International Trade Committee on April 18th, 2016

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Trade depends on two things: predictability and stability for businesses to invest either here domestically to access a market, or to invest in that market to help access back to Canada.

One of the strengths that Canada showed through the recession in 2008, and ongoing as we struggle to get back up to strength, is the diversity of what we offer as a country. That's been alluded to here. We're a huge agricultural resource. We have resources like potash and coal and timber. We also have the energy sector. All of these are predicated on access outside the country. None of them could survive for very long if all we had was domestic supply. I know when it comes to agriculture we export between 50% and 90% of what we produce and, Robin, you made the point about you're up about 100 million tonnes going out through the Port of Vancouver. A lot of that is grain and cereal crops, oilseeds, and so on. Of course, those are going into a lot of that TPP marketplace and could certainly do better.

Are you starting to see a demand for the Vancouver Port Authority to have a bigger footprint? I know G3 is looking at construction here. Others are already growing, and I'm just talking about agriculture. I know the coal sector, the potash sector, are all looking to expand their footprint here to access these markets.

[Robin Silvester]

Absolutely. Last year, about 138 million tonnes moved through the port; around 25 million tonnes of it was grain and specialty products, moved both in bulk and in containers all around the world. We are seeing continued interest in investment from Canadian exporters. Whether it's G3 exporting grain in bulk, or Kali und Salz starting up their potash facility near Regina and exporting potash, or exports in steelmaking coal, or across the board now in containers, there's strong demand.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Ritz.

We have about three minutes left. We have two MPs who didn't get to ask questions or have sufficient time, so Mr. Van Kesteren, if you want to have a question posed to the panel, and the same with you, Madam Ludwig, state your questions and then they can answer them. Then we will wrap it up in a couple of minutes.

Thank you.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you for being here this morning.

I want to go to the LNG panel. When first elected back in 2006, I remember peak oil were the buzzwords of the day then. There was a radical change, and Mr. Fonseca has indicated correctly that in Japan they've moved away from nuclear as a primary source to fossil fuel and, of course, the one that would be most advantageous and that most would agree to would be natural gas.

In my neck of the woods, southwestern Ontario, you're right in saying that we have started to import natural gas from the United States.

I've had the privilege of actually chairing a natural gas committee for the last eight years. The advancement has been radical, to say the very least, but we are having increasing difficulties getting that product to market.

We spoke years ago, I would say three or four years ago, of a window of opportunity. At what point does that window close for Canada in exporting natural gas?

[David Keane]

When you look at the projects that are being developed in British Columbia, it takes four to five years for these facilities to be constructed. If you look at where we expect demand and supply to be in the next decade, 2025, we expect there to be about a 75 million supply shortfall.

I think we're right in the sweet spot in terms of developing our LNG projects in British Columbia that will then supply the world.

[The Chair, Liberal, Mark Eyking]

Thank you.

Ms. Ludwig.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you very much for your presentations.

My question is related to a business case. Certainly all of you have expressed support for TPP, taking it from a business position. So, if we're looking at strengths, weaknesses, opportunities, and threats, you have identified the strengths.

Many constituents in my riding have asked questions related to the TPP about human rights and the environment. If we're focusing on opportunities and threats, how would ratifying TPP affect human rights and the environment?

[David Keane]

I'll start off. I think if you look at the supply of natural gas, natural gas has a lower carbon footprint than coal. If we can replace coal-fired power generation, for example, in Japan or in Korea, or even in China, then we can reduce greenhouse gas emissions by about 50%.

That has an enormous benefit. If you look at British Columbia, we account for two one-hundredths of a per cent of global greenhouse gas emissions. I think if we look at what we're trying to do, which is reduce global greenhouse gas emissions, we have an opportunity to help benefit the world in terms of reducing global greenhouse gas emissions.

[The Chair, Liberal, Mark Eyking]

Does anybody else have final comments?

Go ahead, sir.

[Stewart Beck]

On the trade and human rights side, one thing that you have in a trade agreement is a set of codified rules and regulations around which you operate. Once you start building in various elements, that will improve the situation where it's environmental or human rights.

Tomorrow, we're running a session at the Asia Pacific Foundation of Canada on trade agreements and the impact on human rights. There is a correlation in the context of making people abide by a set of rules that will guide how they operate in the various economies.

[The Chair, Liberal, Mark Eyking]

Thank you very much, sir.

I wish to thank the witnesses for coming and the good turnout here today.

We're going to suspend for 10 minutes and will return with a new panel of witnesses.

[The Chair, Liberal, Mark Eyking]

This commences our second panel for this morning in beautiful Vancouver, British Columbia.

We had a very informative first hour, so let's have a very informative second hour.

Welcome, witnesses.

This is the first trip for the standing committee. This is our first stop, British Columbia. We are going to go right across the country, and we are also going to be doing the territories via satellite from Ottawa.

We are going to be taking submissions from anybody in the public until the end of June, and then we will be going through them. Hopefully, we are going to have a report done before the end of the year and put it in front of the House of Commons so that Parliament will vote on it in the upcoming year.

It's very busy. We had 6,000 submissions from the public last week, and I think we are up to 10,000 now. It is good to see the Canadian public very engaged in what is happening.

This is an important agreement. It's a trillion dollars' worth of trade here. It's one of the biggest trading blocs.

It is not up to us, as parliamentarians here today, to decide if we are doing it or not. We are here to listen, and we are glad the witnesses came.

The witnesses have about five minutes to present their briefs. When all the witnesses are done, we'll open it up for questions from the members of Parliament.

We are going to start with Mr. Duggan from the British Columbia Maritime Employers Association.

[Terry Duggan, Acting President and Chief Executive Officer, British Columbia Maritime Employers Association]

Thank you very much committee members and Mr. Chair.

My name is Terry Duggan. I'm CEO of the B.C. Maritime Employers Association. I'm joined today by my colleague Eric Waltz, who's a member of the board of directors of the BCMEA, and is also the CEO of GCT, the largest container terminal operator in Canada.

BCMEA represents 58 companies on the west coast of Canada. These companies are involved in the terminal operations of the various ports and represent the shipowners and ship agents calling on those ports. BCMEA provides the labour relations, recruitment, and training for their employees.

In 2011 we signed a historic eight-year collective agreement with the International Longshore and Warehouse Union. That gave us a significant advantage over our competitors on the U.S. west coast. The 6,000 longshore workers covered by that collective agreement work at Canada's Pacific ports, from the Lower Mainland to Prince Rupert and Vancouver Island.

One of our key economic indicators in the industry is how many hours are worked in a calendar year. In 2006, 2007, and 2008, we worked about six million hours in each year. When the global recession hit in 2009, we lost about 20% of that volume, but we're back. We've regained all of that and more. We reached eight million hours worked for the year that just ended, 2015.

From six million before the recession to eight million hours after the recession, those two million additional hours represent about 1,300 full-time-equivalent jobs in the waterfront industry. These are not minimum-wage, service-industry jobs. These are family-sustaining jobs with pension plans and dental coverage.

There are other family-supporting jobs up and down the supply chain, such as rail workers, miners, prairie farmers, and so on. All of this is possible because Canada is a trading nation. The BCMEA supports the Trans-Pacific Partnership because it opens markets for our customers, hard-working and innovative Canadian men and women who produce goods that the world wants and needs. Should Canada be left out of the agreement, our globally competitive firms would not have access to important Pacific markets. Canadian goods produced by Canadian workers would be at a disadvantage. That would mean fewer jobs on the waterfront, and fewer jobs for our customers across Canada.

If brought into effect, the TPP is especially good news for B.C., given our geographic position and our deep existing relationships with the markets in the participant countries.

All trade agreements contain some uncertainty, and we understand that there are sectors in the Canadian economy that have real concerns, but there's uncertainty in not ratifying the TPP and being left behind. There is uncertainty for communities like Prince Rupert, which has seen an astounding economic recovery since the massive investment in its container terminal back in 2007.

On balance, the TPP represents an opportunity that we believe Canada cannot afford to miss.

I'm going to turn the presentation over to my colleague Eric Waltz to talk about the impact of a healthy and growing Pacific gateway.

[The Chair, Liberal, Mark Eyking]

Mr. Waltz, you have two minutes.

[Eric Waltz, President of Global Container Terminals, British Columbia Maritime Employers Association]

As Terry said, I'm president of Global Container Terminals. We're the largest container operator in the country. We move about 40% of the containers for the country.

When we look at it, the exports to TPP markets between 2012 and 2014 were valued at more than $366 billion. While these numbers are impressive, I'd like to get down to a number that's a little bit more meaningful to people. Just our company alone pays $329 million in salaries. That supports 2,000 person-years of work. These are well-paying unionized jobs.

I'd like to pick just one example to give everybody an idea of what we're looking at here. If I just look at lumber exports, right now our lumber exports for Canada face a tariff of 10% to Japan, 31% to Vietnam, 40% to Malaysia. When we look at this, there's an opportunity to open up a lucrative market of 792 million consumers through the TPP nations when we're just looking at the lumber.

When I talk about the $329 million in salaries that we have at our company, that's just the last portion of the supply chain. That doesn't include the supply chain and the jobs created from getting trees down, processing them, putting them on the rail, and moving them to whichever port is going to export them. It doesn't count the jobs for the stuffing. It doesn't count the jobs for the trucking to bring it back to the terminal. I'm just giving the one piece of the supply chain that we have.

It's a tremendous amount of economic growth and opportunity for Canada.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thanks very much, and thanks for being on time.

We'll move now to the Canadian Architectural Licensing Authorities.

We have two gentlemen with us, Mark Vernon and Scott Kemp.

Mr. Kemp, you are leading off. You have five minutes.

[Scott Kemp, Past President, Architectural Institute of British Columbia, Canadian Architectural Licensing Authorities]

Good morning, Mr. Chairman and members of the committee.

My name is Scott Kemp. I am a member of the international relations committee of CALA, which is the Canadian Architectural Licensing Authorities. I'm a practising architect here in B.C. and am the immediate past president of the Architectural Institute of B.C., the AIBC.

With me is my colleague Mark Vernon. He is the CEO of the AIBC and is also, with me, a member of the international relations committee.

I'd like to thank the committee for giving CALA the opportunity to discuss this morning the Trans-Pacific Partnership.

To begin, I want to give you a little background on how our profession is organized in Canada. The Canadian Architectural Licensing Authorities, CALA, represents the 11 regulators—the 10 provinces and one territory. We set the standards for entry into the profession and issue registration of licensing to those individuals who meet the standards of practice.

The regulators individually regulate the practice of architecture in order that the public interest is protected within their province or territory. Through CALA, the Canadian architectural regulators work collectively. We do that to set national standards and programs that meet the regulatory duties as well as satisfy the needs of the profession. In Canada we have full reciprocity, so that as an architect I am able and willing to be licensed and to work in any jurisdiction in Canada.

Architecture is very much an international profession, and we believe that the movement of architects between countries and economies is hugely beneficial to residential, commercial, and industrial sectors, but good for the profession. We're a profession of ideas. Sharing of many ideas is beneficial. We are very active in negotiating mutual recognition agreements for reciprocity—licence sharing—on the international stage. Again, this enriches our profession, but it also enriches the public's awareness and appreciation of architecture, and it results in a better-built environment.

I am very pleased to say that Canadian architects are recognized around the world as being some of the finest architects, and my colleagues have been responsible for many groundbreaking and internationally acclaimed buildings.

The international relations committee represents CALA at all the international meetings and develops and monitors agreed MRAs. What we have at the moment is a mutual recognition agreement between Canada and 42 of the states of the United States; we have a tri-national agreement between Canada, Mexico, and the United States—this was done under NAFTA—and just last year we signed a mutual recognition agreement among Canada, Australia, and New Zealand. That was done under the umbrella of the APEC architect project.

These three MRAs are monitored by a joint monitoring committee. They are structured, and the responsibilities are predetermined and are part of the MRAs that have been negotiated.

I'm very pleased to announce that we're also working very closely with ACE, the Architects' Council of Europe. We are very confident that we'll have an agreement that we can ratify when CETA is ratified next year. That's very big news for us.

To accomplish these agreements—the tri-national, the APEC, and the ACE initiative—we'd like to acknowledge that we have received funding from Employment and Social Development Canada and that this was done under the guidance of Global Affairs Canada.

Now I'd like to focus a little bit on the Trans-Pacific Partnership and the way it relates to our profession.

[The Chair, Liberal, Mark Eyking]

You have one minute left, sir.

[Scott Kemp]

I'll jump ahead.

The TPP in place would facilitate us in negotiating more of these MRAs. Last year we had discussions with Japan, and subsequently they've indicated they would only move forward with the MRA once the TPP has been ratified.

We also have had negotiations with Singapore, but Singapore has a restrictive residence requirement, and we believe that with article 10.6 that residence requirements will not be applicable. So it would allow us to continue those negotiations.

CALA would like to confirm and get the government's assurance that this professional working group does not see the transfer of regulatory responsibilities to other bodies. As mentioned, for all current MRAs with the United States, tri-national, Canada, Australia, New Zealand, the monitoring committees are established and tasked with the responsibility of overseeing the terms of the MRA.

We'd expect that any problems identified with the working group would be shared with the monitoring committee for a resolution.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, sir, and thanks for coming.

We're going to move on to the Trade Justice Network and we have Mr. Blair Redlin. Go ahead, sir.

[Blair Redlin, Co-Chair, Trade Justice Network]

Thank you, Mr. Chair, and good morning to the members of the committee. Thanks for this opportunity.

My name is Blair Redlin. I'm a Vancouver-based public policy researcher and co-chair of the Trade Justice Network, which is a network of union, environmental, farm, and other civil society groups that raise awareness in English Canada about trade agreements like the proposed TPP and the Canada-EU trade agreement. We work closely with our Quebec partner network, RQIC, the Quebec network on continental integration.

Inasmuch as 97% of Canadian exports to TPP countries are already duty free, it's our view that the proposed Trans-Pacific Partnership is mostly an investor protection agreement, which should be primarily assessed on that basis.

The arguments that this is about trade versus no trade and whether we're in favour of trade or not are sterile arguments, in our view. Of course Canada is a trading nation, and we need to continue to trade. That's not, in our submission, what these agreements are primarily about.

It's also an important context that the TPP was negotiated by the recently defeated former government and was concluded in the midst of the last federal election campaign. Many Canadians who voted against the last government had the TPP as one of their reasons.

It's also important to note that the TPP is in considerable political difficulty in the United States right now, with major presidential candidates for both parties opposing it, and with very considerable opposition in Congress as well. It's not clear that the TPP will be ratified in the U.S. within the two-year ratification window. There's considerable civil society opposition in many other TPP countries as well, with New Zealand and Peru as two notable examples.

Given all that uncertainty, there's certainly no need for Canada to be rushing with regard to this. We should assess this very deliberately and very carefully.

It's concerning to us that the new Canadian government has not yet commissioned any kind of thorough economic or environmental assessment of the impact on Canada of proceeding with this deal. We recommend that the government proceed immediately to commission a comprehensive and independent public study of the likely economic, environmental, social, and community impacts of such a wide-ranging and potentially significant agreement.

Our network recently joined with the University of Ottawa and the Communications Workers of Canada to sponsor a one-day forum on the TPP at the University of Ottawa. Amongst others at the event, we heard from Nobel Prize-winning economist Joseph Stiglitz, who characterized the TPP as “the worst trade deal ever”.

We additionally heard from Tufts University research fellow Jeronim Capaldo, who is one of the authors of a thorough study of the economic impacts of the TPP recently published by the Tufts globalization and environment institute. Among other findings, the Tufts report found that Canada is likely to suffer a net loss of 58,000 jobs if it enters into the TPP. The study also found that by 2025 the TPP will result in greater income inequality in every one of the TPP countries as it transfers wealth upwards. A loss of jobs and an increased inequality are the opposite of what most Canadians were seeking in last fall's election.

The potential for such results calls out for further independent studies.

The investment chapter of the proposed TPP includes the very controversial investor-state dispute settlement system, something we in Canada have considerable experience with since the advent of the NAFTA in 1994. This system permits foreign investors to sue elected national governments for policy or legislation that the investors argue may limit their potential future profits.

It operates by means of secretive and unappealable commercial arbitration panels, rather than the domestic court system that the rest of us must rely upon. Investor-state arbitrators are empowered to award monetary penalties against participating governments. ISDS provides extrajudicial protection to foreign investors that are enjoyed by neither domestic investors nor us regular citizens.

Canada is now the most sued developed country under ISDS. There have been 35 investor-state claims against Canada under NAFTA, and the number continues to grow. We've lost six claims and have paid out more than $200 million in taxpayers' money in penalties. Canadians have also paid out tens of millions of dollars in legal fees in defending these claims.

Environmental policies, such as our ban on the gasoline additive MMT, our ban on exports of hazardous waste, provincial water and timber protection policies in Newfoundland, and research and development requirements in the Exxon Mobil case have all been successfully challenged. Meanwhile, we face very considerable new challenges with claims in the billions of dollars. Since time is short, I won't go into those.

[The Chair, Liberal, Mark Eyking]

You can just wrap it up, but you're doing fine. Go ahead.

[Blair Redlin]

We have very significant court cases that we're facing. As NAFTA expands into the TPP with the addition of nine more countries, Canada runs the risk that our negative investor-state experience with NAFTA will expand several times over as well. If the TPP goes ahead, we'll soon be sued for our public policies, not only by U.S. and Mexican corporations but by corporations based in countries like Japan, Australia, Chile, and Malaysia as well. It's not clear why we want to do that, and it's also unclear what all these investor protections have to do with the promotion of trade, in any event.

I've more to say, but I'll cut it off there, sir.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you to all the witnesses for your presentations.

We're going to go through questioning with five minutes each. We're going to start off with Mr. Hoback from the Conservative Party.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, witnesses, for being here this morning.

Mr. Vernon and Mr. Kemp, it's interesting. You're probably looking at the service industry in your sector, and it's interesting to listen to you. The IP provisions in TPP, how important are they to your sector?

You've been able to countries such as Mexico and the U.S., Australia and New Zealand. You said you're doing something with Europe and then TPP. How important is that for the growth of your sector here in Canada?