THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Wednesday, April 22, 2026
The Standing Senate Committee on Foreign Affairs and International Trade met with videoconference this day at 4:16 p.m. [ET] to study Bill C-18, An Act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia.
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: Honourable senators, my name is Peter Boehm. I am a senator from Ontario and the chair of the Standing Senate Committee on Foreign Affairs and International Trade. I wish to invite committee members participating in today’s meeting to introduce themselves.
[English]
Senator Adler: Charles Adler, Manitoba.
Senator MacDonald: Michael MacDonald, Nova Scotia.
Senator Ravalia: Mohamed Ravalia, Newfoundland and Labrador.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Ataullahjan: Salma Ataullahjan, Ontario.
[Translation]
Senator Gerba: Amina Gerba from Quebec.
[English]
Senator Woo: Yuen Pau Woo, British Columbia.
[Translation]
Senator Gignac: Clément Gignac from Quebec, sponsor of the bill in the Senate.
[English]
Senator Lewis: Todd Lewis, Saskatchewan.
Senator Harder: Peter Harder, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Petten: Iris Petten, Newfoundland and Labrador.
Senator Coyle: Mary Coyle, selamat datang. I’m from Antigonish, Nova Scotia.
Senator Al Zaibak: Mohammad Al Zaibak, Ontario. Welcome, minister.
[Translation]
Senator Hébert: Martine Hébert, Victoria division, Quebec. Welcome.
The Chair: Thank you and welcome, senators.
[English]
I’d like to also acknowledge the visiting senators who are with us today: Senator Petten of Newfoundland and Labrador, Senator Lewis of Saskatchewan and Senator Gignac of Quebec.
I would like to welcome those who are watching us across the country on ParlVU. Welcome to this session.
Colleagues, we are meeting to begin our examination of Bill C-18, An Act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia.
Today, we have the honour of welcoming back to this committee, one week later, the Honourable Maninder Sidhu, Minister of International Trade. Welcome, minister, and thank you for taking the time again to be with us today. The minister is joined by Aaron Fowler, who is the Associate Assistant Deputy Minister, International Trade Branch, and Chief Trade Negotiator of Global Affairs Canada.
Before we hear the minister’s opening statement and proceed to questions and answers, I would ask everyone present to please mute notifications on your devices and please observe the safety rules that are on the card in front of you regarding best practices for handling microphones and earpieces.
Minister, we are ready to hear your opening remarks, and, as per usual, they will be followed by questions from senators and your answers. Minister, you have the floor.
Hon. Maninder Sidhu, P.C., M.P., Minister of International Trade: Thank you, Mr. Chair. Honourable senators, it’s good to be back in less than a week. I was here last week to talk about the U.K.’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, and here we are to talk about Bill C-18 and the proposed Indonesia Comprehensive Economic Partnership Agreement.
I would like to begin by recognizing the Senate sponsor of this bill, the Honourable Senator Clément Gignac. Throughout your distinguished career in public service, finance and international economic affairs, you have been a consistent and thoughtful champion of trade and global engagement. Thank you.
Here in this chamber, your leadership continues through your work as the Co-Chair of the Canada-ASEAN Interparliamentary Friendship Group, with my friend and colleague MP Matt Jeneroux, and through your broader commitment to strengthening Canada’s economic ties in the Indo-Pacific. That experience, along with all of the insights of senators around this table, greatly enrich this debate.
I’m pleased to be back before the Standing Senate Committee on Foreign Affairs and International Trade to support your review of Bill C-18, a landmark step in delivering the most ambitious trade-diversification agenda in a generation. For too long, Canada’s prosperity relied heavily on a single market. As your colleague Senator Housakos said during the Senate debate on this bill, the United States will continue to be an important trading partner, but in a world marked by geopolitical uncertainty, supply chain disruptions and rising protectionism, relying upon one relationship alone is not a strategy; it is a vulnerability.
That is why our government has committed to doubling Canada’s non-U.S. exports over the next decade. That is not a modest goal; it is a generational shift. It matters — not in the abstract but in concrete ways for workers and businesses in every corner of this country. It matters to the advance manufacturing workers in Ontario, whose products can now reach fast-growing markets in Southeast Asia. It matters to the grain farmers in Saskatchewan and the canola producers in Alberta and Manitoba, who depend on reliable access to international buyers. It matters to the aerospace engineers in Quebec, the clean-tech innovators in British Columbia, the seafood harvesters in Atlantic Canada and the small-business owners in the North who want to scale up and sell to the world.
When we diversify trade, we diversify opportunity, and we are seeing the results.
In 2025, Canada recorded $96.8 billion in foreign direct investment, the highest level in 18 years. The Port of Vancouver handled a record 170 million metric tonnes of cargo, with international trade volumes increasing by 11%. That is a historic record that represents more trade to markets like China, Japan and South Korea. In fact, more than three quarters of the international volume from the port is tied to Indo-Pacific markets. Last year, non-U.S. exports also grew 17% in 2025.
These are not projections; these are results of our government’s actions. And we are building upon them. Our plan will catalyze $1 trillion in new investments over the next five years. Global companies are choosing Canada not by accident but by design, because of our stability, skilled workforce, natural resources and our access to global markets through 15 free trade agreements, or FTAs, with over 50 countries. New investments will translate directly into jobs — good middle-class jobs — in manufacturing, clean energy, technology, natural resources and advanced industries.
Mr. Chair, in the past, if you had asked the world to describe a Canadian, you would likely have heard the words “kind,” “nice” and “good-hearted.” Those qualities remain true; they are part of who we are. However, I believe that if you asked that same question today, you would hear something else: confident.
Canadians are confident, and we are no longer shy about showing it — confident in what we produce, from world-class aerospace components to critical minerals powering the clean economy. We are confident in our skills and in Canadian tradespeople, engineers, researchers, farmers and entrepreneurs. We are confident in our know-how in advanced manufacturing, artificial intelligence and clean and conventional energy. We are confident in our values: democracy, rule of law, fairness and respect for human rights. Finally, we are confident that, together, we can overcome any challenge in front of us.
That confidence is not arrogance; it is grounded in capability.
Under the leadership of the Prime Minister, we are building a confident Canada, a country our allies can depend upon, a country investors trust and a country that partners around the world want to do more with.
Trade diversification is central to that vision, and that is where Indonesia comes in.
Indonesia is the fourth most populous country on earth, with a population of over 270 million potential consumers, distributed across its many regions, making it one of the most densely inhabited nations in the world. The country consists of over 17,000 islands, forming a vast and geographically diverse nation that spans a significant portion of Southeast Asia and bridges the Indian and Pacific oceans. It has the largest economy in Southeast Asia and is on track to become the fifth largest in the world, overtaking Germany soon, supported by a combination of natural resources, industrial growth and a rapidly expanding consumer market. It is also one of the fastest-growing economies in the G20, demonstrating steady economic progress, resilience and an increasingly important role in global trade and investment.
The agreement we are here to discuss represents the first bilateral trade agreement Indonesia has ever signed with a North American country, marking a major milestone in its efforts to deepen international economic ties and expand its global partnerships. That is not a footnote; that is history.
This agreement is not just about tomorrow; it is about the next 20, 30 and 40 years. It will eliminate tariffs on key Canadian exports, open new doors for our agriculture and agri-food sector, expand opportunities for clean technology firms, strengthen supply chains for critical minerals and provide new pathways for Canadian services and digital trade.
For Canadian workers, that means more customers, more stability and more resilience. For small- and medium-sized enterprises, or SMEs, which make up the vast majority of Canadian businesses, it means fewer barriers and clearer rules when entering one of the world’s most dynamic markets. For our clean energy sector, it means partnering with a country undergoing a major energy transition, creating real demand for Canadian expertise in renewables, carbon management and sustainable infrastructure.
Honourable senators, in uncertain times, some argue that the answer is to turn inward, to retreat behind borders and wait for the storm to pass, but Canada has never prospered by turning away from the world. We have prospered by engaging it, by building bridges, by leading with our values and by competing with confidence.
The Canada-Indonesia Comprehensive Economic Partnership Agreement, or CEPA, is a part of a broader strategy of strengthening ties across the Indo-Pacific, deepening partnerships on every continent and reinforcing North American supply chains under the Canada-United States-Mexico Agreement, or CUSMA.
That strategy is already working. As mentioned, the Port of Vancouver, our largest gateway to the Pacific, just had its best year on record, with Indo-Pacific markets driving that growth.
While I’m on the topic of infrastructure, our government is focusing on building up the infrastructure so that we have the capacity to meet our trade diversification goals. Through a $5-billion Trade Diversification Corridors Fund, delivered through Transport Canada, we are making historic investments to modernize ports, rail lines, highways and airports, ensuring Canadian goods move efficiently and reliably to global markets. We have also dedicated $1 billion focused on infrastructure in the North, recognizing the unique challenges and immense potential of Canada’s North.
This is about more than concrete and steel; it is about unlocking opportunity, reducing bottlenecks and building stronger, more resilient supply chains. By expanding our reach beyond traditional partners, we are creating good jobs, supporting communities and positioning Canada as a competitive trading nation for decades to come.
Indonesia is a part of that story, and, with this agreement, it becomes a much bigger part.
Together, these efforts reduce risks, create leverage and ensure that no single disruption can undermine Canadian prosperity. That is what diversification means: It means resilience, it means security, and it means choice. It means that when global headwinds arise, whether they be economic shocks, geopolitical tensions or supply-chain disruptions, Canadian workers are better protected because they are backed by a network of partnerships that spans the globe.
Mr. Chair and honourable senators, even when times are uncertain — and we know they are — Canadians are confident. We are confident that we can compete, confident that we can innovate and confident that we can come together, move forward and win together.
This agreement is a statement of that confidence. It tells the world that Canada is not on the menu; we are at the table, and we are open for business. It tells Canadian workers that we believe in their talent, it tells our allies that Canada is a reliable partner, and it says to every young person in this country to choose ambition over hesitation, always.
Trade agreements are not just documents; they are commitments to opportunity, growth and shared prosperity.
By supporting Bill C-18, this chamber is supporting a Canada that looks outward with purpose, a Canada that diversifies boldly, a Canada that attracts record investment and a Canada that stands tall in the world. Together, under the leadership of Prime Minister Carney, we are building that Canada — a Canada that works for everyone.
Thank you, honourable senators, and I look forward to your questions.
[Translation]
The Chair: Thank you, minister. I wish to remind committee members that they have a maximum of three minutes each for the first round. This includes questions and answers.
[English]
Many senators have indicated that they wish to ask questions, and I’m going to be very strict on the time, probably more than I usually am.
Senator Ravalia: Thank you, minister and your team, for being here and for your incredibly hard work on this file.
With respect to Indonesia’s expectation to enforce mandatory halal certification requirements, are Canada’s existing halal certification bodies sufficient to meet the potential increased demands from Indonesia for Canadian agricultural products?
Mr. Sidhu: It’s a great question, senator, around halal beef, but maybe I can quickly touch on beef in general. If you look at the beef sector in Canada, it represents over 200,000 workers, with farmers across multiple provinces. In fact, there are close to 60,000 farmers represented by the Canadian Cattle Association.
What I’ve seen in terms of beef access to some of these markets, especially maybe around halal, as well, is there are incredible opportunities that have been seized. I’ll give you one example. Under the CPTPP, when the CPTPP was signed in 2018, beef sales to those markets were about $340 million. They have now increased by close to 120% — if we fast-forward to 2024 — which is roughly $750 million. You can see the tremendous potential in this market.
In Indonesia alone, in the last 10 years, there were no further beef industry processors added to their acceptance list, and now we have two more that have been added to the list — JBS Foods Canada and True North Foods — which represent close to 3,000 workers.
We’re moving in the right direction. Of course, we need to explore further examples in terms of what more we can do around beef, but the beef sector is very supportive of this deal. If I can read into the record quickly, senator, the Canadian Cattle Association has said:
We appreciate the efforts of Canadian negotiators who worked tirelessly to secure comprehensive tariff-free access for Canadian beef and to address challenges for the Canadian beef sector. . . .
There is support across the board.
On halal, maybe I can get Aaron Fowler to touch on that quickly regarding the technical aspects.
Aaron Fowler, Associate Assistant Deputy Minister, International Trade Branch, and Chief Trade Negotiator, Global Affairs Canada: Thank you, minister, and thank you, senator, for the question.
In 2024, two Canadian private halal certification bodies were approved by Indonesia to certify that Canadian agricultural products, including meat products, meet Indonesia’s halal requirements. As long as meat products are certified halal and meet all other Indonesian food safety import requirements, they can be exported to Indonesia. We currently have access for boneless beef into Indonesia, and we have seen exports of those products resume in 2025.
There is a further commitment in the agreement that the approval of certification with respect to the certification bodies — to ensure that, in looking at these institutions, reviews are done in a timely manner.
We are confident that the agreement provides a degree of elevated certainty with respect to the ability to export halal products to Indonesia. Thank you, senator.
The Chair: Thank you very much.
[Translation]
Senator Hébert: Minister, thank you for joining us again today. I think it’s worth noting that we are very pleased and that it’s good for Canada to have as many agreements as possible, because we have a big challenge ahead of us, which is to double our exports outside the United States, a goal set by the Prime Minister. I think what we’re seeing here today is a step in the right direction.
[English]
When you came here last week, we discussed the importance of the government shifting the services that we were offering and the way that we were developing markets in the past to maybe better serve bigger players in more promising sectors so that we are sure that the needle of exports will move in the right direction. You talked to us about the strategic exports office. I think that’s a very good initiative.
Prime Minister Carney announced yesterday the constitution of an advisory committee for trade relations with the United States. I thought maybe you are considering having such a committee attached to the strategic exports office, composed of business associations and chambers of commerce that could advise this bureau on how to deploy services to ensure that we are benefiting and that we are translating these fantastic agreements that we are signing into results.
The Chair: You have a minute for that one.
Mr. Sidhu: It’s an excellent question, senator, on the strategic exports office.
You’re right; it’s an initiative that I brought forward — it was presented in the budget — to really get the needle moving on some of the major industries: aerospace, energy, mining, infrastructure and defence. There are active considerations right now. There will be a committee at the officials’ level from all departments to come together but also to bring the associations together — the aerospace industry association, energy, infrastructure — to get those business groups together to really talk about where the bottlenecks are.
Part of it is to find opportunities, but part of it is to unlock some of the bottlenecks that they have been facing, whether it’s on the government side or other things that they need help with.
Yes, government alone can’t do everything. We need industry support, and this is why the Prime Minister established the Advisory Committee on Canada-U.S. Economic Relations, as you mentioned. That involves bringing people together from all walks of life from across the country — ex-premiers and those who belong to different political parties or with different business backgrounds — and those voices are important because they can tell you the real-life experiences. Practical experience, I believe, matters when you take up these jobs because you bring that voice to the table. We want to ensure that when we are creating something like the strategic exports office, it works for those businesses that we’re trying to advocate for.
The Chair: Thank you very much.
Senator Ataullahjan: Nice to see you here, minister.
I am supportive of this deal as someone who has travelled to Indonesia — in fact, we travelled with this very committee — but the one thing we kept hearing is that Canadian businesses are risk-averse. I know you say, “We’re open for business; choose business over hesitation.” Is this a conversation that you will be having with businesses?
I’ve just come back from the Assembly of the Inter-Parliamentary Union, or IPU, in Türkiye, and Indonesia is a leader in the Indo-Pacific region, but I also noticed in conversations that I had with other countries that it’s becoming a leader in the Muslim world, so it’s a very important partner.
Are businesses ready to be dealing with this market?
Mr. Sidhu: Absolutely, and it’s a great question. I mentioned it last time — we missed you last week when I was here — and I mentioned it there that the free trade agreements are no good if businesses are not utilizing them, and so we need business communities to utilize the FTAs that we’re signing.
On this free trade agreement with Indonesia, the Indonesian Chamber of Commerce and Industry and the Business Council of Canada have already signed a memorandum of understanding, or MOU, to work in partnership. To put that into context for those who are watching, together, these business associations represent tens of thousands of businesses, both in Indonesia and here in Canada.
They are ready to put some effort behind it. They are ready to take delegations as soon as we ratify it. We’re going to hope the Indonesians ratify it just as fast, and then businesses can start utilizing it. There’s a lot of excitement from the business community about the opportunities this presents.
You have been to Indonesia. I have been there as well. There are 270 million potential consumers. It’s a fast-growing market. If you talk about how fast their economy is growing, they are destined to be the fifth-largest economy in the world, and it’s something that we shouldn’t ignore.
It’s a milestone moment for Canada. This is the first bilateral agreement that we will have with a country from the Association of Southeast Asian Nations, or ASEAN. That’s big for Canada. In ASEAN, there are 10 — now 11 — partners. Many of them we have access to through the CPTPP, but this would give us preferential access to a fast-growing market like Indonesia. I do see the energy from the business community behind this FTA.
The Chair: Thank you.
Senator Coyle: I will try to get in two quick questions.
I’m from the East Coast, so I’m interested in what the seafood potential is looking like. I’m interested in clean tech. I would like to know a little bit more about the details on that.
The third thing I want to know about is the support that we are giving — the $25 million of implementation support over five years — to Indonesia. How is that going to work?
Thank you, minister.
Mr. Sidhu: Thank you, senator, for that very important question. Maybe I can start with the clean-tech sector and just briefly talk about that. I always like to add context for those who are watching who are not familiar with the clean-tech sector. If I may, for this country, it’s an economic driver that supports over 350,000 jobs. We punch way above our weight in the clean-tech sector. In fact, we are in the top 10 in the world for a country of our size.
But Indonesia is looking to push for 34% more renewable energy by 2034, so that’s really driving demand in that sector for renewables, such as carbon capture, waste energy, smart grids and water treatment technology, which are all areas of Canadian strength. If you look at the Canadian Trade Commissioner Service, that’s helping businesses get into that region. Clean tech is a fast-growing sector where we’re supporting Canadian companies to get out there.
This agreement will present savings on wind turbines, water filtration, hydrogen fuel cells and battery systems; this agreement will phase out tariffs on these products over time, which will give us preferential access. That’s where the clean-tech industry can definitely excel.
On the seafood sector, agriculture is big. Indonesia procures over $30 billion of agriculture a year, so you can see where I’m going with some of these stats around agriculture. There will be a tremendous opportunity for seafood exporters to that region.
Canada also has the value of quality in our regulations. There is a premium people around the world pay for Canadian products, from what I have seen. We would love to support our seafood sector to get into that market and explore those opportunities, just as we have done in China. In January, we unlocked opportunities for our seafood sector, which supports over 65,000 jobs on both coasts. I’m very aware of that sector. We want to make sure we’re supporting our fishermen as well. Thank you.
Senator Al Zaibak: Minister, thank you for your leadership on advancing Canada’s Indo-Pacific engagement. As this committee continues to study the agreement between Canada and Indonesia and its potential economic impact, we have heard a range of perspectives from stakeholders. I’m interested in understanding how the industry is viewing this.
What are you hearing from different sectors about how this agreement will benefit them?
Mr. Sidhu: Thank you for that question, senator, and for your important work and working with the business communities.
We have heard tremendous support from the aerospace industry, from the infrastructure sector and agriculture. Across the board, there’s tremendous support. I have a whole list of testimonials to read into the record today. I will hopefully get to that.
Since you are from Ontario, I can quickly touch on nuclear energy. Energy is very important. Indonesia is looking to build up its nuclear capacity in terms of energy. Canada is well positioned to do that with our CANDU technology. As I said, they have over 17,000 islands in Indonesia. They are looking at our small modular reactor, or SMR, technology. I am having active conversations with them. As you have seen in Darlington, Ontario, at the Darlington New Nuclear Project, we have committed $2 billion for SMRs. That’s the GE Hitachi SMR project, the first commercialized SMR unit in the G7. We have a lot to be proud of, and Indonesia is looking to Canada to perhaps acquire some of that technology for their energy needs.
That supports 90,000 workers in Ontario alone. Beyond that, infrastructure is very important. If you are talking about AtkinsRéalis or WSP, many of them are located in Ontario and support thousands of jobs; it is engineering opportunities as well. What I’m hearing across the board is a lot of positivity because it is such a big market that we traditionally didn’t have preferential access to. With this FTA, businesses will greatly benefit across the range of sectors that I mentioned already.
Senator Al Zaibak: Thank you.
Senator Woo: Good afternoon, minister. Do you think the deal will benefit Canadian companies that want to seek preferential access to ASEAN markets through Indonesia?I do not know if the rules of origin allow for that sort of opportunity and whether the department has done some analysis to elucidate it for us.
And my second question is how we’re doing on the Canada-ASEAN free trade agreement.
Mr. Sidhu: A great question, Senator Woo. I would be remiss if I did not thank you for your work in British Columbia. You have seen the numbers I mentioned for the Port of Vancouver, the gateway to the Indo-Pacific.
To highlight the ASEAN region first for those watching, ASEAN is 10 plus one new country team or less. The countries in question are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
To many of these countries, as I mentioned earlier, we have access through the CPTPP, such as Malaysia, Singapore and Vietnam. This would be access to Indonesian markets. This is more of the FTA directly with Indonesia, which we’ll have preferential access to. ASEAN is something that the Prime Minister and I have committed to getting done this year. It is important to get access to some of those countries we don’t have access to.
I can briefly speak on the record that ASEAN represents roughly 680 million consumers of those 11 countries and a $3.7 trillion GDP — tremendous potential. You would also know that we have launched negotiations with the Philippines. They are also part of ASEAN. We’ve launched negotiations with Thailand as well; they’re part of ASEAN. I’m leaving no stone unturned to ensure we are able to access these markets, whether it’s within the broader ASEAN or CPTPP or direct bilateral FTAs. You can imagine negotiating with 10 countries at the same time. It’s not easy. Our negotiators are in Jakarta this week to have a round of ASEAN negotiations.
I’m very optimistic about the way that the negotiations are progressing and I hope to have a conclusion by the end of this year.
Senator Harder: Thank you, minister and officials, for being here.
I clearly support this agreement, as I support other free trade agreements, particularly if they are of this kind of quality. Minister, I agree with your comments that this is now the opportunity for businesses to pursue the benefits of free trade agreements. But it is also your department’s responsibility and, broadly speaking, the condominium of Global Affairs to provide the services that support the capacity growth that we hope these free trade agreements bring.
Therefore, I’m kind of disappointed when I see that the department is going to lose 583 persons in rotational and non-rotational, not locally engaged, staff. I see that those are disproportionately rotational, which means that you have the Ottawa bias of cutting what you cannot see. This bothers me a lot because, at the end of the day, it is the whole infrastructure of Foreign Service officers, both trade commissioners and the political staff, that gives us capacity building, particularly in new countries.
Can you assure this committee that you will devote time and effort to ensuring that the capacity to implement matches the rhetoric of commitment?
Mr. Sidhu: Thank you for that question, senator. I think it is important to note that, in Budget 2025, I was very fortunate to get additional resources —
Senator Harder: Those are for the negotiators, not the overseas —
Mr. Sidhu: Additional negotiators and, within the Defence Industrial Strategy, you will notice there is more money for diversification efforts. That includes additional Export Development Canada, or EDC, footprints on the ground across Europe, but it also includes making sure that we’re repurposing some of our Trade Commissioner Service operations to get the needle to the $300 billion. You want to be more efficient and prudent with taxpayers’ money, and that is what we have told Canadians we would do in the election. That is what we’re following up with. I want to ensure we’re utilizing government resources, Canadian taxpayers’ money, most efficiently in some of these new markets in the Indo-Pacific, in the European Union, because they relate to our industrial strategies, whether it’s the auto strategy, our defence strategy or what I’m trying to do in my diversification efforts. We are putting more resources there to make sure this works for businesses.
We’ve got about $69 million for the CanExport program, which has been very encouraging for businesses to get out to new markets. For those who are watching, CanExport provides assistance or resources for businesses to get out to new trade shows, legal assistance and market research. It is important to note that was in Budget 2025, and we’ll be doing more around trade diversification. We put more money into infrastructure, as I mentioned in my speech, a $5-billion Trade Diversification Corridors Fund, because to get to $300 billion, you have to add capacity at ports and our inland terminals because there are bottlenecks there that we need to be aware of.
The Chair: Thank you, minister.
Senator MacDonald: Minister, according to the Office of the Chief Economist of Global Affairs Canada, the projected economic gains are to be modest, according to their assessment. They also point out that, under the agreement, Indonesia would eliminate or reduce about 85% of the tariff lines. Well, there is a big difference between eliminating and reducing. Could you give us something more accurate? I mean, are we going to eliminate 40% and reduce 60%, or eliminate 10% and reduce 90%? What do these numbers mean? They are not very clear.
Mr. Sidhu: Absolutely. I will have Aaron Fowler speak more to the technical terms of the timeline, but you spoke about economic modelling, and that question comes up from colleagues. The economic modelling is based on a point in time: Countries — how much are they spending in their budget on infrastructure investments and where can we add value? The middle-class — how fast is that growing? Do they want to spend money to travel? Do they need Canadian aerospace products?There are some things we can’t project.
For the record, the projection around CPTPP from the economic modelling was an increase of 7%, or $3.2 billion, but since implementation, it has grown by 40%, or $8.9 billion. Therefore, I would take the economic modelling with a grain of salt because we cannot predict what other countries are going to do and what they’ll want to buy from Canada. It is a snapshot of a point in time.
I will give you one example: If Indonesia decides to spend $70 billion on nuclear technology tomorrow, our exports would hopefully go up because we’re known for our capacity and technology there. We should be mindful of that.
Maybe, Aaron, I can ask you to speak to the tariffs.
Mr. Fowler: Thank you, minister.
In fact, the outcome on tariffs is quite ambitious — one of the more ambitious outcomes that Indonesia has agreed to. The tariff schedule will eliminate tariffs or reduce tariffs on about 97% of Canada’s existing exports to Indonesia. I noted your question as to what the balance is between those two, and it is only a handful — maybe three dozen or so — tariff lines that are slated for reduction as opposed to elimination. The vast majority will be eliminated over differing periods of time.
In addition to the five-year review clause built into the agreement to do a general review, there is an accelerated three-year review of the tariff outcome, with the view to seeing whether we can’t achieve a more ambitious outcome even sooner with this particular partner.
Senator MacDonald: Fifteen per cent of the exports from Indonesia will neither be reduced nor eliminated. What are those 15%?
Mr. Fowler: It’s not 15% of our current exports, senator, with respect. It’s the tariff lines, and those are primarily products that Canada is not currently exporting to Indonesia. I can provide you with a comprehensive list of the sectors that are covered by the tariff lines that are excluded from the agreement.
[Translation]
Senator Gerba: Welcome again, minister.
I’m one of those who believe that Canada must increase its international agreements, particularly with emerging countries. Obviously, it can’t be done overnight, and we’re not going to replace the United States tomorrow. However, we have to start somewhere, and you’re doing it very well.
As part of Canada’s Indo-Pacific Strategy, the Government of Canada is advancing market export development objectives. It also focuses on strengthening supply value chains in regions that, like the Asia-Pacific, are expected to play an important role in the world.
If this agreement is ratified as part of Bill C-18, to what extent will it allow us to achieve concrete results and have real indicators on the government side to measure its impact?
I’d like to draw a connection with Canada’s Indo-Pacific Strategy that is currently in place. Has the impact already been assessed? If Bill C-18 is passed, how will that change the landscape?
[English]
Mr. Sidhu: Thank you for that important question, senator, and for your work.
The Indo-Pacific region presents a wide variety of opportunities. I was the Parliamentary Secretary to the Minister of Foreign Affairs when we launched the Indo-Pacific Strategy. We’re very proud of that strategy — over $2 billion invested. We’ve launched our agri-food marketing office in Manila, Philippines. That is one of the areas where we see a lot of growth potential.
As I was saying, on the road to the additional $300 billion, the Indo-Pacific presents quite a wide range of opportunities. Maybe I can come back to the economic modelling question. When the Canada-Korea FTA was signed, it was projected at that time not to increase by much, but trade has gone up by 56%. If you look at the CETA, the European Union trade agreement, back then, projections were for trade to increase by $6.1 billion. In fact, trade has gone up by $22.3 billion.
You see a lot of potential there. Of course, when I look at emerging markets and I look at the spending power of some of these countries, I look at the middle-class: How fast is it growing? What are they looking to procure from Canada? Where can I get wins? It is not something I do alone; it is in consultation with the industry, whether it’s the aerospace, energy, agriculture or seafood sector, I ask them where they are going and where they need the government to be. Where can we help you? This is an active conversation; it’s a two-way street to ensure we are moving in the right direction.
Senator Wilson: Minister, first of all, I am very supportive of moving forward with the trade agreement with Indonesia. I would like to thank you for your commercial about the Port of Vancouver at the beginning of your remarks. As someone who spent two decades at the Port of Vancouver trying to get the infrastructure built and trying to get attention here in Ottawa for the need to build infrastructure, it is nice to have reflected back that the message has landed and our leaders here understand the importance of the port to Canada’s economy.
My question to you is a simple one: What are you most excited about in this agreement, and what, if anything, would cause you to lose sleep at night, or what do we need to up our game to respond to?
Mr. Sidhu: Thank you for that question, Senator Wilson, and for your advocacy at the Port of Vancouver. I know we’ve long been following that story. There has been a strike at that port. I was on the Trade Committee when we studied that strike and the economic impacts of that. They have come a long way. We’re very excited to see what is next for that port. Of course, 170 million metric tonnes is no small feat. That’s more shipments to China, Japan, South Korea and others.
What I’m most excited about with this agreement are the opportunities in a market of that size. If you look at just the population alone — 270 million or so people — potential consumers — they are growing at a pace to overtake Germany soon in terms of their economic GDP. I’m looking at the fact that as they grow, so does their spending power. That will benefit many Canadian companies, especially in aerospace, because as you get more spending power, you want to travel more, so there are more opportunities for our aerospace companies, like Bombardier, Airbus, De Havilland and others, including Bell Textron helicopters. They will need more of that.
Also, agriculture — you need more energy and food. We have both of those things to offer to Indonesia. So, we’re well positioned in terms of what they are investing in.
They are also investing billions of dollars in infrastructure projects, where I also think we are well positioned to add value.
There is a lot of excitement.
Maybe some of the downsides are to ensure the business energy is there behind it. I can sign this FTA and get it done with your support, but I also need them to come along. Indonesia is a long way from Canada, so how are we supporting them to get there? Part of that is the CanExport funding to make sure more people utilize it. What I am doing as a minister to put amplifications around this FTA in terms of the opportunities and maybe bringing a delegation to Indonesia once this is ratified to explore opportunities? That is where there will be work to be done. It is not just signing an FTA and putting it on the shelf; it is signing it, putting it on the shelf and then bringing the businesses out to ensure they are able to utilize and leverage this FTA.
Senator Lewis: Mirroring Senator Wilson’s comments, thank you for the advertisement for agriculture. You mentioned it a number of times today, and it is much appreciated.
As we talk about infrastructure and so on, Vancouver is at capacity in many ways; there is more and more pressure being put on Vancouver. There is a secondary port in Prince Rupert that is actually the closest one to Indonesia on our West Coast, and infrastructure improvements at Prince Rupert are very important. Certainly, one of the major things against Prince Rupert is that it is serviced by only one of our Class I railroads. A twinning of that track to Prince Rupert, with CPKC, would be important and move a lot of products through Prince Rupert and take some of the pressure off Vancouver.
With the signing of these new agreements, we are going to see more and more of bulk, especially, move out of Canada and into places like Indonesia and ASEAN countries, so I think it is important that we don’t forget about Prince Rupert as well.
Mr. Sidhu: I appreciate those comments, senator. I was just at the Canadian Chamber of Commerce summit yesterday, where I talked to the Prince Rupert Port Authority about the potential around mining and around energy.
As you know, in the Major Projects Office, some of those projects are located in northern B.C. and will need the Port of Prince Rupert to support those projects. There are also other things we’re looking at, such as Roberts Bank in Delta, B.C., and how we are coming together, and this is an active conversation that I’m having with the Minister of Transport, Steven MacKinnon, leading on the $5-billion Trade Diversification Corridors Fund. That application period is now open, so these industry partners can apply for more support to help them unlock the bottleneck.
I don’t want freight rates to go way up. I want to ensure that there’s capacity at these ports and inland terminals; otherwise, businesses will just pull back. That happened during the pandemic, when a container went from $4,000 to $22,000 overnight. We can’t have that happen again, so we need to ensure that there’s some resiliency built into our ports and our inland terminals, so this is an active conversation.
As I push on diversification, the Minister of Transport is working on that effort, and we are making sure we are working with industry partners. You saw the Prime Minister announce the expansion of the Port of Montreal just two weeks ago at Contrecœur. That is about jobs, too, supporting jobs and industry on the ground at the Port of Montreal, because that market, as you know, will service the European market and the African market. We are making sure we are supporting the whole ecosystem across the country.
The Chair: There’s Churchill, too.
I will ask a very quick question, minister: Are you at all concerned about competition from Indonesia in the aluminum sector? The Indonesians are building smelters. There might be some concern. Our aluminum industry is, of course, under siege from the south. Do you have a comment?
Mr. Sidhu: The aluminum sector is definitely under a lot of pressure, from what I understand from talking to different stakeholders. How are we enabling the shipping of aluminum elsewhere outside of our number one trading partner? You’re seeing the trend lines. They are shipping to new markets around the world. We also have our tariff relief fund to support some of these aluminum industry partners to pivot to other markets.
Of course, in any FTA there’s always a balance. You need to be able to manage that balance for the overall benefit of Canadians. That’s what I’ve told my negotiators — that we need to look at what benefits Canadians at the end of the day and get an overall win for Canadians. Of course, for me, I have to balance different sectors and different parts of the country. They are all very important to me, and every FTA is about getting wins for Canadian companies.
The Chair: Thank you very much.
Senator Coyle: I will circle back but introduce it slightly differently. This is an ambitious plan for Canada, and I love it and support it. Indonesia is also very ambitious, right? They are trying to get a developed country status by 2035. Canada has been in Indonesia for a long time, doing a lot of things. As we support, through this implementation support that I started to ask about, are we also building on what we have done over the years?
I used to work in rural development in South Sulawesi back in the 1980s. I went back 10 years ago, and I did some other work with the State Islamic Universities. We have been doing a lot. Canada has been doing a lot. Are we building on that? Will we support Indonesian businesses outside of Java, for instance? What does that implementation look like?
Mr. Sidhu: Thank you so much for your work, senator. Of course, we are building on that friendship that we have established over many decades, and that’s why Indonesia is a natural partner for Canada to work with, because there has been a long, shared history there between Indonesia and Canada.
I know you had a question in the first round about capacity building and what that means. Maybe I can turn to Aaron Fowler quickly to get that on the record.
Mr. Fowler: Thank you very much for the question, senator.
I was the chief negotiator for this initiative. It was a very exciting agreement to negotiate because we had to be quite creative in terms of how we bridged the gaps between the two parties.
As a result, there are things that Indonesia has agreed to do for the very first time in this FTA, and there are things that Canada has agreed to do for the very first time. One of those is to commit ourselves, within the terms of the treaty, to provide technical and capacity-building assistance to our trade partner. The purpose of doing that was to give Indonesia the confidence that they had the ability to agree to some of the more ambitious provisions that Canada was asking them to take on, and the secondary benefit is that it gives us an additional level of comfort that Indonesia will, in fact, be able to systematically comply with the terms of this agreement.
Obviously, even capacity-building assistance of this nature is recipient-directed, so we will wait to see where they feel those funds can be most usefully directed. But the commitment that Canada took on is $25 million over five years — $5 million a year — and our hope is that when we review this agreement in five years’ time, that investment will come back to us.
Senator Al Zaibak: Minister, I’m really intrigued by the creativity of this agreement, leveraging capacity building and development assistance to gain more markets.
Are we considering any other countries outside the Indo-Pacific region and outside ASEAN where you use the same agreement, CEPA, as a template? If we are, what are those countries?
Mr. Sidhu: That’s an excellent point, and I brought this to my officials, saying, “Why can’t we just copy and paste something from this country to the next?” Every country is different, of course. Every country is different in their approach. There are offensive interests, and there are defensive interests, and so we approach every negotiation a little bit differently.
Outside of your question on what else we are doing outside of ASEAN, of course, Mercosur is very important to me and to Canada. We have committed that we will get that done this year. I relaunched negotiations in Brazil with Mercosur in August last year. It’s a huge market of four different countries: Brazil, Argentina, Uruguay and Paraguay. The European Union just signed with them as well, and so that market is growing fast. There are a lot of opportunities there. If you look at fertilizer, aerospace and others, there is quite a bit that’s going on there.
Negotiations are going on there, but we also have negotiations with Saudi Arabia, negotiations with the United Arab Emirates, or U.A.E., as well, on FTAs. Before the turmoil, a lot of countries were looking to the Persian Gulf. The argument was that we can use the Gulf to set up a hub there and then ship to the region, so that’s part of the equation.
Also part of the equation is investment attraction. When you have an FTA, it sends a strong signal to the business community that this is a trusted partner and this is a partner that we can work with. That’s why we were able to get a commitment of $70 billion —
The Chair: Thank you, minister. I’m sorry to interrupt.
Senator Woo: That’s a good segue to my question. Do you see opportunities to work with Danantara, the newly set up Indonesian sovereign wealth fund, which has maybe $1 trillion in assets? Are there some conversations going on already?
Mr. Sidhu: Yes, we are having tremendous conversations with Danantara. As you know, we are having our first-ever Canada Investment Summit in Toronto. The Prime Minister announced that a few days ago. That is attracting sovereign wealth funds, which are some of the biggest global investors in the world, and we’re getting traction on that.
In my opening statement, I mentioned our foreign direct investment. Considering everything that’s happening with the U.S., there’s still a lot of interest in Canada. People believe in Canada. They believe in Canada because of the provisions we put in place in Budget 2025. We have the lowest effective tax rate in Canada, 13.2%, and the lowest in the G7, so it’s a very competitive investment climate to invest in.
Just today, OMERS, which is a big Canadian pension fund, has agreed to invest $10 billion in Canada, which is huge. It’s a sign that there is growing interest, even from our own Canadian institutions that traditionally looked outwards. They are also looking inwards, so that sends a strong signal to Danantara and others that are looking to invest in Canada.
Senator MacDonald: The Canadian Cattle Association has advised:
In order to fully capitalize and realize the benefits of CEPA for Canadian beef, Indonesia’s requirement that cattle intended for beef export complete a four-month residency in Canada prior to export must be removed.
Could you explain what this is about? It sounds like they are going to school or something. What does this mean, and how does that affect the exports? Would that kill the opportunity?
Mr. Sidhu: When we do FTAs with different countries around the world, there are residency requirements. I will get Mr. Fowler to speak to the technical aspects of that.
In the beef sector, the Canadian Cattle Association is very supportive of this agreement because of the market size and the potential it unlocks. You speak about CPTPP and what we’ve done for the Canadian Cattle Association and what that means there, but every country, on the residency requirement — some countries have it, and some do not. Maybe I can ask Aaron to speak to some of the technicalities behind that.
Mr. Fowler: Thank you very much, senator.
We were very cognizant of the residency requirement being an issue for our exporters such that we sought to address it in the course of these negotiations. As is often the case, Indonesia preferred to leave those discussions to the responsible authority for food safety in their country to take up after the agreement was addressed.
For us, the issue is not so much the residency requirement but the differential in terms of the treatment that is extended to Canada and the United States with respect to how that residency requirement is being applied. Our view is that the conditions in the two countries are sufficiently similar that they should have consistent treatment between the two.
We continue to work on that. The Canadian Food Inspection Agency, or CFIA, is engaged, as are officials at the embassy in Jakarta. We look forward to having important news soon.
[Translation]
Senator Gerba: If Bill C-18 were passed, it’s clear that, in any agreement, there are always winners and losers. Which sectors in Canada do you think would benefit most from this agreement, and which sectors are likely to be negatively affected? Also, what potential impacts could arise from increased trade with Indonesia?
[English]
Mr. Sidhu: Thank you for that question, senator.
There are many sectors that will benefit from this agreement. The agriculture industry will, but so will the infrastructure companies that are doing terrific work — I mentioned Hatch, which employs about 3,500 people; AtkinsRéalis has 8,000; WSP has 13,000 workers here in Canada — because of the billions of dollars that Indonesia is investing in infrastructure projects.
We have long been there, and this will unlock more opportunities because the trust has already been built up. As the senator said, we have been doing work in different sectors there in different capacities, so definitely infrastructure, aerospace — of course, agriculture is one of them, as well — and there are many others across the board.
It is also about investment attraction both ways. I see some opportunities there. We heard about Danantara — what they’re looking at — but as Indonesia grows, they need energy for the data centres they are putting up. Where can we add value there, whether nuclear, SMR technology or through LNG from our West Coast? We’re well positioned to do that.
That’s part of the conversation, as Indonesia grows at a rate of 5% every year. Their growth rates are phenomenal, so it presents tremendous opportunities for Canadian companies.
Senator Adler: The question is for the minister and Mr. Fowler.
Our esteemed chair used the word “siege” earlier, and that is the impression that Canadians have. The chair was talking about aluminum, but it doesn’t matter. The general impression is that our country is under an economic siege, and the bad guys in the siege story are the Americans. We understand that most of our trade is with the Americans, but when you’re dealing with all of these other countries that you’re doing deals with, like Indonesia, are you facing potential for sieges? Are you facing significant tariff hurdles from other countries?
This isn’t me trying to support the United States’ communications. I simply need to get a sense — and I think the public needs to get a sense — of whether we’ve got tariff issues in various countries around the world.
Mr. Sidhu: It’s a great question, senator.
We deal with partners all around the world. In fact, the challenge in the U.S. is opening up opportunities for me as Minister of International Trade. You heard the Prime Minister speak about middle powers coming together and working together. The reception abroad for Canada is open arms: “We want to do more with Canada.” The phone is ringing. What can we do? How can we capitalize on this?
That’s why you see us moving as fast as we’re moving. The numbers reflect that, as well. We’re hopefully getting Indonesia done, the U.K. done. Ecuador would be next. There is the U.A.E. investment agreement and then there are a handful of others — ASEAN, Mercosur, India, Thailand, the Philippines, Saudi Arabia. We’re moving, and we’re making sure that window does not close on us.
Countries all around the world want to do more with Canada because we’re stable, reliable and our rules won’t change overnight. When they are looking for energy, critical minerals or agriculture, they are turning to Canada. Even on nuclear, in terms of getting a stable supply of uranium, Canada stands above everyone else, from our Saskatchewan Cameco and some of those companies there. That’s what you saw in India when we signed the $2.6-billion deal.
It’s greatly benefiting Canadians. We need to continue to capitalize on that. You’re seeing that from the Port of Vancouver. On the East Coast, the Port of St. John’s has reported a 30% increase in cargo, which is historic for that side of the country. And then we are helping the Port of Montreal expand.
It’s benefiting Canadians. Of course, we should not ignore the U.S.; they are our number one trading partner and will be for a long, long time. We will continue to have those conversations, but, at the same time, my responsibility is to look outside of North America, and that’s what we are doing here.
The Chair: I’m sorry, senator. We have gone over time.
Senator Adler: Okay.
The Chair: Minister, on behalf of the committee, I would like to thank you for joining us again today. Your responses to our questions were very pertinent, and everyone would agree with me, I’m sure. Thank you, Mr. Fowler, as always. We will be seeing you a few more times soon, I suspect, as we move into clause-by-clause consideration of two bills. Thank you.
Colleagues, for our second panel, we welcome, from the Canada-ASEAN Business Council, live from Jakarta at, I think, 4 in the morning, Wayne Christopher Farmer, President. We have in the room with us, from the Canadian Labour Congress, Elizabeth Kwan, Senior Researcher. From the Asia Pacific Foundation of Canada, by video conference from Vancouver, we have Vina Nadjibulla, Vice-President, Research and Strategy, who is with us again. And from the Canadian Cattle Association, also a frequent visitor here, we have Jennifer Babcock, Chief Government and International Affairs Officer.
Welcome. Thank you for being with us today. We are ready for opening remarks. I will be strict on those, as I am with questions as well, so Mr. Farmer, you have the floor.
Wayne Christopher Farmer, President, Canada-ASEAN Business Council: Good morning from Jakarta. Quite timely that this meeting is happening when I happen to be here on a business trip from Singapore.
Honourable chair, distinguished senators, good afternoon and thank you for the opportunity to appear before the Standing Senate Committee on Foreign Affairs and International Trade. I’m Wayne Farmer, President of the Canada-ASEAN Business Council, or CABC.
The CABC is the sole Canadian private sector organization formally accredited to ASEAN, representing over 100 companies with active business interests across Southeast Asia and Indonesia. Over the years, the CABC has supported Canada’s engagement in the region through high-level business forums, policy advocacy, industry dialogue and networking platforms that bring together government and industry leaders from both sides to encourage more trade and commerce.
In the context of Indonesia, the CABC has consistently advocated for the timely conclusion and signing of the Canada-Indonesia Comprehensive Economic Partnership Agreement and is pleased to be part of the Indonesia-Canada CEPA task force, working alongside Global Affairs Canada, the Ministry of Trade of Indonesia and key Indonesian business organizations, such as the Indonesian Chamber of Commerce and Industry, or KADIN, and the Indonesian Business Council, or IBC, as well as other Canadian organizations, such as the Asia Pacific Foundation here today.
Last year, at the signing of CEPA in Ottawa, the CABC signed an MoU with KADIN to continue to formally promote two-way trade and investment powered by the CEPA agreement.
I am very pleased to speak in support of Bill C-18.
As mentioned, it was something we have been supporting for a while. We felt it was negotiated very timely, with a three-year window to have that concluded to go into ratification, which we’re dealing with now.
At its core, this agreement represents a timely and strategic step forward in deepening Canada’s engagement with one of the most dynamic regions in the global economy. Indonesia is Southeast Asia’s largest economy, a G20 member, with a market of more than 270 million people, but also a key anchor within ASEAN’s broader economic architecture.
The agreement is expected to eliminate tariffs on approximately 86% of tariff lines for Canadian goods and services, with extensive features on investment protection and services, helping to level the playing field for Canadian businesses relative to competitors that already benefit from preferential access to the Indonesian market. Updated analysis by the Office of the Chief Economist at Global Affairs in 2025 estimates that Canada’s GDP should increase by approximately C$329 million, with Canadian exports to Indonesia projected to rise by about C$446 million once the agreement is implemented. Once the agreement is fully implemented, the number is projected to rise to C$1.5 billion or more as it becomes a catalyst for further awareness of this trading opportunity for Canadian business in Indonesia, and also Indonesian business into Canada.
These gains reflect improved market access across key sectors for Canada, such as agri-food, machinery, business services and advanced manufacturing. From a business perspective, in our Canada-ASEAN Business Outlook Survey, which we conduct every year, nearly 60% of our respondents identified Indonesia as the top market for expansion over the next one to three years, with 50% of those respondents, mostly Canadian companies, already having an active business presence in the country.
Again, this reflects strong growing investment from Canadian companies in agri-food, clean energy and technology and expertise to bring Canadian technology expertise to Indonesia’s economy.
This is not a one-way street. Indonesian businesses have invested in Canada in several sectors rather robustly. If we look at the numbers from 2023 to 2024, roughly $5 billion of Canadian FDI went into Indonesia, and roughly the same amount went into Canada. We don’t have the numbers for 2025 yet, but these numbers are a very encouraging sign. I think a few years ago we did not see this level of investment from Indonesia into Canada, and our discussions and negotiations have proven quite a catalyst for this. There are several large Indonesian conglomerates that have big pools of capital, very global in nature, in their investments. In some ways, they’re more global than some Canadian companies that we have.
Canada is certainly rising as a preferred place to look for business opportunities because of the fact we’re on this agreement but also because they are facing similar geopolitical trade and diversification challenges, and Canada is certainly coming up tops on that.
We would recommend a quick and effective ratification and then implementation of the agreement. Obviously, post-that, there’s a lot of work to be done to continue to deliver results, support for Canadian businesses, including small and medium enterprises, continued government advocacy and presence on the ground. The work that private sector business organizations like the CABC and others do is crucial to make sure that these agreements are utilized and this continues to grow.
I would offer four brief recommendations.
The first is — I may be repeating myself — getting small- and medium-sized enterprises encouraged to understand what the framework can do for them and to get them to take some calculated risks and look at the market here, working with capacity-building initiatives to help Canadian businesses navigate the market, and Indonesian businesses navigate the Canadian market.
Second, continued work on non-tariff barriers and regulatory alignment remains a priority, supported by continued robust dialogue and the mechanisms that will be implemented under the agreement.
Third, maintain strong on-the-ground support through the Canadian Trade Commissioner Service, the mission here in Jakarta, Export Development Canada and the other tools that we have to support business activity, as well as private sector business initiatives, which are very crucial as well.
Fourth, we look forward to an approach to sectoral cooperation, again, in the energy transition, infrastructure development, the digital economy and food security, which are all very big issues here in Indonesia at this moment.
The Chair: Thank you, Mr. Farmer. I’ve let you go over a little bit. I’m sympathetic to the hour of the day where you are.
Mr. Farmer: Sure.
The Chair: Ms. Kwan, please.
Elizabeth Kwan, Senior Researcher, Canadian Labour Congress: Good afternoon, chair and members of the committee. Thank you for the opportunity to speak today on Bill C-18.
My name is Elizabeth Kwan. I am a Senior Researcher with the Canadian Labour Congress, or CLC, the largest labour organization in Canada, representing more than 3 million workers in every sector of the economy, including trade-exposed sectors of steel, aluminum, forestry, agriculture, energy, transportation and critical minerals.
Chair unions are calling on the federal government to anchor Canada’s trade policy in three core principles:
First, trade must be worker-centred and enforceable. Canada must insist on strong labour chapters with real consequences, including meaningful health and safety protections, safeguards for women and migrant workers and clear measures to address gender-based violence at work.
Second, Canada must preserve its policy and regulatory space. Trade agreements should strengthen — not restrict — our ability to rebuild domestic manufacturing, expand value-added production, regulate artificial intelligence in the public interest and meet our climate commitments.
Third, public services must be protected. Trade agreements must not undermine the strength of our public services or limit our future ability to expand them.
Chair, it is concerning to the CLC that the Canada-Indonesia Comprehensive Economic Partnership Agreement, or CEPA, foregrounds investor rights, while labour rights and environmental protections are weakened compared to previous agreements. Canada should build on the strong, comprehensive and enforceable labour rights in CUSMA and the modernized Canada-Ukraine Free Trade Agreement and never compromise workers’ rights in new trade agreements.
This CEPA reflects a broader shift away from democratic trade policy toward a transactional approach that, in the past, hollowed out Canada’s industrial base and contributed to the loss of hundreds of thousands of manufacturing jobs.
Labour has consistently called for strong, comprehensive and enforceable labour provisions in all trade agreements to prevent a race to the bottom. Instead, Canada should be pursuing a race to the top; one that puts workers first, benefits all workers, upholds democratic rights and supports economic security, stability and sustainable growth.
Canada and Indonesia launched CEPA negotiations shortly after Indonesia enacted the omnibus law on job creation. This omnibus law weakened the conditions of work, undermining workers’ rights to freedom of association and collective bargaining, misaligning with the ILO Conventions 87 and 98, which Indonesia has ratified.
Considering the erosion of democratic rights of Indonesian workers, Canada should have insisted on stronger, more comprehensive and enforceable labour rights in the CEPA to hold both countries to account for their obligation to promote and to realize ILO principles and rights and more. Instead, the CEPA entrenches the kinds of asymmetries workers have experienced under past trade agreements that have resulted in job losses, downward wage pressure and race-to-the-bottom supply chains.
Labour has been clear about what a democratic trade agreement must include: strong, comprehensive and enforceable labour rights; the elimination of investor-state dispute settlement; mandatory human rights and supply chain due diligence; and full policy space to rebuild domestic industry and strengthen public services.
This CEPA does none of these things. For these reasons, the CLC urges the committee to take the time necessary to fully study the impacts of this CEPA before proceeding further on Bill C-18. Thank you very much.
The Chair: Thank you.
Dr. Nadjibulla, please.
Vina Nadjibulla, Vice-President, Research and Strategy, Asia Pacific Foundation of Canada: Thank you, Mr. Chair and honourable senators, for the invitation to appear before you again today.
At the Asia Pacific Foundation of Canada, or APFC, we have been supportive of this agreement and are hopeful for its swift ratification, both in Canada and in Indonesia. I would like to use my time to highlight the economic and strategic value of CEPA but also to underscore what we need to do beyond ratification to reap its full benefits.
On the economic importance of CEPA, I will not repeat all the statistics that Minister Sidhu and my colleague Wayne Farmer have already mentioned. I will just underscore that although Indonesia is ASEAN’s largest economy, our trade and investment relationship remains modest and underdeveloped relative to its potential.
Our exports to Indonesia are extremely concentrated in a few areas — in agriculture: cereals, fertilizers — so at APFC we see CEPA as an enabling platform that can provide certainty and the institutional channels necessary to expand our trade to new sectors, like clean energy, critical minerals, digital trade, digital governance, infrastructure, financial services and advanced manufacturing. So the real economic opportunity —
The Chair: May I interrupt you for one moment with a plea of perhaps slowing down your cadence? Our interpreters want to do accurate interpretation. Thank you.
Ms. Nadjibulla: My apologies, chair. I was worried about you cutting me off.
The Chair: I have that reputation, I’m afraid. Please go ahead, just a bit more slowly.
Ms. Nadjibulla: Sure. The real economic opportunity of this agreement lies in modernizing, expanding and diversifying our economic relationship with Indonesia. That brings me to my second point, which is around the strategic significance of the agreement.
As the first bilateral trade agreement with an ASEAN member state, CEPA strengthens Canada’s credibility in Southeast Asia. It signals that Canada remains committed to open trade and deeper economic engagement with Asia at a time when protectionism and fragmentation are rising globally. It helps to create momentum for Canada’s wider trade diversification agenda in the region, including with ASEAN but also with the Philippines and Thailand.
The fact that CEPA was signed during President Prabowo’s visit to Ottawa, alongside new defence cooperation agreements and MOUs, is also significant because it shows the potential of the Canada-Indonesia relationship to move from a limited economic relationship to a more multi-dimensional partnership, linking trade, defence and strategic engagement.
Here I should also note that Canada is not alone in recognizing Indonesia’s importance; other countries are ahead of us. Australia, for example, concluded a similar agreement in 2020 and already doubled its trade with Indonesia. The European Union also just concluded an agreement in 2025. In other words, for us to be able to be competitive, we need to move quickly because others are moving .
On that front, in terms of challenges, I would note that some of the biggest constraints on the Canada-Indonesia relationship are still limited awareness and familiarity. At APFC, we do surveys, and consistently we see that only 1 out of 10 Canadians say that they know something about Indonesia. Similarly, in Indonesia, awareness about Canada is still low. As you know, agreements don’t implement themselves; they require businesses, institutions and people to know how to operate in each other’s markets and know something about each other.
I am happy to note that there is positive movement on this. Even since the signing of the agreement in September and since President Prabowo’s visit, a lot has been happening and there is momentum. APFC hosted two delegations from Indonesia just this month to Canada. We have also signed MOUs with the Indonesian Chamber of Commerce, as was mentioned by the CABC, as well as two other organizations in Indonesia. There is momentum, but we need to move on it.
Next year marks 75 years of our bilateral relationship, so we should absolutely use that occasion to raise familiarity and visibility.
I would also very much second the recommendation of the CABC that we should support Canadian small businesses. It’s great that we have $25 million in funding to support Indonesian businesses to better engage, but we also need a lot more dedicated support for Canadian small businesses. Team Canada missions are great, but we need long-term, sustainable support. For that, we need a serious reconsideration of trade services more generally. So in this moment of Canada really moving forward with all of these new agreements, there should be broader thinking around trade services and the kind of support the Government of Canada and the entire ecosystem are providing to Canadian businesses. We need to reconsider that. It can’t be business as usual if we are to double our non-U.S. exports.
Chair, I will stop there. I think I’m over time. Thank you for your indulgence.
The Chair: Thank you very much.
Ms. Babcock, you have the floor.
Jennifer Babcock, Chief Government and International Affairs Officer, Canadian Cattle Association: Mr. Chair and honourable senators, thank you for the opportunity to appear before you today.
My name is Jennifer Babcock. I’m with the Canadian Cattle Association, or CCA. Through our provincial members, CCA represents over 60,000 beef producers across the country.
Today, I would like to speak about trade diversification done right and why the Indonesia-Canada Comprehensive Economic Partnership Agreement, or CEPA, is a strong example of Team Canada working collaboratively between government and industry to find positive outcomes. I will also touch on why diversification for the sake of diversification does not work, particularly when it comes to beef.
Trade diversification must be meaningful for the Canadian economy. Trade is crucial to the long-term growth and sustainability of the Canadian beef industry. We export $7 billion of live cattle and beef annually, and producers earn an additional $1,500 per animal because of trade, or about 40%.
We strongly support trade diversification when it delivers meaningful market access. For producers, that means not only tariff reductions but the removal of non-tariff barriers so that trade can actually take place.
The recently signed CEPA is a good example of this approach. CCA welcomed the signing of the final agreement as a positive step toward diversifying Canada’s trade in the Indo-Pacific region.
Global demand for beef is increasing, and there is growing momentum for Canadian beef in the Indo-Pacific region. Indonesia is forecast to become the world’s fourth-largest economy by 2050, with a growing population and a rapidly expanding middle class.
During recent trade missions, CCA heard directly from Indonesian importers that their customers are looking for high-quality beef — exactly what Canada produces. Throughout the negotiations, CCA worked closely with the ministers of trade, agriculture and Canadian officials to secure concrete outcomes, including the immediate phase-out of tariffs for many beef products. This is the kind of result that matters to producers.
Alongside the agreement, Canada and Indonesia signed an MOU on sanitary and phytosanitary cooperation, establishing a bilateral dialogue to address market access issues for Canadian beef. Following political and industry engagement, we saw several technical issues addressed. We were pleased to see the four-month residency requirement removed as of February this year. That engagement is critical.
However, market access alone does not equal meaningful access. We also need to address existing non-tariff barriers, including the discriminating allocation of import permits and beef quotas. Indonesia’s recent allocation favours state trading enterprises, which dramatically impacts the potential for Canadian exports, adding significant administrative and financial burdens of having to work through the state trading enterprises rather than work directly with private entities.
Canada’s success in trade depends on working with like-minded trading partners — countries that respect science-based standards, transparent regulatory systems and rules-based trade.
By contrast, trade diversification pursued without regard to outcomes does not serve the Canadian economy or Canadian beef producers. Agreements or negotiations that offer limited export opportunities while exposing Canada’s domestic market to significant risk do not strengthen our sector.
Canada’s current negotiations with Mercosur illustrate this concern. There is no viable opportunity for Canadian beef in Mercosur countries, yet we are the number one bargaining chip at the negotiating table. Allowing increased access from countries with low standards displaces Canadian sustainably produced beef and undermines domestic production at a time when the Canadian beef herd is rebuilding. Signals have started that we’re at a 2.5% increase this year.
For Canadian beef producers, that is not diversification. It is risk without reward. We need to ensure trade agreements provide long-term benefits that encourage further production in Canada to meet the global demand.
In closing, the CCA supports trade diversification that is strategic, reciprocal and meaningful. As Canada continues to pursue diversification, we urge policy-makers to focus not on the number of agreements but on their quality and outcomes, ensuring they create real opportunities for the Canadian economy, protect high standards and support the long-term sustainability of sectors like beef producers.
Thank you.
The Chair: Thank you very much. Colleagues, as per usual, you have three minutes. Since we have four panellists, please be very clear to whom you are directing your question.
[Translation]
Senator Gerba: Welcome to our witnesses in the room and online.
My question is for the Canadian Cattle Association. The issue of halal beef was mentioned earlier. In Canada, there are currently eight or nine small- and medium-sized federal cattle slaughterhouses that are facing a fairly significant shortage of work. This issue was raised at the Standing Senate Committee on Agriculture and Forestry in the context of Bill C-18. How do you think these slaughterhouses could be helped to gain access to the Indonesian market?
[English]
Ms. Babcock: Thank you for the question.
First of all, each slaughterhouse has to be federally inspected to be able to export internationally. Of those, they make their own business decisions based on where they see the market potential. Each animal is — it is not like one cow goes to one country. Each animal — each piece goes to a specific market, depending upon the high value that they can get.
Senator Gerba: They are already certified.
Ms. Babcock: As federal, yes. They then have to make the decision if they want to export to Indonesia, if it is a market they see value in. If they do, the government has created some funding for halal certification, and they have to apply and go through that process. There are two processors that have done that certification process, but it is up to each processor if they see the value in moving forward with that market.
Senator Gerba: Thank you for the answer.
[Translation]
The minister has said that this bill will allow those small- and medium-sized businesses to have access to that market. In the current context of the bill, do you think this will disadvantage or advantage small- and medium-sized businesses in the cattle industry?
[English]
Ms. Babcock: I don’t know if I could answer that directly. For our sector — and what the Canadian Cattle Association believes — the government’s job is to open up as many market opportunities as possible. Then, it is up to businesses to decide if it is a viable market option for them. If it is, then the door is open. It is the government’s job to get the tariffs removed, ensure there are no non-tariff barriers in place, and then businesses decide where they want to send it.
I could not speak to whether it would discourage those small businesses — I have not heard directly from them — or encourage them. Indonesia itself is a growing market with long-term potential for Canadian beef, especially with their growing middle class, but the global demand for beef has never been higher. So there are a lot of competitors, especially in the Indo-Pacific region, looking to buy it.
The Chair: Thank you very much.
[Translation]
We will now go to the sponsor of the bill, Senator Gignac.
[English]
Senator Gignac: My question will go to the CABC. First, as the Co-Chair of the Canada-ASEAN Interparliamentary Friendship Group, let me thank Mr. Farmer for joining us at this time of the day. I know that CABC worked quite well on doing different studies and analyses, in addition to organizing some networking events to bring opinion leaders and decision makers around the table. You, Mr. Farmer, referred to some suggestions, including one to maintain strong support from EDC and a different program.
Do you have some big concerns regarding the fact that Global Affairs Canada, or GAC, as highlighted by Senator Harder in the previous panel, will have cost-cutting and what the impact will be? Do you have any suggestions? Thank you.
Mr. Farmer: Thank you, Senator Gignac.
There is a tremendous amount of support already out there. What we need to figure out is how to get that working more efficiently, both within government and the various government bodies that are there, alongside the Canadian private sector organizations.
These frameworks set the conditions for Canadian business to enter these markets, but Canadian business has to be aware and take the steps to take advantage of them. That is work to be done in Canada. As you know, the CABC has been expanding in Canada to get the message out about ASEAN, including Indonesia as the largest market.
Understanding that there are some fiscal challenges and some cost-cutting occurring, hopefully, with ASEAN being a centrepiece of trade growth and diversification for Canada and in the Indo-Pacific in general, we’ll escape some of those larger cuts. But I think that there is room for what is existing to work more efficiently together and also to work better with the private sector. Not that we’re working badly, but there is always room for improvement.
Senator Coyle: I will ask Dr. Nadjibulla a question, and perhaps Mr. Farmer could weigh in as well. Dr. Nadjibulla, you mentioned that we are not the first ones at the table here, that Australia and the EU have established relationships, and, in fact, Australia has doubled its trade. That is something we could learn from.
I’m curious whether you know or if anybody has done research on what has worked with the Australian example and what Canada could learn from that. Maybe you have something to mention, and perhaps Mr. Farmer may also have something to add.
Ms. Nadjibulla: Absolutely. Thank you, senator.
You’re right. There are things for us to learn. One of the points is, obviously, that having trade agreements is a start, but they need to be better utilized, and businesses need to know that they are there, and they need to be competitive in that market.
The Australia case I mentioned in part because it shows that trade agreements do make a difference if they are properly utilized and that it can result in a significant increase in bilateral trade. For Canada, we are at a good moment. There is interest in Canada. I’m seeing this when I travel in the region. There is interest on the Canadian part to diversify away from overreliance on the U.S.
I think we need to pick concrete sectors. We need to move in those sectors. The minister mentioned a few. I mentioned a few as well: clean energy, nuclear, the mining sector. We have so much expertise and know-how. There is a lot we can partner on. Again, Australia is in that same space, so we can learn from them.
One other helpful element is that we are now coordinating much more with Australia in a way we hadn’t before, including in this region. I think that what Prime Minister Carney is doing with visits to Australia, Japan and elsewhere can also help us to leverage those relationships to be complementary in Southeast Asia rather than competitive. I will stop there.
Sorry, one final point. We have done some papers, and I’m happy to circulate them to the clerk if that would be useful.
Mr. Farmer: To follow up on what Ms. Nadjibulla said, without engagement, we have very little influence. The way I look at it and the way Australians have looked at it, their initial agreement has been revised and deepened a couple of times since the initial framework was put in place. The way we should look at our trade agreement is exactly the same. This is an opening where we are engaging with Indonesia. Over time, as the relationship blossoms, there will be opportunities to deepen this and bring it to a higher level from both sides of the table.
To mention what Ms. Nadjibulla said, I’m here in Jakarta today because I have two or three clients that are Indonesian conglomerates looking at investments in Canada in similar industries, and a few years ago you would not have seen this. Trade diversification efforts are working, and it is in both directions between Indonesia to Canada and Canada to Indonesia.
I see this CEPA as just the first step in deepening our trade relationship, which will grow and be further amended and deepened over time.
The Chair: Thank you.
[Translation]
Senator Hébert: Ms. Babcock, I believe it was you who spoke in your opening remarks about the importance of stability and predictability, or something along those lines. An amendment was made to add a provision to the agreement, article 15.2(1), which provides for a comprehensive review of the operation and effect of the agreement every three years.
I would like to hear Mr. Farmer on that as well. Do you think this type of provision could create uncertainty for businesses that often have to invest in order to enter major markets, such as Asian markets? Do you think this could have a negative impact on potential investments by our companies and their desire to diversify their trade with Indonesia or with countries like it?
[English]
Ms. Babcock: Thank you for that question. The review, as we’re seeing it play out in our industry, can be helpful to fix any outstanding non-tariff barriers that are there. It can work in both directions — to hold trading partners’ feet to the fire in terms of what was said in the MOUs, on the sidelines and in the side letters and to ensure that it is working, so I do see it as a positive to have a review in place. Of course, it is important to have guardrails around that for business stability at large.
Mr. Farmer: I agree with what Ms. Babcock said. If we look at the context of the Australia-New Zealand relationship with Indonesia and ASEAN, their ability to review has been quite a net positive over the last few years because every time they reviewed, they ended up with a deeper engagement and agreement, and business has grown as a result of that.
So, as Jennifer mentioned, it does need guardrails and certain protections around investment, which our agreement does, but I think having an ability to do that is a net positive in dealing with countries in ASEAN, Indonesia in particular, and there is precedent for that.
Senator Harder: Dr. Nadjibulla, I was intrigued by your comments about the need for more innovation and trade services support. I am putting that in the context of what we know will be a reduced, at least, Foreign Service network of trade commissioners and political officers. We don’t know yet about the network.
Can you give us some examples of the kind of creative innovation that you would be suggesting, and are there countries that do it better than us from which we can learn, particularly in the region?
Ms. Nadjibulla: Thank you, senator. I was making that comment precisely in the current context of cuts that we’re seeing and also recognizing that business as usual will not cut it if we are to truly diversify away from the U.S. We have a robust ecosystem, but there are coordination issues around that ecosystem in terms of EDC, Trade Commissioner Service and private sector actors. Many entities do many different things. There is not a ton of coordination.
Even within the trade services itself, we have to look beyond just the mega trade missions which go, which are relevant from the perspective of raising awareness, but they don’t actually close the deal.
How do we have smaller, more targeted sector-specific missions? How do we also leverage the enormous potential of Canadians who are in the region who are not necessarily working for Canadian institutions but are CEOs, alumni of Canadian universities, Canadian networks, so really finding champions and having more sector-specific discussions? Prime Minister Carney has upped the game, and we’re seeing a real step change, but we now need the machinery of government to be equally innovative and get out of the things we’ve been doing for the last 20 years, which have had a marginal impact and won’t get us to where we want to go in terms of doubling trade by the end of the decade.
Senator Harder: Who does it best?
Ms. Nadjibulla: Australia does it better in the region. I’m comparing us to Australia because we are similar in size, in terms of values and our profile. They are better. They are more strategic as well. Even small things, senator, in terms of linking trade facilitation with our development work and “Brand Canada.”
In the past, we had the luxury of having all of these streams of work operate on their own lines, their own values, promoting separate things. We need to bring all of that — the development assistance, the cultural work that we are doing and the work that provinces are doing — more holistically together. Australia does it better in terms of “Brand Australia” in the region, from their development assistance to their provincial engagement and so forth.
The Chair: Australia is also a little closer than we are, geographically speaking.
Ms. Nadjibulla: Indeed, senator, and they have direct flights, which we don’t, with Indonesia.
Senator Ravalia: Thank you to all of our witnesses. Dr. Nadjibulla, could you comment on potential risks in relation to Indonesia’s complex regulatory environment, which potentially includes inconsistent enforcement, bureaucratic delays and governance challenges and which could potentially increase the cost of market entry and transparency concerns?
Ms. Nadjibulla: Thank you, senator. I have written about this in the past. It won’t be easy because of the regulatory complexity of Indonesia but also because of the political risk we may face. Last year, we saw demonstrations in Indonesia, and now, with the crisis in the Middle East, Indonesia is on the front line when it comes to inflation, shortages, energy shortages. There is political risk, compliance risk and regulatory risk. There are also obviously transparency concerns and corruption. Indonesia ranks about 100th on the list for corruption perceptions. It will be challenging.
The overall analysis we have, senator, is that given the scale and given the opportunity, the engagement is still worth it. We have to continue to move forward. We need to support our businesses to better understand the regulatory environment, to manage risk and to essentially have the backing of our provincial and federal governments to properly engage in the region. Yes, it is a complex market, but we no longer have the leverage of not engaging, given the opportunity and the scale.
Senator Ravalia: Can you perhaps outline potential scenarios in which we could mitigate some of this risk?
Ms. Nadjibulla: There might be colleagues who are better qualified than me, as I am not a lawyer.
I will note — this also goes to the presentation of another witness — that there are provisions in the agreement in terms of mechanisms for dialogue between the two governments, the institutional set-up within the agreement, including on labour and other elements, which are much stronger than I think we will see in future agreements, including with ASEAN and potentially with the Philippines and Thailand. While the agreement may not be perfect, it does have provisions as well as the institutional set-up that would allow the government to address issues. We may not see such provisions in future agreements.
I would caution those who are critical that the agreement doesn’t go far enough in protecting Canadian businesses and mitigating risks that it actually goes quite far given what the market would bear now with other negotiations we’re having.
Senator Ravalia: Thank you.
Senator Al Zaibak: My question is directed to Ms. Kwan. Thank you for being here, together with our other witnesses.
You have expressed concerns and you have outlined those concerns very clearly. I hear you. Have you advanced or proposed any amendments suggesting improvements to the agreement? If you haven’t, what is your suggestion at this advanced stage of our consideration?
Ms. Kwan: Thank you very much for your question.
First, let me start by saying that one of the improvements will be to actually have a discussion with stakeholders before this advanced stage. That would be greatly appreciated, as opposed to being at the very end of the process.
Second, stepping back from strong labour provisions — the other presenter said to get ready because it’s going to be less. I do believe that, but I also think that’s harmful to Canada and Canadian workers. I’m happy to explain that a little bit more, but it is complex.
Once you have a different playing field in terms of fewer obligations to follow, then you are basically asking the workers and the provision of their labour to be competing lower and lower in your trade agreement to actually be able to compete. That erodes the rights of workers. In actual terms, that means that our economy survives a lot on household consumption. Someone has to make those dollars to spend in our economy. You can see that this is not some legal agreement out there somewhere; it has a real impact on workers in Canada and also workers over there.
Labour stability — when there are more unions, there is more labour stability. If you haven’t looked it up, please do: The omnibus bill was a thousand and something pages, putting together 79 laws in Indonesia and stripping people who already don’t have labour rights as much as we do of even more rights at the other end.
If we want to do business, let’s do business, but workers are very much a part of that equation. You have to have some safeguards to protect workers so that, for instance, people are not providing Canadians with cheaper goods because their health and safety are at risk. You don’t go to work and never expect to come home just because you don’t have those standards. That is what labour standards are about, and it is wrong, and there is an economic cost at the end of the day when there are disparities like that.
The Chair: I want to follow up on this very question that Senator Al Zaibak posed.
You were in the room and heard the minister, Ms. Kwan, when he said there will be an agreement with ASEAN, as well, and then he listed another few. I know you are very focused on this area in your analysis at the CLC, but are you, as an organization, worried about the trend line in terms of the erosion of workers’ rights and workers’ benefits as we conclude so many free trade agreements in rapid succession?
Ms. Kwan: Thank you.
Yes, absolutely. Like I said in my presentation, you have downward pressure on wages. You have the displacement of workers. Workers lose jobs. There is evidence that trade-exposed jobs, when they are lost — the workers who have lost those jobs will perhaps get a job in a year or even less, but they move out of that sector; they move out to another sector. The skills they had in the previous sector are gone. It is the same if a plant closes: The equipment is moved out and that plant is gone. It will never come back.
These are the material realities of what trade agreements are. Down the road, because trade is not instantaneous when it comes to outcomes, bad trade agreements bring not very good results. They hurt the Canadian economy. They will hurt Canadian workers, and they will hurt other workers.
To actually be able to level the playing field and to say, “Let’s have strong labour provisions in this” is good. I will give you one example, which should actually put some ideas into your mind about what this means. Forced labour is part of the labour provisions in trade agreements. It’s under the ILO fundamental rights. Whether it’s the Biden administration or the Trump administration, forced labour is on the table for CUSMA.
In Indonesia, there are forced labour and child labour. If we, because we haven’t done a very good job at all with CUSMA, import things that have those in the supply chain — forced labour and child labour — what happens when we meet the obligations of CUSMA to uphold forced-labour legislation and ban those imports? Then, on the other hand, you have us going out, making deals with countries that actually use forced labour and child labour.
Not only that, but there’s the transshipment issue because China is very active in the Indo-Pacific area. When you put those things together — I am just asking people to take some time and reflect on those issues.
The Chair: Thank you.
Ms. Kwan: It is very important. We don’t want to be so tangled up because we are just hurrying up that we are basically tripping ourselves up at the end of the day.
The Chair: Thank you very much.
[Translation]
Senator Gerba: The Canadian Cattle Association welcomed the Comprehensive Economic Partnership Agreement while criticizing the requirements that cattle must have been in Canada for four months prior to export. What are the impacts of this requirement on Canadian exporters?
[English]
Ms. Babcock: The technical issues around the four-month residency requirement, which we did note at the time of the signing, were not addressed yet, so while we welcomed the agreement coming in, we did need these caveats there.
That means that cattle had to be in Canada for a minimum of four months before it could be slaughtered to be shipped to Indonesia. With the way the North American market is so integrated, it was very challenging to have a four-month residency requirement, and it was not feasible for many of the processors.
In February this year, Indonesia did agree to remove that requirement, so it’s no longer in place. I know the officials earlier were not sure where that was at, but CFIA officials were able to get that done, so that has been a success.
Senator Gerba: Okay, thank you.
[Translation]
Ms. Kwan, I’m very interested in what you said about jobs and child labour. Today, we are seeing the rise of fast fashion. What could be done within the framework of Bill C-18 to prevent a deterioration in labour practices? Have you considered any measures that could be added to strengthen this aspect?
[English]
Ms. Kwan: Regarding the upcoming trade agreements, most of those countries have child labour and forced labour. This is one of the most tangible examples in this very complicated trade work in terms of trying to balance Canada’s interests, workers’ interests and business interests.
As I said before, our biggest trading partner is the U.S. The U.S. has put down demands. The demands include specifically forced labour provisions. That is a specific demand from both Biden and Trump administrations. We can’t be running out there and just saying, “Okay, well, let’s lessen it.” Because in this CEPA, there is no aspiration put down on paper that says that they have to actually ban imports from —
Senator Gerba: How can we improve it?
Ms. Kwan: Well, we can improve it —
The Chair: I’m sorry; I’m intervening here. We have gone over time, but thank you.
[Translation]
Senator Hébert: Ms. Kwan, you’re right. I’ve heard some experts express the same concerns as you following the investigation into forced labour launched by the U.S. administration. I think that’s definitely something to keep in mind.
Ms. Nadjibulla, you mentioned that we need to completely rethink our trade services, support for small businesses, and so on. You elaborated a bit on what you meant by that. Could you tell us a bit more about what Australia has done and what Canada should do? I understand that helping SMEs is a good thing, but that’s not what’s going to make a difference in terms of exports for small- and medium-sized businesses. It would be the high-potential players instead. I’d like to hear your thoughts on that.
[English]
Ms. Nadjibulla: Thank you very much. I will be happy to address that, and, chair, if you would indulge me, I have one small point on the issue of forced labour and the agreement if I could come back to that at the end as well.
On what more we can do, Madam Senator, I was just mentioning that we are at a moment where we have to rethink how we have been doing trade promotion, especially in a place like Indonesia, but the Indo-Pacific more generally. We need a much more sustained presence, a much more strategic presence, a way that we are linking what the private sector is doing better with what the government is doing and what provincial governments are doing. So far, from our estimation, there’s a lot of activity, but it’s not always coordinated or growing in the same direction.
Bringing all of that together a lot more will be helpful, and we’re seeing early signs of that. Prime Minister Carney himself is really changing the pace, the tone and the engagement, so the system is moving around it. The fact that there is now restructuring happening in Global Affairs does give us an extra incentive to look at the 1,060 trade commissioners who are working, particularly in the Indo-Pacific, to see how they can better do the work that they have been doing.
This means leveraging more, as I said, the Canadian expertise that already exists in the region, managing the alumni of Canadian universities, looking at small businesses — because at the end of the day they are 97% of our economy — but also supporting Canadian champions, for instance, a company like Cohere in the AI sector, right? How do we support them in the same way that other governments in the region support their national champions?
We need to do both.
The Chair: Could I intervene and just ask you to make that additional point that you wanted to make, because we’re almost out of time?
Ms. Nadjibulla: Yes, thank you very much, senator.
I completely agree with the discussion that we need to be mindful of forced labour and other human rights issues, but we need to see whether trade agreements are the place to now advance them in the current environment.
Canada has laws on the books that need to be enforced. We don’t need that provision in the CEPA. We need to make sure that the laws that we already have, prohibiting imports of products made with forced labour, get implemented. We need more enforcement capacity, not necessarily slowing down agreements around provisions which are already law here as well as international law. Thank you very much.
The Chair: Thank you. We have come to the end of this meeting, and, on behalf of the committee, I would like to thank Wayne Farmer, Elizabeth Kwan, Vina Nadjibulla and Jennifer Babcock for being such great witnesses. You have enlightened us on a lot of points. Mr. Farmer, I don’t know if you have a chance to go and get some sleep, but thank you for joining us from Jakarta at such an early hour for you. Thank you.
Colleagues, clause-by-clause consideration of Bill C-18 will take place on Wednesday, April 29, during our second hour, starting at 5:15 p.m.
Our clerk will send an email with further details this evening, and we will reconvene tomorrow morning, in this room, for the clause-by-clause consideration of Bill C-13.
(The committee adjourned.)