International Trade Committee on Feb. 13th, 2008

[The Chair, Conservative, Lee Richardson]

I think we'll have to begin. We are always a little late when we're meeting in this venue, because of the video conferencing. It takes a little longer to get from the House to this building.

We have witnesses waiting and I think we shall begin. We have five today, so we're going to have to be careful about our timing of questions and answers—we'll have to be firmer than usual.

I would like to begin by welcoming everyone to the Standing Committee on International Trade. This is the 14th session of the current sitting.

We will continue our discussion and study of the proposed Canada-Korea free trade agreement. We have witnesses from the Canadian Labour Congress, Congrès du travail du Canada; Spirits Canada/Association of Canadian Distillers; the Canadian Association of Mouldmakers; and, I hope, via video conference, Fission Energy.

This will be the only business we deal with today. We will commence hearing from the witnesses. We'll hear from all of you. Hopefully Mr. Khan will be joining us on video conference. If not, we'll begin the questions without him.

I'll ask each of the witnesses after their introduction to give a brief opening statement, which will be followed by a round of questions. We have a format: questions and answers are limited to seven minutes per member. We hope to stick to that. I'll remind you of it as we begin questions.

Mr. Khan, can you hear me?

[Steve Khan, Executive Vice-President, Fission Energy]

Yes, I'm here now. Thank you.

Can you hear me?

[The Chair, Conservative, Lee Richardson]

Yes, we can. I have just begun the meeting and you haven't missed anything yet.

I'm going to introduce the witnesses as they speak. We're going to begin with the representative of the Canadian Labour Congress. I'll probably bring you in when the four speakers are finished. At that time we'll take questions from the members.

To begin, may I introduce Teresa Healy, senior researcher from the Canadian Labour Congress. Ms. Healy.

[Dr. Teresa Healy, Senior Researcher, Canadian Labour Congress]

Good afternoon, members of the committee. Thank you for the opportunity to appear before you today.

I'm here to speak on behalf of the Canadian Labour Congress, which is Canada's house of labour. The CLC represents over three million working people across the country.

We are pleased to participate in your study on the implications of the bilateral trade negotiations currently under way between Canada and the Republic of Korea. We know that your findings and recommendations will have an impact on how the Canadian government decides to proceed with the Canada-Korea trade file, and we wish to make a meaningful contribution to your report. We realize this is especially important now that the negotiations have come to what seems to be an apparent impasse.

We have three major concerns with the Canada-Korea negotiations. First of all, we are concerned that the model of trade under consideration will solidify Canada's role as a resource-producing region within North America and within the world economy, at the expense of Canada's manufacturing base and communities and public services. Second, we are concerned that the deal is wrong for workers in both countries. It puts corporate profits ahead of the needs and interests of working people in both Canada and Korea. Third, we are concerned that Canada is playing an unfortunate role at the level of world order. Instead of understanding why there is such deeply held and widespread opposition to neo-liberal trade and investment policies around the world, Canada is unfortunately reinforcing U.S. unilateralism, to the detriment of the multilateral system.

Our first point concerns long-term effects and structural changes in the Canadian economy. We represent women and men who work in resource industries, and with our affiliated unions we continue to work for collective agreements and public policies that ensure good, safe, environmentally responsible jobs in these sectors. We recognize that Canada's natural resources have often been the basis upon which we as a society have supported secondary manufacturing, public services, and strong communities.

With thoughtful stewardship of our natural resources, we could ensure economic justice and prosperity for many generations to come. We realize that the fate of many Canadian communities is linked with stable export markets for resources and agricultural products. Nevertheless, we are very concerned that Canada's rush towards a bilateral free trade agreement with Korea is intemperate and short-sighted and will lead to even more uneven development.

You have heard from other presenters that Canada's trade with Korea in manufactured goods is wildly unbalanced. As the Canadian Centre for Policy Alternatives has shown, Korea exported $1.7 billion in automotive products to Canada in 2006, meaning that for every $153 of automotive products Korea sends to Canada, we export only $1.

Our major exports to Korea are in resource industries, and include coal, wood pulp, aluminum, and copper. A free trade deal between our two countries is likely to ensure that the mix of trade will favour resource-based exports and manufactured imports. It is likely that food processing and paper industries would benefit from an expansion in Canada-Korea trade. If Korea decides to open up its beef industry, this might benefit workers in Manitoba. Workers in Kelowna might also benefit from the export of paper products, but job losses in other sectors will be much greater.

As you have heard from other presenters, it is expected that high value-added manufacturing industries will be negatively affected. These include the electronics, machinery, and automotive assembly and parts industries, and the textile and apparel industries, among others. Using real-world assumptions, the Canadian Auto Workers concludes that at least 33,000 jobs will be lost.

Members of this committee who represent the people of Sherbrooke, Welland, Niagara, Mississauga, Markham, Owen Sound, the lower mainland, and Louisville, Quebec, will be intimately aware of the effects of plant closures on families in their ridings. I'm sure they could vividly relate to the impact of plant closures that have already happened and their impact on the communities they represent.

As you know, Canada has lost nearly 300,000 manufacturing jobs since November 2002. One in eight of Canada's manufacturing jobs that existed six years ago is gone. According to Statistics Canada, workers displaced by closures and layoffs, and those who go on to find another job, suffer an average decline in income of over $10,000, equivalent to 25% of a typical manufacturing wage. As our CLC economists have found, the total number of jobs in mining and in oil and gas extraction is less than the number of jobs lost in manufacturing.

Wwhile plant closures might not be the issue of the day in certain parts of the country, we would like to remind the members of Canada's historical weakness in the capital goods sector. If Canada were stronger in advanced green technologies and in the manufacture of capital goods, the economic boom in the oil sands could be that much more balanced and sustainable.

The service sector is affected as well. Many of these jobs are low paid and are tied to the support for the manufacturing sector. Workers in the service sector are disproportionately women and workers from racialized groups. These workers are disadvantaged because of their already precarious employment situation, and will now be doubly disadvantaged because their sector is so closely tied to manufacturing, which is under attack.

Second, we are aware of the opposition to free trade in Korea and of the negative impact on workers in both Canada and Korea. Recently, the Canadian Labour Congress and the Korean Confederation of Trade Unions issued a joint statement and called on our respective governments to halt these trade talks immediately. In light of the serious manufacturing crisis, the devastating deterioration of Canada's automotive trade balance, as well as the serious risks facing the Korean agricultural sector posed by this agreement, both labour centrals recognized that the Canadian and Korean manufacturing sectors will be adversely affected. In Korea, workers face the trend towards irregular and precarious employment, already at 54% of the labour force. This will only intensify as a result of such a trade deal. Korean and Canadian workers suggest that our governments choose instead to engage in a process of real consultation with labour and relevant stakeholders, one that will lead to an economic development strategy that will build our societies rather than pit worker against worker.

Third, we are further concerned that the Canadian government has decided to abandon an independent trade policy and, as it is doing in negotiations with Colombia, is pressing forward with a trade agenda that is widely unpopular around the world and one which the U.S. administration cannot get past Congress. Canada, it seems to us, is playing the unfortunate role of legitimizing unpopular bilateral deals forged by the United States. In the context of a weakening multilateral international system, this strategy concerns us.

By following the North American Free Trade Agreement model, the governments of both countries are trying to undermine opposition in the international community. Evidence of such opposition is seen in the apparent failure of the Doha Round. Yet the Canadian government continues its efforts to undermine this widespread opposition and entrench investors' rights at the expense of workers' rights and their wages on a bilateral basis. We expect these negotiations are intended to impose NAFTA-style restrictions on industrial policies and to entrench WTO plus intellectual property rights. Following in the footsteps of the unratified U.S.–Korea deal, we're concerned that both governments intend to weaken public services and social safety nets to the point where they are ineffective in protecting the people of Korea and Canada from the painful side effects of an unrestricted free market.

Not having learned the lessons of NAFTA, there are plans to keep the infamous chapter 11 provisions, which allow corporations to sue governments that act in the public good and keep governments constrained from implementing active social, environmental, and industrial policies. The core of these negotiations is based on a devastating model of development that can only lead to competition at the expense of workers' rights, labour standards, and the environment. These agreements, which grant excessive rights to business—in particular to transnational corporations—and facilitate the mobility of speculative financial capital, weaken workers' rights and lead to the erosion of basic labour and human rights.

Our recommendations are as follows. The Canadian Labour Congress calls for a moratorium on the current Canada–Korea negotiations. We recommend that discussions begin on a fair trade arrangement based on the rights of workers in both countries to fair social and economic development. We further call this committee to recommend that Canadian trade policy take a back seat to sustainable industrial and social policy, so as to ensure decent jobs based on the fundamental rights enshrined in ILO core conventions.

I thank you for considering our views on this matter and look forward to your questions.

[The Chair, Conservative, Lee Richardson]

Thank you very much. That was great timing.

We will proceed with the presentation from the Confédération des syndicats nationaux. We have Josée Lamoureux.

[Josée Lamoureux, Union Advisor, Confédération des syndicats nationaux]

Thank you, Mr. Chair and members of the committee. Good afternoon.

On behalf of the Confédération des syndicats nationaux, I thank you for this invitation to testify about our concerns about the negotiation of a free trade agreement with Korea.

The Confédération des syndicats nationaux is the second largest labour organization in Quebec, representing more than 300,000 workers in all sectors of the economy, mostly in Quebec. We have a presence in both the public and private sectors. The CSN is a member of the International Trade Union Confederation and sits on the Trade Union Advisory Committee, also known by its French acronym CSC, of the Organisation for Economic Cooperation and Development.

Both because of its membership and because of its international affiliations, the CSN is greatly concerned by everything involving trade and the negotiation of trade agreements. The CSN is not opposed to trade. We know that the Quebec economy depends in large part on the strength of its exports. But we have serious reservations about the process currently underway. Given that the multilateral negotiations at the WTO, the Doha Round, are struggling to make progress, we are now seeing a profusion of bilateral accords.

We are particularly critical of agreements like NAFTA, in which the elimination of tariffs comes with provisions that limit governments' freedom of action to regulate, and reduces their ability to support local industry or to require local content.

We believe that not only should any investment provision not restrict a government's room to manoeuvre, but that it should also insist on social responsibility from companies in their labour standards. It should also require that OECD's guiding principles for multinational companies be applied and implemented.

The CSN has always supported the need for trade agreements to recognize the primacy of social rights, human rights and labour rights, specifically upholding basic labour standards in commercial and company law.

We do not feel that these rights are an obstacle to trade. On the contrary, we believe that they must be at its foundation. The opening of markets must have as its objective the improvement of our quality of life; it must encourage the creation of high quality jobs for us, but also for people in the countries with which we sign these agreements.

So we are particularly sensitive to the concerns expressed by the Korean Confederation of Trade Unions, which is affiliated with ITUC as we are, about the negotiations underway between our two countries and about the possible effects on their working conditions and on their union rights. In this free trade treaty, Canada favours reaching subsidiary cooperation agreements on the environment and on labour. The government has already indicated its intention to proceed along these lines with Korea.

Unfortunately, beyond this stated intention, we have little information about how discussions are moving forward. We are particularly worried about what form a cooperation agreement on labour could take. Experience teaches us that just because countries have signed an agreement to uphold the ILO's basic principles and labour rights, this does not mean that these rights will become a reality. Regrettably, we must point out that this kind of agreement, NAALC, for example, is clearly limited. The violation of workers' rights is a reality we still face, while a number of trade union rights, such as freedom of association and the right to collective bargaining, are excluded from the complaints procedure.

In a word, the shortcomings in complaints and in dispute resolution, as well as in sanctions, are clear. Let us also not overlook problems that a lack of vigilance in upholding social and union rights could cause. According to ITUC's latest report on the violation of union rights, progress has certainly been made, but much remains to be done in Korea. The violations are numerous: anti-union repression directed against the Korean public servants' union, arbitrary firings of union activists, violent attacks on strikers, and so on.

The government must ensure that labour legislation reflects the ILO's basic rights. It must also ensure that they are implemented and that measures are in place so that they are upheld. Furthermore, it must provide for legal recourse when there are disputes and for severe consequences when there are violations. In addition, we are particularly concerned about the Canadian government's position on Special Economic Zones.

According to the International Trade Union Confederation report mentioned earlier, the Special Economic Zones Act of July 2003 contains preference clauses for foreign companies that invest in these zones by exempting them from many national regulations on the environment and on labour standards. This provision suggests the possibility of further violations of workers' rights. Korean trade unions are strongly opposed to this act, mainly because it will allow the hiring of a workforce that is casual and has almost no protection.

How will imports from these zones be handled? What will our requirements on upholding social rights be?

These questions affect us all the more because we have a strong presence in the manufacturing sector—agri-food, paper, forestry, smelting, metal products, electronics, shipyards, etc.—that is presently experiencing serious difficulties. It has seen significant job losses in recent years, and the bleeding has not stopped. Since 2002, 135,000 jobs have been lost in the sector, that is one job in five. In 2007 alone, the year that has just ended, we have 38,100 fewer jobs in manufacturing.

Of course, some sectors are affected more than others. Forestry and textiles above all. Some say that the jobs lost in manufacturing are offset by jobs in the service sector. This is true, but they are often lower quality jobs, meaning that they are less secure, poorly paid, with few benefits, or none at all, and not unionized. We must not forget that, for several years, wholesale and retail sales have replaced manufacturing as the largest provider of jobs in Quebec and this trend shows no sign of being reversed.

The rising level of anxiety from those who see themselves as the losers in globalization must not be taken lightly. It is not enough to say that jobs lost are made up elsewhere. Job loss is first and foremost experienced by real people who find themselves unemployed and with few prospects of finding another job with comparable conditions. This is the turmoil that thousands of Quebec workers are now experiencing. The downward trend in the number of manufacturing jobs is going to continue because of the slowdown in the United Sates and the rise of the Canadian dollar, which is now hovering around parity with the American dollar.

It is in this particularly difficult context that Quebec must also deal with a drop in productivity, mostly due to the lack of investment in machinery and equipment and to inadequate training. Since 2000, Quebec exports have been progressing at a rate that cannot even be called moderate, only 1% per year from 2000 to 2006. This performance is significantly below the 8% recorded in the 1990s.

So, just as for the rest of Canada, Quebec's balance of trade with Korea is in a significant deficit. We do not believe that a free trade agreement with the country will succeed in reversing this trend. Quite the opposite. Far from what now seems to be an article of faith about the virtues of free trade, it seems to us that significant uncertainties persist as to the positive effects that such an agreement will have on our economy, our jobs, our income and our working conditions.

Without getting into a battle of statistics here, economic impact studies on this agreement hardly show cause for optimism. Of course, the CSN is particularly influenced by the study done by the Canadian auto workers, which foresees significant job losses for Quebec.

In summary, the CSN is asking that no agreement be rushed into. A number of factors lead us to believe that a free trade agreement with Korea will have no positive outcomes for workers. Before it proceeds any further, the government has the responsibility to study more carefully the possible consequences of such an agreement on employment, on working conditions and on the distribution of income. It must also provide us with a much clearer picture of the impact on the economy in general, the various sectors of that economy, and on the provinces. In addition, the CSN asks it to take utmost care with social rights and to break new ground in the area by imposing truly deterrent sanctions and penalties when basic labour standards are violated.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you.

We will now hear from Spirits Canada/Association of Canadian Distillers. I see that we have Jan Westcott, president and chief executive officer, as well as C.J. Helie, executive vice-president. I take it, Mr. Wescott, that you're going to present the brief.

We will hear from Mr. Westcott.

[Jan Westcott, President and Chief Executive Officer, Spirits Canada / Association of Canadian Distillers]

Thank you, Mr. Chairman.

Spirits Canada is the only national trade association that represents the interests of Canadian spirits manufacturers and marketers. On behalf of the Canadian distilled spirits industry, we appreciate this opportunity to appear before you today to share our perspectives on the ongoing negotiations between Canada and South Korea to reach a potential free trade agreement.

Let me begin my comments with a strong endorsement on behalf of our member companies for an FTA between Canada and Korea. Korea is an important beverage alcohol market in its own right, and in addition may also be of strategic interest in terms of acting as a form of gateway or springboard for the entire region.

By volume, total spirits consumption in Korea is approximately the same as in the United States, or about ten times the size of the entire Canadian market. The leading local beverage alcohol products in Korea are beer and a locally made spirit called soju, but international whiskey brands also have a significant presence.

At its very core the Canadian spirits industry is comprised of primary manufacturers. Our members buy agricultural products like rye, barley, and corn predominantly from local farmers here in Canada and transform these grains into premium consumer goods that are enjoyed by discerning adult consumers around the world.

It sounds simple enough, but in reality the experience, technology, investment, knowledge, and dedication behind this part-science, part-art, part-magic creation is truly something to behold.

Our signature product is Canadian whiskey. Canada is fortunate to be one of only four regions in the world with an internationally recognized premium whiskey category. Our main competitors in terms of the international trade of whiskey are the United States, with American bourbon, and Ireland and Scotland, each with their own distinctive whiskey styles.

By practice and by law, all Canadian whiskey must be distilled and matured in Canada, which creates important local manufacturing, employment, and other significant economic spinoff activities.

The Canadian spirits industry has important manufacturing, maturation, and/or bottling facilities across the country, including Lethbridge, Hay River, and Calgary in Alberta; Gimli, Manitoba; Amherstburg, Brampton, Grimsby, and Windsor in Ontario; and Montreal, Dorval, and Valleyfield in Quebec.

The Canadian spirits industry is an international trade focused sector, with 70% of our overall production and 80% of Canadian whiskey production actually shipped and enjoyed outside of Canada.

The spirits business is also a brand business. Consumers, and yourselves, I'm sure, would be most familiar with us through our companies' world-renowned and respected brands like Crown Royal, Canadian Club, Canadian Mist, Gibson's, Schenley, and Wisers. These Canadian whiskey brands are icons for Canada and for a premium Canadian quality all over the world.

I began my comments with an endorsement of a free trade agreement with Korea. Let me now identify the key elements of any FTA that are a prerequisite to our support: one, recognition and protection of Canadian whiskey and Canadian rye whiskey as geographic indications and/or distinctive products solely of Canada; and two, duty-free access to Korea for Canadian whiskies immediately upon ratification of the agreement.

Korea currently imposes a 20% customs import tariff on Canadian spirits, limiting the ability of Canadian whiskey brands to compete effectively for their fair share of the consumer adult beverage market. In contrast, Canada eliminated its import duties on all whiskies and other brown spirits as part of the World Trade Organizations' Uruguay Round a number of years ago. I should also point out that American whiskies received similar concessions in the recently concluded U.S.-Korea FTA. Canadian whiskies need equivalent market access opportunities to ensure that they can compete effectively with U.S.-sourced whiskies in Korea.

We would also like to take this opportunity to extend the industry's thanks and appreciation to Canadian trade officials within the Department of Foreign Affairs and International Trade with the Canadian embassies, missions, and consulates around the world, as well as officials with the Department of Agriculture and Agri-Food and the Department of Finance in their ongoing diligent efforts to open up new export market opportunities through FTA negotiations such as those undertaken with Peru, Colombia, and the Caribbean community.

Thank you for your attention.

We'd be pleased to answer any questions.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Westcott.

Now, from the Canadian Association of Mouldmakers, Dan Moynahan. Mr. Moynahan.

[Dan Moynahan, President, Platinum Tool Technologies, Canadian Association of Mouldmakers]

Thank you, Mr. Chairman.

First, I'd like to thank you for inviting me to participate and to have a voice before the Standing Committee on International Trade.

On short notice, as of Friday of last week, I have put something together on Canada-South Korea free trade and its effects on the Canadian economy.

First of all, let me tell you a little bit about myself. I am married; I have two children and have been blessed with four grandchildren. I'm a journeyman mouldmaker with over 36 years of experience. Presently I am employed as the president of Platinum Tool Technologies. I have three partners, who are also skilled tradesmen.

Platinum Tool was incorporated on August 17, 1999. In eight and a half years the company has become the leading manufacturer of moulds in North America for the automotive lighting sector. Today the company has 52 employees and utilizes 16,400 square feet for manufacturing along with 4,000 square feet for engineering and administration. The end of this month will be my first anniversary as president of the Canadian Association of Mouldmakers.

I have brought charts for everybody today, but they have not been handed out. The charts and numbers in this booklet, along with the facts that follow, are based on the most recent data available.

The last time Canada had a positive trade balance with South Korea was in 1997. It was $197 million. In the following nine years, to the end of 2006, Canada has had a negative balance with South Korea averaging negative 97.45% per year. Canada's trade deficit for 2006 with South Korea has grown to $2.5 billion for the year. From 1997 to 2006 the Canada-South Korea trade deficit has risen by an astronomical 11,661%. We have amassed a $23 billion trade deficit with South Korea over the last 10 years alone.

How many Canadian jobs must be sacrificed for South Korea? When does it end? What trade deficit must Canadians accumulate with South Korea before we have fulfilled our obligation? Is there a dollar-value target we must attain?

In the mould manufacturing sector, the hemorrhaging has not fared much better. Canadian mould imports from South Korea had grown by 3,885% at the end of 2006 to $13 million, from $345,000 in 1997. In the five years from 1997 to 2001, Canadian mould imports from South Korea grew by 80% per year, to $1.7 million. However, during the next five years—from 2002 to 2006—South Korean mould imports into Canada grew by an additional 86% per year, to just over $13 million a year.

The last time the Canadian mould manufacturing sector enjoyed a positive trade balance with South Korea was in 2002, and it amounted to $1,680,000. By the year end of 2006 the Canadian trade deficit with South Korea stood at $2,111,000 for the mould sector.

In the previous 12 months from December 2005 to November 2006 South Korea exported $3,830,000 into Canada. During the same period, Canadian mould exports were $1,664,000, resulting in a 43% decrease, or a $2,165,000 trade deficit with South Korea for the year.

South Korean total mould exports to Canada ranked them at number nine for the period ending November 2006. During the following year South Korea total export moulds into Canada for the year ending November 2007 has grown to $5,228,000.

The most recent 12-month data from 2006 to 2007 shows South Korea's trade advantage having grown by 87.6%, or a $4,578,000 trade deficit for Canada for the period. South Korea remains the number nine country for mould exports into Canada for the year ending November 2007.

Meanwhile, Canadian mould exports to South Korea for the year ending November 2007 totalled $649,000. For this period, Canadian exports to South Korea represented the largest percentage drop, at 61%, among Canada's ten largest mould-supplying countries. The November 2007 year end showed a trade deficit increase of 77.9% in total mould trade with South Korea for a net difference of $4,578,000.

With more time to research, the Canada—South Korea free trade agreement would only result in my filling you full of negative points. You will have the opportunity to look at the facts and the numbers yourselves.

For the manufacturing sector, and more specifically the mould-manufacturing sector, there is nothing positive that can come out of this agreement. We have bled enough jobs to South Korea's democracy. Now is the time to reach an agreement that is beneficial to all Canadians. The Asian nations have knocked us to our knees, and yet we get up and fight back using technology, innovation, and a skilled workforce.

Let's talk fair trade, not free trade. Level the playing field for tariffs on Korean imports and exports. The net result will be fair trade. What future does the proposed Canada—South Korea free trade agreement offer to my grandchildren and the generations that will follow them? Trade agreements with any country should be developed to allow the small and medium-sized businesses to flourish, as they are the backbone of our economy in Canada. Canada was built on entrepreneurship. Let's keep the entrepreneurial dream alive.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Moynahan.

Now, from Vancouver, we have a video conference and, representing Fission Energy, Steve Kahn, the executive vice-president.

Mr. Kahn, can you hear us all right?

[Steve Khan]

Yes, I can, thank you.

Thank you very much for allowing me to join you today.

I was invited to this panel just late yesterday afternoon. I apologize; I haven't had a chance to prepare a formal presentation. But I want to share with you and the group there today some anecdotal evidence of some recent developments in our company.

Fission Energy Corporation is a junior mining exploration company based in Canada that is involved in the development of uranium resources and mining development in the Athabasca basin of northern Saskatchewan. Some of you may be aware that this area is the most prolific producing area in the world for uranium.

I recently returned from South Korea, about 11 days ago, after experiencing a very positive reception from a group of companies that have come together in a consortium. That group has been led by a company called Korea Electric Power Corporation. The consortium of companies has recently committed to an earn-in agreement with our company to spend $15 million over the next three years to earn 50% of our project in the Athabasca basin.

The reason I think it's important to share this story is that we are a small company and we depend upon risk capital. While there is evidence that there are flows going outside the country, I want to share with you that there are flows coming in for companies like ours that depend upon risk capital.

To have one of the largest utility companies in the world, like Korea Electric Power Corporation, make an investment of this type is unique. It also opens the door for them and other companies of the same nature to come in and look at additional investments in Canadian mining companies like ours. We are certainly predisposed to and optimistic about the relationships we can build with additional Korean companies, such as KEPCO and its partners.

I think it's important to share, from the small company perspective, that in Canada many new jobs are created by small companies. Our company right now probably has about 15 employees. We can double or triple that over the next two years because of the investments coming in from the Korean companies that are interested in securing the potential for future sources of uranium to fuel their power plants.

This will help develop some of the northern, remote areas of the country that require capital that would not necessarily be forthcoming from traditional sources, such as banks or other more conservative sources here in Canada. We're very welcoming of the opportunity to have international companies, and certainly the Korean companies, come in and help us develop these projects. Opening markets for us would be very beneficial. We certainly are benefiting from the additional risk capital that we see coming in from South Korea.

International groups continue to recognize the large commodity base here in Canada, and companies like KEPCO are leading the way in helping companies like ours develop these early stage projects. Hopefully this can result in the development and discovery of new mines, which will create jobs and increase the tax base, particularly in areas such as the remote areas I talked about. Other companies are following KEPCO to look at ways to deploy risk capital here in Canada. We're hoping that we can garner more of that access to capital.

Fission welcomes further cooperation with Korean companies and the support of free trade. We've been very pleased to date with the experience. It has been a very short one, but we think it will grow significantly over the coming years. From the point of view of small business Canada, we would look to see, hopefully, more developments of this kind.

Thank you for the opportunity to share my thoughts with you today.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Khan.

We'll now proceed to questioning. As I mentioned at the outset, with five witnesses and witness groups here today, I think we're going to have to be fairly firm with our timing of questions. We have allocated to each member in the first round seven minutes for questions and answers. I would begin by asking members to try to keep your questions brief. You can direct them to a specific witness or to all the witnesses. If a question is directed to all the witnesses, obviously, I would have to ask you to keep your answers brief.

We're going to begin our questioning today with Mr. Maloney.

[John Maloney, Liberal, Welland, ON]

It would appear that there's been a significant impact on the mould industry sector without a free trade deal. We've been able to keep up with improvements and technology, if I understand you correctly. How would you be affected if there was a free trade deal? What is the tariff right now for your product?

[Dan Moynahan]

I'm not familiar with the tariff rates. In a lot of Asian countries there are hidden tariffs, where they penalize the companies if they do not buy from certain suppliers. In China they penalize the mould manufacturers if they import moulds. There's a VAT tax they apply to the companies, penalizing them. It's not a tax; it's a penalty.

My company is a small company. That's why we've been able to sustain ourselves. We also have a niche in automotive lighting. We stick within our niche, and we're 100% committed to it. We developed our customer base from all the number-one tier ones and OEMs.

[John Maloney, Liberal, Welland, ON]

But if we had a free trade deal with Korea, would this affect your business, or would you be able to continue in business as usual?

[Dan Moynahan]

I'd like to see a free trade agreement that would level the playing field.

[John Maloney, Liberal, Welland, ON]

How would you suggest doing this?

[Dan Moynahan]

As Teresa mentioned earlier, we should look at all the living standards, the hidden tariffs on the exports. There's obviously something wrong when Canada, one of the leading countries for mould manufacturing, only exported $634,000 worth of moulds last year to Korea.

[John Maloney, Liberal, Welland, ON]

You don't export at all, though?

[Dan Moynahan]

Yes, I do. Eighty percent of my business goes to the United States and Mexico. I've also exported to Turkey.

[John Maloney, Liberal, Welland, ON]

Do you feel there's a possibility to increase your business and then trade with Korea?

[Dan Moynahan]

Smaller companies like us, 52 people, don't have the resources to do it properly. If you're going to sell a product like ours, you have to stand behind it. Our moulds come with a lifetime warranty, and our customers expect it and hold us to it. To set up anything with Korea and start exporting there, we'd have to create a partnership with a shop in Korea.

[John Maloney, Liberal, Welland, ON]

I'd like to turn now to Ms. Healy and then to Ms. Lamoureux.

You've introduced an interesting aspect to this debate. I don't believe anyone has appeared before this committee who was concerned about the rights of workers in Korea. We've heard from many people concerned about Canadian workers. What are your sources? What are the concerns of Korean workers, and where do you get this information?

[Dr. Teresa Healy]

We have a relationship with the Korean Confederation of Trade Unions. They were happy that we agreed to work with them on an analysis of this kind of free trade agreement. The Koreans are worried about the increasing precariousness of their jobs. They're worried about their labour rights. They're worried about the downward pressure that they would feel with the increasing liberalization of the markets. They're also worried about the restrictions that their government would face in protecting the social policy space under the new liberalism.