International Trade Committee on May 1st, 2007

[Maude Barlow]

Yes, it does conflict with NAFTA, because in NAFTA water is a commercial good as well as an investment.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Maloney.

[Maude Barlow]

Could I--

[The Chair, Conservative, Leon Benoit]

I'm sorry, Ms. Barlow, I thought you had answered. Mr. Maloney is out of time. He's a minute over. So make it a very short answer.

[Maude Barlow]

It does conflict with NAFTA, but in our view the United States has broken NAFTA by not abiding by the softwood lumber rulings. Therefore we feel it is perfectly legitimate for Canada to take a stand on the areas of NAFTA that don't work for Canada. We should ban bulk water exports, which means breaking our commitment under NAFTA.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Maloney.

Mr. Cardin is next for five minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair. Good morning, ladies and gentlemen.

Last week, we heard from witnesses whom I asked for information regarding where talks stood on the SPP. I did not necessarily get an answer to that question. Considering what was said during the first meetings, which were held in order to consult with stakeholders in the business community, the government and non-governmental bodies; Ms. Barlow, were you ever asked for your opinion with regard to the SPP?

[Maude Barlow]

The first officials to ask about our view were from the American embassy, two weeks ago. They invited us to the bunker to chat. We invited them back to our office instead.

Nobody from either the previous government or this one has asked anyone, as far as I know--not just us, but any environmental group, education group, or health care organization. All of our groups are in the dark on this.

In fact, two years ago we held a cross-country citizens' inquiry into Canada-U.S. relations. We had very good representation. We had members as citizens' juries hearing the testimony from all political parties. We heard from Canadians from all over the country, including Quebec, that they did not know anything about this process. So we held our own inquiry, which gave them an opportunity to say what kind of continent they would like, what values in this North American shared space they would like.

We heard from all sorts of groups, including small businesses who felt left out of it too. The common thread we heard over and over was that they were so glad to have a place to speak to this, because nobody had asked their opinion on it.

This process was guided by the Canadian Council of Chief Executives, the C.D. Howe Institute, and the Liberal government at the time. It has been handed in that form to this government, which has, in my opinion, deepened the commitments.

[Serge Cardin, Bloc, Sherbrooke, QC]

Trade is important to the SPP, as is clearly evidenced by comments from representatives of the automobile industry and import-export tradespersons. They want a secure and smart border that will facilitate trade. I don’t think there is any problem in that respect. However, with regard to standards, values in Canada and Quebec are not necessarily the same as in the United States. Things can be exported and traded easily in a way that benefits others more than us.

I want to go back to water. In one of your reports, you asked Canada to change the position that it took in April 2002, during a meeting of the United Nations Commission on Human Rights, i.e. that it was opposed to water being considered a human right. Should it be understood then that it agreed with water being considered a marketable good? If it was a human right, without having unlimited bulk exports, there could be some minimal trade of water, but NAFTA covers all goods expressly set out in the agreement and water is not one of them. Therefore, it could become one.

In Canada, nine of the ten provinces protect their water resources and have laws banning the export of bulk water. If I remember correctly, the North American Free Trade Agreement Implementation Act states that there is no exporting of bulk water. At this time, Canada should make formal submissions so that this is completely clear and the exporting of bulk water is truly excluded from NAFTA.

[Maude Barlow]

I have two points.

One is that you won't see the word “water” in NAFTA. What you'll see is the reference to the definition of a “good” that was in the old General Agreement on Tariffs and Trade. When you go to that, you will see water in all its forms, including ice and snow. NAFTA adopted the old GATT tariff notion of a good, so water absolutely, definitely, is in NAFTA, which supersedes the provincial laws; not one of the provincial bans on water exports would stand up to a NAFTA challenge. We have to remove water as a good, an investment, and a service in NAFTA. We need to do that.

At the United Nations, I am ashamed that our government continues to oppose the right to water. We got a rebuke last year from a subcommittee of the United Nations for Canada's continued appalling position. The United Kingdom just changed its position; it is now favouring the right to water, as are most countries in the world. I believe the reason we continue to oppose the right to water is that we know it would violate the notion of water as a good in NAFTA.

So for that reason, and joining the community of nations moving towards a right-to-water convention, Canada needs to change its position on water and protect it ecologically and politically.

[The Chair, Conservative, Leon Benoit]

Merci, monsieur Cardin.

Now to the government side, and Mr. Lemieux, for five minutes.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you to our guests here today.

Seeing that we've just been talking about bulk water, I'd like to clarify this. There is a lot of speculation in the media, in particular, regarding bulk water and the sale of bulk water, etc. So I'd like to say, first of all, that the Government of Canada has no intention of entering into negotiations on bulk water products; in fact, the International Boundary Waters Treaty Act prohibits bulk removals from boundary basins. Canada is committed to protecting water in its natural state.

The second thing I'd like to point out is that water in its natural state is not a good. Bulk water is not a good under NAFTA. Water in its natural state is not subject to trade agreements. And I'll just finish this off by saying that Canadian provincial governments have full sovereignty over the management of water resources and are not subject to trade agreements. I wanted to bring that out.

Last, a lot of the speculation comes from studies being done by private think tanks. Private think tanks are able to operate on their own and to do whatever studies they like. This does not mean they have government support, or even that they have government interest. I think these think tanks are where a lot of the speculation is coming from, as it's being reported that think tanks are launching studies. Well, go ahead. But these don't reflect on government or government policy or government position. They are think tanks.

To move on, I'd like to thank Mr. Adams for his presentation. I thank you as well for your positive comments regarding our report, and I'd like to acknowledge your support for some of the key recommendations contained within that report.

You spoke basically about the Canadian government having to focus on promoting trade negotiations and on exports of products to the U.S.—but also to other countries. You also supported recommendation 12, the advancement of the security and prosperity partnership talks going on right now. You mentioned vehicle emissions standards as an example of where progress, in fact, would be a good thing for your market.

Could you share with us how you see other security and prosperity partnership initiatives—because they are just initiatives that are going to come from this framework—specifically benefiting your industry? Could you share examples with us on how they would benefit your industry?

[David Adams]

I have already outlined some of the initiatives, particularly in the area of motor vehicle safety standards. We are largely harmonized with the United States right now, but there are some minor differences in about 40 motor vehicle safety standards at the moment. A simple one that I could offer as an example is the difference in bumper standards between Canada and the United States. Again, there is no real discernible reason why there should be a difference; one has a five mile per hour bumper standard and the other has a 2.5 mile per hour bumper standard. But if those were brought together, it would allow the product to be tested once; it wouldn't have to be tested twice.

I also made a comment in my remarks that I didn't get to, appreciating the point made in the committee's report on looking not only beyond our borders but also within our borders, and the need to have a harmonized approach to our regulatory regime within Canada. I guess I would speak to that in terms of the emissions standards you alluded to, with respect to different provinces considering California emissions standards—which have been a bit of a buzzword these days in terms of automotive emissions standards. Clearly, our view is that the best benefit for all consumers would be to avoid a patchwork quilt of regulation, both within Canada and North America, and to have one common emissions standard in place and one common fuel economy standard.

Those are a few examples of how these types of initiatives within the SPP, in particular, could assist our industry.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Very good.

I wonder if I might ask Ms. Anderson the same question. We have the SPP, and it's a framework under which there are comments and discussions going on between industries to basically facilitate trade and other issues. I wonder if you could elaborate for the committee where you see specific initiatives benefiting the industries that you work with, and how it would benefit those industries.

[Mary Anderson]

Thank you very much for the opportunity to comment on that.

I think first of all, as a general perspective, that the opportunity within the SPP is one of dialogue that brings together a whole variety of ideas. I think the value of it is that we have had on the table over 400, so we do know that we have a lot of industry input on what issues need to be addressed. They are very pragmatic issues, as Dave was alluding to, ones that when harmonized will also create better prosperity within all of our jurisdictions.

I think within our association...and as I mentioned, it includes small, medium, and large industries, as well as touching almost any industry with manufactured goods, into a whole variety. We even include, for example, the Port of Vancouver, CN and CP, so it's quite an interesting group. All of those areas, all of those jurisdictions, touch on regulations and regulation opportunities for looking at specific issues.

One of the areas that I think I would like to address, though, is probably within food products. What I see here is an area that has a multitude of requirements and regulations. There are areas related to food safety and food security that I think we need to look at very carefully. We all recognize some of the issues related to that, so we need to look at some ways in which we can track and trace products from their point of origin to final destination. I believe there are some very intriguing ideas that can be done along that line to harmonize those ideas.

As well, as I alluded to, there are some issues related to opportunities for looking at inspections. Other government departments are involved in food products; a whole variety of government departments touch on food. Going forward, I would welcome the opportunity for other government departments to be included in a consultation framework.

I mentioned as well some of the challenges that Canadians face in exporting their products to the U.S. Because they have inputs that are from other jurisdictions--for example, blended product into the final product--we have to track where that product originally comes from. We need to develop some transparency about where it's from and where it's finally going. But we also need to look at the framework in the U.S., within the FDA requirements, of looking at products that may have come from multiple places and are finally sold into the United States. The FDA right now requires a number of products that go across the border to be investigated or held back and looked at.

I would like to say again that I think that from our regulation perspective there are a lot of opportunities to see how we can streamline that process, expedite that process, as well as work with the U.S.--for example, to expand the number of accredited labs that can inspect products so they aren't held up over a period of six weeks or so.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Anderson, and thank you, Mr. Lemieux.

To Mr. Julian, for five minutes. Go ahead.

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

Thank you, Mr. Chair.

I'd like to come back to you, Ms. Barlow, and ask you two questions. But I have some comments to make beforehand.

One is on the issue of prosperity, because this is something that comes sort of by rote from folks who are proponents of the SPP and proponents of NAFTA. They always say that Canada has prospered immensely over the past 15 years.

The figures from Statistics Canada actually tell a completely different story. Since 1989, the lowest-income 20% of Canadians have seen their incomes collapse. They've lost a month's salary, in real terms. So they're getting by, now, on 11 months' salary as opposed to 12. The next 20%, the working class, has lost two weeks' salary. The middle class has lost two weeks' salary. The upper-middle class has seen absolutely no progress. Those who have profited are the CEOs and chief executives. The wealthiest Canadians have seen their incomes skyrocket.

Bruce Campbell, who testified last Thursday, said that essentially, under NAFTA, the top 5% of income earners had reaped almost all the benefits, creating this massive prosperity gap wherein 80% to 90% of Canadian families are earning less now than they did in 1989. It's incredible that anyone would continue to propagate a myth when the figures are so compelling and so clear. Why do we have an economic policy that leaves 80% to 90% of Canadian families behind?

My second question is about protections, or regulations, that we put in place to protect Canadians. I know that you were involved in chasing back bovine growth hormone in Canada. It was something that was approved automatically in the United States, because they don't have the same rigorous testing standards and their system is much more prone to influence from powerful corporate lobbies.

What do you think would be the implications or the impact of removing all of our ability to set protections for Canadian families, so that bad products that might be approved in the United States don't automatically come onto the Canadian market?

[Maude Barlow]

Thank you for both those questions.

We are very concerned about the social consequences of a merger the size of the SPP coming out of NAFTA.

We've watched our country change from looking like a large egg, with a great big middle class, to looking more like a pear, with more and more Canadians falling out at the bottom and fewer holding power at the top. And now, the further we merge, the more we look like the United States. We're not as extreme in the difference between rich and poor, but it's getting there.

In recent research, I discovered that the greatest difference between rich and poor in the world now is in the United States. It's not in Mexico. It's not in Latin America. It's not in China. It's not in Africa. The top 10% control two-thirds of the wealth. So we would be merging more deeply with a superpower that has basically abandoned the bottom two-thirds of its population. We are very deeply concerned.

It's very interesting that you should raise the bovine growth hormone issue, because I had written a note about the “tested once” provision. Several of the Conservative MPs talked about the harmonization of our regulatory positions and standards. One of the provisions is this “tested once” provision, whereby if something has been given the go-ahead in the United States, we would not have the ability to have a separate regime here in Canada.

Bovine growth hormone is the perfect example. We were able to stop it. And you should know that it was a Conservative Senator, Senator Mira Spivak, who took it very seriously, held Senate committee hearings on it, and was very much responsible for helping us fight to keep bovine growth hormone, which has been linked to cancer in tests with rats and so on, out of Canada.

Our concern is that we will harmonize our policies on seeds, foods, chemicals, environment, energy, water, and so on with the needs and concerns of the superpower that's 10 times bigger than we are. It's not that they're bad people or anything; it is that they're bigger than we are, and the big tend to suck in the small when you have this kind of situation.

We need to maintain our sovereign rights on this side of the border. That does not mean we're anti-American. I can't stand it when I or anyone I know is called that, because I'm on the board of three American organizations. We have a different vision of what North America must look like and what we need to hold on to. We are not anti-trade. We hope we continue to have wonderful trade relationships with the United States. But strong fences make good neighbours, as well, and we need to protect ourselves on this side of the border.

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

We've certainly seen a reaction in both the American mid-term elections, when there was a strong reaction to that kind of gutting of the middle class in the United States, and in the Mexican elections, where the PRD, according to many observers, actually won those elections. Again, it was a strong reaction to this economic policy by which only the top 5% benefits and the other 80% or 90% of Canadian or American or Mexican families are left behind.

Should Canadian families, then, be concerned about putting into place a system in which we automatically adopt whatever lower American standards are out there for pharmaceutical products or food products? We know there have been a number of cases--scandals--when products that should not have been put on the market were and were recalled afterwards. Should we not have those protections in place for Canadian families?

[Maude Barlow]

We absolutely should.

Let me quote to you from this paper that we're going to be giving you from the North American Future 2025 project. I've been talking about water, but it's full of many interesting things. They talk about:

In order to remain competitive in the global economy, it is imperative for the twenty-first-century North American labor market to possess the flexibility necessary to meet industrial labor demands on a transitional basis and in a way that responds to market forces. This demand will prompt policymakers [in all countries] to think creatively about prospective policy options.

That sounds to me very much like what they're proposing with the Atlantica project in Atlantic Canada and the northern United States. They're talking about bringing down the minimum wage and labour standards to the lowest of whichever jurisdiction has those lowest standards. So it's bringing those standards down.

This is all about merging with a country that has cut welfare by 13% every year since George Bush took power in 2000. As one woman said to me, “Well, he has created lots of jobs. I myself have three of them.” This is what life is like living under George Bush, and if that's what we want in this country, that's where we're headed.

We're asking our legislators here to consider and listen to those Canadians. We think we're the majority who want good relationships with our United States friends and neighbours. Many of us have family there, but we do not want to give away the right to maintain our own standards and one day influence the standards in that country to go higher.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Barlow.

Thank you, Mr. Julian.

Now we'll go to the official opposition. Mr. Temelkovski, for five minutes.

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

Thank you, Mr. Chair.

Thank you to all of the presenters.

Last week we heard from some of the presenters that prior to 2001 the average time it took for goods to be transferred between the States and Canada was about 45 seconds, and now it's over 200 seconds. They also alluded to the fact that the solutions were going to be physical, such as more borders, more bridges, and so on. Do you think the problem is borders or hardware? Or do you think it's legislative issues that have increased the time it takes to move goods and people across the borders?

That's to all of you.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Adams, you can lead off.

[David Adams]

I believe the numbers from the chamber, if I'm not mistaken, suggested that since 2001 there has been a 300% increase in the time it takes to cross the border, and the cost associated with those measures is about $14 billion U.S. So there is definitely a challenge. I'm not sure that prior to 2001 that challenge didn't exist already in terms of actually having the physical infrastructure in place to facilitate cross-border trade.

I think what 9/11 did was bring a laser focus to the issue and how we needed to look at developing some solutions. Situations like trying to address the new border crossing in Windsor have been, and continue to be, long-term propositions that we hope will be resolved sooner rather than later. Putting a new bridge across a river does take time. Environmental assessments do need to be conducted. The proper legwork on both sides of the border needs to be undertaken.

So I would suggest it's a combination of both. It's the physical infrastructure crossing the border. It's the infrastructure leading up to the border. And then the other element, as you suggest, would be the customs mechanisms, for instance, that are used to facilitate that cross-border trade. Ms. Osmond mentioned the e-manifest as being one of them.

[The Chair, Conservative, Leon Benoit]

Ms. Barlow, briefly please.