International Trade Committee on April 26th, 2007

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

So in that case, because of NAFTA's proportionality clauses, if there is a shortage of supply in Canada, Canadians would literally freeze in the dark while we supply the American market.

Under this energy integration, where we simply hand over energy policy to Washington, D.C., and the Bush administration, the proportionality obligations we have now would worsen.

[Bruce Campbell]

We are locked into—

[The Chair, Conservative, Leon Benoit]

I'll ask you for a very short answer, please.

Mr. Julian's time is up.

[Bruce Campbell]

We are locked into exporting a certain proportion now. It's almost two-thirds of our oil and gas export and close to 60% of our gas exports.

It becomes extremely difficult under the proportional sharing arrangements to change that situation. So we have an energy security problem.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Campbell.

We'll now go back to the official opposition Liberal Party, to Mr. Maloney, for five minutes.

[John Maloney, Liberal, Welland, ON]

Thank you, Mr. Chair.

Mr. Stewart-Patterson, in your presentation you referenced the smart border accord, which was signed in 2001 and which was a good step towards border issues between the United States and Canada. In 2007, it still hasn't been implemented, as you are aware.

Also, in both presentations—Mr. Sosnow's and yours—reference was made to the need for additional border infrastructure, specifically in the Windsor–Detroit area. The Buffalo and Fort Erie Bridge, the Peace Bridge, also has a plan for renewed infrastructure. The problem is they can't proceed with building new bridges because they don't know how to design their plazas. They don't know whether the cross-border accord is going to be in or going to be out. And after they design their plazas, they have to get environmental assessment approval based on these plans.

I was happy to hear, Mr. Stewart-Patterson, that this has boiled down, in your opinion, to one outstanding issue on having the smart border accord implemented. What is that issue? How can we as parliamentarians facilitate to remove that, if we can?

[David Stewart-Patterson]

I have to say that my knowledge on this file is limited. There are negotiations ongoing at this time, as I understand it, so obviously I don't know what's being said at the table.

As I understood it, as of, say, the beginning of the week, the outstanding issue dealt simply with the question of how to deal with people who approached an American officer at a preclearance facility, were chosen for secondary questioning, and chose not to proceed. I'm not an expert in terms of the legal issues and constitutional issues involved in that, but my understanding was that it was the only question that was still outstanding as of the beginning of the week.

[John Maloney, Liberal, Welland, ON]

Would a solution be to make that area, the preclearance area, not an international zone, but a...?

[David Stewart-Patterson]

That's the whole question with this preclearance facility. The question is, on whose ground are you standing, and therefore what constitutional requirements have to be respected, and so on?

One of the early issues that had to be dealt with was the question of whether border guards could or should carry guns while on this preclearance terrain. That one has been resolved, but....

[John Maloney, Liberal, Welland, ON]

Mr. Sosnow, do you have a comment?

[Clifford Sosnow]

Thank you, sir.

That is one of the issues. The other issue is, as you correctly pointed out, that environmental assessments have not yet been done.

Interestingly enough, locations have not yet been chosen, and these are, frankly, very fundamental yet enormously basic decisions that come before a discussion of the preclearance issue, which raises complex constitutional and legal arguments. What we're simply saying is, can we not agree as a committee to recommend to the House that it move with all due haste in terms of site selection, in terms of environmental assessment, and in terms of frequency of meetings to ensure constitutional jurisdictional issues are rectified sooner rather than later?

[John Maloney, Liberal, Welland, ON]

My understanding is that the Peace Bridge—Buffalo and Fort Erie—and also the Thousand Islands have been designated as pilot projects, but we want to move beyond the pilots to universal implementation when we're required to cross our border.

[David Stewart-Patterson]

I think you're right.

The pilot project was designated for the Buffalo crossing area, and obviously the fact that it has been held up for so long since the original smart border accord is very frustrating, not only because it's holding up efforts to deal with infrastructure and congestion at that crossing but because we need the pilot projects under way and completed in order to spread the process of land preclearance to the other major border crossings as well. So this is one of those little things that's holding up a very important piece of the border puzzle.

Certainly I would urge members of the committee, from all parties, that if you want to focus attention on one border issue that the government really needs to bring its full force to bear on and to work hard with the United States to get this thing resolved and get this project under way without delay, you'd certainly have our support.

[John Maloney, Liberal, Welland, ON]

How am I doing, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Mr. Maloney, your time actually is up.

Mr. André, for five minutes.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Good morning. I listened carefully to what you said and I have a question to ask you.

Presently, in the context of the Security and Prosperity Partnership of North America, are there business people representing the three countries and, if there are, how many have interests both in Canada and the United States or Mexico? It is well known that freedom of movement encourages industries to move from one country to the other.

There is also the whole matter of Chapter 19 of NAFTA. The softwood lumber crisis had a major impact on our industry in this area. As you know, Chapter 19 is very important as far as regulation, negotiation and disputes go. There are presently many questions about its validity, which was found to be rather weak in the context of the softwood lumber agreement. Are you presently reviewing issues related to Chapters 19 and 20 of NAFTA?

Obviously, some countries as well as some U.S. States are unwilling to ratify the Kyoto Protocol. But are you working together to identify some measures industry might take in the next few years to reduce greenhouse gas emissions? What kind of discussions are taking place in this regard?

[The Chair, Conservative, Leon Benoit]

Mr. Campbell, could you respond first, please?

[Bruce Campbell]

Thank you very much.

Mr. André, on your reference to softwood lumber and chapter 19, I think you've asked an important question. This committee held a lot of hearings on the softwood lumber agreement. I happen to think, and I think a number of members of the committee agreed, that it was not a good agreement, for a number of reasons. One of those reasons was that it would give the United States an effective veto over Canadian policies.

I have some recent correspondence from the Office of the President to the Minister of International Trade. They're asking for consultation because they believe the policies that have been put in place, for example, by the Quebec government, are contrary to the agreement. So the $436 million, another program in support of regional development in Quebec--$75 million--and $44 million intended specifically for forest workers.... These are indications that it holds a veto power and will determine and shape and limit the ability of our governments to apply policies in the best interest of workers and businesses in the industry.

On the question of Kyoto--and I come back to what I was talking about earlier about regulations--if, as it seems the NACC is recommending, there's a North American default standard that should be accepted, and the regulation should comply with that standard, we have different international commitments with respect to the reduction of greenhouse gases and Kyoto treaty commitments. If something like that is in place, how are we able...? I mean, regulation is a very critical part of implementing a protocol like that. How are we able to have the flexibility to apply a range of regulatory instruments that would be effective in reducing greenhouse gases if there is this North American standard that limits our flexibility? Those are real concerns.

[The Chair, Conservative, Leon Benoit]

Mr. André, your time is up.

We now go to Mr. Cannan for five minutes.

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

Thank you, again, Mr. Chair.

I just wanted to comment on one of the discussions that was taking place earlier regarding the Canadian Centre for Policy Alternatives' report. It did have some really interesting information about the fact that, working with statistics, the Canadian economy doubled in size in the past 25 years. Average real family earnings increased from $60,000 to $70,000 from the late 1970s to the early 2000s. In fact, the poor are demonstratively not getting poorer. This is according to the report's own statistics. The poorest 10% of families with children are 8% better off, in real terms, than they were 25 years ago. That's from your own report.

There have been over three million net new jobs created in Canada. This bilateral trade relationship between Canada and the U.S. is the largest in the world. Approximately 80% of Canadians live within 160 kilometres of the border. The report mentions, Mr. Sosnow, over $2 billion in trade per day--37,000 trucks, 300,000 passengers.

I come from British Columbia, the Okanagan Valley. The movement of goods and services is not too far from the border. Passports are a big concern.

I need to know a little bit more, from your perspective. What did we learn from this exercise that took place? I'm looking for some recommendations that you might have gained from the opportunity to experiment on communication plans. You looked at developing a communication plan to ensure that businesses on both sides of the border are informed on who and what can cross the border during an emergency.

Obviously, communication is key for businesses to understand what they have to do to help eliminate their freight being tied up for 10 days at the border, costing us money. Maybe you can elaborate a little bit more. What did we learn, and how can we share that information with our constituents?

[The Chair, Conservative, Leon Benoit]

Mr. Sosnow, go ahead, please.

[Clifford Sosnow]

Thank you, Mr. Chair.

With respect to that particular exercise, one of the big faults, if I can put it in those terms, is the sharing of information. In particular, there was a software that was used. We're getting down to the nitty-gritty here, but the software was supposed to create links that would be portals to allow businesses to understand what the governments on both sides of the border were doing to ramp up the border, to close the border. That software, to put it diplomatically, just was not working properly at all.

That basic government communication function of getting information out to the widest possible distribution, to tell us in very basic terms what the governments are doing and what we need to know to get our product across the border, and when we can get that product across the border is just not being performed.

Then, of course, there is the issue—and we discussed this earlier in my comments—of the need to have a sense of when there has been a shutdown, when there will be a ramp-up, what goes across first, and, when we're identifying people, who can go across first, and, when we're identifying goods, what kinds of goods can go across first, and how much and using what methods of transport. These are real nuts and bolts kinds of nitty-gritty issues, but, frankly, they just haven't been worked out yet.

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

So will we continue to have those fruitful simulations as we move closer to implementing some sort of consensus then?

[Clifford Sosnow]

Yes.

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

There is just one other thing before I pass the floor to my colleague, Mr. Wallace. There was a comment earlier about the importance of ensuring that Canadians stand up for sovereignty. I know Mr. Day was quoted in the paper today. There was some discussion about traffic flow over the Buffalo, New York, border. The Americans would have to give up critical inspection tools to comply with Canada's Charter of Rights. Minister Day said there was no way, and that we are standing up for the Canadian Charter of Rights. So that's an example of how the Americans are going to have to, instead of battling to the bottom, raise their levels to meet Canadian standards.

Mr. Wallace, I pass the floor to you.