International Trade Committee on Nov. 25th, 2013

[The Chair, Conservative, Rob Merrifield]

Your time is up.

Mr. Shory. See, I didn't let him cut into your time this time.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you so much, Mr. Chair. I was not expecting you to be so generous. Give me one second.

[The Chair, Conservative, Rob Merrifield]

We could go to the next questioner, if you like.

[Devinder Shory, Conservative, Calgary Northeast, AB]

No, Mr. Chair. Thank you so much.

Mr. Delaney, I will come straight to the question. I understand that canola oil, wheat, and soybeans comprise a substantial export to the European Union. With the elimination of tariffs on these exports, are you able to assign a dollar amount to how much you project to gain from the trade deal?

[Michael Delaney]

Thank you for that question.

The only quantitative data I have seen is the number I already quoted. For canola, in oil and meal, the estimate is $90 million. For Canadian beef and pork, it's close to $1 billion; $600 million for beef and $400 million for pork. For common wheat, it's estimated at $20,000,500. Biofuel is another $50 million.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I also understand that in the European Union canola is the preferred source for biodiesel production. How prepared are your industries for the increased exports of this and other grains to the European Union? Are there steps being taken to increase your capacity and production capabilities to take advantage of the more liberal access to these markets you will now have?

[Michael Delaney]

Thank you for that question.

As I am an Atlantic Canadian, my answer will be somewhat constrained, but suffice it to say that the canola and grain industry has analysts who can address your question more specifically. In a general way, western Canada is blessed with world-class export infrastructure. Some of the largest companies in the world are located in western Canada on the grain assembly and export side. If we can get the railroad and port delivery mechanisms up to speed, there's every expectation that commercially those sectors could grow in response to the increased market demand.

[Devinder Shory, Conservative, Calgary Northeast, AB]

We have heard from the Halifax Gateway Council, and we have heard from other witnesses. Are the industry and all of these stakeholders and businesses ready for the jump they are supposed to receive as far as business is concerned? Are they ready from a positive perspective, for the opportunities there will be?

Of course, it will increase the market for all the industries, I would say, in this region. Whether it is grain growers or the grain elevators association or the gateway people or...we talk about metal workers that do an excellent job. Do you guys have any joint meetings and so on to brainstorm on how to address all those potential issues you will have to face given all these growth opportunities?

[Michael Delaney]

Halifax Grain Elevator, for example, has a storage capacity of approximately 150,000 tonnes, and it's been underutilized, so this makes them more competitive due to greater throughput.

As well, the Halifax Grain Elevator and Halifax Port Authority have access to a whole bunch of ships and they also have containerized facilities. The opportunity could be that Atlantic Canada, for example, would gear up more hormone-free beef, which is something. We have a federally inspected plant in the region, so there's an opportunity.

I'll stop there, if that's okay.

[The Chair, Conservative, Rob Merrifield]

Yes. We're good.

Our last questioners are to be Mr. Masse and Mr. Davies. I think they're sharing their time.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Mr. Ross, I can confirm to you that I have had American politicians say to me that we should actually be looking at a buy Canadian act to at least negotiate access to the market, because there are so many companies with high integration that it's creating significant issues for their companies.

I would like to expand a little bit on bidding for contracts with some of the larger consortiums in Europe. We have one that just took place in Windsor where we're building a multi-billion dollar parkway to a new border crossing. Freyssinet, a Spanish consortium, actually went around the rules and produced 500 girders. Two hundred had been put in the ground already. They all had to be taken out and destroyed because they didn't meet Canadian standards. They didn't have the proper people in place, and they also tried to take shortcuts in the process.

I'd like you to comment on procurement bidding with some of these larger consortiums that are coming in, because we had local and also some national Canadian consortiums that were outbid on this P3.

[Stephen Ross]

I guess it comes down to whether, when it comes to infrastructure, you want foreign companies building your infrastructure for you.

I'm aware of the project you're talking about. I'm aware of the events that took place, and they did make some mistakes. They're certainly paying for them and they are correcting their mistakes, but I would say you're just taking chances at some point.

For example, in New York there have been a number of bridges that were built by a Brazilian company that there were significant problems with. The Whitestone Bridge was completed seven years ago, and after two years they started to notice some problems with the quality of the work. There is that element. Whether that's a big element or not, I can't really say because a lot of these international companies certainly know what they're doing. They're certainly qualified.

From the Canadian consultants that I deal with, such as Lavalin and the big companies we do a lot of work with, the European general contractors are very large construction companies. They have a tendency to take over the project from the local Canadian consultants because they are telling them that this is how they build things in Europe and this is the way they're going to build this job. We lose a little bit of control.

The design consultant does lose some control of the project because the international company is so large and has so much horsepower that they tell them how they're going to build the job as opposed to our telling them what we're going to do. We do see that, but I wouldn't want to dwell on it too much. I'm well aware that it is a problem at the Freyssinet project.

Of course, we have selfish interests, but for the infrastructure, especially when it comes to bridges and a lot of the infrastructure we're talking about, we think it is important to have that protected and built in Canada.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Delaney and Mr. Campbell, you have quoted the CAFTA numbers that include things beyond grain in the total amount of benefit to Canada, such as jobs, beef, etc. In terms of grain, in your neck of the woods here, can you give us an estimate of how many jobs you think the Atlantic grain industry will create in Atlantic Canada as a result of CETA? Do you have any idea?

[Neil Campbell]

I would say that we don't know how many jobs will be officially developed off this, but just in P.E.I. alone, they had over $30 million last year in grains and oilseeds, which is a big deal for Prince Edward Island, being a small player in the grains and oilseeds business. Jobs are being spun off that all the time.

To go back to that labour shortage we had earlier, we're dealing with some immigrant foreign workers and we're hoping to retain more of our people and get some home.

[Don Davies, NDP, Vancouver Kingsway, BC]

In terms of the trace GMOs, would you agree with me that whether or not we can take full advantage of the increased trade opportunities for our grains, for some of the grains anyway that are affected by GMO, it will require us to get a successful resolution to the trace GMO issue? I understand, as you quite correctly said, Mr. Delaney, it is not resolved by CETA yet. It's subject to an ongoing discussion group.

That needs to be resolved in order for us to fully get the benefits of CETA for the grain industry, does it not?

[Michael Delaney]

My answer would be that we agree. The agreement foresees dialogue, particularly in canola and to some extent in soybeans, and 15 years out, maybe wheat. Now is a great opportunity to have the constructive dialogue.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Ross, in terms of the broader manufacturing sector in Atlantic Canada as well, have you talked to colleagues of yours in your industry or other manufacturing industries? Is your testimony indicative of what they're telling you?

[Stephen Ross]

Not particularly related to CETA but related to the topics you talked about earlier, about foreign competition, and whether it is Asia or Europe, it's really the same thing. There has been a lot of discussion over the past several months across the country with companies from Quebec, Ontario, Alberta, and British Columbia. I've had a lot of discussion on this very topic.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Chair's prerogative on a final question.

Mr. Ross, I was actually talking to the steel association recently, and they seemed to have a different opinion and are actually very supportive of CETA. I don't know if they represent all of their members or not or whether you're—

[Stephen Ross]

Are you speaking of the Canadian Institute Of Steel Construction?

[The Chair, Conservative, Rob Merrifield]

Yes.

[Stephen Ross]

Yes, we were speaking on the topic.

[The Chair, Conservative, Rob Merrifield]

Are you a member of that association?

[Stephen Ross]

We are, yes.

[The Chair, Conservative, Rob Merrifield]

Okay, are you offside with their position on CETA?