International Trade Committee on Nov. 23rd, 2023

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

What danger do you think this clause represents for workers you represent?

[George Soule]

As I said in my remarks, I think that all the power lies with the corporation, so the countries and the workers lose out and don't have the ability to bring their own complaints forward. That is actually a victory that the steelworkers won here in Canada, to join other countries around the world where workers can bring forward their own complaints. We were happy the government brought that forward, but then to not see that language in this agreement, and explicitly excluded because of the ISDS, that is something we need to change.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

It is quite surprising to see that, after removing this provision from the Canada—United States—Mexico Agreement, it is now back in. Do you think that makes any sense?

[George Soule]

Especially, as I said, seeing it being taken out of the USMCA as well as CETA, there are examples where we can remove that, so I think it should be removed from this agreement as well.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Obviously, there was an economic crisis as a result of COVID‑19. There may have been a drop in trade, but I don't think it's because of the removal of these provisions or this clause. No‑one can say that investors were afraid because they no longer had the right to sue states.

[George Soule]

I would absolutely agree. In fact, as I was saying again in my remarks earlier, there is no proof that ISDS improves the situation for workers or the economy. In fact, it usually does the opposite.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Looking beyond the impact on the economy, society, the environment or labour, are we not creating perilous conditions for democracy by putting states and companies on an equal footing? I'm talking about democracy and institutions that seek a mandate to legislate through the ballot box, as opposed to for-profit institutions that rely solely on the power of money.

[George Soule]

Absolutely. I mean, some people call these tribunals pseudo-democratic, but I would argue that they're more anti-democratic. They remove the power from the people, and frankly even the elected governments, and put it all in the hands of the corporations.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So, apart this agreement in particular, you no longer want to see such provisions in any future agreement.

[George Soule]

That's correct.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Duly noted. Thank you.

[The Chair, Liberal, Judy Sgro]

We will suspend until the members come back from the voting process.

Thank you.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

All the members are here, so we'll go to Mr. Jeneroux for five minutes, please.

I'm sorry, Mr. Cannings. How could I ever skip over you? My apologies.

Mr. Cannings, you have six minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'd like to start with Mr. Soule and pick up on some of the comments about ISDS.

You mentioned in your opening statement that this could hinder the reconstruction efforts in Ukraine after the war rather than help them. Could you expand on that? What would the possible risks and disadvantages for the Ukraine government and for Ukrainian industries be?

[George Soule]

Again, with ISDS, the ISDS allows for corporations to be able to overpower governments but gives governments no ability to do a counterclaim. For instance, if the government wants to invest in their own infrastructure or any of a number of other projects, with ISDS, there's the ability for corporations to go to a tribunal and go after claims that then can.... All too often, the corporations win those tribunal cases, and the penalties we've seen have been quite severe.

In a postwar situation, you could see Ukraine facing realistically millions or even billions of dollars in fines. That money obviously would not be available to help reconstruction.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Would the fact that we have a foreign investment protection agreement in place with Ukraine make things any better? If we took the ISDS part out of the investments chapter, I assume we'd have to somehow get rid of the FIPA, the old FIPA agreement, as well. Is that how it works?

[George Soule]

Again, I think you could look at how that has worked. You know, trade has existed under the current agreement. The current agreement is there, and we haven't seen huge investments either way.

It's not like we're undercutting the ability for trade. It's not like there hasn't been a ton there already, but I do think that the agreement overall encourages us to re-engage and have more trade with Ukraine, and there are lots of ways we can do that. We can certainly share expertise both ways and push trade. I'm interested in getting some more diversity in the cheeses that I might be able to order after today's hearings.

Absolutely, I think things exist, but ISDS isn't the answer to fix that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

There was a time five or 10 years ago, it seemed, that ISDS was in everything. Is there a trend away from that now in global trade agreements?

[George Soule]

We've seen the European Union and Europe in general clearly moving away from that. Canada has done it again. Even after signing the agreement, after signing CETA, Canada was able to remove it, and we've seen that in the CUSMA as well. Yes, I think the trend is going away from it, so why would we now in this new agreement be bringing it back in? I don't have a good answer to that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

You also brought up a lot of concerns around the labour chapter and what that might or might not mean to improving labour situations within Ukraine. These chapters in free trade agreements are meant to basically uplift all parties to equal levels, whether it's under environment, labour or investments. Could you just give a little more detail into why this agreement falls short in that regard?

[George Soule]

There are certainly some inclusions around labour that provide some teeth for workers, but again, with very few firm requirements and without the ability for workers themselves to bring forward their concerns, it lacks the strength that it could otherwise have.

As we were talking about with ISDS, corporations are able to bring forward their own complaints, but under this agreement, workers can bring forward complaints but only through the support of the state, so they have to have an agreement from the Ukrainian government that there is a problem rather than being allowed—the workers, organized labour—to bring those things forward themselves. In the current context in Ukraine, where workers in firms of less than 250 employees have lost their right to organize, that problem is made even worse.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I have one minute, and I think I'll turn to Mr. Roy and the Pork Council.

You talked about this agreement as being one more little thing that could help the pork exporters in Canada, but you're up against Ukraine, which produces pork, and the EU, which is right next door and produces pork. We're also up against, as you say, non-tariff barriers.

Can you maybe expand on those non-tariff barriers very quickly and what we can do to eliminate them, or at least make sure we don't have so many in the future? What can we do?

[René Roy]

I will relay this question to Mr. Heckbert.

[Stephen Heckbert, Executive Director, Canadian Pork Council]

Thank you for the question.

The real challenge for us is that if the terms in this agreement were the same terms we had proposed in the U.K. bilateral agreement, we could live with them. That's largely because we're talking about free and fair trade that will allow agricultural products to go into Ukraine and will allow us to sell our products in Ukraine. The U.K. bilateral, at the moment, is not going to increase access for Canadian pork. At the same time, the U.K. is asking for increased access for cheese coming to Canada.

This agreement, frankly, would be a model that we'd love to see going into the future. From our perspective, it's vital that we have access to these kinds of markets in a free and fair trade model. We think that we'll be competitive in Ukraine, and we think there's an opportunity for us to do more trade with Ukraine. We know that food security is a crucial issue for Ukraine at this exact moment.

From our perspective, if this committee were studying a U.K. trade agreement at this moment and it had the same provisions for agriculture based on science, we wouldn't have opposition to a U.K. trade deal with the same kinds of provisions. We know that Canada is capable of negotiating trade provisions that will allow free and fair trade between our countries, and we'd love to see that kind of model be extended to other bilateral trade agreements.

That's why we're in support of this agreement. We think a science-based model that will allow free and fair trade will help importers and exporters. Obviously, from the Pork Council's perspective, we're focused on exports. We understand that Britain would love to export cheese into Canada. However, until they're going to be willing to accept agricultural products in return, I'm not sure why we'd be motivated to allow the U.K. to impose those kinds of non-science based terms on our trade agreements. That's why we're supportive—

[The Chair, Liberal, Judy Sgro]

Thank you very much. I'm sorry to interrupt, but we have to keep on going.

Mr. Jeneroux, please, you have five minutes.