International Trade Committee on Feb. 27th, 2007

[John Maloney, Liberal, Welland, ON]

The United States has bilaterals with some of the GCC. You indicated that the GCC prefers to deal in a bloc--so the six countries.

Are we prejudiced now because the U.S. is in ahead of us again, or do you think that negotiating free trade with the bloc will be okay? Can you get six countries to agree with us?

[Dwain Lingenfelter]

My sense is that Canadians don't realize how well they're liked in that region and how much better they're liked than the U.S at this moment in time.

The U.S. has trade agreements because they've pushed harder than we have. But even if we go there this late in the game with an approach to do trade agreements, I think they can be done very quickly and the results would be quite phenomenal. We have an image that we're the same as the rest of the world, but in the Middle East, and especially in the Arab-speaking world, in many cases Canadians are on a pedestal. Because of our French background, especially North Africa--look at Tunisia, Algeria, Morocco--would much prefer to deal with Canada because of the French language. Then there are many other political things that have happened in the last few years.

But as David said, we can't sit around and wait for this window to stay open, or not to start to close, because I don't think we'll have the advantage we have right now in five years from now. I'd be very surprised if we did.

[Paul Mariamo]

If I may add to that, at one time, for example, I was told clearly that Libya would like to do business with us and not the Americans. They want North American technology but they want to go through Canadians; they don't want to go to the Americans.

In Algeria, SNC-Lavalin has been doing business, even during the bad years. We were rewarded, big time, with many contracts because we stayed during the bad years. We shared the political risk that we talked about before. If you sacrifice a bit, you get rewarded. Many contracts in Algeria were given to SNC-Lavalin because it survived the 10 years that were tremendously bad in Algeria. And of course speaking French helps a lot. SNC-Lavalin has been the leading engineering company in Africa for a long time.

Because we speak French, we were the first company in Africa for a number of years. That helped us a great deal. It gave us an advantage over other companies like Bechtel or any other American or international corporation. Since we spoke French and were close to our clients, we could overcome the American obstacle and win a number of contracts. They think we are different from the Americans or the Europeans. They also wanted to put an end to the way that they awarded contracts to the French and to the British. The Europeans had a captive market in those countries. They want Canadians. We must find some way to capitalize on that advantage.

[John Maloney, Liberal, Welland, ON]

Mr. Chair, Mr. Temelkovski has a short question and I'd like to share some of my time.

[The Chair, Conservative, Leon Benoit]

Yes, just one question.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Thank you.

We have many people from the Arab world in Canada. There must be a substantial need for direct travel. You mentioned that currently we're flying through Brussels to get to the Arab world. What are some of the roadblocks, and what are some of the carrots we can provide to improve that?

[David Hutton]

If we're looking for greater transportation links, I think the solution is a very simple one: we just give them the landing rights. These are negotiated government to government. Of course, the only one that I'm personally familiar with is in the UAE. That currently offers six flights a week, on either side. We have not picked it up on the Canadian side, and certainly I think there is a market opportunity. I know that Air Canada was developing their Indian market instead of focusing on their market into the gulf, into Dubai and Abu Dhabi, but now they've decided not to pursue that any further.

So it's an open door. I know that Qatar is looking for an air agreement, Kuwait is looking for an air agreement. If you can put your freight in the bottom of a freighter going back and forth and get your goods and services there in a day instead of routing it through somewhere else, it makes a difference. And there's an enormous amount of business.

Ironically, and this probably isn't well known, one of the big cargo items on the Etihad flight from Toronto to Brussels to Abu Dhabi is diamonds. All of those diamonds were passing through Heathrow with an enormous insurance cost, and now they have a much more direct route to get there. I think there are trade negotiations going on between Canada and Kuwait right now. Royal Jordanian, of course, has regular flights as well. It's 100% a policy issue.

If you'll permit me, Mr. Chairman, I'll just add a quick word about the GCC as a group. This emerging group is of enormous significance I think to the global economy. By 2010 they will have a common currency. Inside one common trading bloc will be 50% of the oil reserves. It's an open question as to how they will denominate the currency. If they decide to not denominate it in U.S. dollars, which is what most of the member states have, but rather a basket of currency, such as the euro and maybe even an Asian currency such as the yen, we're going to have a profound shift in the world economy.

So this is going to be an extremely significant economic bloc. To my mind, that's just one more reason to be inside the tent and to have these economic agreements and relationships with an emerging force of very significant economic significance.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Cardin for about four minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you.

We are well aware of what you expect from government representatives in those countries: a more constant presence and better support for businesses. We seem to be failing you on that score. The government is thinking of closing some Canadian consulates: in Milan, in Italy, in St. Petersburg, Russia, as well in Fukoka and in Osaka, Japan. Since the trend is to close down consulates, there will not be as great a Canadian presence in various other countries.

You have a certain awareness about that part of the world and you hope to see a government or even a political representation there. That is not what is happening elsewhere. If you have a message for our friends across the table, you can tell them, today. It's important. If consulates are closed down in some countries, it is perhaps because they want to put government money to better use elsewhere. From what we can see, it does not seem to apply to that part of the world. Do you think it would be the best place for the government to invest and establish a presence?

[Paul Mariamo]

I think it is one of the best places in the world for the government to get the best return on its investment and that is because of the huge surpluses that the Middle East countries have. They are undertaking large scale, subsidized projects and creating jobs in the process. We see it as a consumer society and not a competitive one. It isn't like China where you create a competitor after having invested there. In the Middle East, there will always be investment and consumption; there will always be jobs for Canada. Money will flow into Canada.

What's more, the population is exploding in these countries, which have the highest birth rate in the world, if you don't count the expatriates living there. Investments will be made in their infrastructure to meet the needs that I have spoken of, and the investments mean business opportunities for us. It is up to us to make the most of that and invest in those countries.

It is one of the areas where the GDP will increase by 5% this year, compared to other parts of the world. I understand what you are saying, but I think it is a region where investment is warranted. We have to plan for the next five years. We have to know what Canada's return will be. We have invested in China, in India and in Brazil and we have created competition there. We are not creating competitors when we invest in the Middle East. The GCC countries are a consumer society, they do not compete.

[Serge Cardin, Bloc, Sherbrooke, QC]

You say that there is no competition in those countries. But what about downhill skiing? That would never have occurred to us.

[Paul Mariamo]

That is one of their big projects. I used to have a picture of it on my cell phone. It is quite interesting. Where else in the world, other than in Dubaï or Qatar, would you expect to see that?

[Serge Cardin, Bloc, Sherbrooke, QC]

That means that there is money over there.

[Paul Mariamo]

Yes, a great deal of money. It is the Canadians who should have built that project. Canadians are the best downhill skiers, isn't that right? There is a lot that can be done over there.

They built a huge hotel in Abu Dhabi; I think it cost 2.5 or 3 billion dirhams. The hotel was built for the GCC conference that was held three or four years ago. There is a special entrance for the exclusive use of government representatives who attended the conference. That door has never been opened again since the conference ended. Other doors are open though. There are mountains of cash to spend. They have huge surpluses.

However, they are not very familiar with Canada. People with money invested it in the United States and in Europe. After September 11, the money flow changed direction and was invested in the Gulf, in Arab countries and in Africa. We have to capitalize on that so that Canadian companies will get these projects.

We can also encourage them to invest here. Canada is considered to be a peaceful country, where there is no conflict, a country which is neither imperialistic nor colonialistic. So why not encourage them to invest here in Canada? That would create jobs.

I will respond to your question, which dealt with how we might generate business here in Canada. It isn't up to me or to my colleagues to do that. It is up to the government, the Prime Minister, the minister, the governor general. They must encourage investment in Canada, which is a stable country. Even though there might be talk of dangerous political situations in the Gulf, the countries are relatively stable. There have been no problems there for some time now.

Egypt, for example, has only had three presidents in 50 years. It is an extremely stable country. Yes, it is a dictatorship, but that is part of the Arab mentality. They can't form the type of democracy that we are familiar with. The word “sultan” comes from the Arab word “sulta” which means power. The sultan holds the power in his hands. After thousands of years, they did try to change things. But it has never worked.

We have to invite them here and show them that Canada is ready to welcome them. If we open our doors to them they will invest here. They don't know Canada very well, and are unfamiliar with the type of tourist opportunities that we can provide. They could, for example, come here to ski, to see our autumn colours, and what we have to offer. We were able to do it with the Japanese. Why not try it with the Arabs? They are interested and they have money to spend. They travel first class, and that generates income for the airlines. They are interested in doing that type of thing.

[The Chair, Conservative, Leon Benoit]

Merci, Monsieur Cardin. Your time is up.

We're really short on time. I know we have a motion that we want to bring to the committee, and we're running a bit late for that even. We'll go ahead, but your time is up.

Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

Did you want to start on this motion right now?

[The Chair, Conservative, Leon Benoit]

Yes, go ahead.

[Ted Menzies, Conservative, Macleod, AB]

We certainly mean no disrespect, but we do have some business that's been hanging over the committee. I have a motion that is, as I stated at the last meeting, a very friendly motion that all parties would and should support. They've had ample opportunity to go back to their respective caucuses to talk about this.

The motion is as follows:

That any Member of the Committee have the right to issue a dissenting opinion on any report to be presented to the House of Commons by the Committee within the conditions imposed by the Committee and in accordance with the Standing Orders of the House of Commons.

[The Chair, Conservative, Leon Benoit]

Mr. Menzies, before you speak on that...we can do this in two ways.

I don't know if there will be any debate on this. It was debated quite widely last time. We can go straight to a vote, in which case I would leave the witnesses here and maybe have a little bit more questioning. Or I can dismiss the witnesses, thank them, and then go on to the motion.

Can we go straight to a vote?

Mr. Julian, do you have a comment?

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

I think to be polite to our witnesses we should thank them for their presence here today.

[The Chair, Conservative, Leon Benoit]

Okay, then we may not be going straight to a vote.

Thank you very much, gentlemen. This was certainly a very interesting meeting. The information you brought to us is extremely helpful. Thank you very much for that, for your time, and for the great presentations and good answers.

[Dwain Lingenfelter]

Thank you for your attention.

We look forward to some meaningful things, and we'll watch for your proposals in the House.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Menzies, go ahead and speak to the motion.

[Ted Menzies, Conservative, Macleod, AB]

I think it has all been said. We've had ample opportunity to talk to our respective caucuses.

Looking at the clock, I would like to suggest, as you have, Mr. Chair, that we've had ample opportunity to formulate our opinions.

It's a very simple motion, and as I said before, it's one that should have been dealt with earlier. Perhaps it was my oversight that I didn't suggest it earlier on.

It provides an opportunity, which was provided to all the opposition members in a prior Parliament, that if they were not comfortable with the positions of a specific report they could add their opinions to it.

As it's that simple, I would like you to call the vote on this, Mr. Chair, and move forward so we can have our steering committee meeting immediately after this.

[The Chair, Conservative, Leon Benoit]

We will.

Mr. Julian, I see your hand.

Is it the mood of the committee to go to a vote right after Mr. Julian has a very short say? Is that the mood?