Bill C-4 (Historical)

Canada–United States–Mexico Agreement Implementation Act

An Act to implement the Agreement between Canada, the United States of America and the United Mexican States

This enactment implements the Agreement between Canada, the United States of America and the United Mexican States, done at Buenos Aires on November 30, 2018, as amended by the Protocol of Amendment to that Agreement, done at Mexico City on December 10, 2019.
The general provisions of the enactment set out rules of interpretation and specify that no recourse is to be taken on the basis of sections 9 to 20 or any order made under those sections, or on the basis of the provisions of the Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Agreement, provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional and administrative aspects of the Agreement and gives the Governor in Council the power to make orders in accordance with the Agreement.
Part 2 amends certain Acts to bring them into conformity with Canada’s obligations under the Agreement.
Part 3 contains the coming into force provisions.

[Jason McLinton, Vice-President, Grocery Division and Regulatory Affairs, Retail Council of Canada]

Thank you, Madam Chair and members of the committee for the opportunity to come and discuss with you Bill C-4, An Act to implement the Agreement between Canada, the United States of America and the United Mexican States .

RCC, the Retail Council of Canada, strongly supports Bill C-4

I will briefly introduce the RCC.

The retail trade is the largest private employer in Canada. More than 2.2 million Canadians work in our industry. Recognized as the voice of retailers in Canada, RCC represents more than 45,000 businesses of all types, including department stores, grocery, specialty, discount, independent and online stores.

The grocery members of the RCC are proud to be an integral part of the Canadian food system. They constitute the final and direct link with consumers, offering Canadians the wide variety of foods they eat every day.

RCC is highly supportive of Bill C-4.

Canada is a trading nation. Free trade is essential to a modern economy, allowing Canada access to world markets for its exports and allowing retailers and consumers in Canada to access a variety of goods at competitive prices.

The renegotiated NAFTA, otherwise known as the Canada-United States-Mexico agreement, or CUSMA, preserves key elements of the previous free trade agreement and incorporates new and updated provisions that seek to address 21st century issues.

Let me be clear. CUSMA is good for retailers and CUSMA is good for Canadian consumers.

Specifically, I'd like to make comments on two points within CUSMA.

The first one is the de minimis threshold. Retailers in this country are pleased that the Canadian negotiating team delivered a deal that protected Canadian retailers from the most unreasonable demands made by the U.S. side. With U.S.-based online merchants and couriers pushing hard for an increase of the de minimis level to $800 U.S., it could have been devastating for retail merchants in Canada and to the over 2.1 million Canadians working in the retail sector.

This level would have created a tax and duty advantage for foreign shippers over Canadian retailers, essentially incentivizing Canadians to shop anywhere but in Canada, at the expense of those who actually invest and employ in Canada. Clothes, books, shoes, toys, sporting goods, consumer electronics and housewares would have been particularly hard hit, and these tend to be the areas in which small and medium-sized retailers specialize.

We're very pleased to say that the Canadian negotiating team did not cave in to these demands, and I would personally like to thank the Prime Minister, Minister Freeland and the Canadian negotiating team for the work they did in this area.

The second area that I'd like to comment on is the tariff rate quotas for supply-managed goods. Through negotiation of CUSMA and other new trade agreements, such as the CPTPP and CETA, Canada has increased its TRQ commitments for supply-managed goods nearly threefold, and the landscape of Canadian industry and consumer demand has changed significantly.

RCC is supportive of the government's decision to conduct this comprehensive review of its TRQs for existing and new trade agreements, such as CUSMA.

That said, if the purpose of these trade agreements is to bring competitive pricing for Canadian consumers, retailers must be given their fair share of duty-free quota under Global Affairs Canada's review, to maximize consumer choice and bring these better prices.

In particular, quota on products meant for final retail sale to the consumer should be allocated directly to retailers, rather than slicing the pie so thinly that each piece of the pie would be of negligible value, or allocating the bulk of ready-for-sale goods such as fluid milk, cheese and poultry up the line.

Having fewer price takers along the supply chain will ultimately lead to more competitive prices for Canadians.

While quota cannot be allocated directly to consumers, it can be allocated to the people who are closest to consumers, and that is retailers, if Canadians are to see the full benefits of this deal.

In conclusion, thank you once again for the opportunity to present the perspective of food retailers and other retailers on Bill C-4.

I'll be pleased to answer your questions.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

We will continue our study of Bill C-4, an act to implement the agreement between Canada, the United States of America and the United Mexican States.

Welcome to all of our witnesses for our second week of hearings.

From the Canadian Electricity Association, we have Michael Powell. From the Canadian Federation of Independent Business, we have Corinne Pohlmann and Jasmin Guénette. From the Chemistry Industry Association of Canada, we have Isabelle Des Chênes and David Cherniak. From the Retail Council of Canada, we have Jason McLinton.

Mr. McLinton, we'll start with you.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much.

Thank you for coming to testify today.

My question is for Mr. Nantais.

In your statement, you said that the new NAFTA, Bill C-4, should be ratified expeditiously, and I believe you also noted the importance of obtaining certainty.

Is that certainty something that your members in the auto industry and the approximately half-million Canadians who work in the auto industry are asking for?

[Pierre Lampron, President, Dairy Farmers of Canada]

Good afternoon. On behalf of the Dairy Farmers of Canada, I want to thank you for the opportunity to offer our perspectives on Bill C-4 concerning the Canada — United States — Mexico Agreement.

I'm accompanied by Jacques Lefebvre, our chief executive officer, and Chris Cochlin, our legal advisor from Cassidy Levy Kent LLP. Mr. Cochlin is an expert in international trade.

The vast majority of politicians in this country say that they support supply management. However, in the end, actions speak louder than words. Today, with CUSMA, supply management has never been more weakened. There's no doubt that Canadian dairy farmers have been hit by the three most recent trade agreements. This is something that even the Government of Canada recognizes.

When the imports already authorized under the WTO and the access previously granted under the Comprehensive Economic and Trade Agreement, or CETA, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, are added together, these total imports will be equivalent to 18% of Canadian milk production by 2024. CUSMA also gives the United States oversight over the management of our dairy system by requiring a consultation with them prior to any changes in its administration.

Is this not an abdication of the independence of Canadian decision-making and our sovereignty? Have we negotiated reciprocity with the United States, given the non-tariff barriers that our products must face in order to enter the American market?

The Prime Minister has repeatedly committed to full and fair compensation to the dairy sector for the cumulative impacts of CETA, CPTPP and CUSMA. In terms of the first two agreements, at the end of 2019, we received a first instalment representing a little more than 12% of the total promised compensation. We await guarantees that the sums still to come are locked in. Once again, actions speak louder than words.

This compensation doesn't include CUSMA. Some wonder why financial compensation is being offered instead of programs.

First, our recent experience with programs set up to mitigate agreements with Europe hasn't been conclusive. Of the $250 million granted, almost 10% was allocated to the administration of the program by the public service. This amounts to $22 million returned to state coffers for the administration of the program by federal public servants. The remaining sums benefited only a small number of producers.

Second, the compensation formula announced in August 2019 is consistent with the recommendations of the mitigation working group created by the federal government after the signing of CUSMA. However, beyond the numbers, realities on the ground affect some 11,000 families across the country.

My experience isn't unique, but it sheds light on why financial compensation is needed. When my brothers and I took over the family farm some 30 years ago, we knew that the market was equivalent to the potential of Canadian consumers. We made calculations and projections on this basis. We determined that we could make ends meet despite the significant costs associated with acquiring a farm.

The Canadian government will have ceded nearly one-fifth of our production to foreigners by 2024. We know now that our business plan didn't take into account the fact that our market would be conceded in this way. If we had known this, my brothers and I would have given serious thought to whether it was worth it to take over the family farm. This would be true of any business confronted by a loss of nearly 20% of its market.

However, since the concessions have been granted, we have a few recommendations.

We recommend that the Canadian government continue to give dairy farmers, in the form of direct payments, the remaining seven years of full and fair compensation to mitigate the impacts of CETA and CPTPP. We ask that the total amount be formally accounted for within the 2020 main estimates and that the government announce the amount of compensation for CUSMA prior to its entry into force.

On the other hand, CUSMA contains a provision that imposes export taxes, above a certain threshold, on skim milk powder, milk protein concentrate and infant formula.

This threshold is draconian. In the first year of the agreement, it represents about half our exports for 2018, and then it declines. This export tax undermines the competitiveness of our products in relation to the products of other global players, including the United States. This provision sets a dangerous precedent for any dairy product that may be exported.

In addition, if CUSMA enters into force before August 1, the beginning of the dairy year, the export thresholds will see a dramatic decline of nearly 35% after only a few months. For Canadian dairy producers, CUSMA presents a fourfold threat.

On the one hand, we've conceded more of our domestic milk production to foreign producers for products that will end up on our shelves. These products will be made from foreign milk whose production is directly and indirectly subsidized, which isn't the case here. This results in cheaper milk for foreign processors that export products here. This gives rise to the question of whether this unfair competition constitutes the dumping of foreign dairy products on our shelves.

At the same time, we face export barriers for dairy products made with milk from our own country. Add to that the fact that our border is porous and the government isn't in a position to test foreign dairy products coming into the country. It's important to note that these products aren't subject to the same production standards to which we adhere.

Given the impact on our industry and the dangerous precedent set by the export thresholds, we call on the government to take mitigating steps. We understand that this could be done through administrative measures after the ratification of CUSMA, on a voluntary basis, without reopening the agreement.

When it comes to controlling our borders, the government must commit to giving the Canada Border Services Agency the resources and training to enable officers to fully play their roles. After our discussions with the union management, we're convinced that the officers expect nothing less.

Canadian dairy producers are committed to the highest standards of sustainable production. This is done through the proAction program. These standards come with costs for farmers. For example, unlike American producers, our Canadian producers don't use artificial growth hormones to increase milk production at the expense of the health of the cows.

Instead of supporting our farmers so that they can maintain these rigorous production standards, the government has chosen to open its market to surpluses of foreign dairy products that don't meet our domestic standards.

In conclusion, the Dairy Farmers of Canada understand the importance of international trade to the Canadian economy in general. They aren't opposed to Canada exploring or entering into new trade agreements. However, let's be realistic. All countries have both offensive and defensive interests when it comes to trade negotiations. The United States, for example, has a long tradition of protecting their sugar, cotton and dairy sectors. Unlike in Canada, these industries receive production subsidies, directly or indirectly, from the American government.

The defence of supply management has never prevented Canada from entering into an international trade agreement. Trade negotiations don't seek to pit one Canadian industry against another. However, we firmly believe that access to the Canadian dairy market should no longer be the price of entry into these agreements. Despite the government's assurances, we remain concerned about what could be conceded in a free trade agreement with Great Britain. It's also important to consider that the impacts of recent trade agreements weren't limited to dairy farmers.

The Canadian government should also provide full and fair compensation to dairy processors, in addition to Canada's poultry and egg farmers. Lastly, the time may have come for a committee of the House of Commons or Senate, or even of both, to look into the possibility that foreign dairy products are being dumped in Canada. Your farmers aren't scared of international competition, provided that there's a level playing field.

I'll be pleased to answer your questions.

[Mark Nantais, President, Canadian Vehicle Manufacturers' Association]

Thank you very much, Madam Chair.

Good afternoon, honourable members.

I'm pleased to be here today representing Fiat Chrysler Automobiles Canada, Ford Motor Company of Canada and General Motors of Canada Company.

Our members operate four assembly plants, as well as engine and components plants. They invest many billions of dollars in the development of zero-emission technologies and advanced vehicle safety technologies. We have over 1,300 independent dealerships across Canada, and we contribute quality employment opportunities for over half a million Canadians.

The CVMA has been a primary advocate of CUSMA, and we recommend passage of Bill C-4 without delay. The passage of CUSMA is essential to provide certainty to North American automobile manufacturers. The automotive provisions, as well as the side letters that provide protection from the U.S. section 232 tariff actions, are indeed critical elements to support automotive manufacturing competitiveness within the North American trade bloc.

It's important to remember that, for the auto sector in Canada, the alternative to reaching this agreement was the cancellation of NAFTA, the reimposition of tariffs on finished vehicles and parts, and likely section 232 tariffs on input materials. So, if we are anxious to see ratification, that is indeed why.

We again want to say thank you to the Canadian negotiators for working so closely with us and ultimately ensuring that we maintain Canada's auto sector as a truly integrated part of the North American industry. This agreement was existential for Canada's largest manufacturing and export industry.

The agreement reinforces the long-established integration of the auto industry supply chain necessary for its competitiveness and, importantly, the ongoing need for continued regulatory alignment with the United States of vehicle technical regulations that are integral to trade and the environment while ensuring greater consumer product choice and affordability.

The auto portions of the new agreement, including the rules of origin, the labour value content provisions and the section 232 side agreements, are things that all our members support and can adjust to over a reasonable time period so that we will remain compliant, enabling us to continue to enjoy duty-free access to the largest and most beneficial auto market in the world.

Since the Auto Pact of 1965, Canada's automotive industry and its supply chains have become deeply integrated with the United States and, over time, with Mexico. Vehicles are built seamlessly on both sides of the border. The resulting deep integration has led to a more competitive Canadian auto industry, greater consumer choice at more affordable prices and a strong North American trade bloc.

When the original NAFTA came into force in 1994, it provided a foundation for a strongly global competitive trade bloc. The geographic proximity of the three NAFTA partner facilities, the multi-billion dollar sectors, the parts sector and the just-in-time supply chains are critical to vehicle assembly operations in North America. It also created inherent transportation and supply chain logistics cost advantages.

Today, automotive manufacturing represents the second-largest Canadian export sector, with $54 billion in trade in 2019. Ninety-two per cent of the total value of that was to the United States. The United States is our number one automotive trade partner, and it's absolutely critical that a trade agreement be in place to provide the foundation for Canadian automotive production and exports in the future.

We must always keep in mind that Canada is one-tenth of a complex, fully integrated long-lead industry. Multi-billion dollar product plans and manufacturing investment plans generally begin over five years in advance of the start of production. Planners require regulatory certainty to make their decisions. They especially need Canada to maintain fully harmonized safety, vehicle GHG, criteria emissions regulations with the United States.

This remains imperative if we are to continue to be part of this fully integrated, long-lead, high-capital-cost industry. Put simply, we did not work this hard to modernize integrated rules of trade in North America to then take our eye off the ball and drift away with unique or different regulations. That could actually put us back to square one and leave us on the sidelines.

Canada's officials must also maintain a high degree of engagement with their counterparts in the U.S. and Mexico. We cannot relax our efforts to ensure that Canada is sufficiently competitive to win future manufacturing investments that anchor much of the Canadian automotive supply chain. Canada must have competitive, in fact, more competitive, costs of auto operation in Canada, including investment incentives, carbon costs, competitive labour agreements, taxes that keep pace with the United States, competitive electricity prices and competitive regulatory regimes.

It's important to remember that the auto sector is going through one of the most dramatic periods of change in its 100-year history for auto technology and mobility business models. We must work closely together with the Canadian industry and all levels of government to demonstrate that Canada is the best place anywhere to invest in the future of this important industry.

In closing, we fully respect the committee's need to hear Canadians and ask questions. We have worked with all parties over the last two years to discuss this very complex issue. We have been truly involved, and we appreciate your interest and open dialogue. We thank you for that, but we must ask you to ratify this agreement promptly.

I'd be pleased to answer any questions.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order this meeting of the Standing Committee on International Trade. Pursuant to the order of reference of Thursday, February 6, 2020, we are studying Bill C-4, an act to implement the agreement between Canada, the United States of America and the United Mexican States.

Welcome to all of our witnesses and to committee members.

We're about to start another week of consultations. If we can get another 20 hours of consultation.... I'm glad to see that all our members are still anxious to keep going. I'm glad you're all here.

As an individual, we have Wietze Dykstra. From the Canadian Federation of Agriculture, we have Mary Robinson, president, as well as Robert Friesen, trade policy analyst. From the Canadian Vehicle Manufacturers' Association, we have Mark Nantais, president. From the Dairy Farmers of Canada, we have Jacques Lefebvre, chief executive officer; Pierre Lampron, president; and Christopher Cochlin, international trade legal adviser at Cassidy Levy Kent.

We will start the opening remarks with you, Mr. Dykstra.

[Dr. Michael Geist, Canada Research Chair in Internet and E-Commerce Law, Faculty of Law, University of Ottawa, As an Individual]

Thank you very much. Good morning.

As you heard, my name is Michael Geist. I'm a law professor at the University of Ottawa, where I hold the Canada research chair in Internet and e-commerce law, and I'm a member of the Centre for Law, Technology and Society. My areas of specialty include digital policy, intellectual property, privacy and the Internet. I appear today in a personal capacity representing only my own views.

As you know, the typical approach before a committee on bill study is to examine the bill, identify provisions to support and areas for amendment. In this case, at least for my areas, what really matters is not what is in the bill, but what's not. The most notable issues from a digital policy perspective, which obviously have significant implications for issues addressed by this committee, won't be found in Bill C-4, by and large. Rather, they are found in CUSMA itself and they typically limit Canada's policy options for future policy reforms rather than require immediate legislative action.

This raises a significant challenge, since the flawed aspects of the deal can't be fixed in C-4. Rather they require a change in a trade agreement that is largely presented as a take it or leave it deal.

I'd like to briefly discuss four issues along these lines, some of which could create costs that run into the hundreds of millions of dollars for Canada: copyright term extension, the cultural exemption, privacy and data protection and Internet platform liability.

I'll start with copyright term extension, and I know you heard about that earlier today. The IP provisions in the agreement raise some significant concerns, but none more so than the requirement to extend the term of copyright from the international standard of life of the author plus 50 years to life plus 70. The additional 20 years is a reform that Canada rightly resisted for decades under both Liberal and Conservative governments. By caving on the issue, the agreement represents a major windfall that could run into the hundreds of millions of dollars for rights holders and creates the need to recalibrate Canadian copyright law to restore the balance; for example, perhaps addressing some of the issues you heard earlier on digital locks.

The independent data on copyright term extension is unequivocal. It creates less access to works, higher costs for consumers and no incentive for new creativity. In the words of professor Paul Heald, one of the leading researchers on the effects of term extension, “it's a tax on consumers” with no obligations to benefit the public.

This committee's copyright review conducted an extensive review into the issue and recommended establishing a registration requirement to obtain the additional 20 years of protection, to mitigate against the disadvantages of term extension and increase overall transparency of the copyright system.

Term extension doesn't appear in C-4 because the government negotiated a 30-month transition period to address the issue. I think the government has rightly not rushed into term extension and we should be taking full advantage of the transition period to follow this committee's recommendation to establish a registration requirement for the additional 20 years. That would allow rights holders who want it to get the additional protection they're looking for, while also ensuring that many other works enter into the public domain after their term of protection expires after life plus 50 years.

Second, I'll turn to the cultural exemption. Much like copyright term extension, there is no reference to the cultural exemption in Bill C-4. That's because the exemption doesn't require legislative reform. However, I'd argue that the exemption is one of the most poorly understood aspects of this agreement, at least in the areas I focus on.

Consistent with government claims, the cultural exemption covers a broad range of sectors with a near complete exemption for Canada. While the government has emphasized its broad scope, it rarely speaks of what the U.S. demanded in return, namely the right to levy retaliatory measures of equivalent commercial effect where Canada relies on the exemption. The retaliatory measures provision means the U.S. is entitled to levy tariffs or other measures that have an equivalent commercial effect in response to Canadian policies that would otherwise violate CUSMA, if not for the cultural exemption.

Since the provision does not limit the response to the cultural sector, the U.S. can be expected to target sensitive areas of the Canadian economy such as the dairy sector in order to discourage its use. That was the U.S. strategy recently when responding to a French plan to levy a new digital tax, which led to plans or threats to levy $2.4 billion U.S. in tariffs against French goods such as wine, cheese and handbags.

How could this play out in a Canadian context? The recent broadcasting and telecommunications legislative review panel report—the so-called Yale report—contains what I would view as many ill-advised recommendations on regulating the Internet and online news services such as news aggregators.

Should the government adopt the broadcast panel recommendations on content, the U.S. would have a strong case permitting retaliation with measures of equivalent commercial effect. Panel proposals that may violate the new trade agreement include requirements to pay levies to fund Canadian content without full access to the same funding mechanisms enjoyed by Canadian firms, licensing requirements for Internet services that may violate NAFTA standards, and discoverability requirements that limit the manner in which information is conveyed on websites and services.

I emphasize that I think this is bad policy that should be rejected. However, for the purposes of this review, note that the policy flexibility to enact reforms in this area is severely limited by the agreement, which establishes the possibility of retaliatory tariffs in the hundreds of millions of dollars.

Third, I'll address the digital charter and privacy. Limitations on Canadian policy also arise in the context of privacy and data protection. Unlike the cultural exemption, which permits violations of the treaty subject to those retaliatory tariffs, on the issue of privacy, Canada would run the risk of simply being offside its commitment under CUSMA.

Once again, there is no provision on point in C-4—there's no need for one—because CUSMA prohibits certain privacy-related provisions, rather than requiring them. For example—and I know this came up in the previous panel—CUSMA includes a provision restricting data localization, which refers to measures requiring data be stored within Canada. It features a more restrictive provision than that found in the CPTPP. There are some general exceptions, but the Canadian government will be restricted in its ability to establish localization requirements under the agreement.

Those implications I think are far-reaching. Consider the wide range of policy issues with data right now: Canada's digital charter and its proposed privacy and data reforms, concerns about data sovereignty, AI-related issues and fears about the competitiveness of Canadian businesses in relation to Canadian data.

The Canadian government itself has established localization requirements as part of its cloud computing policy. Indeed, there is a recognition that data localization may be needed in some circumstances, yet under this agreement, Canada has limited its ability to regulate. The same is true on the issue of data transfers, as CUSMA also limits the ability to restrict them. As we enter into a discussion with the European Union about the adequacy of Canadian privacy laws, there are concerns that a data transfer provision could leave Canada between a proverbial privacy rock and a hard place, with the EU demanding certain restrictions and CUSMA prohibiting them.

Finally, I'll address Internet platform liability. A similar dynamic arises in the context of Internet platform liability, which raises the question of what responsibility lies with Internet companies for third-party content on their sites. The issue captures large players such as Google and Facebook, but frankly, almost anyone that offers user comments or content. There's no provision in C-4 on this either. Once again, the reason is that CUSMA restricts policy in the area, rather than requiring a new provision.

CUSMA includes a legal safe harbour for Internet intermediaries and platforms for content posted by their users. The rule is designed to provide Internet platforms with immunity from liability, both for the removal of content, as well as for the failure to remove content. Contrary to some claims, that does not mean that everything goes: sites and services are still subject to court orders and the enforcement of criminal law. Further, intellectual property rights enforcement is also exempted. However, some have now argued that the responsibility of Internet intermediaries should go further, with potential liability for failure to act, even in cases of harmful, albeit legal, content. I think that issue raises important freedom of expression concerns and questions about how we balance freedom of expression and speech with protection from harm.

The issue with C-4 and CUSMA is not to debate where Canada should land. The broadcast panel recommended liability for online harms, even if the content is legal. Others, including me, would argue that liability should rest with illegal content, but to create liability for legal content is to render Internet companies judge and jury over what remains online, thereby further empowering the large Internet companies, as well as limiting competition and freedom of speech.

The key point here is that there is a policy debate to be had, and under CUSMA, Canada has already committed to a position, one that restricts our ability to establish liability for third-party content.

I look forward to your questions.

[The Chair, Liberal, Sherry Romanado]

I will call the meeting to order.

Welcome to the Standing Committee on Industry, Science and Technology. Today, we are studying clauses 22 to 28 and 108 to 122 of Bill C-4.

Today we have with us Professor Michael Geist, Canada research chair in Internet and e-commerce law at the faculty of law at the University of Ottawa.

Joining us are Bruno Letendre, the chair of Les Producteurs de lait du Québec; François Dumontier, its director of communications, public affairs and trade union life; and Luc Boivin, the owner of Fromagerie Boivin.

Welcome to all of you.

We will start with presentations of 10 minutes by each group, followed by questions for each. We have three groups today instead of four at this panel, so we have a little more time for the witnesses.

If you see the yellow card, that means you have 30 seconds left.

We'll start with Luc Boivin, the owner of Fromagerie Boivin.

Welcome, Mr. Boivin.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you very much, Madam Chair.

Thank you to the team, and I would even say congratulations. Prior to my election, I was watching and observing this, and I'm really pleased that we're at this place now that we're looking at Bill C-4.

I've been listening intently this morning and even during question period.

One of the areas of concern that Monsieur Lemire has been probing extensively is the whole area of the aluminum industry in Quebec. We heard this morning that there are really severe concern about the competitiveness of that industry going forward. SMEs are concerned, so I would just like to hear a little bit more about the engagement that occurred with the players and stakeholders in that industry. I know you were able to achieve perhaps more than what was there before, but could you reassure us a little bit more as to how you see this going forward?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Yes, but in Bill C-4 we've got 50 years cited in proposed subsection 6.2(2).

You don't need to answer now. Some clarity on that would be useful.

With respect to the Criminal Code provision, I'm just curious why this provision in the Criminal Code is necessary. What does it cover that wasn't there previously?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's fair. I take that to mean that's not something we put on the table, but something we accepted because broadly or overall, the agreement is in our benefit. While this provision may not well be, it's still worth it.

I have a very specific question and it's just because a previous witness pointed this out. In BillC-4, to amend proposed subsection 6.2(2) of the Copyright Act, there's a reference to 50 years, which is inconsistent with the other dates that I see throughout C-4. I'm curious. Is that reference to 50 years supposed to be 70 years, or is it to be 50 years?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you. That's good enough.

I'm wondering if you can point me to anything in Bill C-4 that would preserve the rights of Canada to proceed with similar types of legislation.

[The Chair, Liberal, Sherry Romanado]

We will begin the third panel.

Today we are hearing witnesses on the subject matter study of clauses 22 to 38 and clauses 108 to 122 of Bill C-4.

I will remind folks in the room that no photo taking or video conferencing is allowed. In addition, during testimony, when you see the little yellow card, that means you have 30 seconds to wrap it up. I'll try to give you a little wave to give you the heads-up.

Today we have various folks from the Department of Foreign Affairs, Trade and Development. We have Mr. Steve Verheul, our chief negotiator; Robert Brookfield, director general; Loris Mirella, director, intellectual property; Shendra Melia, executive director; and Nicola Waterfield, deputy director.

Welcome to everyone. We will have a 10-minute presentation from the panel, after which we will move to questions from the committee members.

With that, I open the floor for your presentation.

Thank you.

[Jennifer Mitchell]

Sure.

Just to quickly finish the points I was making, waiting the 30 months to implement the copyright term extension for all classes of intellectual property, particularly when it comes to songs and musical compositions, will create more confusion in the marketplace.

My first point was that we were stifling innovation and creativity, export potential and growth for small businesses, but we also risked creating more confusion. Commercial users who license songs typically do so worldwide, which means they need to get a licence for the entire world. Remaining out of step with all of our international trading partners will continue to complicate licensing for users rather than providing any kind of relief.

We also risk introducing even more complexity by extending the copyright term for some classes of intellectual property and not others as Bill C-4 would do.

[Jennifer Mitchell, President, Red Brick Songs, Casablanca Media Publishing]

Thank you very much, Madam Chair and honourable members, for this opportunity. I'm here today with Casey Chisick of Cassels, who is external legal counsel both to Music Publishers Canada and to my companies.

I have had the pleasure of owning and running a Canadian-owned independent music publishing business for almost two decades. I'm here to talk to you about the need to fully implement copyright term extension in accordance with the Canada-U.S.-Mexico agreement immediately, completely and with no conditions. In doing so, small and medium-sized businesses in the music publishing sector and our songwriting partners are able to continue innovating, growing and exporting songs to the world.

Canadian music publishing is a $329-million industry, which grows every year because of innovative entrepreneurs who help create value from songs. In today's digital and globally connected age, songs, music and culture have no boundaries, allowing many Canadian songwriters to achieve international success because of the scale of opportunity outside our country.

The market in Canada is simply too small for songwriters and publishers to succeed only within our borders, so music publishers work hard and make investments to help songwriters expand and grow into international markets. In fact, two-thirds of music publishers' revenue now comes from foreign sources, which is a dramatic change from 2005, when only a quarter of their revenue was from these same foreign sources.

The key to dealing with changes in technology has been our ability to expand globally. Music publishers use their relationships in other countries, built over many years, to create opportunities for songwriters to succeed.

Music publishing is about championing a songwriter and a song through the lifetime of the writer's career and the song's copyright. We take a long-term perspective, and we work a lot behind the scenes to create value. We are the songwriter's partner. We not only make financial investments in songwriters; we also invest time and leverage our relationships to help a songwriter's career evolve.

This means matching people such as songwriter Jeen O'Brien with partners in lucrative markets like Japan to co-write singles that are released by other artists or used in TV, movies, commercials or video games. It means arranging co-writing opportunities for Dan Davidson in London, England, and China and financing radio promotion. Those efforts led to a top 20 Canadian country radio hit.

It means taking a risk to sign emerging songwriter Tom Probizanski, who moved to Toronto from Thunder Bay. We invested in him so he could go to Los Angeles and Denmark to co-write. He released an EP under the name of “Zanski” and we paid for his blog and playlisting promotion so that he was featured in Clash Magazine, EARMILK and various Spotify playlists.

We were able to take these risks and invest that money in Jeen, Dan and Tom only because we could rely on the income of several songs for which my companies hold the copyright. These efforts were made possible by the value that we were able to create from songs such as Imagine by John Lennon; What a Wonderful World; My Way; Y.M.C.A.; Start Me Up by the Rolling Stones; Skinnamarink by Sharon, Lois and Bram; and even the theme for The Simpsons.

This brings us to today. I would like to thank the government for agreeing in CUSMA to extend the term of copyright in works by 20 years. It is critical, though, that this be implemented completely, immediately and with no conditions, rather than waiting the 30 months that is allowable under CUSMA. Bill C-4 would extend the term of copyright for a few works: anonymous works, audiovisual works and so on. It would add an extra five years to the term of protection for performances and sound recordings, which was already extended in 2015, a welcome development to be sure.

However, the bill would not finish the job. It would not extend the term of protection for musical compositions known as songs. On behalf of Music Publishers Canada and the songwriters and composers I work with, I urge the committee members to amend Bill C-4 to align Canada with its global trading partners by extending the term of copyright protection for all musical, literary, dramatic and artistic works right now, instead of using the 30-month transition period.

Why is this important? Many works will fall into the public domain in the next 30 months. That will affect creators' and publishers' ability to reinvest in the Canadian economy.

As I mentioned, many music publishing companies are small and medium-sized businesses that rely on steady income from hit songs to develop new talent. For a small business like mine—