International Trade Committee on Oct. 17th, 2006

[Mark Rowlinson]

I can answer that quickly. When there were negotiations ongoing regarding the FTAA, the free trade agreement of the Americas, for example, a draft text, you may recall, was made available prior to the somewhat now notorious gathering in Quebec City, and the same process has not been followed with respect to this agreement.

[The Chair, Conservative, Leon Benoit]

Okay, thank you.

Now we go to the Bloc for seven minutes. Monsieur Cardin, go ahead, please.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chairman.

Gentlemen, good morning and thank you for being here.

When our colleague Mr. Julian insisted on hearing from you, I thought it was a very good idea, first, because this brings an important dimension to any free trade agreement with the countries of North America, South America and so on, and, second, because it appeals to us because of globalization and multilateral, international agreements, the WTO and so on.

It's relatively unrealistic to think we can apply labour standards across all American countries in the short term. We see that businesses move from country to country in order to take advantage of their differences so they can make more money, operate their businesses and make them more profitable.

I'd like to go back to replacement workers. They say that Canada could be a leader or be a source of good things for all agreements. The Bloc has made a number of attempts to have the principle of eliminating replacement workers accepted, as is done in Quebec and a number of other provinces — the term “a number” may be excessive — but it's nevertheless being done. Canada is negotiating the agreements, and it can't even stand up for its own workers. That's why workers vary from province to province.

How can Canada keep pace in order to comply with minimum labour standards in international agreements?

[Mark Rowlinson]

Thank you very much for your question. I'm going to answer you in English because I'm more comfortable in that language.

First, you referred to the utopian desire to have labour rights enforced on a transnational basis. I would suggest to you that it may seem utopian, and I would agree with you that in the short term we're not going to see that sort of rigorous transnational enforcement of labour law—as opposed to labour rights, to some extent—in the Americas, and there are a number of reasons for that.

The primary reason, of course, as was pointed out at the last meeting, is that Canada as an economy and as a country is so different from Central American countries individually. You can't necessarily transpose a Canadian model of any kind of economic regulation onto a Central American country, and we're not suggesting that in any event. But as with Europe, where it has taken forty or fifty years to build up the kinds of institutional levels necessary in order to genuinely start talking about transnational enforcement of human rights, equity rights, and labour rights, we think that sort of slow, gradual institution-building is something all the states in the Americas should be considering.

And what you say about Canada is true. As I indicated earlier, the standards of Canadian labour law leave much to be desired in many respects. You raised, for example, the replacement worker issue. Of course, Ontario had a ban on replacement workers for a brief stretch in the early nineties, but it no longer does. Quebec remains a shining example for all Canadian labour law jurisdictions. British Columbia and Saskatchewan still have bans, but even the British Columbia ban is under threat.

When you're talking about international labour rights, those are issues that aren't insubstantial, but they're issues at the margins. Where we think Canada can really contribute is in our enforcement mechanisms and our labour rights regimes and the ability that we have to enforce our labour laws. Those things are actually pretty good by international standards, quite candidly.

In terms of that infrastructure, labour law requires two things. It requires laws on the books, something that is actually the easy part for most of the developing world. The difficult part is actually enforcing those labour laws and actually having the necessary infrastructure to enforce those laws. So that's the direction in which you have to go, in our view.

[Nick Milanovic]

I just want to add something briefly with respect to the utopian comment, because that stood out for me as well.

There was a time when property rights were a utopian idea, and they have obviously since developed in the western world a much greater importance and enforceability. When we take a look at the commercial rights that are now part of the NAFTA, even in the early 1960s or the early 1970s if we were to suggest that individual corporations had the right to sue governments independent of their own government's decision, that was viewed as being an idea very much at the margins.

But with the development of trade policy in the United States, in its provisions in some agreements with the Americans, and now in this agreement with Canada and Mexico, those rights have taken on a whole new meaning and are now being discovered by international trade lawyers in the three countries and vigorously pursued in some cases.

So given what was once a utopian idea in the 1960s and 1970s of commercial entities having these rights to enforce within international trade agreements, we see 30 or 40 years later a much more robust regime for the enforcement of property rights. We are at the point of beginning to enforce fundamental rights, and those rights, such as labour rights, have already attained some acknowledgement in trade agreements in the parallel agreements that we have criticized here today. We suggest to you that by inserting them in an agreement like this, we then begin to develop the institutional capacity to enforce labour rights internationally in accordance with these agreements.

[The Chair, Conservative, Leon Benoit]

Merci.

Monsieur Cardin, a very short question.

[Serge Cardin, Bloc, Sherbrooke, QC]

I simply wanted to go back to what I said earlier about what might be unrealistic in the very short term. However, I think there is an obligation to ensure that there are minimum employment standards in the countries that deal with each other. I think that's achievable, and that will probably be done sooner than in Europe, that is in 40 or 50 years. In the countries with which we do business, people are informed about, among other things, globalization.

Do you have any organizations or institutions, or do you establish comparative minimum employment standards, for example? The minimum wage, whether it's in Quebec, elsewhere in the country or in various American states, may vary quite a bit. The minimum wage in Quebec already corresponds to an existing poverty level.

In short, how should we proceed, at the international, North American or American level, to evaluate and compare minimum standards? Who can do it?

[The Chair, Conservative, Leon Benoit]

It'll have to be a very short answer, gentlemen, if you want to respond to that.

[Mark Rowlinson]

The notion of a living wage internationally, again, is a fairly well-established international norm. The International Labour Organization does work on these issues and indeed consults regularly with states about appropriate levels of minimum wage, the issue you raised. Obviously a minimum wage is going to depend upon the particular economy you're speaking about, but it's absolutely possible to both require countries to have a minimum wage and require that the minimum wage be enforced.

[The Chair, Conservative, Leon Benoit]

Thank you.

We'll go to the government side now. Mr. Cannan will start off for seven minutes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair. I'm going to share my time with the honourable member, Mr. Menzies.

Thank you, gentlemen, for your comments this morning, it's been very interesting. I think it's important that we do hear from as many people as we can from our country to have an agreement that represents fairly both the labour end and the business side of the agreement.

I wanted to comment a little about your request to have the draft agreements released. I've had the experience...and I think everybody in this room respects labour and the human rights law. We all agree that's very important, as is also the fine balance between the men and women who risk their capital, many of whom put their lives on the line to provide that opportunity of employment.

During the negotiations we've had with the CA4 agreement to date, our government has agreed to release the draft if there's consensus amongst the five parties involved. Being labour lawyers, you've been in negotiations with labour agreements, I would assume, in the past with different companies. I've been on both sides. I've been in unions and in management with unionized companies, and when you're negotiating a deal there has to be consensus, an agreement, amongst all the parties before that draft information can be released. To date the CA4 groups have indicated that they think it's premature to release this information.

My question to you is, from your experience in negotiating, don't you think it would be inappropriate for one country to release the draft unilaterally, since among all parties there's not been a consensus achieved to date?

[Nick Milanovic]

I'll begin briefly with the example of having consensus to release the draft text, which has been achieved today.

Canada led vigorously at the effort in Quebec City among the various countries of North and South America--34 countries--and worked very hard to convince its partners in this arrangement that there had to be some public accountability and transparency, and lobbied very hard and was successful at having the draft text released. We thank you all for your participation in that. It is important in understanding what's being negotiated at the table.

You also asked about our personal experience in labour negotiations with the employer. It would be a fair comment to say that unless there is consensus, unions and employers don't necessarily release draft collective agreements in the midst of negotiations. But one thing trade unions certainly do is have all the proposals vetted by their members, so the initial position of the trade union going into those negotiations is not only known by all the members, but also known by the employer, because it is certainly tabled before them.

In this circumstance there is no comparison, because we don't know what the Government of Canada's initial position at the table was. If you are going to operate on a model of consensus and you're not able to achieve it after trying very hard, then I would say you should at least release what the Government of Canada's position has been with respect to the various issues under negotiation.

[Mark Rowlinson]

I have one other point, to carry on with the analogy of collective bargaining. In most Canadian jurisdictions, any collective agreement that's reached has to be bindingly ratified by all the members once it has been negotiated, and we would certainly encourage that model with respect to this trade agreement.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Chairman, to supplement that, I totally agree, and that's one of the reasons we have a committee like this, to provide the input to the committee, and then all 308 parliamentarians will have the opportunity to discuss and debate the agreement.

Following up on your comments that when there is consensus among the parties...they'll release that information at that time. It was the same thing in the negotiations I've been in. The company I worked for was on strike, and I was a member of the union. We didn't get a copy of the agreement until it was final and we had to sign off on it. It will be before the House before that opportunity presents itself this time and there will be a lot of opportunity for further dialogue.

I have just one other comment before I hand it over to Mr. Menzies.

You mentioned the independent body that looked at the arbitration process--independent and efficient arbitration bodies. If one country imposes legislation on another country, how do you see that evolving into a model so there would be fair representation from everybody around the table to try to enforce unilateral laws?

[Nick Milanovic]

That wouldn't exactly be the model. We wouldn't be enforcing our laws against the Government of Guatemala. We would all be agreeing to a standard that every country would meet, and when there was a violation of that standard....

Currently under the NAFTA model, the chapter 11 model, the independent organization, the company involved, has a right to enforce the rights that all the countries agreed to in the particular context of its case or its dispute. When that happens, they choose from a number of international conventions regulating arbitration processes that have already been agreed to, and that initiates the process of getting parties to file their statements of claim, having an exchange of documentation, and having a legal hearing, which then is enforced by a panel of arbitrators. Sometimes the arbitrators are selected one from each country, and then a third is selected by the parties themselves, or there's another selection process. Then that panel goes forward and enforces or hears the case, hears the evidence, decides what the facts are, and applies them to the context of what was going on, the labour rights that have been agreed to, and then it issues a decision, whether the complaint is upheld or not. And if there is a finding that there's been a violation, then that panel has wide ability to enforce its finding and to provide a wide list of remedies.

That's the model, in a nutshell.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Menzies. You have about two minutes.

[Ted Menzies, Conservative, Macleod, AB]

Thank you, Mr. Chair. I knew I was going to be running out of time, but my short-winded colleague has left me a little bit of time.

I'm troubled by some of the comments, such as “downward harmonization” and “gradual erosion of labour standards”. I tend to disagree with those sorts of comments. I think we live in a wonderful country where our Canadian employers treat their employees quite well. I find those comments a bit insulting. It's insulting to Canadian employers, to people who drive this country, who employ people.

The last time I looked, we were hounding our immigration minister to let more people into this country. People want to come here to work because labour standards are high. People want to work in this country. That's what makes this such a great country. It troubles me when I hear these sorts of comments, that free trade has degraded our people because they're not treated as well.

I just wanted to get those comments out there.

Concerning negotiations in public, you're suggesting that these negotiations should be done in the House of Commons. I would like to get your comments, if I could.

Most labour negotiations are made behind closed doors before, as Mr. Cannon mentioned, the representatives of either side see the actual agreement. Are labour negotiations done in public or behind closed doors?

[Mark Rowlinson]

I have two comments on the labour negotiations issue.

First, labour negotiations take place, I'm proud to say, in a fundamentally democratic environment. That is to say, as I said earlier, the proposals are prepared by the membership, as a general rule, they are negotiated by a committee, and then they are brought back to the membership for ratification. I think the analogy between a broad inter-state trade agreement and collective bargaining is to some extent obviously not an ideal one. When governments—sovereign, democratically elected governments—engage in important treaty negotiations, the standard of broad-scale consultation should probably, it would seem to me, exceed that of a private negotiation between a union and an employer.

I want to make one other brief comment in respect of Canadian employers. You and I may or may not agree about the normative merits of Canadian employers, but I can tell you this. It's not so much that Canadian employers are bad or good, but I can tell you that I have on numerous occasions sat across the table from Canadian employers who came to their workers and said, “You need to take concessions”, or “You need to give up your defined benefit pension plan”, or “You need to take concessions on benefits”, or “You need to take wage concessions.” Why? “Because we have other operations”—in Mexico or China—“where wage rates are a quarter to a fifth of the wage rates we are paying you.”

That doesn't necessarily make an employer a bad or a good person. It's not a question of whether employers are good or bad; it's a question of the fact that employers are looking—and this is what employers do—to minimize their wage costs and make as much money as they can. They're charged with the responsibility to do that, and if they can do it by moving operations.... We have a serious—

[The Chair, Conservative, Leon Benoit]

Mr. Rowlinson, I'm going to have to cut you off, because we're over time, but I didn't hear an answer to Mr. Menzies' question, which was whether these negotiations take place in private or in public. If you could just answer that, then we'll go over to Mr. Julian, so that he has his time.

[Mark Rowlinson]

Very quickly, collective bargaining negotiations are a private process. As a general proposition, they normally take place in private, although the parties can agree to release proposals at any time. It depends on each negotiation.

[The Chair, Conservative, Leon Benoit]

If all parties agree to it.

[Mark Rowlinson]

Yes, if all parties agree to it.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Julian, you have seven minutes.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

Thank you very much for your presentation; it was very thorough and refreshing.

I'll touch on the point Mr. Rowlinson made earlier, which is the issue of the race to the bottom, because this is a critical component when we talk about the trade regime.

Since 1989—we all know this because Statistics Canada tells us—80% of Canadian families earn less now than then. So obviously there is something fundamentally wrong with the picture—that the trade regimes increase exports, but generally for the Canadian public and Canadian working families, they're worse off now than they were in the 1980s. That's a fundamental problem. So this race to the bottom is a fact, it's something we have to deal with as a trade committee, and we appreciate your bringing it forward.

I have three questions stemming from that. The first is the issue of what are the enforcement measures that have taken place or been put into place in other parts of the world? You mentioned that Europe's enforcement measures have been put into practice over a series of decades. How would they apply to Canada? How would they apply to the agreements we might care to put in place?

Secondly, you referred very specifically to some of the most egregious impacts of fundamental labour rights, such as the abolition of child labour. But how do we move to actually raise labour standards? How can we do that within trade agreements, so that in a sense the populations are better off in other countries--for example, in Central American countries?

And thirdly, in our last committee we had a hearing on the issue of the CA4 reference to Glamis Gold and that tragedy in Guatemala. In that example, or in any other specific examples, how would a provision for enforceable labour rights make a difference in communities impacted by the actions of Canadian companies?

[Mark Rowlinson]

Quickly with respect to your question about the race to the bottom and the European model, one thing that's interesting and terrific in some respects about the EU model is that they have managed to avoid the problem of capital flight by gradually developing these sorts of intranational labour rights enforcement mechanisms. This is to say that Europe took as a starting premise that they were not going to create an economic union where certain parts of Europe benefit by cutting labour standards, to the detriment of other parts of Europe. So empirically you don't have capital flight, say, from the wealthier Sweden to Portugal, or even to the former East Bloc countries, which are now part of Europe. Before the East Bloc countries could become part of the EU, they were required to essentially rewrite their labour law and bring all of their standards up to EU standards.

Clearly the distinctions between the Canadian and Central American economies are greater than the distinctions you find in Europe, so it poses an additional challenge. But that's the model you want as your starting premise, so that as you say, we're not going to have a sort of race to the bottom. That's not the basis upon which we're going to engage in international trade.

Nick.