International Trade Committee on May 8th, 2012

[Richard Phillips]

Yes.

[Ed Holder, Conservative, London West, ON]

So not just sign them—that's kind of the starting point—but actually put them in place.

[Richard Phillips]

That's correct. We continue to start deals, and all of those markets are important, but at some point we need to actually finish some of these to keep our resource....

We have only so many trade negotiators. After a deal is signed, that's only the start of it, as you're suggesting. A whole bunch of regulatory stuff has to happen to bring systems into alignment for inspections.

[Ed Holder, Conservative, London West, ON]

I don't want to then talk about the signed deals, particularly, because that talks about CETA, and that talks about.... It doesn't even talk about Japan, quite frankly, because we're not even there. It doesn't talk about Panama, which is somewhere in play. A lot of things are frankly in play.

I just want to remind committee members, and the panel, that we have actually—even since my time, and I've only been elected four years—the European free trade agreement, which was the very first deal that we did, which included four countries. That was Norway, Liechtenstein, Switzerland, and Iceland. Even the Norway deal was absolutely beneficial to my city of London, Ontario. I'd remind you that we've done Colombia, we've done Peru, and we've done Jordan.

So there are things that, frankly, we have done. Opportunities come from that. Of course, it's not just finishing that aspect of the agreement—and by the way, I support precisely what you say—but I want to make it really clear that there are eight countries right there, that in my short time here....

Frankly, this has been the most aggressive government in the history of Canada in putting together free trade deals. I would say to say that the ambitious deal with CETA is critical, and we agree. I think Panama has its own opportunities, and of course Japan is huge.

So I listened to the point, but I didn't want it to be lost that we haven't been closing, finishing, deals. I didn't want there to be any confusion about that. I'm sure you'd agree with that.

My question, though, is for our colleagues on the insurance side.

Mr. Wilkinson, your company has actually done it; I mean, you're there in Japan. If I understood your testimony earlier, you said that initially you bought a company to get your foothold in. Did I understand that correctly?

[Peter Wilkinson]

Yes, when we came back in the 1990s.

[Ed Holder, Conservative, London West, ON]

Do you have anything going on from the early 1900s to...? You said that in 1939 things changed, and of course we know what happened then. Were you totally out of it and then got back in about, what, 20 years ago?

[Peter Wilkinson]

That’s absolutely correct.

[Ed Holder, Conservative, London West, ON]

You started by an acquisition.

[Peter Wilkinson]

That’s correct.

[Ed Holder, Conservative, London West, ON]

You might be able to uniquely tell us this, because you're on the ground there now, doing business in Japan, and I'd like to understand. I don't know if you've had natural growth, which I presume you've had as well. But I don't know if in your business, doing business in Japan versus in Canada, whether the actual reserves have to be different, whether it's harder to do business in Japan.

What are the impediments to growing in Japan on the services side, that you see—or have you found that it's actually worked for your company?

[Peter Wilkinson]

I would say that generally, for us, it has worked fairly well in Japan. Are there differences in regulation? Yes, there are.

There's no doubting that Canada has the most conservative regulatory regime, in regard to capital requirements, of anybody in the world, and it has the most conservative accounting system in the world. It actually, from our perspective, makes us look much weaker than we are—I think in all Canadian insurance companies, and Janice would agree—as compared to international competitors. In the world of—

[Ed Holder, Conservative, London West, ON]

In Canada—if I might interrupt you—you're exceptionally significant.

[Peter Wilkinson]

We're number one in Canada. We are the largest.

[Ed Holder, Conservative, London West, ON]

That's not too bad a position to be in.

[Peter Wilkinson]

It's not too bad a position to be in. But this year is our 125th anniversary for Manulife. Our first president was Prime Minister Sir John A. Macdonald, actually, when he was the prime minister.

[An hon. member]

Hear, hear!

[Peter Wilkinson]

I thought you'd like that.

Our first foray outside of Canada and into Asia was in 1897 in Shanghai and Hong Kong. We've always seen that the future for us has to be outside of Canada. Canada is a great country, but it's a small country. So we've always had to go other places.

To go back to your original question about Japan, we've had our issues with the regulators, as anybody else. I think we've enjoyed our time in Japan. We've been treated well by the Japanese government. It has been relatively easy.

Our big issue, of course, is this Japan Post issue, as we've talked about, and it's not just us.

[Ed Holder, Conservative, London West, ON]

Fair enough, and I appreciate that. Domestic as well, I heard Ms. Hilchie say.

What's your concern with the strict regulatory system in Canada that you've indicated? What are your concerns about Japanese markets coming into Canada?

[Peter Wilkinson]

To be honest with you, at the moment there is no Japanese life insurance company in Canada. We're not overly concerned. As long as everyone has to play by the same rules, come on in.

[Ed Holder, Conservative, London West, ON]

It's nice to be number one.

Thank you very much.

[The Vice-Chair, NDP, Don Davies]

Thank you.

Mr. Easter, for five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Just to start off, Ed, on your first comment, I took that what Richard meant was that the government is all talk and not really many results—

[Voices]

Oh, oh!

[Wayne Easter, Liberal, Malpeque, PE]

Because when you—

[Ed Holder, Conservative, London West, ON]

A point of order, Chair, a point of order.