Finance Committee on May 21st, 2013

[Murray Rankin, NDP, Victoria, BC]

So even if de jure it is, it's not de facto. In other words, it's possible in the real world that it would just be a tax.

[Prof. Mike Moffatt]

Exactly.

[Murray Rankin, NDP, Victoria, BC]

Is there a list of common consumer goods, electronic goods, that you know will be affected by this graduation of certain countries from the GPT regime?

[Prof. Mike Moffatt]

I haven't seen any, and there actually aren't too many. It's difficult to say. Even if the tariff is going up, is there some exemption under chapter 99 of the customs tariff document from CBSA? There aren't too many that I've found—just this whole class of iPods and MP3 players.

[Murray Rankin, NDP, Victoria, BC]

I want to give you an opportunity, maybe just for my benefit, to clear up something you said in your opening remarks. You referred to some 16 jurisdictions. Could you just explain a little bit more what you were getting at there? I didn't grasp that.

[Prof. Mike Moffatt]

We talk about China having preferential tariff treatment over a number of countries, but right now there are only 43 or 45 countries that pay higher tariffs than China, and 27 of those are in the European Union. So once we have a trade deal with 27 of those countries, there are only going to be 16 countries with a worse tariff treatment than China. So China is really only getting preferential treatment over 16 countries, and those countries include places like Andorra, the Isle of Man, and San Marino, so we're talking about a lot of really small European city-states, including the Vatican.

[Murray Rankin, NDP, Victoria, BC]

I see.

Dr. Cohen, I appreciated what you were saying and the clarity with which you suggested a specific recommendation at the end of your remarks. Psychological assessments, you say, are a necessary health service, and they are necessary for lawsuits. In your view, there should be an exemption from GST/HST. My question is, has the CPA done any economic analysis of such a change, or are you aware of what the government intended to get from the change they've implemented in Bill C-60?

[Dr. Karen Cohen]

In relation to Bill C-60, I don't know, given the length of time that it's taken to come to our attention. I want to underscore that it's not just in relation to court proceedings. It also has to do with insurance, because that's how psychological services and care are delivered in this country. We have recently commissioned a business case for how to enhance access to psychological services for Canadians—through a variety of models, whether they be insurance, publicly or privately funded, or employer-supported programs.

[The Chair, Conservative, James Rajotte]

You have about 30 seconds.

[Murray Rankin, NDP, Victoria, BC]

I'll pass.

[The Chair, Conservative, James Rajotte]

Thank you.

I'm going to take the next round as the chair.

I did want to thank all of you for coming, obviously, and I did want to focus my questions, if I could, on the two agricultural witnesses.

I appreciate your talking about the supply chain and drawing the linkage between the agricultural and manufacturing sectors. We often silo sectors. We say that ag is over here and manufacturing is over there, and that's not true. In fact, all these sectors are very much linked, so I appreciate your support for the capital cost allowance changes.

Mr. Laws, the Meat Council and your industry have been very pro-free trade. I did want you to comment further, though, on the general preferential tariff changes, because in your opening statement you supported the government. We've heard a lot of discussion about it today. I'd just like to get your further reaction to this discussion.

[James Laws]

Sure. Thank you very much.

I think it's important for people to realize—and I'm sure they do—that the changes to Bill C-60 actually extend the ability of the government beyond June of next year to offer these preferential tariff rates to developing and least developed countries. I think, as my colleague at the end of the table mentioned, that there are actually two separate issues: who's on the actual list versus what Bill C-60 is doing.

So we do support the Meat Council's standpoint that Canada does offer these preferential tariff rates to these countries. That's important.

The other point is that we also agree that if we are negotiating with a country.... For instance, Canada has a 0% tariff on pork from all countries, so if we go to negotiate with another country, it's very difficult because we're already completely duty free, but we are very.... So that's challenging.

On the beef side, we do have a 26.5% tariff on beef for most countries, except those that we have a free trade agreement with, so we do have something to trade. With the Europeans, we have a tariff to trade off with them. With the Japanese, we have something to trade with them. But we do believe that the list of countries that qualify for the general preferential tariff rate should be reviewed every now and again.

I didn't mention it before, but it's my view that there probably should be some international reference to which developed countries could refer to, a separate list that everyone accepts, such that these countries meet these criteria or not. That's my personal opinion.

It's true that if we are negotiating with another country we want to see also the elimination of all tariffs, all of them, but we believe, though, that it should be done bilaterally with a country or multilaterally through the World Trade Organization. That's important. It is indeed.

[The Chair, Conservative, James Rajotte]

I appreciate that comment. Similar to what was done in budgets 2009 and 2010, where there was a five-year elimination of all inputs in terms of machinery, this is something that I think you and Mr. Bonnett would very much support, I would say.

[Ron Bonnett]

That's right.

[James Laws]

Absolutely. That was fantastic.

[The Chair, Conservative, James Rajotte]

Okay.

In the time I have left, I did want to get the two of you to comment on the temporary foreign worker program. As an MP from Alberta, where there's a real labour shortage, I do my best to try to explain to people the necessity of this program.

As you've mentioned in your opening remarks, there has been a lot of misinformation spread about this program, implying that its purpose is to actually lower the wages of Canadian workers or to abuse foreign workers. Can I get both of you to comment very briefly on the necessity for this program, especially for your sectors?

[Ron Bonnett]

Would you care to lead off?

[James Laws]

Sure.

I'll repeat that Canada's meat industry has many, many temporary foreign workers working in meat processing facilities across the country, especially in some more remote facilities, and, very important for us, we don't pay workers less than what Canadians make. They all pay union dues. They all have guaranteed housing. The companies pay for airfare to and from the country. We were very pleased a couple of years ago when the government extended it to two years.

We worked with the Province of Quebec for many years because the Province of Quebec wasn't allowing temporary foreign workers. What was happening was that companies in Quebec that operated in other parts of Canada were having to decide whether they would actually move their processing capacity outside of Quebec. Luckily, Quebec finally agreed that, yes, they needed to bring them in.

It's very important to us. We welcome all Canadians, all the time, and we try very hard to get Canadians to work in these meat facilities.

[The Chair, Conservative, James Rajotte]

On this issue, Mr. Bonnett, you have about a minute.

[Ron Bonnett]

I have just a couple of quick comments. I think the discussion around temporary foreign workers has been taken off in a different direction because of some examples that really weren't accurate.

If you look at agriculture from the primary production side, you'll see that the seasonal agricultural worker program is one of the most valuable programs and has been around for a number of years. Actually, some of the workers from the Mediterranean countries and Mexico are looking at this as one of the best development programs they have for their countries, because workers are coming here, making money, and then going back.

That program is separate from the temporary foreign worker program, which, as James has outlined, is extremely important for the agricultural processing sector. We depend on that sector to buy our products. There's that integration.

There are also temporary foreign workers used in between there, too, for everything from chicken catchers to some of the contract jobs that are done.

I think one of the things we want to emphasize is to make sure that we don't get hamstrung with approval mechanisms such that we can't get the labour sources we need, and we also want to try to dispel this myth that we're paying those workers less than any other worker would be paid.

[The Chair, Conservative, James Rajotte]

I appreciate that clarification very much.

I'll go to Ms. Glover for the final round, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair, and welcome to the witnesses.

I want to say that the two panels we've heard from today have been very interesting, particularly when we're talking about the GPT, the general preferential tariff. We've heard just today from the Canadian Manufacturers and Exporters that it's a good thing that the government has changed this. The chemistry folks who appeared today said the same thing, as did the agriculture federation, the meat council.... Even trade law firms, who weren't here today, such as McMillan LLP, have said that it's a good thing that we've finally changed this after 40 years.

We have heard from Mr. Moffatt, the only one who has said some things that he's actually had to correct, as when he said that thousands and thousands of products are going to be affected, and then he of course—

[Prof. Mike Moffatt]

Well, keep in mind—

[Shelly Glover, Conservative, Saint Boniface, MB]

Let me finish, and then I'll let you respond.

Then, of course, we said that there are 1,200.

I'm going to give you the opportunity, Mr. Moffatt, to correct the “thousands and thousands” comment that you have made in newspapers, etc., when it really is only 1,200—to which you nodded your head in agreement with when it was brought to light, and on which officials have been very clear about.

[Prof. Mike Moffatt]

Well, it's 1,290 tariff classifications, but each individual classification can and does affect multiple products. Take the sporting helmet classification. It affects hockey helmets, baseball helmets, ski helmets, and so on.