International Trade Committee on April 26th, 2007

[The Chair, Conservative, Leon Benoit]

You have about 30 seconds, Mr. Wallace.

You can take the next round, though, of course, but go ahead.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Campbell gave an example of regulation dealing with approval of drugs south of the border and whether we should be.... I'll give you a personal example, using the case of my mother-in-law. There was a drug in the United States that was approved and had been tested but had to wait for a clinical trial here.

Now, thank God, it saved her life—and I'm not just saying that, it actually saved her life—but it's exactly the kind of work that I think we should be doing: try to find an opportunity to work with our partners south of the border. That way, if it is tested only once and we're sure that the test is accurate, then assuring the health of Canadians, for example, can be expedited by that kind of work. I think it's a good thing we should be doing and not a bad thing.

[The Chair, Conservative, Leon Benoit]

I'll take that as a comment, Mr. Wallace. Your time is up.

We will now go to the final questioner on the first five-minute round.

Mr. Julian, five minutes.

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

Thank you, Mr. Chair.

What Mr. Wallace didn't mention were all the cases where the Americans fast-tracked pharmaceutical products that turned out to be harmful and afterwards had to remove them from the market. So we're actually putting Canadians in danger if we don't have a sober, second thought, a testing system that is not subject to manipulation by the pharmaceutical industry.

I'd like to come back to Mr. Campbell. On your comments about the regulatory framework, we've discussed.... Some members have referenced the egregious softwood sellout, whereby Canadians now have to go to Washington to get approval on any programs to help softwood communities, even though we've now lost 5,000 jobs and counting as a result of this very poor agreement. We talked about energy integration earlier, which means the same thing--Canadians going to Washington to negotiate access to our own energy resources.

I'd like to come back to the regulatory framework. Some of the things that have been thrown around by some of the other presenters--health and safety regulations, environmental regulations, and labelling standards--are all things that Canadians feel very profoundly about. Many Canadians are concerned about not having a genetically modified food labelling law so that we would know when there are genetically modified foods in products.

If we continue to lower our standards to lower American ones, whether it's pharmaceutical products and accepting dangerous products in Canada or not being able to have the kind of right-to-know labelling that many Canadians feel very strongly about, is it not true that, essentially, it would mean Canadians would have to go to Washington to lobby--right now, the Bush administration--for the kinds of standards and protections that many Canadians feel are important for their health and the health of their families?

[Bruce Campbell]

I think this regulatory harmonization issue is really important. Let's call it what it is and dispense with the Orwellian term of “cooperation”, because I think what this does is go well beyond it in certain places. If it is about recognition, or mutual recognition of standards, let's see the mutual recognition agreements. These agreements are incredibly difficult to negotiate.

Regulation is a vital function of parliamentarians. It's been defined as a subordinate form of legislation or a delegated form of legislation.

My concern on the sovereignty question is that, over time, the room to manoeuvre gets narrower and narrower, and at a certain point we realize we don't have the ability to regulate or legislate in the best interest of the country as determined by, for example, our health regulators or our environmental regulators. It's a real concern for me.

It's doubly concerning because of what we're regulating to, especially with the current administration in Washington, which has embarked on a very aggressive deregulation initiative of gutted air standards. I could go through a long list of regulations they have either weakened or eliminated, regulatory capacity that they've reduced.... I worry that this is a form of importing a deregulation agenda south of the border.

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

So, in a sense, we'd be gutting the protections that Canadians have decided, as a society, they want to have in place.

[Bruce Campbell]

Yes. Let's go back to drugs. Are you suggesting we have...?

I've heard a trade negotiator say we should get rid of the 900 people over at Health Canada, have maybe a dozen people looking at what the United States is doing or what other countries are doing, and basing their criteria for drug approvals on that basis.

Are we talking about gutting our regulatory capacity? Is this what it's about?

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

Are you familiar, Mr. Campbell, with any case where there has been an enhanced protection?

In the transport industry, I'm familiar with this push to lower our standards to lower American ones. That means fewer flight attendants to assist people getting off planes in emergencies. It means companies, on their own, taking over safety management and doing whatever they want with it. These are the kinds of things we see.

[The Chair, Conservative, Leon Benoit]

Mr. Julian, your time is up.

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

Do you see any areas where there has been an improvement?

[The Chair, Conservative, Leon Benoit]

We will now go to Mr. Temelkovski for five minutes for the official opposition Liberal Party.

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

Thank you, Mr. Chair, and thank you very much, gentlemen.

I'd like to ask a number of questions in terms of the estimated processing time of shipments. Are you aware of what the figures were prior to 2001, from 1995 to 2001, for example? Were they on an increased or a decreased level?

[Brian Zeiler-Kligman]

This was actually from a report by the Coalition for Secure and Trade-Efficient Borders, which was a coalition of about 50 businesses from both sides of the border that are studying the issue. Actually, their final report was in 2005, because they gave up on this issue, but the numbers within there were that prior to September 11, 2001, estimated processing times--and this, of course, varies depending on the shipment and other factors--averaged about 45 seconds, and that at this point as of 2004, which was when the latest data was available, the processing times had gone up to 2 minutes and 15 seconds.

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

Thank you.

You mentioned infrastructure as a capacity or as a reason for the delays, and you also mentioned infrastructure as part of the solution to the delays. Do you think infrastructure is part of the problem?

[Clifford Sosnow]

If I may, I think if you look at the border as a wall--and we talked about this before--when we talk about infrastructure we talk about doors through that wall, access points. The reality is that if your door is jammed, you're not going to be able to get into your house, and the more doors you have, the easier it is to get into the house and the easier it is to get out of the house.

The reality is that Canadians want to trade with the United States. The reality is that our trade grows every single year, and it is not just big business. When the trucks go over, they carry the produce of the farmers, they carry the produce of labourers and small business. But when you have doors that are creaky, when you don't have enough doors, you create the proverbial bottlenecks with all the attendant frustration, with all the attendant costs.

So you're quite right when you say infrastructure is the problem, but from our perspective infrastructure is the problem because (a) there are not enough doors, if I can put it in those terms, to manage that pressure to want to trade, and (b) the doors that are there, the infrastructure that is there, is fast becoming obsolete.

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

Is infrastructure going to solve most of it, or was it legislation that made this time increase from 45 seconds to 2 minutes and 15 seconds, firstly? And second, if I could put in my question, have you seen growth such as this in transferring goods and people across borders in other jurisdictions such as Europe, China, India, and Brazil? Are their timings of moving goods and people increasing similarly to our numbers, or are they somewhat insulated from the issues that we have to deal with in North America?

[Clifford Sosnow]

Those are all very good questions.

The reality is that everyone wants to integrate. The Europeans want to integrate further. I was in Beijing just last week, and the Asian countries want to integrate further; there is talk of an Asian sensibility that's different from a North American or European sensibility. The talk there is about how to break down barriers.

As you know, in Europe it's a community, so there are commonalities of standards with respect to labour, with respect to environment, and with respect to products and their labelling. For them, the drive is to remove those differences, because those differences mean greater timing.

As to whether those particular jurisdictions are suffering the kinds of issues that we suffer here in Canada, the answer is yes and no. It is yes in the sense that they're at a lower level of development, particularly in Asia, than we are in North America, so customs processing continues to be a problem that plagues them. From their perspective, that's something they need to work on. It's something they want to work on to reduce.

With respect to the United States, you asked why there is the problem of the time issue. That's the $64 million question. Part of it is security: the United States is feeling less secure. Since 2001 there has been a fundamental cultural shift in the way they view trading partners. That just means more paperwork. Then there is the issue of devoting dollars to infrastructure. As well, there is the issue of managing the complexities; we talked about them with respect to the Detroit bridge.

There are legal issues, there are dollar issues, and there are cultural issues. They wrap themselves up in a fairly complex ball.

Given the level of the importance of infrastructure and the complexity of the problems, delay, from our perspective, costs all Canadians billions of dollars.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Sosnow. Thank you, Mr. Temelkovski.

We now go to the government side. Please go ahead, Mr. Wallace, for five minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chairman.

Could I have just a brief response?

Mr. Campbell did mention mutual recognition agreements, and I agree with him that this is what we would need to see, but you can't have it without dialogue, Mr. Chairman. If we're not having dialogue, it won't happen. We are having dialogue and we may find solutions. I think Mr. Julian was one of the ones who accused us of fear-mongering on the government side this week, but he's the king of fear-mongering. Maybe he sleeps with the covers over his head; I'm not sure.

But without the dialogue, it would not happen. That's what I have to say.

My question is to the other people here today.

I am the chair of the steel caucus, and I am joined by Mr. Maloney, who is also on the steel caucus from the Liberal side. Part of the work that's been happening.... There is a North American steel trade cooperative. Just for the understanding of everybody around the table, for example, galvanized steel that's produced in Canada is treated as North American steel. It does not attract any duties, and it is not treated as offshore steel as it is sold in the United States. From the steel perspective, our biggest market is the United States. Unfortunately, Chinese imports are actually starting to surpass us for the first time in the United States, so it's putting pressure on our steel market--but as an example, steel is treated as a North American commodity. Jobs are produced in this country because they're able to sell the product south of the border and have it treated as a Canadian product.

I would like either the chamber or the CEO group to tell me if this is the kind of thing you would like to see for other product lines, in terms of our being able to work with our partners on a North American basis to make sure we are competitive against other areas of the world that are producing similar products.

I'd like both to answer that question.

[David Stewart-Patterson]

Mr. Chairman, I think the steel industry is an example of an early leader in the whole process of North American companies working together. Long before the SPP, the steel sector was ahead of the pack in figuring out how to make economic integration work for Canadians and work for Americans as well.

As you say, in the early days of Canada-U.S. free trade discussions, the big debate was over whether Canadians could handle competition from the United States. Today it's very clear that competition is global, and the best way for Canadians to compete and for Canadian communities to prosper is to work with our neighbours and figure out how to combine our forces, how to combine our strengths, and benefit communities on both sides of the border. I think the steel industry has gone a long way in showing how that can happen.

It's more difficult I think in other commodities, but I think the steel sector has shown what is possible, and I would commend them for their work.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

Mr. Sosnow, would you comment?

[Clifford Sosnow]

There clearly are, in our view, products for which a North American standard makes sense. For example, we talked about the proverbial movement of cars back and forth, and as they move back and forth, more and more products are added to them. That's just a reality. But all the different components have a U.S. standard and a Canadian standard. So there's compliance with two sets of standards. Notwithstanding the fact that North American labourers, if I can put it in those terms, work together to produce a North American vehicle, there's a plague in that there's both the Canadian standard for the variety of products that exist and there's the U.S. standard.

I didn't hear the chamber, in its opening statements, and I have not heard the chamber say anywhere else that the chamber is asking for a race to the bottom on the issue of developing common standards. What the chamber is asking for is the development of common standards that are mutually beneficial to both Canada and the United States pursuant to negotiations and agreements between the two of them.

[The Chair, Conservative, Leon Benoit]

Mr. Wallace, you can have a very short question.

[Mike Wallace, Conservative, Burlington, ON]

Okay. I'm just going to make a short comment then.

I think everybody, even Mr. Campbell, agrees that the only way to find solutions is through discussion. Some of us may agree or disagree on the process we've put together. But I want to be on the record as saying that I agree that we need to discuss this, particularly after you've demonstrated that when you're in Asia, the Asian groups are coming together, and obviously we know about the European Union and their approach. They have to work together. I think it's important for us on this continent to be working together.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Wallace.

With apologies, I go back to Monsieur Cardin. I apologize for missing you. Go ahead, please, for five minutes.