Thank you very much, Mr. Chairman.
I would like to thank Committee members for inviting me to make a presentation on this today.
I want to point out, right from the start, as I did with the Clerk, that I am appearing today as an individual. I want that to be clear because I am concerned that some Committee members may believe that I intend to talk about softwood lumber again. I obviously have discussed this with you a number of times in the past, and I do intend to use softwood lumber as an example to illustrate some of the points I will be raising today. However, softwood lumber is certainly not the main issue I wish to discuss with you today.
Having read your report entitled “Ten Steps to a Better Trade Policy”, which was passed and tabled in the House last month, I have chosen to deal with two points that you touched on in your report, but which are not really addressed in detail, and I understand why.
To begin with, I would like to talk about the federal-provincial dimension of developing and managing a Canadian trade policy. For that, I will obviously rely on my own experience, both at the federal level and working for the Government of Quebec, a number of years ago, as it relates to trade policy issues. I would then like to talk about the role of industry and how to involve it in discussions leading to the development of trade policy and in its management which, of course, includes conflict management.
Let me begin with the federal-provincial dimension. We all know—although I think it is worth reminding people of this—that the Canadian Constitution is perfectly clear: the federal government and the federal Parliament are responsible for trade policy. However, that was the case for a very long time without there being any real issues in terms of federal-provincial relations, up until about the 1970s. At that time, developments in multilateral trade negotiations, particularly the GATT at the time, meant that the issues being discussed for the purposes of negotiating and possibly concluding agreements directly affected areas of provincial jurisdiction.
As early as the 1970s—in April 1973—the Quebec Minister of Industry and Trade, Mr. Guy St-Pierre, as well as the Alberta Minister, I believe, asked the federal government to establish mechanisms whereby the provinces could provide input and express their views with respect to Canada's policy, as the Tokyo Round was beginning. That was done primarily through a committee of federal-provincial deputy ministers who would meet regularly to bring forward and discuss issues that would be negotiated. That process went beyond the Tokyo Round, but in mid-1980s, when the Free Trade Agreement with the United States was negotiated, things changed.
Why? At the time, it was envisaged that a very broad agreement would be reached with our main trading partner, and the provinces were even more concerned than usual about the need to be onside with the principles. As you know, the then government, led by Mr. Mulroney, had established the principle of full and complete participation by the provinces in the negotiation process. That did not mean that the provinces were at the negotiating table, but a certain number of mechanisms had been put in place, including more frequent First Ministers and Ministers meetings—that last mechanism was used only once—and even more frequent meetings of the Riesman Committee, named after Canada's Chief Negotiator. That committee met literally once a month to conduct a detailed review of positions being discussed at the negotiating table.
I have to say, having been involved at the time, that this mechanism was effective. That obviously does not mean that everyone agreed. You may remember the very strong and serious opposition expressed by a number of provinces, including Ontario and Manitoba, which continued to be opposed—adamantly opposed—to some things that were on the table, right up until the very end.
Immediately following the negotiations, in 1988-89, the provinces sought to formalize these mechanisms. It was believed—and I think the provinces were pretty well unanimous in that regard—that these mechanisms had worked very well. The idea was not to continue to hold frequent First Ministers meetings, as was the case while negotiations were ongoing, but there was most certainly a desire to maintain the kinds of consultation mechanisms that were developed at that time, particularly as regards officials.
Those discussions lasted almost a year and resulted in a codification, in a very short document, of practices followed for several years. Unfortunately, that exercise did not yield the desired results, because the then federal Minister of International Trade, Mr. Crosbie, refused to ratify the work that had been carried out by federal and provincial officials at the time. Provincial premiers made representations to the federal Prime Minister, Mr. Mulroney, who allowed Mr. Crosbie's decision to stand. Thus, the mechanisms established at the time were never formalized.
Several years later, in the mid-1990s, following the broadening of the Free Trade Agreement to include Mexico, the provinces made another attempt to formalize collaborative mechanisms. That basically resulted in the system we now know, which involves consultations and meetings. However, these consultations and meetings are never held within a formal framework. For example, there are no exchanges of letters between ministers or federal-provincial agreements. There is none of that—just minutes of a meeting chaired by an assistant deputy minister in December of 1998. In fact, that is the basis for the mechanism being used today.
I would also add that this mechanism and its description are confidential, which is strange, because they are part of the minutes of a meeting of what is known as C-Trade, the main federal-provincial consultation mechanism. This refers to a quarterly meeting of federal and provincial officials with responsibility for trade policy issues.
As regards negotiations, the mechanism is working well. However, it still poses certain problems with respect to dispute management. Let me give you an example. Federal officials have decided that there are two types of disputes: offensive and defensive disputes. With respect to offensive disputes—when Canada takes the initiative of raising an issue at the World Trade Organization—the provinces are not included in the Canadian delegation, even if they have an interest in it. If it is a defensive dispute—when a foreign country attacks Canadian policies that may, for example, be provincial policies—the Canadian delegation includes provincial officials. Of course, they do not have the right to speak, unless the head of the Canadian delegation asks them to comment.
It's strange. For example, in the case of softwood lumber, when we raised the issue with the WTO—it was perceived and defined as an offensive dispute, because Canada was challenging an American measure. So, the provinces were not included in the Canadian delegation, which is rather ridiculous. I'm sure you will agree, since provincial actions are really at the heart of this dispute. So, there is definitely a need to adjust this mechanism so that it better reflects reality.
I would like to move on now to mechanisms for consulting industry. At approximately the same time, in the mid-1980s, two additional mechanisms were also formalized—
