International Trade Committee on April 26th, 2007

[The Chair, Conservative, Leon Benoit]

Good morning, everyone.

We're here today pursuant to Standing Order 108(2). The House of Commons Standing Committee on International Trade is undertaking a study examining the opportunities and challenges Canadian businesses face with respect to the Canada-U.S. relationship.

The committee is specifically interested in identifying and removing the obstacles that stand in the way of stronger economic ties with the U.S. and answering the question of what the Government of Canada can do to help Canadian businesses take better advantage of trade, investment, and business opportunities.

Before I introduce the witnesses for today, I have a couple of other items of business that I want to quickly mention. The first is the issue of travel. Somehow the dates given by the clerk and the dates the committee and I had talked about throughout the discussion are different. I had talked about the Thursday of the first week in June as the starting point, which makes it June 7, and that was certainly the date the committee discussed. So just for the record, the travel will be from roughly June 7 to June 19.

There may be a motion coming up toward the end of the meeting, and we'll deal with it at the time. It's certainly up to the member. I'll ensure that there's been proper notice given of that.

Mr. Julian, do you have a question or a comment on the travel issue?

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

No, I simply move to refer the travel issue to the steering committee.

[The Chair, Conservative, Leon Benoit]

I don't understand your comment.

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

We have a motion coming up later in this committee hearing. Rather than avoiding the witnesses, I simply move to refer it to the steering committee.

[The Chair, Conservative, Leon Benoit]

I don't know if there is an issue, but if there is, it can certainly be brought up later. I was only clarifying those dates.

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

Well, Mr. Chair, you need a discussion and a vote on that issue, so I move that we refer it to the steering committee.

[The Chair, Conservative, Leon Benoit]

It may be something we'll talk about later, Mr. Julian.

I will introduce the witnesses, and we'll have the presentations in the order of the introduction.

From the Canadian Chamber of Commerce we have Clifford Sosnow, partner, Blake, Cassels & Graydon; and Brian Zeiler-Kligman, policy analyst international. From the Canadian Council of Chief Executives we have David Stewart-Patterson, executive vice-president. From the Canadian Centre for Policy Alternatives we have Bruce Campbell, executive director.

I'd like to thank you all for coming today. I'm looking forward to your presentations. The clerk has discussed with you the amount of time you're allowed for the presentations. I ask you to stick to that time.

We'll start with the Canadian Chamber of Commerce. Clifford Sosnow, go ahead.

[Clifford Sosnow, Partner, Blake, Cassels & Graydon, Canadian Chamber of Commerce]

Thank you, Mr. Chair, members of the committee.

Recognizing the time differential, I'll break right into our comments. I understand that these have been passed to you in both English and French. For the most part, I will be sticking to that text.

Just to repeat the introduction, my name is Clifford Sosnow. I am the co-chair of the Canadian Chamber of Commerce's international affairs committee and partner at the law firm of Blake, Cassels & Graydon. I have with me Brian Zeiler-Kligman, policy analyst. Of course, after our presentation and when questions are asked, both Brian and I will be more than happy to respond to those questions as fielded.

We are pleased to provide input on the vital issue of the Canada-United States relationship. I think it's fair to say that our relationship with the U.S. is extremely complex, with literally thousands of agreements, consultations, and discussions going on at any one time. As you all well know, in our new security environment all issues are tempered by the need to balance North American security and competitiveness. Frankly, our ability to achieve both is very much tempered by the tone and the strength of that overall relationship. In our respectful submission, moving that relationship forward is of the utmost importance.

Now, we must keep in mind that the degree of our integration is such that we do not just sell to each other. We are not two separate entities that have no linkages other than trade. The reality is, we make things together.

The classic example is that each vehicle that's produced in North America crosses the border approximately seven times during the production cycle, so as result, effectively dealing with the Canada-U.S. border is a cornerstone to our ability to keeping this important relationship strong and progressive. Again, it is not an “us and them” equation; it is a “both” equation.

Balancing security and competitiveness, developing a border contingency plan, improving border infrastructure, and further regulatory cooperation are all interdependent strategies to enhancing the Canada-U.S. relationship. Further, the successful implementation of these initiatives can better position Canada in the U.S. market and enhance North American competitiveness generally vis-à-vis other established and emerging economic forces. We make that point cognizant that this is one of the key issues that you are looking at--how we manage that relationship given the threats from China, from India, and Brazil, recognizing also that those are valued and cherished trading partners.

If I could, I'll speak a few moments on the border contingency plan. A pandemic, a natural disaster, or terrorist activity--any of these could lead to a partial or full border closure. The border's importance means a strong contingency plan to deal with such a situation needs to be in place, and it's not yet there. That said, the Canada Border Services Agency, through the impressive work of its officials—and they usually get brickbats thrown at them, but the Canadian Chamber is showering them with flowers on the work they're doing—and the U.S. Customs and Border Protection agency are developing a border contingency plan through consultations with industry in both countries. We definitely applaud that initiative. We also applaud the additional $24 million that has been provided to further develop this plan.

You should know that earlier this month the Canada Border Services Agency and their U.S. counterpart engaged in a simulation exercise with our participation, and paradoxically it was a success, because it highlighted the failures. Clearly, more work is needed, and most evident was the need for both governments to work in tandem with business groups, such as the chamber, to develop a communication plan to ensure that businesses on both sides of the border are informed on who and what can cross the border, both during an emergency and as the border ramps back up to normal operations.

The reality is, though, that work still needs to be done on establishing a framework for determining which goods and people qualify for priority status, and we would urge speedy resolution of that issue.

If I can speak a few minutes to border infrastructure, we must also do more to improve that infrastructure. It's almost a trite proposition, but it's also a vital proposition. Since 2001, estimated processing times of shipments have increased 300%, and that represents at least $14 billion USD in annual costs to both economies, just simply because border infrastructure is lacking. It's that simple.

The growing number of border-related requirements clearly indicates that more must be done to increase border capacity in such areas as extending the number and length of fast lanes and the hours of full operations at key crossings.

I'll remind this committee that $2 billion in trade goes between Canada and the U.S. every day. Currently, 40% of trade occurs at the Windsor-Detroit crossing. So, in our view, an additional crossing is urgently needed.

The budget in 2007 provided for the federal component of this investment, but talks are still going on, so we urge this House to move forward quickly on this initiative. At the same time, we caution that this new bridge-crossing process must ensure that it is structured in such a way that it offers a fair option to the existing infrastructure. We would not want to see the new bridge create a zero-sum game with respect to existing infrastructure.

Investments to ease capacity and efficiency problems are also needed at many other crossings, including in the Richelieu area of Quebec, and in particular the Lacolle-Champlain gateway. That clearly is an issue that the chamber thinks needs urgent renewal.

In addition, Canada has only one marine-based preclearance site located in Victoria, British Columbia, but that terminal lacks infrastructure necessary to maintain passenger sterility and vessel security. In consequence, we have been told that the site is at risk of losing its preclearance status from the United States. We would urge this committee to urge the House to make the investments necessary on the terminal, as required.

Ontario, British Columbia, and Quebec are some of the major sore points with respect to badly needed infrastructure changes.

I'm conscious of the time and I'll try to speed up a bit.

The western hemisphere travel initiative is one of the most contentious border issues that there is between Canada and the United States. As you all know, this initiative concerns the need for a passport to cross into the United States.

There has been progress made to date, and we do applaud that progress and we support the efforts of the government and of the House to encourage the U.S. to delay the next phase of implementation of this initiative until a pilot project has been undertaken and analyzed.

At the same time, the reality is that the WHTI, particularly at land crossings, is going to happen and we can't get away from that. As a result, we ask the government, at the officials level, to do the job it needs to do to properly prepare for what we consider to be the likelihood of a flood of passport applications. We saw that recently with the air deadline. And there must be a quick rollout of a communications strategy to ensure that all travellers are properly informed of what documents are required and when the new initiatives will be implemented.

Finally, we encourage the expansion and promotion of the NEXUS program and the FAST program to fast-track the movement of regular and low-risk travellers. The reality is that those programs will minimize the impact of the WHTI.

I have two more points. Regulatory cooperation will facilitate the movement of goods and people at the border. What we're talking about here right now when we talk about regulatory cooperation is what has been referred to constantly as “the tyranny of small differences” between our regulatory regimes that impose significant costs on Canadian manufacturers, exporters, transport carriers, and Canadian and foreign customers, negating the benefits of the hard-fought tariff negotiations that you have all negotiated.

Differences exist amongst others regarding health and safety, technical, environment, and product packaging and labelling standards. Again, we would encourage greater regulatory cooperation in that area.

We would note that areas begging--and we use that word advisedly--for further cooperation include the auto and food industries. As well, in the defence industries, greater cooperation is needed in the area of U.S. international traffic in arms regulations. We can respond to questions on those specific issues as needed.

Finally, with respect to intellectual property protection, from a Canadian perspective, there is a lack of adequate intellectual property protection and enforcement. The reality is that this affects all Canadian industries and presents a health and safety risk to consumers, to society in general. Just last month, the chamber appeared before the House of Commons Standing Committee on Public Safety and National Security and we did advocate for changes to our IP laws and enforcement for the benefit of not just business but all Canadians.

Canada's poor record on IP protection is also affecting our relationship with the United States. In the past few weeks, the senior House Democrats sent a letter to the President requesting that the U.S. initiate a WTO complaint against Canada for what they say are our weak copyright laws. For both our interests and the sake of our most important relationship, we would urge the Canadian government to make improvements in our IP environment a priority, so that it is up to the standard of our international trading partners, in particular the United States.

Mr. Chair and members of the committee, we all recognize the vital importance of the Canada-U.S. relationship and the large number of potential areas for further enhancements. We have provided you with some areas where the Canadian Chamber of Commerce urges this committee to recommend that the House and the government focus on: enhancing relationships dealing with border facilitation; regulatory cooperation; and of course the corollary to that, intellectual property protection.

Thank you for this opportunity to present the Canadian chamber's views.

Of course, at the appropriate moment, we would be more than happy to respond to any questions you may have.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Sosnow, from the Canadian Chamber of Commerce.

We have now, from the Canadian Council of Chief Executives, Mr. Stewart-Patterson. Thank you very much. I look forward to your presentation.

Go ahead.

[David Stewart-Patterson, Executive Vice-President, Canadian Council of Chief Executives]

Thank you for the opportunity to appear and discuss with you the Canada-United States relationship. As many of you probably know, the Canadian Council of Chief Executives has been a strong supporter for decades of efforts to make the border between Canada and the United States less rather than more of a barrier to both people and goods.

However, if you look back to the 1980s, in the days before the original Canada-U.S. Free Trade Agreement, the main goal at that point was simply to ensure better access for Canadian companies to the huge market to our south. Today, I'd suggest to you that the efficient flow of goods and services and of people between our two countries does more than give Canadians better access to the U.S. market. What it does is enable companies on both sides of the border to work together, as my colleague from the chamber said, to compete more effectively against the rest of the world, and particularly compete against some of the new emerging economic powers out there, like China and India, which are essentially transforming patterns of trade and investment around the world.

At the same time, the terrorist attack of 9/11 ushered in a new era in which security became the focus of public policy in the United States. Despite that, we had a recognition by decision-makers in both countries that economic security and physical security had to go hand in hand. That led initially, of course, to the smart border accord between Canada and the United States and a similar one between the United States and Mexico.

As we've gone on, since the past five years, we've really had to recognize that, as my colleague pointed out, while goods coming into North America face only a single customs inspection, goods that are produced within the continent often cross the border several times as they set a flow from raw materials through intermediate processing and eventually become finished goods. So every measure that adds to the cost or time to cross borders within North America amounts to a tax, a tax on enterprises in both our countries, a tax on jobs in our countries, and a tax on investment.

A clear understanding of this reality is essentially what led governments to agree to the security and prosperity partnership of North America at the 2005 summit of leaders in Texas. I think it's remarkable because there are two sides to the SPP. It is both a strategic, visionary document and at the same time a very pragmatic, practical one.

Strategically, the SPP recognizes that the growth of all three of our economies requires much stronger cooperation if we're to enable companies to continue to invest, create jobs, to build global businesses from bases in communities within our countries. But in a very practical way, it also recognized that there's no great appetite for another grand bargain on the trade front. On the other hand, there is room for a lot of progress in little ways.

The focus of the SPP on issues that can be addressed without the need for treaties or new legislation has led some critics to portray it as a kind of grand bargain in disguise, but the underlying principle of the SPP, I would suggest to you, is simply to encourage a common sense approach to deal in practical ways with practical issues that can help the economies of all three countries do better.

The initial SPP agenda included some 300 items. Many of these represent very small steps and individually won't make much of a difference. On the other hand, even 300 small steps, if we take them all, add up to a pretty giant leap for North America and without any need for a grand bargain.

When leaders met in Cancun last year for the first anniversary of the SPP, they recognized that more direct advice from the private sector would be helpful in driving progress on the measures that would actually make the most difference, be most effective in enabling North American companies to attract investment and create jobs. The result was the creation of the North American Competitiveness Council, the NACC, a trilateral advisory body made up of business leaders from all three countries.

The leaders decided that the NACC should function fully independently of governments and therefore requested NACC members to seek secretariat support from outside government. That was done in each country. My council is pleased to be acting, serving as the Canadian secretariat to the NACC.

Once the NACC had been appointed, it moved very quickly. By August last year, members had agreed to focus on three strategic priorities in their first year: border facilitation, regulatory cooperation, and energy integration. Over the next four months the secretariats consulted broadly across the business communities in all three countries. A draft report to ministers was ready by early December. That was hashed out in the final report, representing a strong consensus across the business communities of all three countries, and it was approved in January 2007.

The report makes a wide variety of recommendations, more than 50 in all. The section on border facilitation makes recommendations in four areas: emergency management, expansion of border infrastructure, the movement of goods, and the movement of people.

On the regulatory front, the report supports the goal of completing a North American regulatory framework agreement this year and makes specific calls for action related to food and agriculture, financial services, transportation, and intellectual property. In the energy section, the report calls for trilateral measures related to cross-border distribution systems, human resource development, and clean energy technologies as well as offering some thoughts on how Mexicans might work within their own country to accelerate development of their impressive resource base.

Across all three areas, the NACC also urged governments not to slip into reverse to allow borders within North America to become more rather than less of a barrier to goods or to people. It highlighted two specific issues. First was the impact of the United States western hemisphere travel initiative on the movement of people and the line-ups for passports that we've already seen at passport offices as a result, and also the new inspections and fees being imposed by the U.S. Animal and Plant Health Inspection Service, or APHIS.

The NACC presented its report to the responsible ministers from all three countries at a meeting here in Ottawa in February. It's a public report. It's available on multiple websites. I brought copies with me for every member of the committee, in case you haven't seen it yet. I just want to emphasize that it is public and has been public for months. I'm interested if there are any comments on that front.

I have to say the government is already taking action on these recommendations. The 2007 federal budget responded directly to two of those recommendations in particular. The first was the elimination of a withholding tax on cross-border payments of interest through the Canada-U.S. tax treaty. The second was expanded investment in new capacity at the Detroit-Windsor border crossing. My colleague has addressed that already.

We're also seeing progress on other issues, although it seems to be somewhat uncertain at times. I would like to suggest to you that the most critical one here is the pilot project for land preclearance. This is something that has been on the books since the original smart border accord. The notion of moving customs processing for commercial traffic away from the physical border is a critical step if we want to ease congestion at those major land crossings. My understanding was that, as of the beginning of this week, a whole host of contentious issues had been ironed out. We were down to a single issue, but we're at a make or break stage, and I am still awaiting information as we speak as to whether that's been worked out or not. I certainly hope so.

Mr. Chairman, I might just note here that my colleague from the chamber touched on a number of issues: emergency management, border infrastructure, the western hemisphere travel initiative, regulatory cooperation, intellectual property. These are not just important to Canadian businesses.

I think perhaps the most important contribution of the North American Competitiveness Council is that with its first report we now have a position that is the formal and public consensus of business communities across all three of our countries. In other words, the business communities of Canada, Mexico, and the United States have looked at where we can agree and where we can speak with one voice to our respective governments. We're hoping this has a positive effect in enabling our three countries to work together more effectively at the government level and to achieve the objectives that leaders have set for us.

The members of the NACC will be reporting formally to leaders ahead of the next North American summit, which is scheduled to be hosted this summer by Canada. As they move into the second year of their mandate, they will be considering further practical ways to help companies and communities across North America compete more effectively within the global economy.

Mr. Chairman, I will leave my opening remarks there and look forward to your questions. Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Stewart-Patterson, from the Canadian Council of Chief Executives.

Our final presenter here today is Mr. Bruce Campbell, from the Canadian Centre for Policy Alternatives.

Go ahead, Mr. Campbell.

[Bruce Campbell, Executive Director, Canadian Centre for Policy Alternatives]

Good morning, and thank you, Mr. Chairman.

Thanks to the committee for at least beginning to investigate the security and prosperity partnership. As you know, it's the umbrella for a vast array of security- and economic-related initiatives under way to further integrate the North American market. It is a NAFTA-plus, or a deep integration, initiative. As David said, it's not a grand bargain type of negotiation, as NAFTA was; it's an incrementalist project. It's an executive branch to executive branch project. Legislative change is not expected, at least not directly, but despite its incrementalist nature, the cumulative effect of the SPP, over time, could be profound. It could be even more significant than NAFTA, depending on how far and how fast it goes. That's why I think it's important that you're focusing on it.

Like many others, I'm concerned about the process. You will hear from some of them in the coming days. I'm concerned about the lack of transparency and the lack of pubic input. I'm concerned about the privileged access that big business has under the new body, the NACC, established by the SPP. We have superficial information about the project, about the SPP, but not a sense of what's really going on.

I'm sure lots of useful and important and beneficial work is being done, but I'm also concerned that hidden by the sheer size and scope of the project, things are under way that may not be so beneficial and that they may privilege private interests over the public interest. In any case, neither Parliament nor Canadians can debate this until we have a better idea of what's going on.

I'm also concerned about substance, namely the free market model of integration that's being pursued. All the rhetoric we hear around the SPP is about ever-deeper market integration to increase competitiveness. It's about the integration of energy markets and reduction of regulatory burdens--regulation is always described as a burden. All of this is to enhance business freedom; I never hear talk about measures that would encourage upward harmonization of labour standards or environmental standards, measures that would encourage productivity gains to be distributed fairly to workers, tax measures that would prevent corporations from engaging in transfer pricing, or tax measures that would discourage shifting of profits to tax havens. This type of cooperation is not on the SPP agenda, and it begs the question: prosperity for whom?

Finally, I'm concerned about the shrinking of Canadian policy autonomy under the SPP. The SPP is a process of convergence or harmonization of policies and regulatory regimes for the purpose of reducing impediments to business. Given the huge power imbalance between Canada and the U.S., I can't help but think that harmonization means, in most cases, that Canada will bend its regulations or simply adopt U.S. federal regulations, and I ask this question: at what point does the narrowing of policy room to manoeuvre fundamentally compromise democratic accountability in our political system?

Those are some of my general concerns. In the few minutes I have left--and you'll be hearing from others about a range of issues from water to energy, etc.--I want to focus a bit on regulatory cooperation, which is really, as I said, about regulatory harmonization. It's proceeding on two tracks. One is the comprehensive track, which has been discussed. Then there are a number of sectoral regulatory initiatives, from energy infrastructure to pesticides, biotech, and pharmaceutical processes. I really hope you will be requesting briefings on the status of these initiatives.

There are a couple of specific concerns. Both the SPP leader statement on regulatory cooperation back in 2005 and subsequent statements make it clear that it's mainly about cost and competitiveness considerations. The considerations of protection--I'm interested in public interest regulation here--are given a subordinate place, so it's the regulated industries, not the regulators, that have a privileged place at the table with the NACC. That's of concern to me.

It's another manifestation of a shift that's been going on in the last four years under the smart regulation initiative, which is really a deregulation initiative. It involves a shift of the basic philosophy to regulation, which is called the precautionary principle, the primacy of protection, toward a risk management approach, which gives equal weight to business cost considerations. There has been a serious weakening of the precautionary approach. This has occurred over the objections of many environmental and health groups. Most recently, it has been embedded in the government's new regulatory policy that was revealed a few weeks ago, the government directive on regulations. So now the structures are in place, and I'm concerned that they will facilitate a regulatory harmonization process in a direction aligned with the Bush administration's aggressive deregulation agenda and that this will further compromise the precautionary approach and accelerate deregulation within Canada.

My other concern, for purposes of my presentation, has to do with the outsourcing of regulatory functions to the U.S. The business advisory committee on smart regulation in 2004 advocated taking advantage of what it called the superior scientific and regulatory capacities of the U.S. Food and Drug Administration and focusing its scarce resources on strategic priorities.

The trinational business report on North American integration in 2005 advocated immediate adoption of a tested-once policy for biotech products and pharmaceuticals, whereby a product tested in one country would automatically be accepted as meeting the standards of the others.

So my question is, is the SPP moving toward a tested-once policy for pharmaceuticals and biotech products? Does it mean a downsizing of our own testing and research capacity and accepting those of the U.S. FDA? How wise would it be to outsource such a vital government responsibility to a U.S. body whose safety record has been widely criticized and which is seen as under the sway of the U.S. pharmaceutical lobby? It seems to me that this is tantamount to importing deregulation.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much for your presentation, Mr. Campbell.

We will go directly to questions.

From the Liberal Party, the official opposition, Mr. Bains, for seven minutes.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Chair, and thank you very much, all of you, for coming here before the committee today. I'm glad we had a balanced perspective presented today, which is very important.

Just to highlight some of the remarks made by Mr. Campbell, we met with department officials as well, and I brought forth some of the concerns he alluded to with respect to transparency and accountability and with respect to the process. These concerns have been raised not only here in Canada with the security and prosperity partnership but also in the United States as well as in Mexico. There seems to be concern among legislators, the general public, and civil societies about this.

I think the primary concern has to do with the limited or exclusive executive-level access to some of these discussions that take place when some of these agreements are talked about or some of these partnerships are talked about. In your opinion, Mr. Sosnow and Mr. Patterson, do you acknowledge these concerns? If so, I'd like to hear from you, how do you think we can improve the process to include and engage other key stakeholders in terms of the going-forward process?

[David Stewart-Patterson]

If I may, I think the leaders established the process in 2005. It was a very public process. It was made clear from the beginning that the intention is to move forward, as Mr. Campbell suggested, not through any great leaps but in very practical, incremental ways. Last year, in establishing the North American Competitiveness Council, leaders essentially recognized that areas like regulation and border management are highly complex, and given the sprawling number of potential items for action, they would benefit from advice from those who would be most directly affected.

In other words, if you have a limited amount of time and attention that a government can bring to a broad agenda, you want to look at what actions we can take and how best we can use time and resources that are available. In serving those outcomes, the governments have decided what advice is going to be most useful. It seems to me that if you're dealing with issues of the nature that are being dealt with under the SPP, leaders simply turn to ask for advice from those with the most relevant expertise, and that's their option at any time.

[The Chair, Conservative, Leon Benoit]

Thank you.

Ms. Sosnow.

[Clifford Sosnow]

Thank you, sir.

My colleague, Brian Zeiler-Kligman, will respond to your question.

[The Chair, Conservative, Leon Benoit]

Mr. Zeiler-Kligman, go ahead.

[Brian Zeiler-Kligman, Policy Analyst, International, Canadian Chamber of Commerce]

Thank you.

Certainly the Canadian Chamber of Commerce always advocates for consultations on important public policy issues. We're a big advocate of the government consulting with business and other key stakeholders on these issues.

With specific reference to the SPP, in the last six weeks, the Canadian Chamber of Commerce has been approached by both Industry Canada and the CBSA seeking input or consultation on the SPP process, giving indications that the government departments viewed the NACC as one consultation and that they welcomed input from other sources. It is our understanding from these discussions that the government is already undertaking wider consultations. So we see this process already happening.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

No, I appreciate that. I just wanted your opinion on whether you felt other stakeholders were maybe being excluded from the executive-level process and should be included. I know the onus is on government to incorporate them into it, but I wanted to get your perspective on that.

Because I have limited time, I am going to proceed with my next set of questions, which has to do with an issue you raised.

Mr. Sosnow, you never mentioned this in your presentation, but I believe Mr. Stewart-Patterson did, with respect to our natural resources, specifically the issue of water distribution.

I travelled abroad with the minister to the Cairns Group discussions and had an opportunity to meet with countries, especially Pakistan and India. I asked them how they viewed Canada and what our competitive advantage was. Consistently, or across the board, in every discussion I had, they always said we were a country of natural resources, full stop. We've done a very poor job of branding ourselves outside of North America. And my concern in North America is that many lawmakers and individuals in the United States view us simply as a country of natural resources as well. I think we have to be very cognizant and mindful of that.

There's been some concern—it was written about today as well—with respect to water supply, water consumption, and water transfer and distribution. What assurances can you give us to make sure this is a competitive advantage that we have as a nation? This is a public good and something that is important to our future prosperity and future generations to come. What assurances can you give us in committee on how that very precious commodity will be protected in our best interests when those discussions take place—and I believe they will start tomorrow?

There's no doubt in my mind that if China and India are looking at our natural resources, it's almost certain the United States and Mexico are as well. I just want your opinion on that.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Stewart-Patterson.

[David Stewart-Patterson]

If I may, I will speak very plainly on the issue of water. The NACC did not consider water as an issue at all; it was not a subject of discussion and not a subject of any of the recommendations made.

The area on which the NACC chose to focus was energy, specifically. Frankly, the vast majority of the discussion about energy dealt with issues within Mexico. Members of the NACC were very cognizant of the fact that those were decisions the Mexicans had to make for themselves and that it was in their sovereign jurisdiction.

The main impact for Canada, for instance, was in regard to very practical things, such as our current very vibrant energy sector that is short of skilled people. Mexico, because of its restrictions on the development of its own resources, has a surplus of skilled people. Can we enhance or facilitate the temporary movement of those people, so that we can work on our labour shortage for now while helping the Mexicans develop and bring their skills up to the highest possible level, so that they're ready to work more effectively in Mexico when the time comes?

If I could speak more generally, not to the water issue so much, but to your second point, which was...?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

My second point was simply on what assurances you can give me. I know the discussion will come up. There are think tanks in the United States who have talked about water supply from the northern part of Canada; they want to divert that water supply throughout the United States. I know they've made many recommendations on that in the past, and it has come up in discussions.

I wanted your viewpoint, as well as Mr. Campbell's, in terms of whether Canada has staked out a position. Have any of these discussions taken place? I know there are future meetings where these discussions will take place, and I wanted to get your perspective on that.

[David Stewart-Patterson]

Specifically, there was a reference in the media this morning to a meeting that has nothing to do with the North American Competitiveness Council or, for that matter, with my council. So I'm not aware of what's on the agenda or who's there. It's not part of the official process.

But I will make one further point, which is that the Canadian members of the North American Competitiveness Council are very consciously aware of their responsibilities, not only as people trying to contribute to a trilateral business consensus, but also of their responsibilities as Canadians. Canadian members of the NACC have met separately with Canadian ministers and officials to talk about Canada's priorities within that trilateral consensus.

I can assure you going forward that as Canadian members of the North American Competitiveness Council continue their work, they will be functioning wearing both hats. They will be looking for places where all three countries can work together more effectively, but they will also very much be taking into account what they see as Canada's best interests.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bains. Your time is more than up, as you're a minute over.

Monsieur Cardin, for seven minutes.