Chair, how much time do I have left?
Evidence of meeting #122 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was countries.
A video is available from Parliament.
Evidence of meeting #122 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was countries.
A video is available from Parliament.
11:05 a.m.
Conservative
11:05 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay. I think Mr. Laws wants to say something, but I want to touch on something else.
You talked about the Nature Conservancy of Canada and the $20 million they received, and you're pleased with that. I'm pleased with that as well, because in Chatham-Kent—Essex we have something like 7% forest coverage. It might be lower than that. One of the big issues, of course, is that farmers are clearing land. We get into a really sensitive area here because the land is privately owned. By the same token, we understand the importance of the forest. Where can those funds be helpful in my neck of the woods, where this is becoming a really hot button?
11:10 a.m.
President, Canadian Federation of Agriculture
I think the big thing is to start partnering with some of the groups that are trying to do conservation outreach, whether it be conservation authorities, groups like Ducks Unlimited, or soil and crop association groups, which are working on some programs. I think the idea is to try to lever the funds as much as possible.
When we're making investments in conservation, I think the discussion in the farm community is more and more one of how farmers can be rewarded for some of the environmental benefits they've provided? I say this because if we set aside that land, there is an economic cost to that and the farmer shouldn't be the one absorbing all of that cost.
11:10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I will first go to Mr. Moffatt.
Thank you for joining us. Your various writings and analyses have been extremely useful. They have really helped us understand the issue of tariffs and the impact of government initiatives.
Minister Flaherty tried to justify the measure in his open letter published in The Globe and Mail. He put forward three main arguments. His first argument was that this was a foreign aid program. He talked about countries such as China and India—so once again, BRIC countries—which no longer need international aid. However, 72 countries still need that kind of assistance. Some countries that cannot be considered economically developed now find themselves on the list of countries that can no longer benefit from the general preferential tariff. The list includes countries such as Equatorial Guinea, Gabon and Namibia.
Why have those countries been excluded even though they are still not economically developed?
11:10 a.m.
Professor, Richard Ivey School of Business, As an Individual
There are two criteria that the government uses, but the major one is basically where countries have more than $4,000 a year in per capita GDP. That's really small. We're talking about a number of countries whose per capita wealth is one tenth of Canada's, so they're still quite developing.
The problem is that once you start raising that up to $5,000, $6000, or $7,000, you start hitting countries such as India and Indonesia. So basically, if you want to include a set that includes India and Indonesia, and even China, there's a lot of collateral damage there, unless you're going to specify them.
I think that's really what has happened. They had to set the bar so low that they caught a number of countries—like Equatorial Guinea, as you pointed out—that no one would really think of as being developed.
11:10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you very much. I have only five minutes, and I would like to ask you three questions.
Would it have been possible to exclude only the BRIC countries without providing any further justifications?
11:10 a.m.
Professor, Richard Ivey School of Business, As an Individual
It would be somewhat difficult because then they would come back and say, “Why are you including us and not including this other country that has the same per capita GDP wealth?”
It would be very difficult to come up with a criterion that doesn't make it obvious that we're just saying, “Well, we think you're really big, so we're going to put some tariffs on you.”
11:10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you.
So the initiative is aimed at certain countries, but other countries are collateral damage resulting from the measure the government has decided to implement.
The second argument was that these were subsidies for foreign companies, such as those from China. You touched on that briefly.
Could you tell us more about that in 45 seconds?
11:10 a.m.
Professor, Richard Ivey School of Business, As an Individual
Keep in mind here that at the end of the day it's the importer who legally pays these tariffs. We can't tax some entity in China simply for jurisdictional reasons.
The idea here is that if this does affect China somehow, the importers will say, “Well now, I have to pay this tax, I'm not going to buy from you”, or “If I am going to buy from you, you're going to have to lower your price.”
Keep in mind that we're only 2.4% of China's market. We don't have a lot of clout in China. It's going to be difficult for Canadian importers to go to China and say, “Hey, lower your price because now we have to pay these tariffs.” The Chinese are just going to expect us to suck it up.
At the end of the day it's going to be Canadian importers, retailers, and consumers who are paying these, not entities in China.
11:15 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you very much.
My last question is about the third argument put forward by Minister Flaherty in The Globe and Mail. He argued that this was a way to encourage those countries to negotiate.
However, we already have a trade agreement with 7 of the 72 countries on the list—Jordan, Colombia, Panama, Peru, Costa Rica, Israel and Mexico. In other words, 10% of the countries are already excluded.
Do you think the argument whereby the objective is to encourage those countries to negotiate is actually valid?
11:15 a.m.
Professor, Richard Ivey School of Business, As an Individual
If it is valid, it's a very unusual one, given that we're not negotiating with the vast majority of these countries, including China and Brazil.
11:15 a.m.
Conservative
11:15 a.m.
Conservative
Mark Adler Conservative York Centre, ON
Thank you, Chair.
Mr. Moffatt, you just mentioned in your last statement that we're not currently negotiating with China and some of the other countries in the Asia-Pacific. I would propose to you, why would they want to negotiate with us? If they have total unfettered access to our market, and we have restricted access to theirs by virtue of the general preferential tariff, there's no incentive there whatsoever for them to negotiate any kind of free trade agreement or any kind of preferential trade agreement.
11:15 a.m.
Professor, Richard Ivey School of Business, As an Individual
Well, keep in mind that the GDP—
11:15 a.m.
Professor, Richard Ivey School of Business, As an Individual
Okay, sorry.
11:15 a.m.
Conservative
Mark Adler Conservative York Centre, ON
Our government since 2006 has eliminated $590 million worth of tariffs. Under the proposed Canada-EU agreement, it will eliminate another $750 million in tariffs.
We import roughly 7,400 items. Here, Mr. Moffatt, just as a point of clarification, you had mentioned earlier that the GPT will affect thousands and thousands of products. That's not in fact true. The GPT will affect 1,200 imported products. So it's important just to be clear on that.
Your comments on cross-border shopping also intrigued me a little bit. When the Canadian dollar was roughly 67¢, 68¢, 69¢, there was a flood of Americans coming into Canada to shop at the expense of their own border towns in U.S. states. I didn't hear any complaints from the Canadian retail association then, nor from people such as you, that we should somehow put an end to that because it was not fair. This is just the normal kind of ebb and flow of the marketplace. I would be in favour of freer markets as opposed to restricted markets, and I suspect you would be the same.
I want to ask you also, Mr. Moffatt, have you ever been a candidate for the Green Party of Canada?
11:15 a.m.
Professor, Richard Ivey School of Business, As an Individual
Okay, so....
No, I have not been a candidate for the Green Party of Canada.
Why don't I give you my entire political history?
Federally I was a Progressive Conservative for a number of years.
11:15 a.m.
Some hon. members
Oh, oh!
11:15 a.m.
Conservative
