International Trade Committee on May 12th, 2016

[Brian Hogan]

I think Dino might be able to help us out better in terms of knowing that sector. Our labour council is made up of public unions and private unions. We have hospital workers, we have teachers, we have city employees, provincial employees, federal employees, and of course we've got all the Unifor groups and a number of other CUPE and OPSEU locals that might be in the public sector.

[The Chair, Liberal, Mark Eyking]

You have 15 to 20 seconds left.

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

Are there members of your organization who look at the TPP in a different light than maybe some of the auto sector guys would?

[Brian Hogan]

The answer is that I haven't heard one. As I said, we have monthly meetings of a variety of union members and we have touched on all of those committees: social justice, human rights, political action, public health, and the environment. These are all things that affect the membership and the members know that they affect their entire community and communities across the nation.

I think my closing comment really was—and maybe my opening comment, too—power to the corporations. You might know what the Auto Pact was about, but I don't think back then that a corporation could sue a government. I mean the tail is wagging the dog on all fronts.

The Liberal government wants to do right by the aboriginal community in terms of a lot of things, but in particular the environment. If you're going to continue with oil you're going to make sure you work with the aboriginal community. You come in and have an idea to do that, and some corporation says, “Tough luck, we're suing you.” That's the challenge of these trade deals over the last number of decades.

[The Chair, Liberal, Mark Eyking]

Can we wrap it up?

[Brian Hogan]

The power is reversed. You can talk about Monsanto, right?

Sorry, Mr. Chair, he got me on a good topic.

[The Chair, Liberal, Mark Eyking]

I know. It's not the witness's fault. Sometimes the MPs get a little excited and throw out a question at the end of their five minutes, and it puts me in an awkward position because you guys start on a roll, and then I have to cut you off. It's not your fault, but I'm going to remind members of Parliament not to throw those balls at the end of your five minutes, because it makes it awkward for everybody to shut you down. I'm sure you're going to get more time this morning to express yourself.

We're going to move on to the NDP.

Ms. Ramsey, you have five minutes.

[Tracey Ramsey, NDP, Essex, ON]

Randy, thank you for being a passionate voice for people. Often we don't have conversations about people at this table. We talk about corporations and their interests and the government, but people are a key piece of this. Of course I've shared that experience. I've been through difficult times, as you all know, in the auto industry, so I understand that well.

Before I go on, I would be remiss if I didn't mention another passionate member of our union family, Rick Reaume, and that the funeral will be taking place today. I'm sure Rick would be proud of us all sitting at this table fighting for our communities.

I'd like to say to Louis Roesch: I hear you. This deal is not the only problem that we're facing. We have many threats to our import controls that aren't being properly dealt with, and so that's a threat to the agricultural industry as well, and we've heard that at this table many times from different groups. It's a concern that I share with you.

I'd like to focus on Dino and what you're saying about the auto policy. It's interesting; you had this great meeting here yesterday talking about a pathway forward for auto, but if we sign the TPP, the ISDS provisions could put us in a position where we will be sued for trying to put into place a manufacturing policy in this country. Why would we put ourselves in a position where we can't actually make the situation better? Kyle Peterson was discussing this.

I'd like you to speak, if you can, to the auto strategy that exists in our NAFTA partners. We haven't actually had a clear path here in Canada, and we're losing jobs. Under NAFTA we have regional content rules that are 62.5% for North American content, and auto parts are 60%. Japan and the U.S. agreed secretly to reduce those thresholds to 30% for parts and 40% for finished vehicles. Canada wasn't even consulted in that. Can you speak to that?

[Dino Chiodo]

I think we have a number of challenges.

When you talk about the reduction of the parts content going from 62%, and potentially to 45%, we have some bigger detrimental effects, because obviously you're going to have more vehicles coming from countries like China, with a content of about 55% now. In saying that, within it there's a 10% flexibility, so it's potentially as low as 45%.

What that does is give you an opportunity for a bigger exodus of jobs out of our industry. You can bring it in for a cheaper labour rate in another country that doesn't have environmental controls, doesn't have health and safety regulations, and has a government that supports them and will change or fluctuate their currency in order to support that initiative. When we look at particular regions, our auto trade deficit with Japan, for example, grew by 16% last year to $5.2 billion, with a massively lopsided ratio of $187 coming in for every $1 that we export to that country.

When you start to look at numbers like that, it's devastating to think what that could mean for our country. We talk about one-fifth change, because that's the number that we've been using, and potentially we're in line to lose 20,000 jobs. That's something we shouldn't take lightly, and we shouldn't negotiate ourselves out of jobs for the future. Free trade agreements should look to make our economy stronger, better, and more prosperous for Canadians, not worse.

[Tracey Ramsey, NDP, Essex, ON]

When we look at this deal, there are 30 chapters and 6,000 pages. Six of those pages are actually about trade in a traditional sense. The rest of the chapter, as all of you have highlighted, has deep and serious concerns for Canadians and our lives.

Something I think you started to touch upon, Brian, if you could expand on it, is ISDS, which is something we hear consistently. We had 19 people who came to Montreal, and 19 people mentioned ISDS and said they were against the deal. ISDS is one of the most concerning pieces of this deal. It's not the tariffs so much, because 97% of the Canadian exports that we have right now to these countries are tariff-free. We're talking about that 3% that's about tariffs, and the rest is about ISDS. I wonder if you can speak to ISDS and your concerns around pharmaceuticals.

[The Chair, Liberal, Mark Eyking]

Make the answer short.

[Brian Hogan]

I've read a bit of history about pharmaceuticals, and I think Natalie Mehra will be speaking about this a little later today. We have a great health care system that could be better if we funded it properly. Why we want to give that sector on the medical side over to multinationals, I don't know. I think we need to have our public health care system beefed up by having a better pharmaceutical piece to it.

[The Chair, Liberal, Mark Eyking]

Now, we're going to move over to the Liberals.

Madam Lapointe, for five minutes.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Good morning and welcome. We are very pleased to welcome you today.

The General Motors plant in Sainte-Thérèse was in my riding. I saw when the plant was shut down and demolished. It was in operation for 40 years in Boisbriand. That is awful. I understand how Mr. Emerson feels about the retirees and all those affected.

In my riding, we have the company called Raufoss Technology, a division of Neuman Aluminium, which manufactures aluminum parts that you would surely see on the assembly lines of General Motors and Chrysler these days.

Based on TPP's rules of origin on original automotive parts, Unifor forecasts a loss of 20,000 jobs, which you mentioned earlier.

First, there are the workers in assembly plants and, second, there are the workers who make the parts. Do you think there will be different impacts on those making the parts and those working in assembly plants? Do you think there will be a difference in terms of jobs?

[Dino Chiodo]

Yes, I believe there's a direct threat to independent parts suppliers, and there's some concern with that. Again, we talked already about the percentages from 62% moving down to 30%, with the 10% flexibility. However, I think the bigger concern is not only the 20,000 that we think are vulnerable—the one-fifth—but also that once you start taking those independent part suppliers and moving them to other places, like the southern states and Mexico, then an OEM will want just-in-time parts. It's not conducive for them to spend $2 billion, $3 billion, $4 billion in Windsor, Ontario, when most of their supply base moves to Mexico. It becomes a bigger hit to us in the long run. That is a double whammy, so to speak, because as you start to get some of these countries providing those lower cost items with government support directly to that industry, you have the OEMs who say that they want the plants as close as possible to them—Chrysler, Ford, General Motors, Toyota, Honda. They will relocate because they have tax incentives, they have tax abatements, they have training costs, they have property right now in Goiana, Brazil. Chrysler got 90% of their overall investment for a full greenfield site by the government. It's just impossible to compete with that kind of money that's thrown at the industry, and when you have a greenfield site like that, this causes more investment from that corporation into that industry because they have major support. We need more of that, and TPP doesn't provide it.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Along the same lines, do you think the rules of origin in the TPP agreement could have an impact on steel workers? Do you think they could also be affected?

[Dino Chiodo]

Yes, as I suggested earlier in my report, we have a number that's about ten-to-one on spinoff jobs, which includes steel, which includes plastic. In essence, absolutely every job will be affected in the community of Windsor and Essex County. We just hired 1,200 new employees at the Windsor assembly plant to Fiat Chrysler Automobiles' credit. So thank you to them. That generates almost 10,000 jobs. That's in corner stores, that's in plastic plants, that's in steel manufacturing, that's in all kinds of industries that we have right here in Windsor. Absolutely, it would affect them.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

Mr. Roesch, earlier, you talked about reciprocity in agriculture. You said that the TPP agreement did not have the same standards for food products. Could you tell us a little more?

[Louis Roesch]

As the regulations are now, the federal inspection is done according to the standards of the country of origin. If there are different regulations for pesticides, herbicides, and health product for livestock, this is not looked at in any way, shape, or form, nor is it reinspected as it comes into this country, as I understand it right now.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

So, according to our regulations, that’s not working properly.

Do I still have 15 seconds, Mr. Chair?

[The Chair, Liberal, Mark Eyking]

You have half a minute.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Mr. Hogan, just now, you were impassioned as you were talking about all the members you represent. You said you had members from a number of companies, including environmental workers, teachers and federal, provincial and municipal employees. You said that the signing of the TPP would affect the whole community.

We had to cut you off earlier, so I would like you to tell us a little more about it.

[The Chair, Liberal, Mark Eyking]

You have 10 seconds, and I don't think it's going to be fair. I think we have to move on, and maybe you'll get a chance from another question. That ends the first round.

For the second round we start off with Ms. Ludwig for five minutes. Go ahead.

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

Good morning. I'm very pleased to be here in Windsor. My connection to the auto industry is that my father worked for almost 30 years with Goodyear. As a student attending the University of Guelph, I had the best tires on my old Volkswagen bus.

Going back to the TPP and its ratification, I just want to be clear: our government has signed the agreement to be at the table. It has not been ratified, and that's the point of these consultations, to listen and to gather the concerns. If Canada does not ratify the agreement, and the other member countries do, particularly the United States, Mexico, and Australia, how do we adapt to the changing marketplace where Canada is going to be sidestepped, particularly by the Mexicans and the Americans, in exporting to the Japanese markets? How will that impact the auto industry and the parts manufacturers?

[Dino Chiodo]

First off, I don't believe that we can't change it. I've heard Minister Freeland say that it can't be changed, but the reality is that, according to a column in The Huffington Post, changes might still be possible.

At the same time, the EU and the United States have heard from their constituents in their countries, who have suggested that they didn't like the provisions and what was offered in CETA, and the officials were told that the changes would go back to a legal scrub through which they would make changes to their trade agreement.

I'm not sure if there's been enough pressure for us to say that we can't participate and that we need to make sure there are changes that protect our Canadian economy. I think that's the first thing we need to consider and look at with reference to that.