International Trade Committee on May 2nd, 2024

[The Chair, Liberal, Judy Sgro]

[Inaudible—Editor] five minutes, please.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I thank the witnesses for being with us this afternoon.

Discussions of supply chains are hugely important in my riding [Inaudible—Editor] trade with the U.S. is very important to us, as 75% of our trade with the U.S. is by truck, and it goes through four main points of entry, which are Windsor, Fort Erie, Sarnia and Queenston. Two of those bridges are in my riding, so it was disconcerting to hear some of the comments today.

Mr. Carey, you were talking about how our traditional trade partners are questioning Canada's ability to deliver key commodities on time, and then I think it was the International Freight Forwarders Association. Mr. Rodgers, I think you mentioned that Canada is now number 51 in ranking in cross-border trade, and I wonder if you can elaborate on that.

[Bruce Rodgers]

Yes. I think that came from the 2020 “ease of doing business” index from the World Bank, and it's 51 for trading “across borders”, not necessarily U.S.-Canada borders but trading overall, globally, into Canada.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That touches on what Mr. Carey was talking about, and then we can add to it the notion of unpredictability. The reliability of supply chains is critically important. We have notions of possible strike actions with our rail. We just had port strikes. You know, it could be a perfect storm: The CBSA, this May, could also be on strike. What is disappointing on the CBSA aspect is that it seems that the CBSA is always negotiating the last contract, and so when they finally resolve this one, it will be 2025 when it ends, and they'll be negotiating a new contract. Again, what we have is no certainty in place with regard to our border crossings.

To the freight forwarders, you talked about your disappointment on learning that the study on ways to ensure strikes are limited had been put on pause. Do you have, for example, any ideas or recommendations to the government that you would like to submit with regard to its examination in this area?

[Julia Kuzeljevich]

In terms of what the government should look at, I think some things are systematic, for sure, with regard to the role that the longshoremen or foremen.... By the way, I use those terms because some of those terms have yet to be changed in the verbiage, but I know that's in progress.

Certainly, there are concerns over automation, and you could probably find just as many studies pro as con. I know that was definitely the case with the LA and Long Beach situation that held the negotiations back for some time. What we'd like to see is maybe—and we've talked with the Maritime employers and ports on the same topic—a look at our labour code and at mechanisms within the code that could encourage stricter mediation timelines, avoiding the need to call on back-to-work legislation. We could bring the parties to the table, encourage stricter timelines and perhaps fast-track arbitration processes, which would offer some reassurance to industry that things are being dealt with and looked at. We don't have that reassurance currently; everything happens behind very secret closed doors.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Madam Chair, how much time do I have?

[The Chair, Liberal, Judy Sgro]

You have one minute and 20 seconds.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'd like to quickly ask ask PECO Pallet a question.

Wood pallets are used widely across the supply chains. Was your organization consulted for the supply chain task force report?

[Lisa Vegso]

We were not. As I said, the industry was identified in the report. PECO was not directly consulted with. Frankly, one of the motivating factors behind participating in today's session is making sure that we're a recognized player in that industry, and our hope is to be a part of consultations in the future.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'll cede.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Arya, you have five minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

I am always glad to see the Canadian Agri-Food Trade Alliance at this committee. Its members have worked hard and have made Canada the fifth-largest exporter in the world in that sector.

I fully agree with its three priorities of going after the new international market, like Indonesia and ASEAN, of promoting and maintaining the international rules-based order, and of strengthening the capacity and having much more collaborative efforts between all the stakeholders. I agree with that.

However, I am quite surprised to hear the words from this body.... I'm surprised to hear words like “back-to-work legislation”, demanding it. Even our partisan political opponents have not used it. To hear a respected industry body demanding, or at least suggesting, back-to-work legislation at this time is unjustified, in my view.

Ms. Vegso, I am very glad to hear about this. I did not know about the importance of pallets and how the process operates.

I have a quick question on the supply chain task force, on whether its recommendations are working, but before that.... Because of the unique nature of your business, you are at the core of the movement of goods in North America. Which are the points—any specific points in your movement chain—that you think should be improved, or which are most problematic for you?

[Lisa Vegso]

Certainly, the most problematic issue that we face in terms of operating our pool is making sure that our pallets come back into our possession.

[Chandra Arya, Liberal, Nepean, ON]

In the sense of their coming back or their going to your customers, is it the transportation time required? What is the major issue?

[Lisa Vegso]

It's working with the distributors that are the recipients of our assets to be sure that once the pallets become empty, the pallets are returned back to PECO. Making sure that those pallets come back to us remains one of the biggest challenges that we face, not only in Canada but in North America. We're working with those distributors and educating them on the impacts of poor behaviours that lead to losses or to excess damage to pallets, to excess dwell time—all the factors that drive up cost.

[Chandra Arya, Liberal, Nepean, ON]

You did mention that there have to be consistent policies between U.S. and Canada. What are the key things where there's inconsistency now?

[Lisa Vegso]

There's nothing specific that I see right now, but I think that's important. We see it in the example that I referred to in my opening remarks in terms of ISPM 15 and the bilateral agreement that exists between the U.S. and Canada. There's nothing particular at the moment, but we see the advantage of that in certain areas of regulation today.

[Chandra Arya, Liberal, Nepean, ON]

As for the supply chain task force, is it working? Is it yielding results? Are you seeing any improvements?

[Lisa Vegso]

We see nothing to speak of yet, but I think it's very early on. We have had some consultations, but it's very early on in the official formation of the national supply chain office and the work that they're doing.

[Chandra Arya, Liberal, Nepean, ON]

Coming back to CAFTA, I have one specific question.

You talked about the problems with customers in Japan and other places. Yesterday I was talking to the ambassador from Singapore about the shipping routes around the South China Sea, etc. Do you foresee any problems? I've even heard that there are some Canadian companies that want to establish a transshipment port in Sri Lanka especially for grains.

I have not heard that anywhere else, but I just happened to meet the minister of that country, and they were talking about this. Do you see any problems there or any solutions being proposed in that part of the world, in the Indo-Pacific area?

[Dave Carey]

I'm sorry. I don't know anything on that, I'm afraid.

[Michael Harvey]

No.

[Chandra Arya, Liberal, Nepean, ON]

No? Okay. This must be something totally new.

The minister of investment from Sri Lanka was here. In the meeting, he mentioned some Canadian companies that were talking about establishing a transshipment port in Colombo. Anyway, that's okay.

Coming to the Indo-Pacific, I think that obviously we want to help open up markets for your members, whether that's in Ecuador, Indonesia or ASEAN. I was with a group of ambassadors recently, mainly from ASEAN countries. They were talking about the need for the Canadian government and Canadian companies to be aware of the cultural sensitiveness in that particular region. ASEAN is not a unique homogeneous body, obviously. Each single country has its own systems and culture.

Where do you see that going? Do you see any problems in having a trade agreement with them?

[Michael Harvey]

I think what I'd say is that the trade agreement might not have the same level of ambition that you have with more developed markets like the United States or Europe. Maybe some of those countries have capacity issues that can make it difficult to have a trade agreement of the same style that one has with Europe. Flexibility will be needed to come to an agreement. You have to take into account the level of development of the countries.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you to the witnesses for their very valuable information.

It's the end of the day.

Committee members, next week for our meetings we will complete our supply chain study, and any witnesses will be requested for the upcoming seafood import policy study as well. We'll have 15 minutes of committee business at our upcoming meeting on May 7.

Are we all right?

The meeting is adjourned.