International Trade Committee on March 12th, 2009

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Cannis, and thank you, Mr. Williams.

Mr. Holder, do you want to continue?

[Ed Holder, Conservative, London West, ON]

Thank you very much, Mr. Chairman.

Just very quickly--because I know Mr. Cannan has a couple of questions--we've talked about tourism and border thickening relating to that. This question is to Ms. George, as it relates to the single window initiative.

I noted a comment you made, and I want to get some clarity around this if I could, please. It seemed to me you got a little bit off-script and talked with some passion about the issue of getting all departments together, because where it seems that companies have to do their online reporting, various government departments don't have their act together. This is the sense I had from you. As a past president of the London Chamber of Commerce, I'm very mindful of business and the critical need to have business flow. So I'd like you to expand on that a little bit just for our clarity, with the ideas the Canadian Chamber of Commerce has with regard to pulling this all together to make it work, and the financial implications if we don't.

[Shirley-Ann George]

Thank you for the opportunity to talk about this. What happens now is that CBSA has done a tremendous amount of work putting in place electronic data reporting systems, but they have no mandate. Even though many other government departments require information when you cross the border--dangerous goods, agricultural goods, there are lots of different reasons government agencies feel they need to collect information at the border--the CBSA has no authority to tell the other government departments they have to use the single window. It's entirely up to that minister and where it falls in that department's priorities. It's important for the economy as a whole, but it has continually fallen down below the level of getting the proper funding inside the other government departments.

We've had briefings from the other government departments. They're looking at it, they'd like to do it, but if they're going to do it they have to change the entire back end of their system, and this will take years and millions of dollars. There are lots and lots of reasons they can't do it, when in fact it is absolutely essential that somebody in the centre pull all these guys together and tell them it's now become a priority and they need to get it done.

[Ed Holder, Conservative, London West, ON]

Not to sound silly, but who is the one pulling at the centre to pull all the departments and compel--

[Shirley-Ann George]

Today nobody is pulling at the centre.

[Ed Holder, Conservative, London West, ON]

And where should that initiative come from, do you think?

[Shirley-Ann George]

I would hope it might start by.... Well, this committee could be very helpful by including it in your report and asking for the other government departments to explain why they do not feel it's essential to meet the same standards.

[Ed Holder, Conservative, London West, ON]

The other part of the question is, have you put a financial cost to that? Do you have any sense of the implication of the failure to do this?

[Shirley-Ann George]

I don't think we have a specific cost right now, but what's happened is that it spreads out. For example, you cannot participate in some of these trusted shipper programs if you have other government reporting requirements because the risk assessment is all done on electronic reporting. So if you can't share some of your information electronically, you can't participate in the programs.

We'd like to see programs such as the ability to do some of these inspections in the production facility. For example, they already have inspectors on site for food. They're more than willing to have the border inspections done on site instead of being done at the border, but because the other government departments aren't doing it electronically you can't even begin to have those conversations. So it has ripple effects, and I can't stress enough how much I encourage you to consider putting this in your report.

[Ed Holder, Conservative, London West, ON]

Perhaps through you, Mr. Chairman, because it's certainly not appropriate for me to do this, you might ask the Canadian chamber if they've got more information on this single-window initiative that helps us reflect on that and that we might take any more information beyond the small segment you had in your report that might be useful for us to consider. I'll leave that to you.

And perhaps I can pass to Mr. Cannan.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Holder.

And thank you, Ms. George.

We're going to continue for a couple of minutes with Mr. Cannan.

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

Thank you, Mr. Chair.

And thanks again to our witnesses.

I just want to reassure Mr. Williams that my caucus colleague, Ms. Ablonczy, is a champion of tourism. Any opportunity she has, she doesn't miss. Within caucus and to anybody within earshot she'll talk about the importance of tourism for each province in our country.

Tourism is one of the biggest economic generators for our region, British Columbia and the Okanagan Valley, so we're very concerned about the border issues from a tourism and an economic perspective, and for the flow of goods and services.

As my honourable colleague Scott Brison alluded to earlier, working with the Canada-United States Inter-Parliamentary Group, we had a delegation that just recently went, and we're going to continue to address that full-court press, because as you know, President Obama just announced trade initiatives this week, and we're concerned with some of the language that's in there that's more and more protectionist.

Ms. George, I appreciate the work of the Canadian chamber and Mr. Beatty as well in continuing to address this issue. I just wonder what kind of dialogue you have with the U.S. chamber to emphasize the importance of removing that protectionist language within their trade policies.

[Shirley-Ann George]

The U.S. chamber was very much in front in dealing with the “buy America” issue. We were very pleased with how proactive and forceful they were in encouraging the government to reconsider its position.

We remain concerned. We expect Congress, which by its nature has a history of being more protectionist.... We expect to see a number of other such issues pop up as we move forward over the next year or two. We'll have to be absolutely vigilant in trying to deal with them.

On the specific “buy America” that was in the stimulus package, unfortunately we're in a bit of a difficult situation with it. The way it's worded now, any federal spending on infrastructure will be exempted because of NAFTA, but because Canada and our Canadian provinces have not opted into the WTO procurement agreement, other countries who have, such as Europe and Chile, will have greater access to state-level infrastructure spending than Canadian companies may.

This is one of those things wherein perhaps we've done it to ourselves, but it's definitely something we might want to reconsider our position on.

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

Here is another question with regard to your excellent vision document. On page 6, in the very last paragraph, you say:

Canada should seriously consider reviewing its regulation in critical sectors and take unilateral action where the tyranny of small differences increases costs with marginal, if any, benefits to producers and consumers.

Prime Minister Harper clearly and passionately articulated to President Obama when he was here on February 19 that any security issue concerning North America concerns Canada. They also went on to talk about some aspects of how Americans consider most trade irritants, such as agricultural policies. I'm wondering what we can do unilaterally that addresses this issue.

[Shirley-Ann George]

Recently someone was telling us at the chamber that in the previous administration one of the powerful secretaries had commented that dealing with Canada is like dealing with a condominium association: there's this unending list of complaints. It's important that we try to change some of that perspective.

On the regulatory aspect, there's a long list of things you really have to shake your head about and ask why we have a standard different from the U.S.'s. If nothing else, let's just mutually recognize the U.S. one as acceptable. Why do we have a different standard for underarm deodorant? Give me a break.

We could quickly come up with a long list of these things that the government could take a look at and consider. Maybe we can't do all of them, but we can take care of 50% or 75% of them, and let's just move forward.

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

Excellent. I appreciate that. It's something we're going to continue to focus on.

I think my time has expired. I just want to mention not only the Olympics in 2010 but the Paralympics. The kick-off is happening right out in front of the Parliament Buildings today. It's important to recognize the paralympians, as well as the importance of what they contribute to not only our economic life but the social fabric of our country and the world.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you.

We're going to have time for another round. We're going to go to Mr. Cardin, then back over to the other side, and then to Mr. Brison.

Monsieur Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair.

Greetings, lady and gentlemen.

I'm going to get right to the subject of regulation that you have just referred to. You seem to be saying that Canada and, I presume, Quebec, should perhaps review their regulations. Why should the same thing not apply to the United States? An American company has just launched legal proceedings against the Quebec government because a fairly powerful herbicide is not authorized for use in Quebec and the company believes it is going to suffer enormous losses. So I think that is an excellent regulation.

That's why I don't understand your reaction when you say that it should be up to Canada to review its regulations, namely with regard to certain types of deodorant. The use of certain herbicides can be harmful to our health, so I think the regulations in force are good. I would say that it is the Americans who are extremely tolerant in some cases, when it suits them, but are less so in other cases, when it doesn't.

[Shirley-Ann George]

Of course Canada will have some areas where we agree to differ and will have different regulations; there's no question of that. We need to make an evaluation of these regulations as to whether or not they're needed.

Let me give you an example. The automotive industry has done some work. The U.S. and Canadian counterparts have gotten together and have built a list of regulatory differences. They've done the homework. You know, when you're in a car in the United States, that the safety belts work; when you're in a car in Canada, the safety belts work. Why do we need a different standard?

We should be able to bring forward a list, and I would encourage the industrial sectors in both nations to work together to build a list to bring forward to government, showing the areas in which they think it should focus on considering either unilateral action or mutual recognition.

I don't know the specifics of the case you brought forward, but there are legitimate reasons for both Canada and the United States to consider important issues such as environmental regulations, and we're not suggesting the abandonment of Canadian regulations. But when we literally have hundreds of thousands of them, I'm sure there are some which you might agree do not need to be different from the related ones in the United States.

[Serge Cardin, Bloc, Sherbrooke, QC]

You are right, because in many respects, you understand... It's one of the world's great mysteries. Often, people try to make things complicated instead of keeping them simple. There are many areas where people take pleasure in complicating things. We know very well that the Americans tend toward protectionism. In a certain sense, it would also seem that for security reasons they install systems that are, for all intents and purposes, irritants. Take passports, for example. The Americans consider them an irritant, but in fact, it is their country that wants to monitor people coming into the United States. Our borders have always been fairly open and, of course, we welcomed visitors to Canada the right way. Armed or unarmed, we gave them a warm welcome. I find that I had more problems returning to Canada and dealing with Canadian customs agents, when I travelled by land, than when I travelled to the United States. I always had the impression that I was dishonest and guilty when I returned to Canada.

For people from the United States, it's an irritant. It has even been proven that they are not interested in obtaining a passport or other pieces of identification. So that's another element that I would describe as being fairly protectionist. It's the same thing with customs. The problems people experience crossing the border, the slowdowns, and the duplication show that, as you say, there is something that is not working. How many years ago were new policies established? I don't know where the problem is. There is a lack of commitment and there are people who try to complicate things, because the border between Canada and the United States should be a model of fluidity.

I am looking at your short- and medium-term recommendations and your pilot projects. The border is long, very long. So we have to focus our efforts on being able to do a certain number of inspections, even if some travellers and shipments are pre-approved. So I don't know how you see the situation or how to fix it quickly. Could you give us a brief overview of how to go about this? I'm not pointing the finger at any one person, because I think there are many people contributing to the problem. How can we truly improve the situation quickly?

[Shirley-Ann George]

Thank you for that question.

The challenge we have with the border is that many incremental requirements have been added. We're trying to bat those off one at a time and deal with them. I think it's fair to say that we may have made progress on a lot of these issues, but there are just so many of them that when you add them all up they result in a thicker border. There are definitely significantly increased costs for companies that are regular shippers across the border, and the delays and confusion on requirements have caused a significant hit to the important tourism industry.

I don't know that there's a quick fix, but I am coming more and more to the conclusion that the incrementalist approach is only going to keep us in the same state for a long time, because there's always another requirement coming around the corner. We need to change the game, and that's why we're suggesting looking at a co-managed border. Unfortunately, I don't have a quick-fix band-aid for you.

[The Chair, Conservative, Lee Richardson]

Mr. Miller. Welcome back to the committee.

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

Thank you, Mr. Chairman. It's nice to be back. I used to sit on this committee.

Tourism is the second-largest industry in my riding, after agriculture. For those living on Georgian Bay, it's certainly big for my area. We're actually on the circle route. It's what they call the scenic tour of Lake Huron, which covers both Ontario and Michigan.

I apologize if this matter has already been addressed. A drop in the Canadian dollar is usually good for tourism. Have you noticed anything significant yet? I know this is not the heaviest tourist season, but we are a four-season area. Have you noticed anything significant there in terms of Americans wanting to come up and spend their tourist dollars in Ontario and Canada? If so, to what degree, and would you be able to put a dollar figure on it?

[Randy Williams]

It helps somewhat, but Americans don't have a lot of understanding about the Canadian dollar, although in the nearby border states they do. I have to say that in 2008 we had 12,000,000 visitors from the U.S. That's the lowest number since recording tourism travel to Canada began in 1972. We used to be around 18,000,000 to 20,000,000 visitors from the U.S. In the last six to eight years we've seen a 40% drop. We've had fluctuations in our Canadian dollar since then. It comes and it goes. It affects it somewhat, but not dramatically.

It will help to keep Canadians in Canada a little bit more. Our travel deficit has ballooned. After the numbers come in for 2008, it should exceed $12 billion. In 2002 we had a $1.5 billion travel and trade deficit. It's going to be over $12 billion after the 2008 numbers come in. It's startling. That's a new record as well.

The numbers are certainly dramatic. I've been in travel and tourism for 40 years. I started as a busboy when I was 16 in 1968 and I'm 56 today. I have 40 continuous years in the travel and tourism industry.

In response to the question on a rapid fix, for 40 years we've been talking about the lineups at the border and the challenge of welcoming at the border, and asking why we, as a friendly nation, can't be friendly at the border. It has been an issue for the past 30 to 40 years. We just can't seem to care to get it right. It is discouraging that a country as powerful, intelligent, sophisticated, and friendly as we are can't get this right. Where's the leadership? Where's the central force that will pull us together? This is silly.