International Trade Committee on Feb. 10th, 2009

[David Plunkett]

Let me give you the information as far as I know it, and if Marvin has anything in addition, he can add it.

During the course of the negotiations and the repeated consultations we had with the industry, the issue of Norwegian subsidies was brought to the table by many players. We used our posts and our colleagues in Industry Canada, and the knowledge and expertise that Marvin's group has, to track this down on more than one occasion. It's our understanding that the Government of Norway indicated that it had eliminated its shipbuilding subsidy programs in 2005, and in 2006 it formally advised the WTO that it had no plans to implement any other programs to fund the domestic production of ships.

Fast forward to more recently: under the WTO there is a trade policy review mechanism whereby, on a regular basis, countries come forward and have the entire WTO membership grill them about various issues that are of relevance. The Norwegians went through this in October of 2008, so just recently. Norway again confirmed that it continues to have no subsidy programs related to marine production and has no plans to reintroduce similar programs. We will continue to monitor this situation as closely as we can, but for the moment my understanding is—and Marvin, if you disagree, chime in—that was the situation as of just a few weeks ago.

[Marvin Hildebrand]

The only thing I would add to that statement, which I agree with, is that Norway, aside from whatever internal disciplines it has and whatever WTO-related disciplines apply in this situation, is also a member of the European Economic Area, which includes the EU countries, Norway, Iceland.... They also have disciplines in this area.

One of the citations from Norway's own public accounts documents from some years ago indicated--and this was in the context of the winding down of the subsidies initially in 2003, and then there was a two-year transition program until 2005, which is the date that David referenced in his comments just now--that financial assistance would no longer be permissible under EEA rules. So I just mention that there is that additional layer of discipline that applies to Norway in this context.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

This is more of a comment, I guess, than anything else.

That is combined with the 15-year exemption, diminishing tariffs for Canadian-built vessels, and ten years for others that are less sensitive, and three years of status quo in all reality. We have tried, I think, to accommodate Canadian industry as much as we can within this agreement. And the flip side of that is that with a newer, more modern industry, we have great capacity and should be able to compete, quite frankly, anywhere in the world.

The part of this that we always leave out is that especially in eastern Canada, there are dozens and dozens of shipyards that can produce smaller-tonnage vessels--those under 50 tonnes--and produce them on a regular basis and sell them all around the world. So we do have a small-vessel industry that's very competitive. They sell vessels in Africa. The majority of New England fishing vessels come out of southwestern Nova Scotia. They sell them in South America. They sell them in Iceland. I think that's the other flip side of that, which we shouldn't forget. There's not a one-size-fits-all in the industry.

The other part of the EFTA agreement is the over-quota on dairy. I know you mentioned it, but I think we should be clear that there's been no change in over-quota, that there's still a tariff system in place. Maybe you could just go over how that tariff system works.

[David Plunkett]

Do you need to introduce our colleague from Agriculture Canada?

[The Chair, Conservative, Lee Richardson]

I want to get it right the first time. Nathalie Durand is the director of the trade negotiations division at Agriculture and Agri-Food Canada.

Go ahead, Ms. Durand.

[Nathalie Durand, Director, Trade Negotiations Division, Department of Agriculture and Agri-Food]

Thank you.

Just to be clear on the current system in place with regard to supply managed products and to give a bit of context, we have what we call tariff rate quotas in existence as a result of our 1995 WTO agreement. We have those tariff rate quotas for a number of our supply managed products. TRQs are basically quantities that are allowed to come into Canada at a low tariff rate. Above that quantity, a higher tariff is applied.

For supply managed products, those tariffs are about 100% to 300% above the quantity that has been negotiated at the WTO. What we have agreed to with the EFTA countries is to go duty free on some supply-managed products within the quota quantity limit. So this is really within access, and of course all of our alliances that are over-access have been excluded from the agreement, which is consistent with our position at the WTO and which is consistent with the position we have taken, as well, in our other FTAs.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Okay. Thank you.

[The Chair, Conservative, Lee Richardson]

Great. Thank you very much.

Well, that gets us through all the members, but not with as much time as everyone had hoped for, I'm sure. But I do have other business, so I want to wrap up this round.

Go ahead, Mr. Julian.

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

Sorry, Mr. Chair. I don't see anything in our agenda mentioning other business, and I think some of us have additional questions for the witnesses.

[The Chair, Conservative, Lee Richardson]

Well, I'm sorry, but it would be some time before we got to your question in any event, Mr. Julian. I have some motions that need to be brought forward to allow witnesses to come on Thursday. We didn't do that at the last meeting. So if you don't mind, we'll carry on with this. It is just about that hour, and I wanted to give another minute or two to our witnesses, because it's been a bit confused today with the scheduling.

If there was anything you felt was missed, Mr. Sunquist, Mr. Beck, or Mr. Plunkett, particularly if you had any closing comments you wanted to make or any answer you wanted to further elaborate on before we close, I'll give you that minute now.

[Ken Sunquist]

Thank you, Mr. Chair.

My closing comment is very simple. We owe, through the clerk, information for Mr. Cardin, Mr. Harris, and Mr. Julian, in particular, and we will get that back to you.

I guess the only comment I'd make is that on “buy American” and its success or failure, the fact is that through Minister Day, through the G-20, the Prime Minister and others, and through the WTO, we're looking at anybody who's backsliding on any of the commitments to keep the world economy open. So through a plethora of fora--G-8, G-20, bilateral--we're very aggressively watching and making representations.

I think if you take a look at how “buy American” started out, where it may end up will be quite different. I think President Obama has made comments to that effect as well. We'll wait to see what the final is, but we'll probably have to go back to you on a few additional questions.

Mr. Chair, maybe that's enough from me on behalf of DFAIT, but perhaps my colleagues would like to say something.

Thank you very much for this opportunity. It really is useful, especially as you do your work program. And we look forward to comments and direction from the committee.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Sunquist, and all of our witnesses today. Again, I appreciate your opening remarks, but also the answers you gave our committee members. We very much appreciate your appearance, and I'm sure we'll see you all again.

Thank you. I'll let you go, and I'll move on with committee business. Thank you again.

The one thing that we need to do before we can have witnesses is have the committee adopt the budget for bringing those witnesses to us. I understand that members have submitted lists of potential witnesses to the clerk. The clerk is contacting these people to appear before the committee on Thursday. That will involve, as usual, some expense, I think, and we need to pass the motion to pay those witness expenses.

Mr. Silva, did you have a comment, or are you going to move the motion?

[Mario Silva, Liberal, Davenport, ON]

No, that's fine. I move adoption.

[The Chair, Conservative, Lee Richardson]

Mr. Silva moves that the committee adopt a budget in the amount of $18,050 for its study of Bill C-2, the Canada-EFTA Free Trade Agreement Implementation Act.

Monsieur Cardin and Monsieur Guimond, did you get that?

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I second it.

[The Chair, Conservative, Lee Richardson]

It's seconded by Mr. Harris.

Mr. Julian.

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

Mr. Chair, I assume that the provision for witnesses from Vancouver is in regard to the B.C. marine workers.

[The Chair, Conservative, Lee Richardson]

I'd have to ask the clerk.

At this point, it's a general budget. The clerks advise me that they are still in contact and trying to see who can get here for Thursday. They got some of the list as early as Friday and began to make these calls. We'll conclude this in the next couple of days, presumably.

Go ahead.

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

Just on that, Mr. Chair, I believe I wasn't the only one, because I believe Mr. Brison submitted names from Nova Scotia as well, and I don't see any transportation from Nova Scotia. If this is a general budget, we're not limited--

[The Chair, Conservative, Lee Richardson]

We just want to make sure we're not--

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

Okay. So I can assume, then, that the Nova Scotia marine workers and shipbuilders are part of the witness list.

[The Chair, Conservative, Lee Richardson]

Yes. It's safe to assume that any people whose names have been submitted will be contacted by the clerk. We're trying as best we can to get it together for Thursday. That's where we start.

In any event, I have a motion and we have people waiting to use the room.

(Motion agreed to)

[The Chair, Conservative, Lee Richardson]

Fine. It's carried. That will conclude it. We'll see you again here at 9 a.m. on Thursday for a discussion of EFTA.

Sorry. Before we conclude, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

I can submit this in writing later on. Is it required that it be submitted in writing to request that Industry Canada officials appear before committee on Thursday to talk about the shipbuilding provisions? I think we should have a finance department official as well, because the accelerated capital cost allowance is a finance issue.

[The Chair, Conservative, Lee Richardson]

Yes, you have just done it. We require notice and you have just given notice.

Mr. Keddy, are you okay with that?