Evidence of meeting #21 for International Trade in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agreement.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ambassador, and thank you, Mr. Cannan.
Now we will go to the New Democratic Party. Mr. Julian, seven minutes, please.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Chair.
Thank you, Mr. Wilson, for coming forward today. It's important to have your testimony.
This is the second day of hearings. As you know, this committee will be discussing later today a motion to continue the softwood hearings in British Columbia over the next few weeks. Hopefully we'll have all-party support for doing that. Given that British Columbia is the heartland of the softwood industry, I expect we'll get all-party support to do that and take this committee to Vancouver so that we can hear from the many producers who have expressed strong concerns about this agreement.
I'd like to start off by following up on the question from my colleague Mr. LeBlanc on the termination clause, so that we're all very clear. The original draft proposal for July 1 started by saying--I'm referring to article XX, clause 33--that after 23 months after entry into force, either party may terminate this agreement, and it goes on. Am I correct, then, that your comments indicate that the agreement would now say that after 18 months after entry into force, either party may terminate this agreement?
P.C., Ambassador of Canada to the United States of America, As an Individual
Eighteen months plus the six-month notice period.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
So we've actually lost five months. The agreement, with this improvement—it's difficult to understand it as an improvement—actually gives us an agreement that is five months shorter than it was in the initial draft agreement from July 1.
P.C., Ambassador of Canada to the United States of America, As an Individual
No, I don't think that's correct, Mr. Julian. The important way to understand this is to add the termination period and the notice period together. What you're reading from there is 23 months plus one month's notice; now we have 18 months plus six months' notice, so that it is effectively the same. The six-month termination was something that was felt important by the industry, by those people you were referring to just a minute ago.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you for your answer, but nevertheless, we've now moved from 23 months after entry into force to 18 months, and I think that's an important thing for this committee to know.
P.C., Ambassador of Canada to the United States of America, As an Individual
Plus six months.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
I'll continue.
Have there been any changes to clause 34? It reads, as of July 1:
The United States reserves the right to terminate the Agreement if Canada is not applying the export measures under Article VII and Article VIII without resort to dispute settlement under Article XIV or any other pre-condition for termination of this Agreement.
In other words, if there is even allegation of non-compliance with the agreement, the United States can, with no further recourse from Canada, terminate the agreement at any time.
Have there been any changes to that paragraph?
P.C., Ambassador of Canada to the United States of America, As an Individual
No.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Okay.
Have there been any changes to the rules or provisions around the running rules? This is something the companies have been raising as a major concern: that effectively the penalties are set retroactively. You referred to some committee that might, in a few months or a few years, come up with some changes. As far as the agreement is concerned—the draft agreement, because we're not dealing with theory here, but with the reality of the printed word—have there been any changes in this draft agreement to the running rules?
P.C., Ambassador of Canada to the United States of America, As an Individual
There has been, as you point out, discussion between the industries in the east and the west. They were looking for greater flexibility in the running rules. The running rules were negotiated after considerable consultation and a good deal of back and forth between the Canadian negotiating team and the United States. The conclusion we have come to is as set out in the agreement.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Okay, so there have been no changes to the running rules.
P.C., Ambassador of Canada to the United States of America, As an Individual
Let me conclude my—
Conservative
P.C., Ambassador of Canada to the United States of America, As an Individual
There were a number of changes from the original proposal for running rules, particularly with the option A running rules, that have provided increased flexibility. The industry was attempting to get changes from the April 27 agreement that had been agreed to. With the flexibility that was introduced during this period, it was felt there was a sufficient basis to move ahead. The U.S. has indicated, as I indicated to Mr. LeBlanc, that they would expect these matters to be brought forward to this consultative mechanism and that they would be happy to engage in discussion at that time.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Wilson. But it's important to note that there are no changes to the running rules.
You referred to continued litigation, and Minister Emerson referred to it as well. In fact, Prime Minister Harper has said there'll be seven years' litigation; we'll just continue, on and on. We know there are two cases, one of which we won again under Tembec a few weeks ago that's subject to one final appeal. We also have, on subsidy, the ECC judgment that the Canadian government has actually suspended, and it's a non-appealable judgment on subsidy.
I'll ask the same question to you as I asked to Mr. Emerson. We have these wild and irresponsible phrases and interventions, talking about endless litigation. We know there are two hurdles, both of which are non-appealable after the fact. So specifically, when you talk about endless litigation, what possible appeals are you talking about in those two cases that would allow both the tariffs to be taken off completely and the moneys to be returned? I'm talking about specific appeals, not vague fantasies like those Mr. Emerson and Mr. Harper have referred to, but specific appeals on the Tembec case or on the ECC judgment.
P.C., Ambassador of Canada to the United States of America, As an Individual
You used the word “irresponsible”, Mr. Julian. I'd be careful about who's using the word “irresponsible” and who they're directing it at, because some of the things that you're saying just now are irresponsible.
Mr. Emerson has directed his comments at the alternative of litigation in the case that we not conclude an agreement. We're not talking about the litigation that is in the courts rights now; we're talking about subsequent litigation that could be launched on very short notice.
P.C., Ambassador of Canada to the United States of America, As an Individual
So that is the litigation he was referring to; that's not the way you addressed it.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you for your answer. This is something that I asked Mr. Emerson. He was unable to provide any further grounds for appeal.
So effectively we are dealing with two legal hurdles, both of which we are very close to going over. Thanks for clarifying that.
Conservative
The Chair Conservative Leon Benoit
Mr. Julian, your time is up. If you have one more short question, go ahead.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
You referred to four to eight weeks before the return of tariffs from the United States. Can you clarify that you're actually talking about moneys that we've paid out through the Export Development Corporation, not moneys that would be coming back from the U.S. for that four- to eight-week timeframe?
P.C., Ambassador of Canada to the United States of America, As an Individual
The four to eight weeks refers to moneys coming back from the United States to EDC and then being financed. The moneys will be starting to come back from the U.S. Customs people during this period of time. But the Canadian government has agreed to discount the whole amount of the deposits and pay those up front within the four- to eight-week period.
P.C., Ambassador of Canada to the United States of America, As an Individual
That's money coming from EDC--