until April 21, 2021. The United States Department of Homeland Security (DHS) released a tweet the same day to confirm the extension and also noted the coordination with Canadian (and Mexican) partners.

Update

Discussions continue within the Government of Canada as to options to move forward on the future of the temporary border arrangement, and an eventual border reopening. Canadian officials have developed productive working relationships with incoming members of the Biden Administration.

Stakeholder interest in the future of the temporary border arrangement and options for re-opening the border to normal flows is expected to continue to rise. Next month, the Wilson Center Task Force on Public Health and the U.S.-Canadian Border, co-chaired by Anne McLellan, Jean Charest, as well as U.S. co-chairs Christine Gregoire and James Douglas, former governors of Washington State and Vermont, respectively, plans to release a report with recommendations as to next steps to re-open the border.

Supporting facts and figures

• According to a Statistics Canada report released in February 2021, while the numbers of non-residents and returning Canadian travellers has declined sharply since April 2020 and is still far below levels of previous years, “other arrivals” to Canada recovered more quickly after an initial drop.
• These “other arrivals” primarily include Canadian and American truck drivers as well as crew members travelling internationally on different modes of transport. This “other” group, mostly essential travellers, have a proportionately larger share of the total after March 2020.
• For example, in December 2020, international arrivals at Canadian borders were composed of the following (in thousands): 4,377 (Canadian residents); 2,192 (non- residents); and 573 (other travellers). By December 2021, the last month of data in the report, the respective figures, also in thousands, were 379, 154, and 513.

Background

The one-year anniversary of the Canada-U.S. temporary border arrangement recently passed; on March 18, 2020, Prime Minister Trudeau announced that the two countries had agreed to temporarily restrict all non-essential travel across the Canada-U.S. border, taking effect on March 21, 2020, and ending on April 21, 2020. The arrangement has since been extended 12 times.

Canada-U.S. cooperation on China

• Canada shares U.S. concerns about China’s actions, particularly with respect to human rights, trade, intellectual property, rule of law, security issues and industrial policies.
• Canada is working with the U.S. and other like-minded partners to address our joint concerns, including in multilateral organizations.
• Appreciate the close coordination with the U.S. and others on economic sanctions of Chinese officials in the Xinjiang Uyghur Autonomous Region. Welcome further coordination to continue to respond to the human rights situation in China.
• We also recognize the need to work with China (and the U.S.) to address global issues such as climate change, health, non- proliferation, and finance.
• We deplore China’s arbitrary detention of Canadians Michael Kovrig and Michael Spavor. We thank the U.S. for its continued support on this issue.
• Nous reconnaissons également qu’il est nécessaire de travailler avec la Chine (et les États-Unis) afin de résoudre les enjeux planétaires, comme les changements climatiques, la santé, la non- prolifération, et la finance.
• Nous déplorons la détention arbitraire des Canadiens Michael Kovrig et Michael Spavor. Nous remercions les États-Unis pour leur soutien continu dans ce dossier.

Supporting facts and figures

• As part of the Roadmap for a Renewed Canada-U.S. Partnership, Canada and the U.S. agreed to more closely align their positions and actions with respect to China.
• Michael Kovrig and Michael Spavor have been arbitrarily detained in China since December 2018.

Background

Whereas in the past the U.S. has seen China as a developing country (with nuclear weapons), its unprecedented economic growth over the last 20 years, technological advances, large military expenditures, and more assertive foreign policy under President Xi have led to the realization that American pre-eminence cannot be guaranteed. Also, the hope that U.S. support for economic liberalization, especially following China’s accession to the World Trade Organization in 2001, would lead to greater democratization has been unrealized.

In light of these conclusions, a new narrative has emerged in Washington, partly reflected in and influenced by President Trump’s “America First” agenda, that China will not engage as a constructive, cooperative partner with the U.S. and that a new era of great power competition has begun. As stated in his January 2021 Senate confirmation hearing, U.S. Secretary of State Antony Blinken believes that China poses the most significant challenge of any state to the U.S. Supported by a bipartisan consensus in Congress, counter-balancing China’s growing global influence and safeguarding U.S. national and economic security is a high priority for the U.S. administration, which is expected to adopt a whole-of-government approach to China. That said, President Biden and his top national security officials have also stated that the U.S. must find ways to coexist with China, noting that competition and cooperation are not mutually exclusive. Canada also recognizes that we need to work with China to address global issues such as climate change, health, non-proliferation, and finance.

In these circumstances, the Biden administration is seeking to act in concert with like- minded democratic partners to address shared concerns about Chinese domestic issues such as repression of human rights (including in Xinjiang and Hong Kong), media freedom, rule of law, growing military expenditures, conditions for foreign investors, market access, and technological competition. The U.S. is also seeking to work with allies to counter other Chinese activities it sees as problematic, such as assertions of its maritime/territorial claims in the South China Sea, foreign direct investment/financial assistance under the Belt and Road Initiative, coercive diplomacy, state-sponsored cyber program (including 5G network concerns) and foreign interference. Long-standing concerns about Taiwan and growing Chinese interest in the Arctic, Latin America, and elsewhere will also preoccupy the United States.

Canada shares many of the U.S. concerns with respect to China’s assertive behaviour both internationally and domestically, notably with respect to trade, intellectual property, human rights, rule of law, security issues and industrial policies. For example, as part of the CUSMA Canada and the U.S. jointly signed on to new obligations that prohibit each country from importing goods made in whole or in part by forced labour. Canada has made use of this provision in order to bring attention to and minimize risk exposure for Canadian companies to the on-going human rights situation in Xinjiang as part of its measures announced on January 12. On March 22, in coordination with the U.S. and U.K., and in solidarity with the E.U., Canada announced new sanctions against 4 officials and 1 entity under the Special Economic Measures (Peoples Republic of China) Regulations, based on their participation in gross and systematic human rights violations in the Xinjiang Uyghur Autonomous Region.

Secretary Blinken and the U.S. administration have also commended Canada’s leadership on the Arbitrary Detention Initiative, supported Canada in advocacy around the world, and joined Canada and 60 other parties in endorsing the Declaration against Arbitrary Detention in State-to-State Relations. The U.S. has also pledged to raise the arbitrary detention of Michael Kovrig and Michael Spavor systematically with China at every level and treating it as though they were American citizen.

Some specific policies of the Biden administration are already apparent. Domestically, Trump-era restrictions, such as the requirement for China-based media to register as foreign missions in the U.S., limits on the network of Chinese-language Confucius Institutes, and attempts to ban Chinese technology companies from critical sectors (e.g. semiconductors, 5G) will likely remain in place. Plans to strengthen domestic U.S. manufacturing and increase supply-chain resiliency, particularly for medical supplies, are partly intended to reduce dependence on Chinese sources. The Biden campaign pledge to increase government spending on green technology explicitly refers to the advantage that state subsidies and industrial strategies have given China’s own industry. Canada is also moving forward on investment in green technologies and is considering options with respect to supply chains resiliency in critical sectors, particularly telecommunication technologies (i.e. 5G), critical minerals, and medical supplies.

To counter China’s aggressive foreign policies, the Biden administration has argued that the U.S. should focus on ad hoc coalitions or issue-specific groups to increase pressure on China such as a “D-10 coalition” (G7 + Australia, South Korea and India) proposed by the UK to address issues related to trade, technology, supply chains, and standards. Increased U.S. engagement in multilateral organizations such as the U.N.

as well as regional groupings such as Quads, ASEAN and APEC are also expected to be instrumental in a Biden strategy to counter-balance China. Secretary of State Blinken has stressed the importance of taking a lead role in international institutions instead of, through disengagement or absence, effectively ceding leadership to China. Biden has advocated greater consideration at NATO of the risks stemming from China’s growing military capabilities and assertiveness (e.g. Taiwan, South China Sea) and in favour of increased military capacity to address potential Chinese security threats in the Euro-Atlantic and Indo-Pacific regions. As a member of the G7, NATO, ASEAN, and other multilateral organizations, Canada will be a key partner for the United States. A number of bilateral priorities will also feature prominently in the U.S. strategy to counter China, such as modernizing NORAD, the Arctic, cybersecurity, and strengthening democracy.

On trade and economic issues, President Biden made campaign promises to address structural issues such as steel overcapacity, industrial subsidies, and support for state- owned enterprises, as well as forced technology transfer, cyber threats, intellectual property theft faced by U.S. companies in China. Canada is already well aligned with the U.S. on these issues.

While Canada did work with the Trump Administration on some China-related issues, it’s clear that the Biden administration policies toward China will provide many opportunities for collaboration and cooperation, including a much greater focus on some of Canada’s top priorities, including human rights. Early signs from Washington are encouraging and there is a clear recognition from the U.S. that working in tandem with like-minded partners, including Canada, will be likely to achieve results when it comes to China.

CUSMA implementation and reinforcing the Canada-U.S. economic partnership

• The effective implementation of the CUSMA is crucial to the success of the North American partnership and post-pandemic economic recovery.
• Canada is committed to working with the U.S. and Mexico to effectively implement the Agreement, including by advocating for Canadian business interests and supporting labour reform efforts in Mexico.
• At the same time, we are looking to leverage this renewed partnership to identify ways that we can collaborate more to address global trade challenges, including with respect to climate change, China, and the WTO.

Supplementary messages

• CUSMA preserves key elements of NAFTA, modernizes provisions to address 21st century trade challenges, reduces red tape at the border, and provides enhanced predictability and stability for workers and businesses across the integrated North American market.
• The new Agreement reinforces the strong economic ties between the three countries and enhances North American competitiveness.
• The parties are currently focused on standing-up CUSMA committees, including those on Small and Medium-Sized Enterprises and North American Competitiveness, and preparing for a Free Trade Commission meeting in the near term.
• The new Agreement advances Canada’s inclusive trade agenda:
  • ensures high levels of labour and environmental protection;
  • includes an innovative labour rapid response mechanism to ensure national labour laws related to collective bargaining and freedom of association are respected and violations are addressed in a timely manner;
  • includes an obligation to ban imports produced by forced labour;
  • contains provisions that will increase and enhance opportunities for SMEs, women and Indigenous peoples to engage in and benefit from North American trade;
  • advances Canada’s interests towards inclusive trade, including through greater integration of the gender perspective and the interests of Indigenous peoples and includes labour obligations regarding the elimination of employment discrimination based on gender;
  • incorporates a general exception that clearly confirms that the government can adopt or maintain measures it deems necessary to fulfill its legal obligations to Indigenous peoples.

Responsive – Mexico labour reform

• The effective implementation of Mexico`s labour reforms is crucial for levelling the playing field for workers in North America.
• Canada will allocate $27.5 million over four years to support Mexico’s labour reform efforts, including through support for capacity building projects and the establishment of an effective monitoring and compliance regime.

Responsive – U.S. concerns on Canada’s dairy tariff rate quotas (TRQs)

• Canada is disappointed that the U.S. requested consultations on Canada’s administration of its CUSMA dairy TRQs.
• Canada is confident that it is fully compliant with its CUSMA TRQ obligations and will vigorously defend our position if this goes further.
• The government will continue to preserve, protect and defend our supply management system.

Supporting facts and figures (statistics in canadian dollars unless otherwise noted)

• The CUSMA economic region is the biggest in the world, encompassing a US$22 trillion regional market of more than 480 million consumers.
• In 2019, trilateral merchandise trade exceeded US$1.2 trillion - a four-fold increase since 1993.
• Canada and the United States enjoy the largest trading relationship in the world. Canada-U.S. bilateral trade in goods and services in 2019 was over $1 trillion.
• Canada is the largest single-country market for U.S. exports, 33 of the U.S. states count Canada as their most important export destination.
• The Business Roundtable notes that 7.8 million jobs in the U.S. are supported by trade with Canada – more than from any other single trading partner.
• The United States is the most important source of foreign direct investment (FDI) in Canada. In 2019, its share of FDI in Canada was $455 billion, representing 47 per cent of total FDI in Canada.
• The United States is the most important destination for Canadian direct investment abroad. In 2019, $632 billion was destined to the United States, representing 45.4% of Canadian direct investment abroad.
• The top 3 most important Canadian merchandise exports to the United States are mineral fuels and oils, motor vehicles and parts, and machinery.
• Mexico is Canada’s third largest trading partner (following the United States and China), while Canada is Mexico’s sixth largest trading partner (following the U.S., China, Japan, Germany, and South Korea).
• Canada-Mexico two-way merchandise trade amounted to more than $44 billion in 2019, with top sectors including motor vehicles, machinery, electronics, and agricultural goods.

Background

CUSMA implementation: Following entry into force on July 1, 2020, the Parties have focused on the implementation of the autos rules of origin and standing-up CUSMA committees, including those on Small and Medium-Sized Enterprises and North American Competitiveness. More recently, work is underway to support a Free Trade Commission meeting, which could take place as early as mid-April. While implementation is proceeding well overall, certain bilateral irritants exist including with respect to U.S. concerns on Canada’s dairy tariff rate quota practices and Canada’s concerns with continued U.S. safeguard tariffs on Canadian solar products.

Mexico labour reform support: Canada has devoted $27.5 million over 4 years, starting in April 2021, to support Mexican labour reform programming and establish a monitoring and compliance regime. The U.S. has appropriated US$180 million for programming to support similar efforts in Mexico. Canadian and U.S. officials are engaged in regular discussions to coordinate efforts.

Dairy tariff rate quota administration: On December 9, 2020, the U.S. requested consultations under CUSMA regarding the administration of Canada’s dairy tariff rate quotas (TRQs), specifically Canada’s practice of allocating a high proportion of its TRQs to processors. Consultations took place on December 21, 2020, between officials from Canada and the U.S. At the end of the meeting, the U.S. indicated that it remained dissatisfied with Canada’s administration of its CUSMA dairy TRQs. The U.S. has been in a position to request the establishment of a panel since January 8, 2021.

Canada-U.S. cooperation on global trade issues: Early engagement with the U.S. on global trade issues is crucial to demonstrate the role that Canada can play in advancing shared objectives. In particular, there is an opportunity to collaborate to support resilient supply chains and North American competitiveness; advance the global response to climate change; and, demonstrate the benefits of our essential security relationship and make progress on global trade issues (e.g. China and the Indo-Pacific, WTO reform, forced labour).

Softwood lumber litigation

• Disappointed that the United States continues to impose unwarranted and unfair duties on Canadian softwood lumber.
• In the past, dispute settlement panels have always found U.S. claims to be without basis. Believe this to once again be the case.
• Vigorously defending the interests of Canadian industry, including through litigation under Chapter 19 of NAFTA, Chapter 10 of CUSMA and before the WTO.

Background

Shortly after the expiry in late 2016 of the one-year standstill period provided by the 2006 Softwood Lumber Agreement, the U.S. Department of Commerce (Commerce) launched, at the request of U.S. industry, anti-dumping (AD) and countervailing (CVD) duty investigations regarding certain Canadian softwood lumber products. In parallel, the U.S. International Trade Commission (ITC) investigated U.S. industry’s claim that it was injured by imports of Canadian softwood lumber.

As a result of these investigations, most Canadian companies were subject to a combined 20.23% duty rate on their softwood lumber exports to the United States from January 2018 until late 2020, when the combined duty rate was reduced to 8.99% for the vast majority of companies. Moreover, in its initial investigations, Commerce determined that softwood lumber imports from Nova Scotia, Prince Edward Island and Newfoundland and Labrador, are not subject to U.S. duties as long as they are certified by the Atlantic Lumber Board (ALB) as having been first produced in these provinces from logs originating in these provinces.

Canada is actively challenging U.S. duties on softwood lumber. Canada launched three challenges under NAFTA Chapter 19 in late 2017 and early 2018 (on Commerce’s initial CVD and AD determinations and the ITC’s injury determination). Canada’s injury challenge ended in May 2020 when the NAFTA Panel adjudicating the case unexpectedly affirmed the ITC’s decision on remand that imports of Canadian softwood lumber injure U.S. industry. Canada and the United States continue to be engaged in protracted discussions regarding panel composition for the CVD and AD cases.

Canada is also challenging Commerce’s determinations before the WTO. The Panel’s Report on Canada’s AD challenge was released on April 9, 2019. The Panel agreed with Canada that the United States improperly calculated dumping margins. However, the report also contains findings unfavorable to Canada. On June 4, 2019, Canada appealed the Panel’s findings on those issues. The Panel’s report on Canada’s CVD challenge was released on August 24, 2020. The WTO Panel’s findings were overwhelmingly in Canada’s favour; the panel unanimously determined that U.S. CVD duties on Canadian softwood lumber are inconsistent with the United States’ WTO obligations. However, the United States appealed the Panel’s report on September 28, 2020. Timelines for both appeal proceedings are unclear due to the WTO Appellate Body’s current lack of quorum.

Finally, Canada is pursuing challenges of the final results of Commerce’s first administrative reviews under Chapter 10 of CUSMA. Canada filed a request for panel review regarding the CVD results on December 10, 2020 (CUSMA Chapter 10 replaced NAFTA Chapter 19 as of July 2020). Canada is also participating in the CUSMA Chapter 10 case launched by Resolute FP regarding the AD first administrative review results.

Forest sector support and trade diversification

• The Government of Canada is providing ongoing support to the forest sector to diversify markets and develop innovative forest products.
• The Government announced a series of support programs generally available to Canadian industry, including investment and tailored financing, in response to the COVID-19 pandemic.
• A key consideration for Canada regarding support programs is compliance with Canada’s international trade obligations.

Supplementary messages

• The forest sector is critical to Canada’s economy and the Government continues to provide support to the sector during the COVID-19 pandemic for a sustainable, low-carbon economic recovery.
• Canada took swift action to minimize the impact of the softwood lumber dispute on workers and communities by announcing the Softwood Lumber Action Plan shortly after the imposition of U.S. duties in 2017.
• In response to COVID-19, the federal government announced a series of generally available support programs, such as the Business Credit Availability Program and the Canada Emergency Wage Subsidy, to help businesses and employees through these unprecedented times.
• Trade diversification is critical to the future of Canada’s forest industries; Global Affairs Canada directly supports forest product innovators, especially SMEs in securing technology partners, foreign investors and new market opportunities for their next-generation forest products, including bioproducts.
• Global Affairs Canada works closely with provinces, territories and Natural Resources Canada in promoting and advocating for Canada’s sustainable forest management leadership and environmental reputation in key export markets worldwide.
• Global Affairs Canada is a longstanding supporter of all Canadian forest- sector trade associations pursuing international market development efforts for the benefit of the entire industry.

Supporting facts and figures

• Natural Resources Canada’s Expanding Market Opportunities (EMO) program aims to increase and diversify market opportunities for Canada's forest products industry with up to a $64 million investment over three years.
• Investments and tailored financing program funding: The Canada Emergency Business Account provides backstopping loans worth up to $60,000 for SMEs, while the Business Credit Availability Program offers loan guarantees up to $5 million through Export Development Canada (EDC) and co-financing through the Business Development Bank of Canada (BDC).
• The Canada Emergency Wage Subsidy provides a 75 percent wage subsidy assistance to all eligible firms.
• Additionally, the $30 million Forest Sector Safety Measures Fund was launched to support the implementation of health and safety measures by small and medium forest sector firms.
• The Trade Commissioner Service staffs approximately 17 full-time equivalent positions in 46 missions in 44 countries responsible for forest product exports.
• Joint efforts made over the past ten years with innovative SMEs are now showing promising results, with burgeoning market uptake for our innovative wood-based bio-products in multiple unconventional applications found in various industries such as automotive, chemical, food, cosmetic, medical, etc.

Background

In response to the imposition of preliminary U.S. countervailing duties on softwood lumber in April 2017, Canada reacted swiftly to mitigate the impact on workers and communities. On June 1, 2017, the government announced the Softwood Lumber Action Plan (Action Plan) to provide $867 million over three years for measures to support forest industry workers and communities affected by the softwood lumber dispute. Budget 2019 allocated a further $251.3 million over three years to some of the programs funded by the Action Plan that aimed at supporting companies to diversify their markets, expand market opportunities or make capital investments (Natural Resources Canada is the lead on this issue). Canada’s approach to support remains that any assistance to industry must comply with its international trade obligations.

The economic shock resulting from the COVID-19 pandemic drove the curtailment or closure of over 130 forest sector facilities nationwide, affecting about 20,000 employees. Canada-wide, sawmill activity curtailed due to COVID-19 has since recovered and mills are now operating at full capacity. However, the industry continues to face significant challenges that existed prior to the pandemic. For instance, in BC, the province faces fiber supply issues due to environmental factors, including mountain pine beetle damaged timber and forest fires, in addition to ongoing pressures from unfair and unwarranted U.S. duties.

Ongoing U.S. trade remedy proceedings on softwood lumber

• The final results of the first administrative reviews established, for most companies, lower duty rates than those set by the initial investigations (8.99% compared to 20.23% “all-others” combined rate).
• However, any U.S. duties imposed on Canadian softwood lumber are unwarranted and unfair.
• Will continue to vigorously defend Canadian industry, including through litigation under Chapter 19 of NAFTA, Chapter 10 of CUSMA and before the WTO.

Supporting facts and figures

The rates in the table below are currently in effect for companies subject to the first administrative reviews.

Companies not subject to the first administrative reviews will continue to be subject to the 20.23% “all- others” combined duty rate set by the initial investigation. The large majority of softwood lumber companies are subject to the first administrative reviews.

Background

The U.S. Department of Commerce (Commerce) conducts annual reviews of its anti- dumping (AD) and countervailing (CVD) orders. This process, known as an Administrative Review, is similar to the process used for the initial investigations, but applies only to companies that are subject to the review. A company is subject to the review if there has been a specific request for a review of that company filed with Commerce. The Administrative Review process establishes duty assessment rates for shipments entered during the period of review, as well as the new duty deposit rates going forward until the next annual Administrative Review is completed.

On November 23, 2020, Commerce issued the final results for its first AD and CVD Administrative Reviews (see results above). The final duty rates are, for most companies, significantly lower than those from the initial investigation (8.99% compared to 20.23% “all-others” rate). The only exception is Resolute, whose final rate increased to 20.25% from 17.90%. These new duty rates will be in effect until Commerce issues its final results in the second administrative reviews, which are expected in late 2021.

On December 10, 2020, Canada challenged the final results of Commerce’s first CVD Administrative Review under Chapter 10 of CUSMA. Canada is also challenging the AD results under CUSMA Chapter 10.

Commerce’s second Administrative Reviews are already underway. Preliminary results are expected May 2021 and final results may be issued by late November 2021. These timelines could change depending on extensions.

The third Administrative Reviews have also been launched. Preliminary results are expected around January 2022 and final results may be issued around August 2022. These timelines could change depending on extensions.

Negotiations for a future softwood lumber agreement and advocacy efforts

• Continue to believe that an agreement bringing stability and predictability to the sector is in both countries’ best interests.
• Remain ready and willing to negotiate a mutually acceptable agreement.
• Softwood lumber is being raised at all levels with the new U.S. administration.

Supplementary messages

• Unfortunately, the United States has, to date, been unwilling to engage in meaningful discussions toward mutually acceptable terms.
• Meanwhile, Canada continues to actively pursue its legal challenges of the unfair and unwarranted U.S. duties on Canadian softwood lumber.

Supporting facts and figures

• In 2020, about 85% of Canada’s total softwood lumber exports (by volume) went to the United States.
• British Columbia is the top exporting province for softwood lumber products to the United States.

Background

Following the expiry of the 2006 Softwood Lumber Agreement (2006 SLA) in October 2015, Canada and the United States began discussions toward a successor agreement in January 2016. Aside from a pause caused by the change in U.S. administrations in early 2017, negotiations continued until the United States released final duty determinations for Canadian softwood lumber in November 2017.

Despite a high level of engagement with the U.S. government throughout 2016 and 2017, and considerable efforts in negotiations and stakeholder consultations, Canada and the United States could not reach an agreement. Since that time, neither the U.S. government nor industry have expressed a willingness to engage in discussions on mutually acceptable terms.

Canada’s position remains that a new softwood lumber agreement is in the best interests of both countries, and Canada is prepared to re-engage in negotiations when the United States is ready to discuss realistic proposals that would be acceptable to Canadian industry. In the meantime, Canada is continuing to vigorously pursue legal challenges against U.S. duties at the WTO and through NAFTA/CUSMA dispute settlement panels.

Softwood lumber continues to be a priority for the Government of Canada, and it is being raised at all levels with the new U.S. Administration. In addition, Canada will continue to work with long-time allies in the United States, such as homebuilder associations, to stress that U.S. duties are not only causing undue harm to Canadian producers, but also to U.S. homebuilders and consumers. The current record-high lumber prices are hampering the role that the U.S. housing sector may play in the economic recovery. U.S. homebuilders have been vocal about the need to find solutions to the high prices and to ensure stability of supply.

Canada-U.S. oil and gas pipelines

• The energy that Canada provides to the U.S. benefits U.S. energy security, economic competitiveness and environmental objectives.
• The U.S. will need fossil fuels for the next three decades even as it transitions to a goal of a net zero emission economy, and Canada is the best source as its #1 foreign supplier.
• Pipelines are the safest, cleanest form of transport for oil and gas.

Supplementary messages

• Canada strongly supports the continued operation of Line 5 as a critical asset in Canada’s energy infrastructure, and continues to engage U.S. officials, lawmakers and stakeholders at all levels to keep Line 5 open.
• We are disappointed with, but acknowledge, the President’s decision to fulfil his election campaign promise to cancel the Keystone XL permit.
• Line 3 is an important piece of infrastructure that will strengthen the integrated energy relationship between the United States and Canada, and we are pleased that construction is underway in Minnesota, the final link in the project.
• Canada will continue to promote the security, economic and environmental benefits of our energy supplies with the U.S. Government, alongside our engagement on fighting climate change and other environmental issues.

Supporting facts and figures

• Canada is the #1 source of imported energy to the United States.
• In 2019, from $151.7 billion in two-way energy trade, Canada enjoyed a bilateral trade surplus in energy of $86.3 billion.
• Over 70 oil and gas pipelines and over 30 transmission lines carry energy back and forth across the Canada-U.S. border.
• Crude oil dominated our overall energy exports - 56% of U.S. foreign supply - and pipelines dominate this trade.

Background

Keystone XL (KXL)

For more than a decade, successive Canadian governments, including the present one, have strongly and consistently supported the KXL project through engagement with the U.S. federal and state governments, and other American stakeholders.

Canada was disappointed with President Biden’s decision to cancel KXL’s Presidential permit, but acknowledges this decision to fulfil his election campaign promise made in public in May 2020. We believed there was a strong case to be made for KXL. To that end, following the U.S. elections last November, Canada made every effort, and reached out to make the strongest possible case for KXL with the incoming Biden team, the transition team and their advisors. In his first telephone call with then President-elect Biden, the Prime Minister raised KXL.

Enbridge Line 3

Enbridge’s Line 3 replacement project has been completed in Canada, and is also complete for the portions in North Dakota and Wisconsin. For the incomplete section in Minnesota, Canada has strongly supported the project through formal, detailed, written submissions to U.S. federal and state regulatory and environmental assessments.

Construction is now underway in Minnesota, with approximately 25% of that leg of the project complete. As the project is still subject to some litigation, we are continuing to monitor the situation closely.

Enbridge Line 5

Line 5 is a 645-mile pipeline, running from the terminal hub of Superior, Wisconsin, to Sarnia, Ontario. It has operated safely since 1953, and carries light crude oil and natural gas liquids (NGLs) from Alberta and Saskatchewan to Michigan and Ontario. Connecting pipelines transport these resources further to Quebec, Ohio and Pennsylvania. A shutdown of the pipeline would cause significant economic disruption.

On November 13, 2020, Michigan announced that the it was revoking Enbridge’s 1953 authorization (‘easement’) to operate its Line 5 pipeline through the Straits of Mackinac, which connects Lakes Michigan and Huron. The State is citing alleged violations of the easement agreement by Enbridge, which Michigan sees as an unacceptable oil spill risk, and has given the company until May 12, 2021, to cease operations. In making this announcement, Michigan Governor Gretchen Whitmer also filed a legal claim seeking a state court decision to validate her proposed action.

Enbridge filed a suit against Michigan in federal U.S. District Court, seeking to remove the case from Michigan state to U.S. federal jurisdiction. The state court case is held in abeyance, waiting for a decision from the federal court. The federal court has set aside all consideration and motions, with the exception of a motion from Michigan to remand the case back to state court.

On February 17, the judge in the federal court set down a briefing schedule on only one procedural motion, whether to remand the case to state court, where all action is suspended until the federal court determines jurisdiction. Filings of pleadings may run until June 2, 2021, i.e. after Michigan’s stipulated shutdown date of May 12, 2021. The federal court judge ordered Enbridge and Michigan to enter into mediation to see if, in the meantime, they might reach a settlement that would render the court proceedings unnecessary. On March 16, a mediator was announced, with the first meeting scheduled to take place on April 16 after which they will report out a meeting schedule to the judge. The mediation outcome would be non-binding.

Commitment to a green economic recovery

• Canada and the U.S. are prioritizing public climate-resilient and green infrastructure spending to spur economic recovery.
• Canadian exports are driving economic growth in the clean technology sector; important opportunities are tied to the global economy which is moving toward a greener future.
• The U.S. Administration’s ambitious plan for clean energy and infrastructure initiatives is expected to enhance opportunities for Canadians who supply products, services and technologies.

Supplementary messages

• The Roadmap, announced by the PM and President on February 23, 2020, strengthens Canada-U.S. supply chain security, including in areas such as critical minerals, zero-emission vehicles and other clean technologies.
• Canadian companies are leaders in renewable energy and power distribution, and these strengths align with the U.S.’ need for clean power to propel its economy.
• Canada and the U.S. will build back better together by reinstating North America as a global leader by fostering clean economic growth and advancing climate action.

Supporting facts and figures

• Global Canadian exports of environmental and clean technology products totaled over $12 billion – the U.S. accounted for over 70% of exports (2018, latest stats).
• The clean technology sector is comprised overwhelmingly of SMEs and is responsible for approximately 194,000 Canadian jobs (2018, latest stats).
• Canada’s infrastructure sector is a key contributor to our economy, accounting for 10% of national GDP ($199B) and employing over 1 million Canadians (2019).

Background

Canada and the U.S. are increasing public climate-resilient and green infrastructure spending as a means to spur economic recovery after COVID-19. Climate change is a “cornerstone” of the Government’s plan to create one million jobs and is included in the four pillars of the Speech from the Throne. The Government of Canada committed to making investments in clean energy and helping sectors transition to a net-zero future. Canada’s Task Force for a Resilient Recovery recognized green recovery as essential for Canada’s competitiveness in climate action – through buildings, zero- emission vehicles, clean energy, nature, and clean competitiveness.

President Biden’s US$2 trillion green infrastructure and clean energy plan, gaining traction through an Executive Order on Tackling the Climate Crisis at Home and Abroad, calls for investments in clean energy technologies and infrastructure, new electric vehicle charging stations, battery manufacturing incentives, and foreign investment. Part of that plan has been incorporated into draft legislation that is currently before Congress. The Roadmap for a Renewed U.S.-Canada Partnership, announced by the PM and the U.S. President on February 23, 2020, embraces the opportunity for clean growth by strengthening the Canada-U.S. Critical Minerals Action Plan for a net-zero industrial transformation, essential to zero-emissions vehicle batteries and renewable energy storage.

Increased demand for clean growth products and services equally leverages Canadian technological strengths – energy storage, renewables, electrification and power distribution via smart grids, and global Canadian infrastructure company expertise in services – project management, engineering, and consulting. Efforts to facilitate recovery after COVID-19 present a transformative opportunity to stimulate economic growth through climate resilient and green infrastructure investments. Canadian firms have significant experience building and operating some of the largest renewable energy plants in the world, through developers, engineering firms, equipment manufacturers and suppliers.

Climate change and border carbon adjustment

• The renewed U.S. prioritization of climate change provides an opportunity to advance Canada-U.S. collaboration on climate initiatives.
• In the 2020 Fall Economic Statement, Canada committed to exploring the potential of border carbon adjustments.
• The U.S. has welcomed continued dialogue with Canada on border carbon adjustments. In that regard, the new Canada-U.S. roadmap provides opportunities for detailed discussions on areas where we can collaborate on climate action, including on border carbon adjustments.

Supplementary messages

• Border carbon adjustments can help mitigate carbon leakage while also encouraging other countries to step up and take effective action to reduce emissions.
• The government is committed to ensuring that Canada’s transition to a low- carbon economy is achieved in a way that is fair and predictable for our businesses.
• As work progresses in Canada, we will be working with international partners to consider how this approach could fit into a broader strategy to meet climate targets while ensuring a fair and predictable environment for businesses.
• It is important to note, however, that the U.S. does not have a national carbon pricing system in place and we expect it will take some time for the U.S. to decide whether it will move forward on a border carbon adjustment.

Background

Canada’s approach to carbon pricing

Canada has had a carbon pricing system in place since 2019, known as Pan- Canadian Approach to Pricing Carbon Pollution. The Pan-Canadian Approach to Pricing Carbon Pollution gives provinces and territories the flexibility to develop their own carbon pricing system so long as the system meets the established criteria designed to ensure all systems are stringent, fair and efficient (known as the federal benchmark).

On December 11, 2020, Canada introduced A Healthy Environment and a Healthy Economy – Canada’s strengthened climate plan. The plan includes $15 billion in investments to build a stronger, cleaner, more resilient and inclusive economy. As part of Canada’s strengthened climate plan, the Government of Canada proposes to continue putting a price on carbon pollution post 2022, by $15 per year to 2030. The Government will engage with provinces and territories, as well as with Indigenous organizations, on the proposal to increase carbon pricing from $50/tonne in 2022 (the current policy target) in $15/tonne annual increments to $170/tonne in 2030.

Current status of U.S. initiatives to tackle climate

President Biden has identified action on climate change as a key priority of its build back better agenda. In addition to commitments to rejoin the Paris Agreement and achieve net zero emissions by 2050, the Biden Administration’s trade policy agenda for 2021 prioritizes using trade to advance environmental sustainability. This includes inter alia: negotiating and implementing strong environmental standards; exploring and developing market and regulatory approaches to address greenhouse gas emissions in the global trading system, including considering border carbon adjustments (BCAs); working with trading partners as they develop their own approaches; taking action against trading partners who fail to meet their environmental obligations; and promoting resilient renewable energy supply chains. President Biden has also committed to condition future trade agreements on partners’ commitments to meet their enhanced Paris climate targets. Early engagement with the U.S. is essential to protect Canadian interests and to position Canada to be part of these discussions on BCAs.

Clean energy (hydro) exports

• In the canada-u.s. roadmap, pm trudeau and president biden encouraged more cross-border clean electricity transmission, as part of the fight against climate change, supporting clean energy and reducing emissions.
• Canada’s existing exports of clean, renewable, affordable hydroelectricity already support these goals.
• New cross-border hydro projects will help u.s. states meet ambitious net-zero emission targets and fight climate change.

Supplementary messages

• Canada is a major exporter of clean hydro energy to the U.S.
• These exports are providing a firm, 24/7 clean baseload that help states meet clean energy and emission reduction goals.
• Cross-border hydro transmission infrastructure projects align with the Government of Canada’s commitments on clean energy and climate change.

Supporting facts and figures

• In 2019, canada exported 60 terawatt hours (1 terawatt hour = 1 trillion watts/hr) to the u.s. of clean renewable hydro worth nearly $3 billion, contributing to states and regions meeting clean energy and emission reduction goals.
• The most important export markets are the six new england states, new york state, minnesota, california, oregon and washington state.

Background

At the PM/President meeting on February 23, the leaders: …agreed to take a coordinated approach to accelerating progress towards sustainable, resilient, and clean energy infrastructure, including encouraging the development of cross-border clean electricity transmission.

On February 24, 2021, the U.S. International Trade Commission (ITC) issued a report examining the economic effects of increased renewable energy commitments in New England and Massachusetts, and the role of renewable electricity imports. Canada and some of the provinces testified at the ITC’s hearings. The main finding is that Massachusetts can meet its increased renewable and clean energy commitments with a relatively small increase in retail electricity rates. Positive for Canada, the report states that increased imports of hydroelectric energy from Canada will likely support Massachusetts’s carbon emissions reduction goals.

Over 30 cross-border transmission lines move electricity back and forth across the Canada-U.S. border. These operate both under long-term contracts (e.g. Hydro Quebec supplies Vermont with 25% of its electricity) and on the spot market as supply, demand and price dictate.

From this existing electricity trade, Canada’s hydro exports are expanding with the Hydro Quebec New England Clean Energy Connect (NECEC) supplying Massachusetts and the New England grid under a 20-year contract, running through Maine. The project has obtained all federal and state permits, and pre-construction work has started. Local opposition to the project remains, and litigation is ongoing, but there is no expectation of federal intervention. Hydro Quebec’s Champlain-Hudson Power Express (CHPE) would provide clean power to the New York City government. The project is fully permitted at U.S. state and federal level, so construction could begin if a supply agreement is reached that includes financing the project. Manitoba Hydro, on July 1, 2020, brought into service a new export/import project the Great Northern Transmission Line (GNTL) between the province and Minnesota.

Vaccines (defence production act / executive orders, Canada-U.S. vaccine cooperation)

• Canada continues to be in regular contact with various u.s. government departments and agencies to coordinate our response to the covid-19 pandemic.
• Following the announcement that the u.s will send canada 1.5 million doses of the astrazeneca vaccine, officials have been working around the clock to finalize the details of this exchange.
• Early in the pandemic, the u.s. exempted canada from export restrictions placed on certain personal protective equipment – a clear recognition of the special role we play in their economic and national security.

Supplementary messages

• My understanding is that U.S.-based vaccine suppliers have indicated to Public Services and Procurement Canada (PSPC) officials that the Defence Production Act has not changed their existing arrangements with countries like Canada and that they continue to work towards target delivery dates.

Supporting facts and figures

• Canada has negotiated eight agreements with leading vaccine candidates, four of which are with u.s.-based pharmaceutical companies (pfizer, moderna, johnson & johnson and novavax). Health canada has authorized use of pfizer, moderna, johnson & johnson, and astrazeneca-oxford on february 26, 2021.
• Canada is a top-5 supplier for 69 of the 203 covid-response products, or 6^th largest foreign source overall (after ireland, china, germany, mexico and switzerland). This includes disinfectants, medical sterilizers, electrocardiographs, and inputs into the production of personal protective equipment, such as the pulp used for n95 masks.
• The u.s. remains canada’s top supplier of medical goods, particularly for more sophisticated medical products such as diagnostic instruments and medications.

Background

On January 21, 2021, President Biden signed an Executive Order titled “Sustainable Public Health Supply Chain” to direct authorities to secure supplies necessary to respond to domestic needs related to COVID-19 including through the authorities of the Defense Production Act (DPA).

Since the issuance of this Order, the Biden Administration has invoked the DPA to increase production of vaccines by U.S. manufacturers. U.S. Government priority- rated orders do not explicitly prohibit exports. However, once a U.S. company has been issued a DPA-rated order from the U.S. government, it is legally bound to comply in fulfilling that order on a priority basis. A supplier can continue to fill other orders while working on a priority-rated order, if its supplies are sufficient, in accordance with the details of the order.

Canada has an exemption to export restrictions of certain related medical products under the Federal Emergency Management Agency (“FEMA“), valid until June 30, 2021. These restrictions do not cover COVID vaccines.

The White House announced on March 19, 2021, that the U.S. will allow exports of 1.5 million AstraZeneca-Oxford vaccine doses to Canada. This will count as part of Canada’s 20 million doses secured through a bilateral agreement with AstraZeneca.

Canada will receive 1.5 million doses as early as March and an equal number of doses will be provided to the U.S. at a later date.

Buy America stakeholder interactions, public consultations, and US outreach during Biden administration

The Government of Canada has been engaged and will continue to engage with stakeholders implicated by Buy America policies. Meetings and stakeholder engagements have taken place on both sides of the border. The issue is raised at every opportunity by elected officials as well as by Canadian representation at the Embassy of Canada and throughout our network of Consulates in the United States.

*exchange of information and comparing notes on potential impact of certain US actions

Softwood lumber stakeholder interactions, public consultations, and US outreach during Biden administration

The Government of Canada is in regular contact with a plurality of stakeholders implicated by the softwood lumber dispute. The federal government works collaboratively with provincial and territorial governments, individual companies, regional and product sub-category associations, organized labour, and First Nation interests and reaches out to these groups periodically to provide updates and seek views on the way forward as the file unfolds. Softwood lumber is also being raised with the United States at every opportunity, including by the Prime Minister, the Minister of Small Business, Export Promotion and International Trade as well as officials with their U.S. counterparts.

Forest sector internal investments in operations - 2020 to 2021 (current as of march 19, 2021)

***Please note that this is an illustrative list for British Columbia, Ontario and Quebec based on key media reporting and thus does not represent a comprehensive picture of all investments made in these provinces during this time period***