International Trade Committee on March 10th, 2009

[The Chair, Conservative, Lee Richardson]

Thank you.

We will move on to Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you, Mr. Stephenson, and the rest of your colleagues for being here this morning.

My colleague Mr. Harris and I are members of Parliament from British Columbia, so we have an appreciation for the softwood lumber agreement. We know it does provide that stability. Since certainty for the industry is difficult in the challenging times it is facing today, we know it would be a lot more difficult and challenging if we didn't have that agreement in place. I know that our predecessor, Mr. Emerson, worked hard to secure that agreement, and we're thankful it's in place.

I just wanted to follow up on my colleague Mr. Brison's comments about security, the thickening of the border. It's a real concern. As a British Columbian, I know we're hosting the 2010 Olympics, and also from a tourism perspective--tourism being a big economic generator for our province and our country--vehicle traffic is down significantly across our borders.

In terms of the discussions we've had, from your administration to President Obama's new administration, I know there was talk about the border being open for legitimate trade. Some barriers have been thrown up for agricultural businesses, for example, on the pretext of security.

I'm wondering if there is any change of thought in the Obama administration, versus the Bush administration, on how they're going to address agriculture and the movement of goods and services across the border.

[Deborah Lyons]

The border issue has been, obviously, a very important one for our department and other departments throughout the Government of Canada. We've been working very closely with DHS and other interlocutors in the U.S.

In terms of commenting on the change between the previous and the present administrations, I think it's still very much early days, but I'm sure you're aware that when President Obama was here, he made the comment about his own concern about the border, about the importance of a smart border, and of ensuring we have a border that allows security to be well addressed but not impeding trade. So I think that was very positive to hear.

Secondly, with regard to Mr. Brison's comments about the northern border and the new secretary for DHS, Janet Napolitano, what we're hearing from her--in the discussions that some of our senior people have had--is that she's very interested in understanding the northern border. She's very sensitive to the issue of trade. This, as you all know, is the former Arizona governor. She's very sensitive to Canadians. In fact, she visited here over a year ago and met with then Minister of Trade Emerson, and spoke at that time about the importance of ensuring we have a border that works well for the business community, for the free movement of people and goods.

You'll recall, I'm sure, that she has asked for a briefing on the northern border. I think when it appeared, there was some concern about that, that perhaps she was attempting to make great announcements about the northern border. She clarified very quickly that this was simply meant to be a briefing to bring her up to date. She set in place a 30-minute press conference with Canadian media to explain her situation and the fact that she was trying to better understand the northern border.

Again, I think some of these are indications that we do have an administration, as I would say we had with the previous administration, that wants to try to work with Canada, its most important partner in trade, on making sure the border works in a way that provides the protection that's necessary in terms of whatever the issues may be with regard to immigration or trafficking or what have you, but also ensures that we continue with the very strong trade relationship.

We're obviously very concerned about how we proceed with regard to the Olympics in 2010, but there again, we're working very closely with our interlocutors in the U.S.

As I said, it's early days in the administration, but I think we were very pleased with the President's comments, and Secretary Napolitano, I am sure, will be engaging with our senior people once she has completed her briefings.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

To follow up, I know that Mr. Stephenson alluded to the February 19 visit by President Obama to Canada. With the rock star celebrity status of the President, we were all proud to be the host. And we were obviously very proud to see our Prime Minister head down south the following week to keep Canada front and centre on the radar.

I know that the Mexican and United States chambers of commerce are meeting next week in Washington to discuss the border issues there. That's why it's so important that we continue to work with our northern colleagues on the north-south border. Perrin Beatty is the CEO from the Canadian Chamber of Commerce. I listened to him speak at an event, and he's looking at other ways we can differentiate our border.

I wonder if you think Canada should revisit the idea of creating a security perimeter around the U.S. so that the pressures of the Canada-U.S. border will be alleviated.

[Deborah Lyons]

That has been part of the discussions with the U.S. Again, it's just one of the options we're looking at. At this stage of the game, we're trying to work through the specific issues we have on the border. I think we've been very successful in doing that over the last couple of years.

There does seem to be an adaptation by business to the changes that have taken place along the border. Wait times are improving. Both governments are putting much more money into infrastructure at the border.

We are concerned about how things will proceed with the passport deadline in June. But again, I think we have established a very strong working relationship with the U.S. in trying to work through each of these issues as they come up.

The perimeter is certainly an option, and it is being looked at, but it has complexities to it, as you can well imagine.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you.

I'll share my time with Mr. Holder.

[Ed Holder, Conservative, London West, ON]

I have a couple of brief questions.

Thank you to the witnesses for attending.

Ms. Lyons, I want to come back to this border issue. I know I'll be the third person speaking on this, but I'm quite concerned when I hear Mr. Brison make the comment that at the political level there are real concerns in the States--and certainly there are here--in relation to the ability for individuals to go across the border. Of course, with the June 1 deadline date for passports, I'm worried that there are two sets of messaging. At the political level we recognize there is an issue, and yet at the administrative level, it looks like June 1 is a fait accompli.

I'm quite concerned for Canada's sake in terms of the Americans coming over. If they can't get back, I suppose until they run out of money it's okay to keep them here a little longer. But I would say there is a genuine concern in terms of the free passage of people back and forth, notwithstanding security issues and the like. I don't know if the answer is an extension of time; I'm not certain of that. But I'm terribly concerned that we're sending different messaging from the political and the administrative levels.

I'm trying to get a feel from you about how concerned we really are. I would say, as a politician, that I'm terribly concerned, and yet I don't get that same feeling.... Can you expand on that and help me understand the messaging to the administration in the United States?

[Deborah Lyons]

Certainly. On all these issues, at the political level and the administrative level--anything having to do with the U.S.--there is always a high level of concern, because our relationship, our partnership is so important. It's part of the reason we have the extensive network in the U.S., with our consulates there and our heads of mission. Our various consuls general are involved on a daily basis in going out with their teams and advocating Canada's position on these many issues.

[Ed Holder, Conservative, London West, ON]

But going back to the passports, what is the issue, then?

[Deborah Lyons]

On this one specifically, we've had a fair bit of experience in the last couple of years on the WHTI in terms of the air implementation. We went through an adjustment period there, which we had to deal with.

On the land implementation, we worked very hard, again with our interlocutors in the U.S., to try to get a delay in the deadline, which we were successful in achieving. They themselves saw it was going to be a problem for their own citizens. They moved it to June 1, 2009, and at this stage it looks like that deadline will hold.

I'm not saying we're not concerned. Of course we are concerned. We're watching it very closely. We, both ourselves and our Public Safety people, are working with the various entities in the U.S., the State Department and DHS--

[Ed Holder, Conservative, London West, ON]

I understand that.

I apologize--I don't mean to interrupt you--but I'm mindful of our time.

Are we then, from an administrative standpoint, asking for an extension beyond June 1, from your perspective?

[Deborah Lyons]

At this stage of the game, I think what we're monitoring very carefully is the uptake of passports. We're in close discussion with our business associations, with our business communities—you mentioned Perrin Beatty—with the Canadian Manufacturers' Association and others, to make sure we're monitoring their concerns as well.

At this stage of the game, we are not asking for an extension. We would certainly be asking for an extension if we thought it was necessary. But again, I think it's something that we watch very closely. What we're hearing from the U.S. is that they feel the passport uptake has been sufficient such that they will be able to meet the June 1 deadline.

That is not saying we will not end up with an adjustment period, and that we won't in fact push for an adjustment period, but at this stage of the game, it looks like the June 1 deadline is going to hold.

[Ed Holder, Conservative, London West, ON]

Do I have a final question, Mr. Chairman? I'm mindful of the time.

[The Chair, Conservative, Lee Richardson]

Sure.

[Ed Holder, Conservative, London West, ON]

Thank you.

By the way, I recognize that some 85% of Canadians have passports, I think, but my concern is really from the American perspective back and forth.

[Deborah Lyons]

Oh, absolutely. That's what we're monitoring as well.

[Ed Holder, Conservative, London West, ON]

My final question, then, relates to the softwood lumber agreement.

It's rather interesting in that, if I heard correctly, it doesn't seem that the New Democratic Party wants a softwood lumber agreement, so I'm a little confused, Mr. Julian.

But here's what I'm—

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

I'd be pleased to answer.

[Ed Holder, Conservative, London West, ON]

If you were a witness, I would be pleased to ask you.

This struck me when I read Mr. Stephenson's comments. I'm disappointed that he's not here to answer this, but perhaps someone else can. I was compelled by his comments that Canadian producers strongly support the secure access to the United States, but the comment was made, in terms of the United States, that the Coalition for Fair Lumber Imports is lobbying Congress to press for an aggressive line with Canada on enforcement of the softwood lumber agreement.

Can I just ask you briefly to expand on this? I think this is an important point. I'm not sure who of the witnesses would respond to that.

[Martin Moen]

I can expand somewhat on that. It's not my area of speciality. Mr. Stephenson has followed it a lot more closely. For many years, the dynamic has been that the coalition will lobby Congress quite hard and also lobby at the local level through governors to try to apply pressure to the administration to do what it wants.

Right now, it's not clear exactly what that's going to mean and how this administration is going to respond. Certainly, the position we've taken with the administration is that we want to continue the agreement and we want to continue to work with them, and we are continually meeting and discussing with the administration. That's the current dynamic. Where that's going to end up in six months or so is not so clear in terms of the kinds of pressures the coalition is exerting.

I'm not suggesting that there's a risk to the agreement or anything. That's not what I'm talking about. I'm just saying that there is that pressure there, and it's not going to go away.

[Ed Holder, Conservative, London West, ON]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Moen, Mr. Holder, and Mr. Cannan.

We're going to have make this a rapid round, with less than five minutes for each participant.

I understand, Mr. Cannis, that you're going to share your time with Mr. Silva.

[John Cannis, Liberal, Scarborough Centre, ON]

That's less than five. I'll go fast, then, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

There you go.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you.

I want to pick up on what Mr. Holder was saying in terms of the softwood lumber.

If I may repeat your words, they were “apply pressure...to do what it wants”, Mr. Moen. I think that's what you just said a minute ago .

We're working very hard on this side to make sure that we comply with, for example, the rules, etc. It wasn't easy to leave a billion Canadian dollars behind last time. It wasn't easy. It was a difficult situation. I remember chairing the committee prior to our chairman here. It was very difficult.

There's a question my constituents are always asking me. I don't have a constituency that has the lumber industry, but I have a constituency that cares overall about what happens, either in the western part of Canada or in the eastern part of Canada, and in Ontario as well, wherever the lumber industry is. Here we have a rules-based agreement. We have an agreement, yet again, with this new administration—it's just a comment—we're having a lot of pressure applied, as Mr. Holder just alluded to. It seems to me that this administration is about to be influenced. I hope that on our side we can stand firm with what we've agreed upon and move on. That's just a comment.

I'm concerned. I want you to help me respond to my constituents. In Mr. Stephenson's comments, he said that “Canada and the United States must continue to work together to promote the recovery and the strengthening of our economies”. Who's kidding whom? And I don't blame them: they're out there and they have a mess. There's 8% less, I think it is, from last month, as was discussed in terms of business reporting an 8% drop in December sales. That's a lot.

We know, at least in my constituency, that the Americans are going to look after their home first, as we're trying to look after our home, but if you can explain this to me, there are circumstances, whether it's in auto or other industries, that need to be addressed first on their side before we can start addressing them on our side. Is that the case, do you think? I named the auto industry. Are there other industries that you can talk to us about?