Foreign Affairs and International Trade

Thursday, June 2, 2022

The Standing Senate Committee on Foreign Affairs and International Trade has the honour to table its

FOURTH REPORT

Your committee, which was authorized to examine the subject matter of those elements contained in Divisions 9, 18 and 31 of Part 5 of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures, has, in obedience to the order of reference of Wednesday, May 4, 2022, examined the said subject matter and now reports as follows:

1. On May 12, 2022, your committee received testimony from Global Affairs Canada, the Royal Canadian Mounted Police, the Department of Justice Canada and the Department of Finance Canada on the subject matter of those elements contained in Division 31 of Part 5 of Bill C-19.

2. Your committee understands that Division 31 of Part 5 of Bill C-19 would amend the Special Economic Measures Act (SEMA), the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) (JVCFOA) and the Seized Property Management Act to allow for the forfeiture, disposal and redistribution of property subject to a seizure or restraint order made under either the SEMA or the JVCFOA. Among other amendments, Division 31 would introduce to both statutes provisions under which the Minister could apply to a court to request the forfeiture of property seized or restrained by an order under section 4(1)(b) of the SEMA or the JVCFOA. Division 31 would also create new sections in the SEMA and the JVCFOA authorizing the Minister to pay out the net proceeds of forfeited property for specific purposes. In the case of the SEMA, these purposes are reconstructing a foreign state, compensating victims affected by a grave breach of international peace and security or restoring peace and security. In the case of the JVCFOA, the amendments provide that proceeds of forfeited property could be used for the purpose of compensating victims of behaviour targeted by sanctions under the Act.

3. Alexandre Lévêque, Assistant Deputy Minister, Strategic Policy, Global Affairs Canada, explained that the amendments contained in Division 31 of Part 5 of Bill C-19 would enable the Government of Canada to fulfill the commitments it made as part of the Russian Elites, Proxies, and Oligarchs Task Force to take “all available legal steps to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit the assets of individuals and entities that have been sanctioned in connection with Russia’s invasion of Ukraine.” Mr. Lévêque specified that the amendments set out in Division 31 could apply to any individuals or entities sanctioned under either the SEMA or the JVCFOA.

4. Global Affairs Canada and the Department of Justice Canada officials described the process that would be followed for the forfeiture and disposal of seized assets. They explained that the Minister would be responsible for identifying which assets could be seized and for applying to a court to seek a forfeiture order. Officials also testified that the proposed amendments in Division 31 would provide for procedural fairness by requiring that a court evaluate the Minister’s request for a forfeiture order and give notice to any parties with an interest in the seized property.

5. Your committee underlines the importance of monitoring and evaluating the effectiveness of the new power proposed in Division 31. Specifically, your committee emphasizes the need to monitor on an ongoing basis the ways in which repurposed funds are used and to learn from the early examples of the new power being implemented.

6. On May 19, 2022, your committee received testimony from officials from the Department of Finance Canada, Global Affairs Canada, the Canada Border Services Agency, and the Canadian International Trade Tribunal and its Secretariat on the subject matter of those elements contained in Division 9 of Part 5 of Bill C-19. During the same meeting, your committee also received testimony from the Canadian Space Agency and the Department of Justice Canada on the subject matter of those elements contained in Division 18 of Part 5 of Bill C-19.

7. Your committee understands that Division 9 of Part 5 of Bill C-19 would amend the Special Import Measures Act and the Canadian International Trade Tribunal Act to strengthen and improve access to Canada’s trade remedy system. The trade remedy system allows for the imposition of anti-dumping and countervailing duties on imports to protect domestic producers from injury caused by dumped or subsidized goods, thereby ensuring better conditions of competition for Canadian businesses and workers. The trade remedy system also provides for the application of safeguard measures to protect domestic producers from injury caused by surges of fairly traded goods.

8. Scott Winter, Senior Director, Trade Rules, Department of Finance Canada, explained that the proposed amendments contained in Division 9 seek to achieve four main objectives. First, the amendments would clarify the criteria and process for initiating anti-circumvention investigations, which are used to determine whether trade and business practices have been altered specifically to avoid anti-dumping or countervailing duties. Second, the amendments would better protect against potential import surges at the early stages of an investigation and prior to the application of anti-dumping or countervailing duties. Third, amendments contained in Division 9 would contribute to improving trade unions’ access to the trade remedy system by allowing them to file global safeguard complaints and by ensuring greater consideration of workers’ interests by requiring that the Canadian International Trade Tribunal includes the impacts on workers in its assessment of injury to a domestic industry. Finally, the proposed amendments set out in Division 9 would reduce the administrative burden for all parties by streamlining the expiry review process for anti-dumping and countervailing measures.

9. Your committee understands that Division 18 of Part 5 of Bill C-19 would enact the Civil Lunar Gateway Agreement Implementation Act. The purpose of the legislation is to fulfill Canada’s obligations under the 2019 treaty it signed with the United States concerning cooperation on the Civil Lunar Gateway. That treaty secured Canada’s participation in the Civil Lunar Gateway, a space station in lunar orbit that will serve as a science laboratory, test site, meeting location and mission control centre for moon exploration. Canada’s contribution to the Civil Lunar Gateway is a smart robotic system — Canadarm3 — which will include a robotic arm, equipment and specialized mechanical tools. In exchange for that contribution, the treaty provides that Canada will be able to use the Civil Lunar Gateway to advance science, innovate and demonstrate technologies, and facilitate commercial activities in deep space. It also provides that Canada will be secured two astronaut flight opportunities to deep space. One of those opportunities will be to the Civil Lunar Gateway, while the other will be on Artemis II — the first crewed mission around the moon since 1972.

10. Jason Wood, Executive Director, Space Exploration Policy, Canadian Space Agency, explained that the implementing legislation would protect confidential information shared under the treaty, amend the Criminal Code to extend its application to activities related to the Civil Lunar Gateway and amend the Government Employees Compensation Act to implement the cross-waiver of liability provided for in the treaty. Erin Cassidy, Counsel, Criminal Law Policy Section, Department of Justice Canada, explained that the Criminal Code provisions in the Civil Lunar Gateway Agreement Implementation Act are similar to those introduced in 1999 regarding the application of Canadian criminal law in relation to the International Space Station.

11. Your committee has no objections to the amendments proposed in Divisions 9, 18 and 31 of Part 5 of Bill C-19.

Respectfully submitted,