International Trade Committee on May 3rd, 2007

[The Chair, Conservative, Leon Benoit]

Good morning, everyone.

Everyone take their seats and we'll get the meeting started.

Before we get to the witnesses today, I would like to note that we've been starting our meetings late quite regularly. I really want that to end. Today, of course, because of the committee that was here before, it's understandable, but from now on, I really want the meetings to start and end on time.

I'll start today by ending this meeting at 1 o'clock, sharp. It's not fair that people have to leave to get to their next meeting and our meeting is extended.

Next time, I encourage everyone to be here on time. I will start as long as we have three members, which is all we need to hear witnesses. So please stick to the timelines that have been laid out for the committee.

I will now get to the business of the meeting today, which of course is a continuation of our study on Canada-U.S. trade. We're dealing with investment issues and other trade issues, including the security and prosperity partnership of North America.

We have, as our witnesses today, from the Canadian Labour Congress, Teresa Healy, senior researcher; from the Canadian Trucking Alliance, David Bradley, chief executive officer, and Ron Lennox, vice-president, trade and security; from the Quebec Network on Continental Integration, Normand Pépin, director, research services, and Nancy Burrows, coordinator; and from Carleton University, Michael Hart, Simon Reisman professor of trade policy, Norman Paterson School of International Affairs.

We will start in the order the witnesses are listed on the agenda. We'll start with the Canadian Labour Congress and Teresa Healy.

I must insist that you stick to the eight minutes that have been allocated. Also, I will cut off the presentations if they go any significant amount beyond that.

Please go ahead, Ms. Healy.

[Teresa Healy, Senior Researcher, Canadian Labour Congress]

Good morning.

I would like to thank you for this invitation to appear today.

The Canadian Labour Congress represents 3.2 million workers across Canada. We live and work in every single community in this country, and we have expertise as workers on every single economic sector as well.

In the labour movement, we are concerned for the well-being of our members and their families, of course, but our concern is broader than that. We organize ourselves by a principle of solidarity, and solidarity has brought us directly into the political realm to fight for public health care and other public services, for equality for women, for dignified work, and a welcoming society for immigrants, for good jobs, and a just economic policy here in Canada. We also work to see that our government represents us in creating a just international order.

Last week we were horrified to hear of the death of two Chinese workers at an oilsands project in Alberta. Migrant workers facing the most precarious working and living conditions in the country also face dangerous work and are vulnerable to abuse in many forms.

In solidarity with organized and unorganized workers across the country, the CLC appears before you today to ask you to consider very carefully the implications of the so-called security and prosperity partnership. We ask you to candidly assess this initiative by answering the question: security and prosperity for whom?

As social activists, we in the labour movement usually have our eyes on the laws that are proposed, passed, reformed, or defeated in our respective legislatures. What the SPP reveals is that the government executives in North America are willing to cooperate to avoid legislative and public challenge. Democratic debate and decision-making are making way for privileged corporate access and new rules that undermine sovereignty and human rights.

The SPP, like NAFTA before it, is partially about trade, but more fundamentally it is about changing the role of the state in relation to investment. It has allowed private investors to continue to push for privatization of public services and an expanded role of the market into the public economy. The creation of an integrated and increasingly privatized North American economic bloc is intended to strengthen the position of North American corporations in world order under the economic and security umbrella of the United States.

Our relationship with the United States is certainly about trade. Many of our members depend upon jobs in the traded sector of the economy. We miss an important lesson, however, if we think about economic integration in North America only in terms of trade flows.

The so-called big idea of negotiations leading to a broader trade and investment treaty has fallen out of favour. Rather, in the context of widespread opposition within civil society and among progressive political parties, proponents of ongoing liberalization have moved underground to promote what is known as deeper integration across North America.

Some define deep integration as coordinated actions by governments, intended to eliminate regulations and open up service markets to foreign competition. Others simply call it NAFTA-plus. At its core, the idea is that the more governments harmonize regulations across borders, the deeper economic integration has been achieved.

As the Minister of Industry Canada said recently, he is working, “to ensure that Canada and U.S. regulations are harmonized”. Where this is not possible, Minister Bernier stated, the government will work with industry to recognize regulatory differences and ensure “an attempt be made to soften them”.

The agenda of regulatory reform tells us that NAFTA did not bring absolute free trade into being. There are still ways in which market regulations are subjected to restraint by society. From a neo-liberal point of view, this must be changed, political opposition notwithstanding.

The SPP agenda tells us that the reforms should diminish environmental regulations, speed up food safety and drug approvals, loosen occupational health and safety requirements, and facilitate the rapid production, export, and consumption of energy resources.

Regulatory reform is also meant to impose corporate-defined benchmarks as “best government practices” to govern the provision of public services.

The SPP is about increasing the power of corporations and ongoing deregulation. However, the current project of regulatory reform is also meant to impose a new layer of regulations on workers, citizens, and residents of North America, framed with an anti-terrorism justification. In this sense, then, deep integration is also about re-regulation and a much stronger role for the state.

Since 9/11 Canadian investors with powerful economic interests in closer integration with the United States have refocused their efforts, but now have cloaked them in the language of national security. Regulatory reform appears at one level to be a mundane and routine area of public policy-making, which simply deals with what makes sense. However, it is anything but that.

The SPP is not a signed treaty and has never been brought before the legislatures of North America for discussion and review. It is driven by the executive levels of government in consultation with the business community but excludes the legislatures and parliamentary oversight. It is a process that depends upon working groups within the public service of all three countries but excludes public consultation. The CEOs, however, have unfettered access to this process.

While I could go on at length to talk about the U.S. energy security agenda, I won't do that right now, nor will I talk about the hyper development of the tar sands, which is something I could speak about, but this is something that you might want to refer to in the brief I submitted to the committee.

What I would like to comment on in the last minute I have here is that we're very concerned about the increased harmonization of Canadian and U.S. customs and immigration policies in respect of the security agenda. The SPP provides for an ongoing process of negotiation on the terms of expanded border surveillance infrastructure. Elements of a common trade and security perimeter are being introduced, with implications for sovereignty, and, on the security front, advances are also extremely worrisome in terms of civil liberties.

We need to understand this aspect of the SPP in relation to the impact on workers, especially workers of colour. What are the mechanisms within the SPP to evaluate the relationship between security cooperation and human rights? Who is monitoring the effects of the new security regime on workers of colour and racialized immigrants as well as migrant workers?

Finally, I'd like to conclude by saying that the great tragedy of this new cooperative dynamic between Canada, the United States, and Mexico is that it does nothing to address the most pressing issues of our day. Given the many ways in which governments in North America could cooperate to increase social equality, it's very clear that these areas are not being addressed by this agenda.

Since the Second World War, the United States has drawn Canada ever closer to itself. Canadians, however, have stubbornly taken their leaders to task in the great debate over whether a government should promote an east-west or a north-south economic orientation. Indeed, Canadians and their social movements and their political parties, in many respects, have worked hard to reveal the interests of capitalists hidden behind the invisible hand of the free market. Over the past five years, the institutional racism exerted by the iron fist of the security regime has been revealed as well.

We call for full public hearings and a vote in Parliament on the SPP. We call for abolishment of the North American Competitiveness Council. We would like to see review and study of the implications of further security cooperation with the United States on workers, especially on immigrant workers. We call for the government to abandon any regulatory agenda that leads to the hyper development of the tar sands. We call for the government to abandon any regulatory reform agenda that leads to the downward harmonization of standards. Finally, we call for a process that is open, transparent, and accountable, leading to a North American relationship built on democracy, human rights, and sovereignty.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Healy.

We will go now to our witness from the Canadian Trucking Alliance. I understand that Mr. Bradley couldn't be here today, so, Mr. Lennox, please go ahead, for eight minutes.

[Ron Lennox, Vice-President, Trade and Security, Canadian Trucking Alliance]

Thank you very much.

First of all, David offers his regrets. He's been ill for the last couple of weeks. He had planned to be here until as late as last night, but, unfortunately, he just couldn't make it. He's asked me to read the following statement on his behalf.

Let me begin by thanking the committee for the opportunity to appear this morning. I'll address some specific issues regarding the security and prosperity partnership and the North American Competitiveness Council in a few minutes. But let me begin by giving you a trucking industry perspective on trade and the Canada-United States border.

No doubt, everyone today recalls the scene back in mid-September 2001: trucks were backed up for miles waiting to cross into the United States. Despite the frustration and confusion that reigned during those days, people, truck drivers especially, understood that we were dealing with an unprecedented situation. The U.S. had been attacked and its government reacted as its citizens would expect, by subordinating everything to national security. As difficult as it was, everyone knew that the border backlogs would eventually be cleared.

Now, almost six years on, border delays can still happen at any time, but they're not a feature of the nightly news, and the lineups, when they do occur, are generally shorter. But no one should have the illusion that all is well at the border. There is no room for complacency. To a great extent, the current situation reflects the fact that Canadian exports of manufactured goods to the United States are soft. Both car and truck traffic are down. The reality is that the border continues to thicken, and this is a threat to our economic well-being.

In some respects, the situation immediately post 9/11 was easier to deal with than today. The Canada-U.S. smart border declaration of December 2001 was the result of a great sense of urgency and purpose by the two national governments.

Improved security and trade facilitation was the goal repeated at every conference, at every meeting, in every speech, and in every interview by politicians and government officials. It made sense then, and it still does now, but are we on the road to achieving that balance? Regrettably, from where I sit, listening daily to the folks who work in the trucking industry and who move two-thirds of Canada-U.S. trade, I have to respond no.

Despite the lofty intentions of the two governments, the border is increasingly bogged down in a seemingly endless stream of costly and often redundant security measures and fees, mostly emanating from the U.S. Some may tell me to be patient, that it's just over five years and we're still in the midst of a transition from the old way to the modern border, where data moves electronically, trucks are processed efficiently, and border officials are able to surgically target those who may do us harm. No doubt, there is some element of that going on. The border is becoming more automated and, done right, by eliminating paper and the need for physical inspection, this should help speed things up over time. There's still hope that risk assessment programs, like free and secure trade, will one day reach their full potential.

But the flip side, and one I hear most often, is not so optimistic. Over the past five years those involved in cross-border trade, but particularly the truckers, have had to restructure their operations to respond to at least a dozen major U.S. security initiatives.

Trucking companies in the thousands have adopted supply chain security programs and have invested in expensive information systems enhancements or outsourcing arrangements to meet strict prior notice requirements. CTA has estimated that the cost to the trucking industry alone just to cross the border into the U.S., which inevitably ends up being passed on to our customers, is about half a billion dollars per year.

Yet even if a company has done everything possible to secure its business, should one individual, say a truck driver, be apprehended for smuggling drugs into the United States, the company he works for will see its C-TPAT and FAST designations automatically cancelled pending a review, which can stretch to several months, putting that company's transborder business in jeopardy.

Initially, companies were encouraged to promote and market C-TPAT and the FAST program as a way to generate business. But it has also been suggested to us that carriers should be wary about promoting their C-TPAT status too broadly less they become targets for smugglers.

There's also an important personal dimension: border security was supposed to be all about keeping the bad guys, the terrorists, out. The rest of us, the other 99.99%, were supposed to be able to continue to travel and trade with a minimum of aggravation. It hasn't turned out that way. Our drivers face the prospect of multiple background security checks, sometimes for different programs within the same department. Trucks drivers have been berated and fined for packing roast beef sandwiches and oranges in their lunch bags. The slightest administrative error and they can be held up for hours. In the worst case, they can lose their FAST card and have little chance of getting it back.

It would be easy to blame the border inspectors, the folks on the front lines. No doubt they do take the brunt of the criticism, and, yes, on any given day, some people will say and do some dumb things or take themselves a little bit too seriously. But let there be no confusion: no one gets promoted for getting more trucks across the border. The real responsibility lies with those sequestered far from the border in our nation's capitals. It is there where I believe perspective needs to be regained.

Lawmakers and public officials seem to be able to roll out new programs and requirements at will. This spring, for example, single-crossing U.S. customs fees for trucks were increased. New U.S. agricultural quarantine inspection fees will be imposed June 1 on all trucks crossing the border, regardless of what they're hauling, even though the agency responsible freely acknowledges that between 80% and 95% of the trucks entering the United States don't even move commodities of interest.

Yet another redundant, duplicative, and expensive transportation worker identity card is being introduced this year, initially at U.S. seaports but eventually at all transport facilities. Truck drivers who have already been security screened under the free and secure trade program will need one of these cards regardless, at a cost of $100 or more.

I'm sure everyone here is aware of the western hemisphere travel initiative. It has been cast as a tourism issue, but make no mistake, if problems are incurred in getting the right credentials into the hands of truck drivers or if there are significant backups in non-commercial traffic, it will spill over into the commercial lanes; it will very quickly become a trade issue as well.

Since 9/11, three major initiatives have been rolled out in an attempt to cope with this dilemma of how to make the border more secure without choking legitimate traffic and trade. First, there was the smart border declaration, then the security and prosperity partnership, and most recently the North American Competitiveness Council.

While CTA has been engaged in all three exercises and saw in each the opportunity to push through some much needed reforms, I'm beginning to question whether we have lost focus and whether the focus and urgency that characterized the smart border declaration, which is being driven in this country by a small focus team in the Privy Council Office, has been similarly defused.

Make no mistake, the Canadian Trucking Alliance expressed support for SPP when it was first announced, but I have to be blunt in stating that I am underwhelmed by its impact to date. At its initial incarnation we were told that the SPP was to deal with low-hanging fruit, those issues that individually might not appear to add up to much but in combination would have a positive impact on the border.

Initially, there was some progress. I point to the 25% solution to increase throughput at Ontario-Michigan border crossings as a useful exercise. Other initiatives in progress also hold promise, most notably the commitment to harmonize automated systems that are used to transmit and receive information from U.S. and Canada Customs.

However, I can't help but note that one of the most important SPP initiatives as far as the trucking industry is concerned, something that had its genesis in the smart border declaration, was shot down last week when the U.S. Department of Homeland Security said it was officially backing away from a commitment to pilot reverse inspection at two Ontario-New York border crossings, the principal one being at Buffalo-Fort Erie.

This was a positive initiative with support not only from traders on both sides of the border but from the local communities themselves. No one ever said that reverse inspections would work everywhere, but they did hold promise at the Peace Bridge. If agreements to conduct pilots of potential solutions can be unilaterally shelved, what confidence can we have in other agreements and declarations?

One other example, a seemingly innocuous initiative under the prosperity banner, would have seen a streamlining of the process by which Canadian carriers file proof of insurance in the United States. But what has happened? The issue has been thrown into the formal rule-making process. Earlier this year, CTA and others filed comments in response to an advance rule-making notice. Sometime in the future there'll be a formal rule-making proposal, and maybe, eventually, there'll be a final rule that will make things better for Canadian carriers. I don't believe this is what the formulators of SPP had in mind.

It's probably too early to reach any conclusions about the North American Competitiveness Council. It has served to once again raise the profile of border issues to a certain degree, and it makes some recommendations on issues of concern to trucking, such as the agricultural fee issue I referred to earlier. But whether it can or will ultimately be a mechanism for effectively dealing with the kinds of issues truckers deal with on a daily basis or to regain the kind of momentum initially generated by the smart border declaration remains to be seen.

I would also like to add that in our opinion, our own government needs to be better organized and less diffuse in its approach to border issues. This is our economic reality as an export-driven economy and the other partner in the world's largest bilateral trading relationship.

Thank you very much for the opportunity to appear here this morning, and I'd be pleased to answer questions.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Lennox, for your presentation.

We'll go now to the Quebec Network on Continental Integration. We have two witnesses today, Monsieur Pépin and Ms. Burrows. Either one or both of you can make a presentation up to eight minutes. Go ahead.

[Normand Pépin, Director, Research Services, Central des syndicats démocratiques, Quebec Network on Continental Integration]

I will begin the presentation, and Nancy will pick up where I leave off.

The RQIC is a multisectoral coalition that brings together 20 or more social organizations in Quebec, including union, community, grassroots, student and environmental organizations, women's groups, and human rights and international development organizations. Altogether, we represent 1 million people in Quebec.

Today you have appearing before you the representatives of the CSD within the RQIC—myself, in other words—and Nancy, who represents the Fédération des femmes du Québec, or FFQ, within the RQIC.

To begin with, I'd like to thank you for extending your hearings beyond what was originally planned, which was to hear only from officials representing the departments concerned and employer organizations, with the exception of the Canadian Centre for Policy Alternatives. It was a great initiative on your part, but it will not be enough.

These hearings are extremely important, but they do not provide an opportunity to reach parliamentarians as a whole—there are about 15 of you here today—and even less so, the people of Canada. And yet, all these people should be kept informed of what a small group of members of the Executive inside the Canadian government is negotiating on their behalf—in other words, the Prime Minister, the Ministers of Industry, Foreign Affairs and Public Safety, and a select group of private sector executives.

We believe that the Security and Prosperity Partnership of North America, or SPP, is an important issue that should be subject to a broader social debate and a vote in the House of Commons. The government cannot hide behind the fact that this is not a duly signed treaty between the three countries to justify its current behaviour—in other words, working behind closed doors and only disclosing the information that it is absolutely required to disclose through access to information requests, or claiming that these discussions are only aimed at resolving technical issues that are hindering trade between the three countries.

They would clearly have us believe that the object of this initiative is to harmonize the size of cans that are used, so that they can be sold in any of the three countries. But if we're talking about bulk water exports or quintupling the production of oil in the Alberta tar sands, well, those are societal choices that are being challenged. And even if we are only talking about harmonizing the size of cans to be used, is this really that innocent a process, when we know that the country that is used as a benchmark will be well ahead of the other countries—as well as everyone using the right size of can—in terms of producing cheaper cans?

With the tabling of the first progress report on the SPP to leaders by their ministers, three months after the partnership initiative was launched, our apprehensions were confirmed through the fact that working groups engaged in their specific tasks long before the official launch which, in reality, only lifted the veil on the existence of the partnership. Indeed, we discovered that 19 working groups had been established: nine dealing with security and 10 dealing with prosperity. They were tasked with moving forward a hundred or more initiatives with 317 underlying objectives.

As early as June of 2005, this initial report told us that the timelines for some of these objectives had already been completed. When the second report to the leaders was tabled in August of 2006, 65 of those objectives had already been met. Therefore, the SPP is clearly moving ahead at breakneck speed, even though almost no one, other than business executives, is aware of that fact.

The SPP introduces a new mechanism whereby the private sector now controls the decision-making. The chief executives of the largest firms in each of the three countries are now involved in the negotiations and have direct access. They lay out the objectives and the ways of implementing them, whereas the Executive in each of the countries—the three heads of state and the nine ministers responsible for the SPP—are tasked with instrumentalization, through specific economic policies or changes to certain regulations.

The legislative route is to be avoided like the plague because it is seen by business executives as leading nowhere, based on their own statements in that regard, probably because of the debate that changing existing laws or introducing new laws would give rise to.

So, no longer is there any need to engage in backroom lobbying when you have direct access to the powers that be. That access was formalized in June of 2006 with the creation of the North American Competitiveness Council, which is made up of representatives of the 30 largest corporations in North America, for the purpose of advising heads of state on issues relating to North American competitiveness.

Another fact that warrants mention is that the 10 Canadian members of the NACC, who were appointed by Prime Minister Harper in June of 2006, are all members of the Canadian Council of Chief Executives, an organization that represents the CEOs of the 150 largest Canadian corporations in Canada. And, it will come as no great surprise that the CCCE is also acting as the secretariat for the Canadian Section of the NACC.

As an illustration of the prominent role of business executives in the North American integration process, I would like to quote the words of the U.S. Secretary of Commerce, Mr. Carlos Gutierrez, at the meeting to launch the NACC on June 15, 2006, in Washington:

The purpose of this meeting was to institutionalize the North American Security and Prosperity Partnership (SPP) and the NACC, so that the work will continue through changes in administrations.

So, governments can change. The CEO members of the NACC will ensure that any work undertaken through the SPP will continue.

Later, Mr. Ron Covais, CEO of the arms multinational Lockheed Martin, and Chair of the U.S. Section of the NACC, told Maclean's magazine that the ministers had told them that if they let them know what had to be done, they would make it happen. That document, that we are unable to distribute because it is in French only, contains the list of NACC members.

Since when are corporate executives the only ones with something to say about such issues as competitiveness, prosperity and security?

I will now turn it over to Nancy.

[Nancy Burrows, co-ordinator, Quebec Network on Continental Integration]

One of the particularly worrisome aspects of the SPP is that it links security and economic prosperity. The SPP can be seen in the global context of increased militarization, as the most powerful country on the continent, the United States of America, wages the war against terrorism, with the result that national security trumps the rights of citizens and has become a pretext for increased government control over the people.

In that context, harmonizing Canadian policies with those of our neighbours to the South is particularly frightening in terms of protection for human rights. We have only to think of the passage of Bill C-36, the Anti-terrorism Act, following 9/11, or the sharing of terrorist watchlists, which resulted in some significant failures, including the case of Maher Arar.

Furthermore, there is now talk of implementing compatible immigration security measures between the three countries and of integrated police enforcement teams at our borders. Canada, like Mexico, would have to adapt to security threats facing another country by abandoning some of its sovereignty, but without having either the means or the power to verify the content of those threats. We do not want to be the United States' lapdog; we want to maintain our ability to establish our own rules and policies based on our own societal choices.

I know you have already received testimony about concerns with respect to water, natural resources and energy security, but I would like to spend a few moments talking about the example of the tar sands. We know that the United States has an insatiable appetite for oil and that it is increasingly seeking oil sources in more stable countries than its traditional suppliers. With the abundant supply available through the oil sands in Northern Alberta, Canada has become an ideal source of supply.

Natural Resources Canada and the U.S. Department of Energy hosted a meeting in Houston, Texas, on January 24 and 25, 2006. Attending that meeting were executives from the U.S. oil industry and from the major oil sands export projects, as well as representatives of the governments of the United States, Canada and Alberta.

That meeting literally took place the day after Stephen Harper's Conservative government took office, on January 23, 2006. None of the people attending that meeting was elected. From whom had senior officials in attendance received their mandate, given that Paul Martin's Liberal government had just lost the election and Stephen Harper's new government had not yet been sworn in?

The discussions were anything but of a purely technical nature, as the governments involved often claim. The report on the Houston meeting told us that there is now talk of accelerating the rate of development and increasing production from the oil sands four or fivefold, over a relatively short period of time. The debate around extracting oil from the oil sands raises significant environmental issues. That practice produces three times more greenhouse gas emissions than conventional oil extraction, produces tons of toxic waste and ruins thousands of square kilometers of land.

In addition, the report recommends that the Canadian and Alberta governments simplify the environmental approval process for energy projects, because time is of the essence for the United States. It should be noted that this report was co-produced with Natural Resources Canada.

This matter, along with the entire SPP process, has to be subject to public debate. The January, 2006 meeting is one of many examples that illustrate the power the corporations hold in these negotiations on public policy issues that affect all Canadians.

In conclusion, the least that can be said is that we are skeptical about the potential benefits for the people of Canada of a process whose fundamental objective seems to be to create an ideal climate for business, rather than ensuring…

[The Chair, Conservative, Leon Benoit]

Ms. Burrows, if you could wrap up very quickly, please, you're quite a bit over time now.

[Nancy Burrows]

In conclusion, we are demanding a moratorium on the entire SPP process, until such time as the work carried out thus far under the SPP is fully disclosed, an impact study has been carried out and there has been real public debate on these issues. We are also calling for the dismantlement of the NACC, which is illegitimate. We are talking about our future here. All citizens of this country are affected and must have their say about the types of linkages we want to maintain with the other people with whom we share this continent.

[The Chair, Conservative, Leon Benoit]

Thank you.

We have now, from Carleton University, Professor Michael Hart, and he's from the Norman Paterson School of International Affairs.

Go ahead, please, Professor Hart.

[Professor Michael Hart, Simon Reisman Professor of Trade Policy, Norman Paterson School of International Affairs, Carleton University]

Thank you, Mr. Chairman, and thank you for the opportunity to appear before the committee and share some of my ideas on the security and prosperity initiative.

Let me begin by saying I don't represent anybody. As you know, university professors are a rather contrarian group, and the idea of me representing any one of them would be taken I think with some deep offence. So I'm here purely on my own responsibility, expressing my own views, and I think I'm here because I have some background in this, both as a government official and as an academic analyst.

Let me comment briefly on the SPP so we can get on with the questions.

I think some of the witnesses here are perhaps a little overexcited about the SPP. I think there's not much to it. What it really is, is a kind of packaged version of what's going on as part of routine between Canada and the United States.

The Canada School of Public Service did an interesting study a few years ago looking at the extent of networks between Canadian and American officials, and they stopped counting when they reached 240. What do these 240 networks do? They solve problems together. They recognize the fact that Canadians and Americans have similar kinds of problems, live very closely together, and have deeply integrated economies, so they set up working groups, they set up networks, and so on, in order to solve those problems. These go on, on a regular basis.

What the SPP did, and a number of initiatives before that, is take many of these ongoing initiatives and package them together to provide a little bit more political jazz to them, and what's useful to officials, in order to provide them with some political leadership. To an official working on a problem, the kind of speed and intensity with which you address those issues is dependent on the amount of political leadership you see, the amount of political commitment you see to a problem. So what the SPP did was try to raise the profile of some of the work that was going on and give it a little bit more political pizzazz.

That's nice. When you look at it, as I've done, the SPP represents the sixth reiteration of that package. There have been a series of such packages going back to 1996, which put together a series of problems dealing with cross-border trade, cross-border investments, and so on, which require the attention of officials. So there's really nothing all that new about it, and that's my main complaint about it--as good as it is, it just isn't good enough. It really doesn't address the real problems that Canada and the United States need to address in the world in which we now live.

The biggest problem that I see with it is that it is an initiative that is limited to what can be done by the three governments within their existing legislative mandates. There's a commitment that they will not do things that will require them to go to Parliament or to Congress in order to make changes. What that means is we will have little changes and incremental approaches to problem solving, whereas I think in the world of 9/11 and in the world of deep integration, there are things that need to be done that require the governments to go to Parliament and to go to Congress to seek deep changes.

What we need to do is take the issues that are in this initiative, add some to them, and make them part of an initiative that will lead to a treaty, similar to what was done in the 1980s in negotiating the Canada-U.S. Free Trade Agreement, where similarly there were a lot of smaller problems being attended to and they were finally rolled up into a serious initiative that led to a bilateral treaty. I think that needs to be done on the SPP front. Why? Because I think there are three fundamental problems that need to be addressed by the two governments. I emphasize the two governments because I think the issues between Canada and the United States are of a different order from the issues between the United States and Mexico, and there are virtually no issues between Mexico and Canada. So the SPP, in effect, is two parallel initiatives that are joined for the convenience of U.S. officials.

I emphasize that we need to concentrate on Canada-U.S. issues, and there are three. The first is the border. Ron Lennox has already I think given you some pretty good illustrations of the extent to which the border is a problem. If you take into account the depth of integration between our two economies, if you take into account the nature of international trade and investment today, the fact that we have the whole just-in-time production system where we now rely increasingly on what are known as “global value chains”, where goods and services move back and forth and different parts of a large network of companies and suppliers integrate that into final products, it is critically important that the border be as open and unintrusive as possible. What we have seen since 9/11 is a border that has become more intrusive as many more things have been loaded onto the border that could be done elsewhere, or perhaps not done at all.

I think we've reached the stage, for example, where we should stop considering the border as a revenue-gathering device. Given the extent of free trade that we have, I remain deeply offended every time I cross the border and I have somebody with a hat and blue shirt asking me if I bought anything in the United States. Who cares? Given the depth of integration and the amount of harassment of people on that small point, which raises at most several million and costs more to administer than it does to do anything useful, I think we should stop thinking of the border as a revenue device.

Secondly, the border is used in order to ensure regulatory compliance. On the Canadian side of the border the immigration and customs officials are responsible for ensuring compliance with over 100 statutory instruments on behalf of their department and other departments. On the U.S. side they're responsible for ensuring compliance with 400 statutory instruments. Many of those things companies comply with regardless of whether they're being checked at the border. What we should be looking at is what can we move away from the border and what can we rid of altogether so that the border can become what it should be: a place where we look after security matters. Even there I think we would have a more secure border if we had proper police and intelligence cooperation rather than a teenager on a summer job asking whether or not you're going to wish one country or the other harm. I think we need a much different approach to the border.

The second issue we need to look at that is related to the fact that we have a border that is used largely to ensure regulatory compliance is the whole issue of regulatory convergence between Canada and the United States. We have two very similar economies with people who demand very similar things, and as a result we have very similar regulatory regimes in place, but they are sufficiently different to ensure jobs for all kinds of people on both sides of the border ensuring these tiny little differences. I think the time has come for us to move much more expeditiously than is being done under the SPP to reduce those small differences to no differences and therefore reduce the number of things that need to be done at the border. In the question period I'd be happy to elaborate on some of this in more detail.

Finally, in order to do that, I think we need to develop a sufficient institutional capacity between Canada and the United States to govern the extent of integration between our two economies. I find it shocking every time I look at it that Canada and Europe have a more extensive institutional framework in place to look after that relationship than Canada and the United States does between them. I think the time has come for us to put into the dustbin of history our fear of institutional capacity between our two countries and do what's necessary to ensure that we have the political oversight that this very deep and important relationship requires.

Doing those three things cannot be done on the basis of the kind of initiative that the SPP represents. It must be done at a higher political level, and it requires the kind of bureaucratic and political leadership that is currently lacking. To that end, I would like to see the government establish a department of North American affairs to provide leadership over this and drive the agenda.

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you very much for that presentation, Professor Hart.

We'll go directly to the questions, starting with the official opposition.

Mr. Bains, for seven minutes.

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

Thank you very much, Chair.

I want to thank the witnesses for coming before the committee.

It's nice to see the range of views on this particular discussion we're having on SPP. As you know, we're trying to study trade and investment between Canada and the United States. Mr. Pépin mentioned the SPP is a treaty. My understanding is that it's not a treaty or an accord. I think it was very well described by you, Ms. Healy, as NAFTA-plus. It's an additional framework that works on top of NAFTA to help with integration matters.

I think there is a recognition that people have expressed concerns around accountability and transparency, hence why we're having these meetings. I think it's a step in the right direction.

These are televised meetings, so not only are they exclusively for the members here but also for the public who have access to television and can view these meetings as well. I think there's an effort being made here to make this as open and public as possible in terms of parliamentary oversight.

I just want to confirm who is being consulted. I know that the Canadian Trucking Alliance has been consulted and has been part of the discussions. Is that correct?

[Ron Lennox]

Yes, sure. I can explain to you a little bit about our involvement.

Again, when the SPP was being rolled out, there were discussions between us and various different departments of government; it wasn't just one. We weren't just dealing with customs; we were dealing with transportation, we were dealing with immigration, because they were looking at various different initiatives and they wanted our perspective on it because they knew it affected us. This, to me, is normal. This is the way we work every day. When a government department wants to do something that will affect the trucking industry, it typically will consult us, and the SPP was no different.

Our involvement in the North American Competitiveness Council was less so. We're certainly not represented as one of those 30 on the council. We did have several conversations with the Canadian Council of Chief Executives, which was coordinating Canada's input on that, and had given it several suggestions for what we thought would be appropriate.

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

Ms. Healy, was the Canadian Labour Congress ever involved in any discussion? Was your input ever sought after? Were you ever asked for your input in any capacity?

[Teresa Healy]

We've never been invited to participate in any of the working groups. Any discussions we have had, we have made inquiries and made our own efforts to have discussions, but we've never been invited.

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

Okay. So you've made an effort on your end. You've submitted information. You tried to get involved in the process, but there hasn't been that kind of forthcoming attitude on behalf of the process from the SPP and the government.

[Teresa Healy]

That's right. There's no mechanism for us.

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

I have a similar question for Mr. Pépin on the Quebec Network on Continental Integration? Were you ever involved, or have you ever been asked for your input, in any capacity?

[Normand Pépin]

We were never contacted. The information we have comes from our own research. As I pointed out in our presentation, often this is material we have obtained through Access to Information requests in the United States. That is how we are able to obtain information about the process. Otherwise, we are not consulted.

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

Mr. Hart, I know you don't represent professors, so I can assume that you haven't been consulted directly on this matter.

[Prof. Michael Hart]

I have never been formally consulted. Have I been asked questions? Yes, often. Do I have difficulty gaining access to people working on the issues I'm interested in? No. Is there information available that I need on this initiative? Yes. There is an extensive website available, which is full of useful information, contacts, and so on. So anything I want to know about the SPP I can gain access to.

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

I'm glad, because the second line of questioning I had was about the concerns that have been raised that there's a hidden agenda, or there seems to be a lack of transparency, and especially with respect to the North American Competitiveness Council, which has put forth some results and has made some recommendations.

Ms. Healy, you mentioned this in your research paper, but what specific concerns do you generally have that you think they're trying to hide or they're trying to avoid public discourse over? What specific concerns do you have about their recommendations or their approach?

[Teresa Healy]

Our concerns are that when you get into any of the substantive areas of concern, for example, energy, there is a series of objectives that is led by the biggest corporations in this country, and indeed in North America, that is not representing a wider concern of the concerns of society.

So, for example, in this hyper-development of the tar sands and the regulatory reform that is related to it, what we see are the interests of large corporations trying to extract resources as quickly as possible without any regard for the environmental impact, which, as has been mentioned today, is quite significant, nor for the safety and dignity of workers involved or for the communities that are experiencing this kind of rapid industrialization.

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

One of the issues that was brought forth by Mr. Hart is the question--and I think he raised a good point--of why, when you cross the border, do they even ask what you've purchased now that our economies are so well integrated with NAFTA.

You have indicated in your research paper as well that from 1996 to 2005 we've generated an accumulated surplus of close to $150 billion. It's helped generate many jobs here, especially in Ontario, which is reliant on manufacturing.

With the appreciation of the dollar, there is concern that we're losing jobs. Isn't it in our best interest as a country to have strong working relationships with the United States to improve integration and trade? If there are concerns you've raised, as you alluded to, with the tar sands or with bulk water diversification, those are genuine concerns, but aside from that there are many synergies and areas we need to work on to help improve trade. In your opinion, do you feel that the SPP process in general is flawed, or are there specific components that are flawed?