International Trade Committee on May 12th, 2016

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

Does anyone else have a comment on that question?

[Randy Emerson]

I've always wondered why, when we are the second-largest country in the world with 36 million people, and we're going into a trade agreement.... If anybody should have the will to say, hey, we don't have to have a trade agreement, it should be us. There's no reason why with all the resources and everything this country has and with that small population we couldn't be on our own.

I'm not saying to be isolationist, but that we should be bargaining from a position of power, not the way we're doing it now.

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

One of the challenges, on that note, would be looking at the numbers. You mentioned 36 million in Canada. We are very rich in resources. We know we're threatened in terms of the manufacturing industry and we need to do more work in the value-added sector.

The trans-Pacific area actually represents 800 million people, so that really is one of the challenges we face. We either get into the group or we stay outside of the group. But if we stay outside of the group, we have to learn how to adapt and be better at, as you said, working with businesses coming into Canada for foreign investment. Maybe we could look at the example of one-stop shopping in Mexico.

[Dino Chiodo]

Let's look at Mexico as an example, because Mexico continues to do too much. They're growing amazingly right now. They had a $1 billion increase just last year. That's 12% to a staggering $11.5 billion. That's $10 imported here to every one dollar that we export out.

I think one of the major challenges we have is that if we did absolutely nothing, it would be better than where we are currently. At the end of the day, if we negotiate our jobs out of here and we lose the major component of our industry, which right now is auto and manufacturing, our number one GDP grower in this country, then what will we really have accomplished?

Those are some major hurdles we'd have to get over, and that's why I think you need to take a step back and revisit the whole plan. The reality is that to sign a bad deal from the outset is not the right decision anyway. That's why I think we need to revisit this.

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

If we don't ratify TPP, how might that affect our NAFTA situation?

[Dino Chiodo]

Right now in NAFTA, our regulations are better than what we see under the TPP. Again, I think I mentioned that earlier with reference to Vietnam and Malaysia. They're at 13 years before their tariffs for their independent parts will be eroded. It really begs the question of why we are at five years. It doesn't even give us a strategy or a plan to be able to react to what the problem is.

Then we take a look at the United States, the major component of the TPP with Japan, and they're at 25 years for auto and 30 years for trucks. So if we take a step back and say if we're going to negotiate, wouldn't we want to at least be on a level playing field so we're all playing the same game instead of eroding our economy so the United States could benefit from that? That's something that just doesn't make sense to me, and I don't understand the logic of it. That's why I think we need to revisit it. They've done it in CETA. They've done it in Europe.

I'm not understanding why the answer is just no. I think there's room, and I think we just have to push further.

[The Chair, Liberal, Mark Eyking]

That wraps up your time.

We're going to move over to the Conservatives for five minutes, and Mr. Ritz.

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

Thank you gentlemen for your presentations today. It's always good to hear all sides of an argument, so we can make an educated decision when it comes to the final ratification of TPP.

I've heard a lot of things around the table here that seem to be at cross purposes. I understand Canada is a trading nation with a small population—that's been brought up—of only 35 million people. We do export a tremendous amount of our manufactured goods and our raw resources. Without the ability to trade them, we wouldn't have the jobs that go along with them. We have to have trade, and I agree with you that it has to be fair trade, and not free. That's why we continue under NAFTA or WTO, and take the U.S. to court, and take other countries to court, the same as they do to us. There's a big point that's been made about how we've been sued 38 times, the vast majority of which have come out to Canada's benefit. Over that time frame, $171 million has been paid out of $5.5 trillion worth of economic growth. We're always going to have these squabbles. Two-thirds of that $171 million was Danny Williams' privatization of Abitibi—and of course the federal taxpayers are on the hook for that. It's not a bad news story, it's quite good.

When it comes to the auto sector, we do a tap dance when it comes to any of the major manufacturing global supply chains, I'll call them. Canada exports five times as many new vehicles as were imported from Japan, because it's a global supply chain. You can't just look at what goes to the U.S., and certainly we're in competition with them. Our current auto tariff, as you're pointing out, is 6% and TPP will phase that out over five years. The Canada-South Korea agreement, which the NDP supported, phased it out over two years, and we're starting to see some talk of investments from Korea into the Canadian market. It's the same as we've seen with Japan. They've put more investments into Canada in the last little while than Ford, Chevrolet, and Chrysler put together. There are 50 affiliated parts plants working now in Canada that are Japanese. There's been some talk about Chinese parts going to permeate, because.... But China is not part of the TPP. You guys need to get that part straight: it's only the TPP countries that will be allowed to take part in that lower number coming into our auto sector. When you put all the facts on the table, I don't see how we can stay out of TPP and maintain our ability to trade on the global stage.

[Dino Chiodo]

When you say it's those people who are outside of the TPP that can't participate, I don't agree, because when they're lowering their content, with Malaysia, and I'll give you an—

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

I meant content specifically to TPP countries. It's not a global lowering; it's the TPP countries.

[Dino Chiodo]

Right, but what's going to happen with Malaysia, for example, is that they're going to go to countries that are even cheaper to get that part garnered, to be able to ship it back to us at even a lower cost. We're reducing our bottom dollar as much as you want to—

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

There are points of origin, and they're stipulated in that lower number.

[Dino Chiodo]

I don't know of any of those stipulations, but as Tracey suggested, there's a total of six pages that deal with that trade. We must have missed it when we read it. I don't agree with that statement whatsoever, but I will tell you that there are countries that can compete, and those are the countries where their governments support the initiative. Germany has one of the highest cost industries and yet is one of the best with regard to providing their vehicles to market, and they get a lot of support. When you take a look at the European Union with regard to the amount of work they do, their deficit.... It's by 15%, or $6.9 billion. It's $22 they import to our dollar that's exported. I don't know why we continue to try to attract that kind of economic stability for Canadians, because it doesn't work. We've seen that it doesn't work. When you do a path like that for 30 years, it's like banging your head against the wall to find out if there's a different result. There isn't. It's a bad deal all the way around.

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

On agriculture, Louis, you talked about blending products coming into Canada and when those are no longer considered a product of Canada. Product of Canada is held at 98%. It has to be produced in Canada to be called a product of Canada, and that doesn't change. If you start blending below that, then it's no longer a product of Canada, and you have to some other type of label on it. That is entrenched.

For our imports, the standards that are implemented are done in the country of origin now, so you don't end with bad products on our shores, and then face the problem of what to do with it. It's at Canadian standards; it's not at the exporting country's standards. That is how it's done.

On the use of pesticides, and chemicals, and so on, certainly some countries are ahead of us. With the Beyond the Border initiative and the Regulatory Cooperation Council, you now have the ability to bring in any product that's accredited in the U.S. for use in Canada, that's used on their product imported into Canada. Under the GROU program, for your own use you have the ability to have access to that product today.

[Louis Roesch]

That could be true, but it's extremely difficult to get that product in, number one.

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

It shouldn't be.

[Louis Roesch]

When did they change the federal inspection regulations? That was not the case a few years back when I sold in Ottawa.

[The Chair, Liberal, Mark Eyking]

We'll have to wrap this up unless you have any more comments.

[Louis Roesch]

I just question that, because that's the way it was. It's according to the standards of the country of origin, and it's not re-inspected when it comes into this country.

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

No, that's not true at all.

[The Chair, Liberal, Mark Eyking]

Okay, you're going to have to have this conversation later because we're way over time, and we have to move on. We have to move back over to the Liberals, and we have Mr. Peterson for five minutes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I have a couple of questions for the agriculture gentleman, Mr. Roesch and Mr. Faubert.

We've travelled across this country now. We started in B.C. and went to Saskatchewan and Alberta, Manitoba, Quebec, and now we're in Ontario. I think it's fair to say from the testimony that we've heard from other farmers and agricultural and agrifood producers that they want to expand their markets. They want to be able to ship product overseas, and the TPP will help facilitate that. They need to expand their markets to make sure their family farms remain sustainable into the future.

What's the sense in Ontario? Ontario is obviously a bigger local market than Saskatchewan or Alberta would be, but is there a sense that shipping overseas is a way to sustain family farms in Ontario into the future?

[Louis Roesch]

We certainly have nothing against being able to export, as long as everything is on a very equal playing field. That's where we want to be.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

On the TPP specifically, then, is there some concern that we'll be importing competitive products against the Ontario agrifood products that won't be able to compete? Is that the concern with the TPP?

[Louis Roesch]

The concern is that, again, it's on an equal playing field, like some of these regulations and stuff that are in their country, and I'll still stand by the statement, as I understand it, that it's according to the federal standard of inspection of the country of origin. If there has been a change to that, I'd like to see it in writing.