Economic Relationship between Canada and the United States Committee on April 8th, 2021

[Rob Oliphant, Liberal, Don Valley West, ON]

At any rate, Matthew from the NDP was a good friend, and it was a very successful thing.

[Brian Masse, NDP, Windsor West, ON]

That is non-partisan and very kind of you, Rob.

[Rob Oliphant, Liberal, Don Valley West, ON]

What we were doing at that time—

[Brian Masse, NDP, Windsor West, ON]

It was Matthew Dubé.

[Rob Oliphant, Liberal, Don Valley West, ON]

Yes, it was Matthew Dubé. I'm sorry. Don't tell him I forgot.

I would take exception to Mr. Trew's absolutely sort of nihilistic view of Mr. Harper's attempt with the Obama situation in his buy America program. It wasn't a good solution, but I'm not sure that it was as horrible as some of the labour unions suggested. I think our approach with the new NAFTA was much better, because it was much less partisan. It involved labour unions. It involved senior leadership from the Conservative Party and the NDP. It involved business. It involved premiers.

Obviously, I am going to start out by saying that this needs to be our approach this time. We need to have a broad-based approach.

I'm appreciating that it's not going away. Mr. Robertson was very right. This is something that is here to stay. I think all the witnesses have said that, so now, as I'm looking at it, if it's here to stay and we need an all-party approach and a multi-level approach, what are our levers?

When I spoke to American legislators, I was astounded at their lack of information and knowledge about their dependence on the Canadian economy and Canadian supply chains. I was astounded that they didn't know about the integration of our manufacturing sectors. I was astounded that they didn't know about the dependence that the United States had not only on our natural resources but on other sectors. Information has to be part of it.

On leverage, though, I'd like all our witnesses to comment on what levers they think that we, as a Canadian government and a Canadian Parliament, can bring to bear, knowing that we start out with a position that a strong American economy and a strong Canadian economy are not mutually exclusive—they're interdependent.

I will open it up to the order in which you spoke, with Mr. Reinsch first.

[William Reinsch]

Thank you very much, Mr. Oliphant.

Let me begin by saying that having worked in Congress for 20 years and then serving in the Clinton administration and then in the private sector, I've seen this issue from multiple angles. I can tell you with confidence that your government—regardless of which party is in power at the moment—and your embassy have done an absolutely superb job over the years in providing the United States Congress with exactly the information you're talking about. That doesn't mean that they pay any attention to it or that they read it, but your government has been diligent in developing the information that demonstrates the linkages you're talking about.

I guess my first point would be to say, “Keep on doing that.” One of the things that I think one learns in politics is that repetition is an important element. You have to keep saying the same thing over and over again. With our congresspeople, I think it's important to do that.

Also, it's very effective to do it in the way you referred to in your remarks: to do it personally—which of course is more difficult now, but it won't be forever—and in direct contact with legislative colleagues in Congress. Forming relationships—personal relationships and cross-border relationships—is also effective.

The information is there. The information is available. I mean, these are teachable moments, but we also have to have learners, and sometimes you have to just keep pounding it in over and over again. I wish I had something more brilliant, but I don't.

[Rob Oliphant, Liberal, Don Valley West, ON]

Can I give Mr. Trew a chance?

[Stuart Trew]

Thank you, Mr. Oliphant, for the question.

I'm not sure I would say that our assessment of the first buy America deal was nihilistic. I think that is not quite the right word.

In terms of the leverage we have now with the Biden administration, I would say we should be working with them where we can. Where we see Biden saying he wants to reform these procurement rules at the WTO, for example, to make it easier for all governments to use public spending in these ways to support domestic priorities—whether it's renewal in the case of post-COVID recovery, whether it's job creation or those kinds of things—that's an area in which we could work with the Biden administration to reform the trade agenda, as we kind of did under the Trump administration with respect to investor-state dispute settlement.

We've kind of started to come up with new thinking around ISDS, that maybe we don't need to be included in these agreements, that maybe the threats to Canadian environmental policy and other measures.... As Minister Freeland mentioned, when we signed the deal, we said, “Thank God we got rid of ISDS. Now we can actually have more flexibility around these policies.”

I would encourage us to work with the Biden administration on these interesting areas in which we can put these things like sustainable development and trade into a better balance than perhaps they are now.

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Oliphant. I'm sorry, we're over time.

Mr. Savard-Tremblay now has the floor for six minutes.

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

Thank you, Mr. Chair.

Hello to all the witnesses. I thank them for their attendance and their testimony.

Mr. Trew, I listened carefully to what you had to tell us. I also read your text, which is very interesting. I really like it when ideas come from beaten paths. I also appreciate your suggestions to increase environmental partnerships. You actually did a good job of describing this kind of a cycle where there is an outcry over protectionism, but it ends up being pointless, except perhaps to hide behind complaints and words of umbrage.

You are putting forward certain ideas, but I would like to know more concretely what actions could be taken. For example, you talk about something equivalent to the Buy America provisions and to the Buy American Act that could be applied in Canada in order to come to an agreement with the United States that could be referred to as Buy North American. Could you tell us more about that?

[Stuart Trew]

Thanks very much, Mr. Savard-Tremblay.

We talked about the steelworkers recently. The steelworkers have done some good work on this through Blue Green Canada. They have a proposal for sustainable purchasing at multiple levels of government. It would factor in things like the carbon emissions of Canadian cement versus those of international cement or steel or aluminum. As the committee has heard, we have some of the cleanest aluminum and steel in the world. Applying those kinds of criteria would in effect favour local production, local jobs and local workers, without running afoul of our trade obligations, which, as I think you know, currently prohibit those kinds of clauses.

That's one angle that I think we could think about in terms of sustainability criteria versus having explicit buy local or buy Canadian criteria, which are prohibited under a lot of Canadian trade deals.

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

Thank you for your answer.

You also talked about increasing environmental partnerships. Finally, there is talk of an agreement concerning public markets. Am I summarizing it properly? This would be an agreement under which the two countries would open their public markets on the issue, for instance, of renewable energy, which you talk about. Businesses could be treated equally under public renewable energy contracts.

That said, doesn't each country have an interest in supporting its own production? Although the renewable energy market is very beneficial for the environment, isn't there a risk of falling back into the lowest bidder logic, which could work against us?

[Stuart Trew]

On things like renewable power, I think I heard Mr. Verheul propose that this is an area in which we might be able to get some kind of sectoral arrangement with the United States, rather than a full-on waiver for everything, which is probably unlikely outside of the buy American policies, for which, in many cases, we would have a waiver.

If we think about how we could negotiate something with the Biden administration in a sector like that, I think in this environment—where certain of these trade rules that were once considered strict and unmovable are now all of a sudden quite movable and when we've seen where the Biden administration is going—I wouldn't rule out ideas like production sharing and maybe an auto pact type arrangement under which we can agree to share the production of these things that we know we need to build quickly and roll out in order to decarbonize our economy and get people working.

That's just another idea in terms of the different ways in which we can think of climate jobs and trade policy now.

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

This is an approach we should definitely look into.

Your text also highlights the issue of good regulatory mechanisms. That is actually something we raised with other stakeholders, when the Canada-United States-Mexico Agreement was presented. Do you think we should find a way to override that aspect of CUSMA, for example, in a discussion between the two countries?

[Stuart Trew]

If I understand your question with respect to the good regulatory practices chapter of the USMCA, the CUSMA, I suppose we'll have to see how that chapter works out in the end. There have been concerns raised by some U.S. businesses around how Canada's plastics management plan might violate that chapter. If they end up pursuing that, then maybe we do have to think about, as you say, some kind of official waiver from the chapter itself, because it seems like a pretty excessive use of the chapter to challenge something like a government's plan to reduce the single-use plastics in the environment.

I haven't thought about it too much, but it's an interesting question.

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

At the very least, this should be considered closely.

The matter of plastics—

[The Chair, Liberal, Raj Saini]

Thank you, Mr. Savard-Tremblay.

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

I am being told that my time is up.

Thank you.

[The Chair, Liberal, Raj Saini]

For the next six minutes, we'll go to Mr. Masse, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for being here.

I have a general question to everyone right now. What I was trying to get at with the previous witnesses.... Mr. Oliphant raised it. What his delegation did helps my riding of Windsor West. I'm on the border here with 40% of our trade and all kinds of cultural and social issues. What I was trying to get to with the last panel was that right now we don't have a border task force that includes the private sector, unions, civil society and so forth to work on our border policies. Sometimes they get entangled; some are outdated, some need tweaking and so forth. And with COVID, it's even more complicated. The point is that the cabinet and the order in council are very secretive. There are no minutes, no provision for the public to have full access to documents and to see what's going on, what's on the table and what's not. I don't think that's a helpful process right now.

A good example is that Mr. Sarai and I have been in the United States, lobbying. Mr. McKay and I have been to so many meetings over the years, and Mr. Hoback and I covered tons of ground in Washington as well, opening up doors and creating conversations the government wouldn't even have access to because either they don't have the people there or they don't have the diversity because they don't represent all of Canada. They represent the political party in power at the time.

My question is general, maybe starting with Mr. Trew and going across the board. Would it not make sense to have some type of a working group or working model that has some type of accountability and openness to the public? I have so many concerned citizens who can't see their relatives or families. They have no idea, month by month, what to go by. They're not asking for things to be unsafe. Then we have issues with our mould-makers, a very particular industry, who are left behind, and we have a series of other types of measures in place that could require some tweaking and that can build stronger economic ties more efficiently.

Mr. Trew, if you think it's a bad idea, say so. I don't mind. It's not going to hurt my feelings.

[Stuart Trew]

It sounds like a good idea to me, and you're the expert on this, Mr. Masse. I would add the municipal governments to that mix as well; I think maybe you mentioned them. Especially when we're talking about procurement, this is an area where we saw during the CETA negotiations, for example, that there was widespread opposition among municipalities to being included in that agreement and permanently bound to those GPA rules now on government procurement, so make sure they're in there.

That could be quite exciting. I think it's a good idea.

[Brian Masse, NDP, Windsor West, ON]

It's a great suggestion.

Is there anybody else?

[William Reinsch]

Yes. I don't want to tell you it's a bad idea, but I won't tell you it's a good idea either. Over the years, I confess I've become cynical about structural solutions. I think structures are things you create when you don't know what else to do, and they don't necessarily solve the problem. They just create another forum to discuss solving the problem.

On the other hand, if you believe there's insufficient transparency on border issues, then the solution you're talking about would have a favourable impact on creating more transparency. Second, if you believe that your concerns are not being adequately attended to in Washington, that nobody is paying attention and you can't get the attention of relevant authorities, then creating a special structure would probably address that as well.

You're a better judge than I am of whether those two needs need to be met.

[Brian Masse, NDP, Windsor West, ON]

That's a fair criticism about that. I appreciate that.

One of the things I liked were our former auto policies. We used to measure results and have measurement criteria specifically for that every year. It's some very good advice.

Go ahead, Mr. Robertson.

[Colin Robertson]

We've had a long trade screen when we cross the border. After 9/11, we had a security screen. We're now going to add a health screen. We need to look at border crossings.

Regionally, there's very good work being done by the Pacific NorthWest Economic Region out there in terms of pilots as to how to make the border work better. There's something going on at the Wilson Center. Ultimately, it's going to be the Prime Minister and the premiers, in their Thursday night conversations, who will make the decisions on where we go.

It's an opportunity for us to also think about how we reimagine this border, post COVID. Yes, we should be looking at this, and we shouldn't be bound by the notion that one size fits all. There may be a variety of things we can try, opening it in certain parts of the.... We have a massive border. It's not just the 49th parallel; it's also the border between Yukon and Alaska.

Yes, I would agree with your approach.