Good afternoon, Madam Chair and committee members. Thank you for the opportunity to present to you today.

I'm Elizabeth Kwan, senior researcher with the Canadian Labour Congress. I'm also the co-chair of the Canadian CETA domestic advisory group for labour. The Canadian Labour Congress is the largest labour organization in Canada, bringing together dozens of national and international unions, provincial and territorial federations of labour, and community-based labour councils. We represent more than three million workers in this country.

I'm going to start with six recommendations that I would like to present to the committee.

First, the government should develop and implement a robust, pro-worker industrial strategy and a Canadian border carbon adjustment—or BCA—mechanism as part of a broader strategy to build up Canada's industrial base, foster innovation and create an environment where good unionized jobs can thrive.

Second, as part of this industrial strategy, the government should strategically build up a downstream economy that adds value to the production of goods, shifting away from exporting raw and semi-processed goods.

The third recommendation is that government actions and investments be established to support workers in labour force adjustment from the uncertainties of trade with the U.S. and the shift to a sustainable, low-carbon economy.

Fourth, the government should commit to accelerating the establishment and implementation of a Canadian BCA as a tool to level the playing field between Canada and other like-minded countries in trade and as one of the tools to reach Canada's climate targets.

Fifth, the government should publish a “what we heard” report on the input from stakeholders from the 2021 consultation on BCAs no later than April 1, 2025.

Lastly, the government should commit to developing a Canadian BCA mechanism that aligns with the EU's carbon border adjustment mechanism—or CBAM—and should conduct public stakeholder consultations on the new Canadian BCA mechanism in 2025.

People across Canada and across the globe are experiencing the unprecedented impacts of climate change in their work and their everyday lives. Many countries around the globe are racing to transition to a low-carbon economy. Our economy must adapt and be positioned to take advantage of the massive industrial and economic opportunities that come with the global shift to a low-carbon economy.

How do we take advantage of the current situation in the world of trade?

As we all know, the U.S. is Canada's top trading partner, accounting for 77% of total Canadian exports. However, there are many uncertainties that lie ahead for Canada's trade with the U.S., with the threat of tariffs of 10% to 25% and a call to move quickly on the renegotiation of CUSMA. We know that the new Trump administration will retreat from various climate change solutions. The response from Canada must be strong. We must all work together to protect Canada's interests and clearly prioritize the interests of workers, their families and their communities.

At the same time, the European Union, with its 27 member states, is Canada's second-largest trading partner. Since 2017, when CETA entered into force provisionally, the EU has enjoyed trade surpluses for goods, while Canada has experienced trade deficits that have continued to widen over time.

Here is the opportunity to develop a robust industrial strategy that diversifies the economy and Canada's trading partners, and includes a pro-worker agenda in the transition to a low-carbon economy more quickly. The carbon border adjustment mechanism is a trade tool to get us there. A BCA is a fair, predictable mechanism that keeps Canadian companies competitive and keeps good jobs in our communities.

Our EU counterparts have expressed to me, as the co-chair of the Canadian CETA domestic advisory group for labour, their keen interest in clean products from Canada because of our high labour and environment standards. One of the immediate government priorities must be to urgently develop a Canadian BCA that aligns with the CBAMs of the EU and the U.K. This will open doors to more trade and more good-paying jobs. There is no doubt that a Canadian BCA will benefit Canada's trading relationships with the EU, the U.K. and other like-minded, low-carbon economies.

Thank you very much.

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