International Trade Committee on April 26th, 2007

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair.

Good morning, gentlemen.

I can see we have a diverse group of witnesses today. We have representatives from the Canadian Council of Chief Executives, the Canadian Chamber of Commerce and the Canadian Centre for Policy Alternatives. I am sure you do not agree on some issues or points of view. However, in 2005, the objectives of the Security and Prosperity Partnership of North America were to establish an approach based on cooperation, to design a common security strategy and to stimulate economic growth, competitiveness and quality of life.

In order to promote economic growth and competitiveness, important measures were considered such as increasing productivity, reducing the cost of doing business, enhancing common stewardship of the environment and facilitate agricultural trade. On the latter issue, it should be noted that countries agreed to consult the stakeholders, including the business community, State governments, municipalities and NGOs.

I want to know how the consultation process is proceeding, who is really taking part in it and, if it has not yet been started, when it will be.

[The Chair, Conservative, Leon Benoit]

Monsieur Cardin, is your question directed at any particular witness?

[Serge Cardin, Bloc, Sherbrooke, QC]

I will direct it to the representative of the Canadian Council of Chief Executives.

[David Stewart-Patterson]

If I may, we really only looked at the food and agriculture part of the agenda within the context of the regulatory priority. In other words, when members of the NACC established their priorities for their first year, they looked at border facilitation, they looked at regulatory cooperation, and they looked at the energy sector. The work after that was limited to those areas.

Food and agricultural issues were considered within the regulatory framework, but as you can see in the report, they were limited to some very specific items, in terms of labelling of fortified foods; eliminating duplicate food safety audits; and dealing with health claims on labels. In terms of the kinds of issues being addressed, that's what was being looked at. In the first year of discussions, no measure was contemplated dealing with changes to agricultural markets, for instance. There was nothing trade-related in that way.

[Serge Cardin, Bloc, Sherbrooke, QC]

I take that to mean there is no consultation mechanism. As you know, in the case of agriculture, most people are in favour of labelling. Moreover, it seems that 4,000 chemicals used in the United States are banned in Canada. Could the U.S., considering its weight, require Canada, for reasons related to prosperity, to accept products containing these chemicals? Should Canada prohibit their importation? In the case of these products, it is not enough to consult a few U.S., Canadian or Mexican ministers. Organizations advocating labour, environmental and health harmonization also have to be consulted.

Getting back to my question -- Mr. Campbell, you can also answer because you are familiar with the situation --, I want to know whether people other than those interested in making money will be consulted, as was contemplated in 2005?

[The Chair, Conservative, Leon Benoit]

Mr. Campbell.

[Bruce Campbell]

Thank you for the question. I think it's a very good one.

As I look at the report of the NACC that has been passed around, when it's talking about regulations it talks about a North American default provision, a North American regulatory standard, and that it should be the one that is utilized.

In the case of chemicals, as you mentioned, the question arises, what happens in the case that there are certain chemicals in food and in cleaning products that are illegal in Canada, which the regulators have determined to be such, and there's a different standard in the United States? What regulatory standard then applies? Is it going to be the U.S. one? Given the size difference, my concern is that it will always be biased in favour of the U.S. one.

Would it be a higher regulatory standard? Is there a principle? There's a negotiation going on, as you know, for an overall framework agreement for regulatory harmonization. Is it one of the criteria that the countries will foster an upward harmonization of regulatory standards?

I think these are really important questions. I favour cooperation, but I don't favour capitulation.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Campbell.

Merci, Monsieur Cardin.

Mr. Allison, for seven minutes, please.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you, Mr. Chair.

I want to thank the witnesses for being here today.

I have a couple of thoughts I'd like to get on the record, and then I have a question for Mr. Stewart-Patterson. It's good to see you back again.

I need to be clear in terms of this process. This last question asks, are we going to consult those who aren't making money? This is about businesses that employ people in this country who need to earn a living to make things happen. The challenge I have is that we have businesses where I come from in Niagara--and Mr. Maloney will attest to this--that while the Liberals were in government had issues at the border. We had fresh cut flowers that couldn't get across because we didn't have an inspection process in place or a preclearance program, etc. Thanks to Mr. Maloney and his government, they were able to go government to government to make this happen and start facilitating these goods.

I think what people fail to realize is that this is a collaborative process. This is to enhance the security, prosperity, and quality of life, because small businesses--I've got a news flash for you, guys--employ people, and this is how things happen. You want to talk about the criticism of lack of public consultations. Any changes to regulations or laws are not up to anyone doing the consultations. It's still going to be left to parliamentarians, an all-democratic process. What I see here is a way we can facilitate how we can move goods and services across the borders. Once again, 85% of our goods--these are all numbers we all know and we look at what is going on. We talk about transparency, and yet we have all kinds of stakeholders involved. I realize, Mr. Stewart-Patterson, you've already made reference to the North American Competitiveness Council.

As I continue to look and wonder, people fail to realize small businesses are affected when we don't work cooperatively with our largest neighbour. We're not talking about changing legislation. What we're talking about is how we can facilitate legitimate goods across the border in a timely fashion.

When I look at some of these things, it always boils down to people. It boils down to the fact that there are families working for small businesses that are trying to send their goods and services across the border. This is not some great conspiracy theory. Some of our members would like to fight with softwood lumber. We need to hold out when we have people who are not working and money that is being tied up.

I wanted to state this for the record before I move on to the question I have. It is directed to you, Mr. Stewart-Patterson. Back in January, the Minister of Public Safety talked about over $400 million for an e-manifest program and trying to enhance this whole initiative of risk assessment and these kinds of things. The example I used before is a great one. Mr. Maloney and I have producers of fresh cut flowers in greenhouses in Niagara. If they're stuck at the border for 48 hours because they can't preclear the programs, those products die; they're worth nothing and they're useless.

I would like you to comment a little bit on this e-manifest program and what it means to other businesses. Certainly, I can tell you what it means to a business that has perishable products. Talk to us about what this could mean in terms of overall trade.

[David Stewart-Patterson]

I think e-manifest is an excellent example of the very practical approach that members of the NACC from all three countries are strongly in favour of. If you look at some of the recommendations and discussions dealing with the movement of goods across borders within North America, and goods into North America as well, the conversion from paper to electronic products is clearly a critical element of that.

I'm strongly supportive of the work that's ongoing. Indeed, I think it's fair to point out that in some cases the recommendations being made by members of NACC were acknowledging that important work is being done by governments. We're simply putting a trilateral business endorsement on this, saying this matters to the future of businesses in all three countries and therefore the future of communities in all three countries.

If I may respond to your comment as well, because it addresses the question Mr. Campbell asked earlier in his presentation.... He was saying, “Prosperity for whom?”, suggesting that the SBP somehow was not producing prosperity for Canadians. I think that's a residue of older times when there were still worries in this country about whether we could compete with companies based in the United States. That is always an issue for Canadian companies. It's a big market. It's a competitive market. It's a challenge for anybody who wants to do business. I think we're also recognizing that there are even tougher competitors out there in the world who are transforming what Canadians buy on the shelves of the stores every time they go to the market.

The real issue is what kinds of jobs are Canadian communities going to be fostering in the years and the decades ahead. I think what the SBP recognizes, and certainly what is the goal of members of the North American Competitiveness Council from all three countries, is to enable people in communities in Canada, in the United States, and in Mexico to do the best they can in creating better jobs with better wages and salaries, better living conditions, a better quality of life, because we're doing the best we can to work together and take on the rest of the world.

[The Chair, Conservative, Leon Benoit]

You have about a minute and a quarter left, Mr. Allison.

Mr. Cannan, do you want to comment?

Go ahead, please.

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

Thank you, Mr. Chair.

I'll continue on in the next round, but just for this particular minute and a half, I thank you, presenters, for your presentation.

Just briefly, you can start, and I'll continue on in my next round. Dealing with this committee for the last three months or so, we have heard numerous witnesses coming together. We are building a trade strategy to help enhance trade, not only within North America but around the world. We've heard clearly the fact that there are challenges with the regulatory standards for both Canada and the U.S. Upon reading and researching it, I would say that the Americans have a lot of concerns as well.

Maybe you could comment on whether all Canadian standards are higher than the Americans' or the American standards are higher than ours. Where are we with this? I'm hearing that Americans are just as concerned as Canadians are.

[The Chair, Conservative, Leon Benoit]

Mr. Zeiler-Kligman.

[Brian Zeiler-Kligman]

Thank you.

Certainly Canadian standards and U.S. standards are not uniform in everything. A lot of commentators indicate that Canadian standards would actually have to rise in order to meet U.S. standards in most instances, so it is not an issue necessarily of racing to the bottom.

I also want to stress the fact that what we're talking about is regulatory cooperation, not just harmonization. In fact, the announcement in January that Mr. Allison spoke of also contained two other funding announcements that were very important toward regulatory cooperation. They were about important programs and issues to highlight what we're talking about here. One of the announcements was for funds to help the Canadian Border Services Agency and the U.S. Customs and Border Protection agency harmonize and come together and cooperate on their programs for registering companies crossing the border, their Partners in Protection program and the C-TPAT program. Rather than having two programs that essentially do exactly the same thing, operated by each country so that a company has to register twice and go through the process twice, they're looking at exactly the same thing. They're doing exactly the same thing, trying to actually put these programs together to create that kind of efficiency.

That's what we mean by regulatory cooperation as well.

[The Chair, Conservative, Leon Benoit]

Thank you very much. Your time is up, Mr. Cannan and Mr. Allison.

We'll go now to the New Democratic Party, to Mr. Julian, for seven minutes.

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

Thank you, Mr. Chair.

Thanks to all witnesses for coming forward today. Thank you particularly to Mr. Campbell. That was an excellent presentation you made.

We have a real problem in this country. It was admitted to by Foreign Affairs and International Trade on Tuesday. They simply admitted, for the first time, that what we've actually seen in this country since 1989 is poor Canadians getting poorer. In fact, there's an erosion of income, in real terms, that affects 80% of Canadian families. So since 1989, we've moved to a situation in which 80% of Canadian families are earning less now in real terms than they were then. We know that overtime hours have skyrocketed--by 33%--so ordinary working families are working harder and harder, longer and longer hours, going from temporary job to temporary job, part-time job to part-time job. This doesn't seem to be addressed by any of the public policy put forward by the previous government or put forward by this current government.

My question is for you, Mr. Campbell.

We seem to have a situation in which our trade and economic policy is made for CEOs and for corporate lawyers rather than for most Canadian families. We have a situation in which most Canadian families are earning less now than they were in 1989. If that's not a failure on the bottom line, I don't know what could be.

Do you see anything in this strategy, in what you've been able to find of it, that addresses this growing and severe prosperity gap?

[Bruce Campbell]

I've been a critic of the NAFTA that's been in place for a long time. I've been a critic of the model of integration that the NAFTA embraces. And it's not just NAFTA; there are other policies too. But the combination of those policies interacting with each other has in part been responsible for a growing inequality in this country, a level of inequality that we haven't seen since the 1920s.

Yes, there are--

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

So are you saying that we're seeing the same level of inequality now as we saw prior to the Great Depression?

[Bruce Campbell]

That's what the evidence suggests. We are a rich country. We've gotten significantly richer in the last 10 to 15 years. Yet our polling research and analysis show that almost half of Canadians have a sense of insecurity, and they believe they're only a paycheque or two away from poverty.

A large majority of families are running harder to stay in the same place. It's only among the top 10% or even narrower—the top 5 or 1%, especially—where there have been spectacular gains. So there is this sense of insecurity and running harder to stay in the same place.

So I reiterate the question that I posed at the beginning: prosperity for whom? I don't see anything in what's moving forward assuring me that measures are going to be taken, even from an integration standpoint, that will enhance the living standards and better the lives of the vast majority.

I suggested some measures that I think would have a positive effect, but I don't see them on the table for the SPP right now.

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

I'm a member of the New Westminster Chamber of Commerce and the Burnaby Board of Trade.

Small business people are impacted most when middle- and working-class families see their incomes decline. So what we really have is a strategy that seems to benefit the largest companies—those most inclined to downsize jobs in Canada—rather than small, local businesses that really need to have a prosperous middle class in their community in order to thrive.

I want to move on to energy integration. I don't know if you saw the excellent piece by Gordon Laxer this morning in The Toronto Star concerning Canada's energy insecurity. Basically Canada has given up its ability to manage its own energy resources.

Do you know of any other country in the world that gives another country preferential access to its energy resources to the detriment of its own citizens, aside from Canada?

[Bruce Campbell]

I find it curious that almost alone among the oil producing and exporting countries, Canada has not used this as a tool for diplomatic leverage. In fact, Canada seems to have pretty much surrendered that option.

So we are in the curious situation now. We don't have a strategic petroleum reserve in Canada, almost half of our energy is imported, and yet we're exporting a huge amount, almost two-thirds of our oil production, south of the border.

So we don't have energy security, and we don't have anything in place to enhance energy security.

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

How many industrialized countries do not have a strategic petroleum reserve?

[Bruce Campbell]

We're a net exporter, but we're also a huge importer. So among developed countries that are huge importers, I think we're probably the only one.

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

Yes, which would be quite appalling—

[Bruce Campbell]

The U.S. has a huge strategic reserve. East of the Ottawa River, 90% of our oil consumption is from imports from the North Sea, and there is a growing percentage from the Middle East, Algeria, and Iraq.

So we have no contingency measures in place in case there's a supply disruption.