International Trade Committee on April 2nd, 2008

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. McArthur, and thank you, Mr. Cardin.

Mr. Julian.

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

Thank you very much, Mr. Chair.

I appreciate all four of you being witnesses here today. Yours are by far the strongest presentations that we've heard on the EFTA agreement. It's a matter of some concern, of course, because a year and a half ago in the same committee we were hearing testimony about job losses in the proposed softwood lumber agreement, and the government didn't listen to the comments that were made at the time. Subsequent to that, we've seen a hemorrhaging of jobs in the softwood industry.

Clearly there is real concern for the shipbuilding industry in Canada. So I'd like to start by asking those from the shipbuilding industry, the marine workers and those representing the owners, do you consider the way the government is approaching this as a broken promise? In a sense, they were pushing you to move away from carve-out to a phase-out, and the quid pro quo was to put in place some legitimate programs. Do you think that's a broken promise?

[Andrew McArthur]

Absolutely, yes.

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

Okay. That's extremely important.

[Andrew McArthur]

Could I add?

In fairness to the bureaucrats, they cannot promise the Government of Canada is going to implement that program. They said they heard us, but they don't sit down and tell us they will ensure we'll get that. So we feel it's a broken promise, but we have to be fair to the individuals we were talking to.

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

But the government has said that they ensured that all interests and concerns were fully understood and taken into account in the negotiations after regular consultation with the shipbuilding and marine industry. And very clearly that's not the case. It's a broken promise.

Parliament has three ways to proceed. First, we could proceed to adopt the implementation legislation as is and push the government to put in place the Buy Canada policy, the SFF and the ACCA, and ensure that is present for shipyards. That's option number one.

Option number two would simply be to have the House of Commons reject this treaty and have the government negotiate a carve-out for the shipbuilding industry. We have the world's largest coastline. It's absurd that we're slowly killing our shipbuilding industry.

Option number three would simply be the House of Commons rejecting the implementation legislation.

Which of those three possibilities do you think would be best, not only to maintain the shipbuilding industry but also enhance it, so we have a shipbuilding industry that's fully supported and provides the kinds of jobs across this country that having the world's largest coastline should normally demand from our shipbuilding industry?

[Andrew McArthur]

It's quite difficult for any member of the association to say you should not sign the agreement. If it's good for Canada, that's great. But as my friend here said, we have asked many, many times, what's in it for Canada?

I remember that we asked at a meeting in Halifax, and she just about brought the place down. She said we're going to sell more horsemeat to Norway. You can imagine the reaction from the floor about selling horsemeat, and that was the official answer: we'll sell more horsemeat.

We've never yet been told the benefits to Canada.

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

We've certainly been hearing representation from the government—and it's not clear—that the advantages seem to be symbolic. Very clearly, in a very practical sense what you're bringing to us today is that there is a huge downside to this deal.

[Andrew McArthur]

Let me go into the other parts of your question. What would we prefer?

If it's a benefit to Canada, the agreement should probably go ahead. Would we like it to go ahead as is? Absolutely not. We would like to see shipbuilding carved out, and in addition to the carve-out, perhaps talk about a combined SFF and ACCA, and then you've got a shipbuilding policy. Then you've got something we could work with.

This is not going to affect me one iota. I turned 73 last Wednesday. It's not going to affect my future. I'm gone. It doesn't matter to me, but it sure affects these guys, and they're quite passionate about that.

[Karl Risser Jr.]

I agree with Andrew. I think this should be rejected straight out and then we should sit down and develop policy.

You hit on it: we are a marine nation. We have a waterway that's longer than the Atlantic Ocean, and how we manage that waterway is even bigger than shipbuilding. Shipbuilding is only a part of that. Waterway management and the controlling of the Canadian fleets and the transportation that goes on around here is really lax, I think, for a maritime nation. For sure, the right way to approach this is to put in place the policies, before you negotiate a trade deal like this, that allow us to start to flourish and watch our industry grow a bit before we go and pull the plug.

Right now we have a 25% tariff in place and we're not growing, we're not competing. So to say “just adjust” as we remove that tariff is totally lax, and I think anybody who really looks at it has to understand that before you could do this, we have to head in the right direction. And right now we're not. We're not heading in the right direction at all.

[Jamie Vaslet, Business Agent, Financial Secretary, Halifax Local 1, Canadian Auto Workers Shipbuilding, Waterways and Marine Workers Council]

It's the same with Norway. Their shipbuilding industry was heavily subsidized for years and years and years, until it got to the point where Norway can now negotiate free trade agreements and say they are not going to subsidize their industry anymore, because it's self-sustaining. It will sustain itself through the subsidies that it's already enjoyed over the last 20 years.

I think it was in 1995 that we did the report on shipbuilding and asked Canada to put in place the measures that Mr. McArthur mentioned and to give us a real shipbuilding policy we could sink our teeth into, so that when we entered into free trade agreements like the EFTA agreement with Norway, which we are talking about now, we would at least be on a level playing field.

We're not against fair trade; we're against free trade, because we're giving Canada away. But we're not against fair trade, as a union. We believe that with the subsidies Norway has enjoyed—and I'll repeat this again—over the past 15 to 20 years, there is no way, even with the 15- or 20-year phase-out, that we can catch up to them in technology, infrastructure, and so on and so forth, because we're pouring nothing into it. It is like pouring water into a cup with no bottom; it just goes nowhere, but straight out the other end.

The other thing with the World Trade Organization, and the free trade agreements with some of the other countries like Korea, is that while they say they don't subsidize their industry, their workers are in fact direct subsidies to their industries, because of the lack of safety standards and because their wages are so low. When you're working in the Halifax Shipyard, you make $24 an hour, and you have medical benefits, and the company pays compensation rates, and we pay our income tax to the government. And then you go to Korea, and the guy working on the ship is working in a pair of sandals, not steel-toed work boots, because there are no safety laws, and he gets $10 a month whereas we get $25 an hour. Their workers are a direct subsidy to their shipbuilding industry, without the government even tapping into what they are doing.

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

Thank you.

I'd like to come back to Mr. McArthur. You're saying that the subsidies for the Norwegian industry are long-term contracts. Essentially those subsidies continue, as they were contracts signed in the past for ships that will be built in the future. So the subsidies are continuing.

The other question I want to ask is about the Norwegian content of 65%. Essentially, if we're looking at this tariff reduction, ships that are one-third build in Poland will be part of the equation of what could get under that tariff reduction as it works through the process.

[Andrew McArthur]

That could be. It's difficult to say categorically how many vessels still have to be built; it's only a few. Norway has given up its subsidies.

There are a few contracts, I am told, under which vessels still have to be built. Is it a massive amount? Obviously not. So they have, in effect, given up their subsidies.

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

Thank you.

Over to you, Mr. Pugh.

In all of the EFTA countries, they have paid particular attention to preserving the family farm. That's very clear from the agricultural side agreements that are part of the EFTA. So my question is about your comments on the chipping away of supply management, the chipping away of family farms. Essentially, what do you think the impact of this is in the long term, and why are the European countries so much better at protecting their agricultural sectors and their family farms?

[Terry Pugh]

Well, I think it goes back to their history, right back to World War II. They realize what the loss of that food production capacity entails, and they're not prepared to go through that again.

On the other hand, here in Canada we seem to be embracing the idea of importing food wherever possible. The CanGro fruit and vegetable processing plant in the Niagara Peninsula in Ontario, for example, which was really the only processing plant east of the Rocky Mountains for Del Monte vegetables and fruits, is probably going to be shut down. The last day was March 31, I think, and we're still not sure how much longer that's going to keep going. But it doesn't make sense to keep importing food at the same time as we are sacrificing our own production here in Canada.

If we sacrifice institutions that ensure farmers have market power, like the Canadian Wheat Board, supply management systems, and the Canadian Grain Commission as well, we are essentially driving down farm income here in Canada and we're turning over control of that food production to outsiders.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Pugh. Thank you, Mr. Julian.

Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman. I'm going to be splitting my time with Mr. Cannan.

Thank you to our guests for being here.

Happy belated birthday, Mr. McArthur. You hold your age well.

Mr. Risser, earlier you mentioned human rights around the world. We all know that there are countries where.... Do you have any evidence that you could put forth that could show human rights abuses in Switzerland, Norway, Iceland?

[Karl Risser Jr.]

No, not in Norway. It would be more specific to South Korea.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

So none of those countries in the EFTA.

[Karl Risser Jr.]

No, not in the EFTA agreement.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Mr. McArthur, you stated earlier--I hope I quote you right on this--that if an agreement is good for Canada, we should probably go ahead and sign it. We've had many witnesses here at the committee who have stated that this is a good agreement for Canada, so I'm glad to hear your endorsement.

Are you aware of any violations of human rights in any of the countries in the EFTA agreement?

[Andrew McArthur]

Absolutely not. They're all first-class.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Mr. Pugh, you represent the National Farmers Union?

[Terry Pugh]

That's correct.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Are you also on the board of directors for the Canadian Wheat Board, or an advocate for it?