International Trade Committee on Nov. 15th, 2010

[Jason Langrish]

No, they haven't.

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

So there's a fundamental problem when we sign these agreements and we end up, as we have with Costa Rica, actually seeing a decline in exports to those markets. That's a fundamental problem that I think your association should be looking at.

[Jason Langrish]

Okay, I thank you for your lecture, and I'd be happy to take any further questions.

[The Chair, Conservative, Lee Richardson]

That's what we have to do.

We have time, I think, for one more, and that would be by Mr. Allison. You will begin, and if you want to share your time.... Or is Mr. Trost...?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Well, I actually wanted to, but I'm going to share it.

[The Chair, Conservative, Lee Richardson]

Actually, I see you have the Conservative international trade expert, Mr. Peter Braid, here today.

Are you going to lead the questions?

Oh, it's Mr. Trost. Very good.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I will ask one question here, and then we'll rotate to one of my colleagues.

I'm wondering if you might elaborate a little bit more about labour mobility and what it means to your members, specifically what you would prioritize as being important to Canada, again from your members' perspective as far as labour mobility is concerned, and how you would advise us in going about lobbying and pushing for it.

[Jason Langrish]

On labour mobility and these things, they are always prioritized. The big driver behind labour mobility is the fact that companies operate globally. So Canadian companies operate in European member states and vice-versa. The number one interest that they're going to have is being able to move their executives around without having to go through very tedious visa requirements. You'd also be looking at things like spousal visas. That's very important, because, obviously, married or common law couples don't really want to split when presented with a job. Both want to be able to work. So that would be a priority.

The other priority is also with regard to professional services, probably at the higher level. As an example, a European company could be invested, say, in Alberta. Maybe it's a technological program of some sort, like a carbon capture and storage program or something like that. It's not reasonable in all cases to expect that if some German company, say, is going to be a lead partner on some project, we're going to find a Canadian engineer who's going to be the principal on it, at least at the outset. They're probably going to have to bring somebody over to get the project moving and to do some coaching to help build the team, and so on. Something that companies are going to be looking for is the ease with which they can move their people around when they choose when and where they're going to be doing projects. You're not talking about creating new jobs here; you're talking about allowing people to move in the first case, and it's those investments that are going to create new jobs.

Also, with regard to the highly skilled workers, like engineers, architects, lawyers, and financial service providers, a degree of mobility is going to be important there, because the reality is that these are positions that operate in a global environment, and if you're not able to provide that type of response to labour mobility, they'll go elsewhere.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I have a question for Mr. Langrish.

Thank you very much for being here. You've touched on this; could you please elaborate on the impact you feel the CETA between Canada and the EU will have on the level of innovation in Canada and the creation of knowledge-based jobs, the sorts of jobs that we want to see established in our economy?

[Jason Langrish]

Well, again, a study done recently by the Rotman School of Management basically said that we need to be pursuing these free trade agreements because it is this level of competition that stimulates innovation.

That happened in countries like Sweden or Finland when they opened up their economies and restructured. Sweden restructured in the 1990s. It liberalized its economy and became more outward-looking. The levels of productivity increased and the levels of innovation increased. With the increase in productive capacities in open markets, the level of export increased as well. This is the kind of thing that we see the CETA doing.

This is not a race to the bottom. We're not competing against a jurisdiction that has low labour costs or low labour standards; in fact, they're higher than ours. The reason they have higher levels of productivity is not that they're inherently smarter or more competitive than we are; it's because they operate in an environment that is inherently more competitive than the one in which we operate. If we believe that we can ring-fence our industries and pursue some kind of state-driven industrial policy and experience growth in productivity and export markets and national wealth, we're kidding ourselves.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Thank you, Mr. Chair.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you for being here.

My question relates to the trade agreement, but it relates more to what Mr. Braid talked about, intellectual property and things like that.

We look at trying to stimulate and do things with the venture capital market, private equity, and things like that. Do you not see an agreement like this facilitating the way? I've heard and seen European pension funds looking at trying to invest in some of our private equity companies and the like. Look at the great resource we have in R and D here, and the great research that goes on in this country, and yet we could do a better job of commercializing it.

Do you see this agreement as trying to facilitate the confidence and the money that get invested back into Canada as well? Is it a two-way street to see them invest here, where they see there's going to be an opportunity with two markets?

[Jason Langrish]

Directly, in terms of the venture capital and how the agreement will affect it, it's hard to say, but more broadly, the answer is yes. Venture capital is going to chase places where it can get good return. It's going to go to places where the investment climate is stable and predictable, and when, if your rights are compromised, you have some sort of retribution, some sort of path that you can pursue.

It's also going to the opportunities. We talk about this all the time in agreements, whether with the European Union or any other jurisdiction: you look to go to places where you feel you can pursue commercial opportunities, innovate, and get a good rate of return. That can be in infrastructure, it can be in resources, it can be in manufacturing, it can be in services, but you don't do it by having fragmented markets or by having barriers between countries. It doesn't really work out in practice; it might sound good in principle, but in practice the record shows that it doesn't work.

Further to that, we also see this agreement as moving along the process of removing the interprovincial trade barriers that exist in Canada, which are not only a barrier for foreign investors and traders into Canada but also for our own companies, which have difficulty, contrary to what some have said. They have difficulty with regard to getting their professional qualifications recognized, bidding on contracts, and providing their services. This is completely unnecessary and doesn't make a lot of sense. We're the only OECD country that doesn't have a single securities regulator. I don't think we are the ones who have got it right while everyone else is out of step. The evidence is overwhelmingly against us.

In these instances I think that we do need to move forward and reform in order to maximize our potential.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Langrish. That was very helpful today. We hope to perhaps have you back in the new year when we pursue this again. It's just the joy of the committee. Thanks very much.

I'm sorry to the committee generally. We're running a little late today. We have our next witnesses prepared to go, so I'll bid Mr. Langrish farewell, and while we're doing that, we'll immediately set up the seats for our visitors from Europe.

I'm going to beg the indulgence of the committee. We may just have to go a little over time today. We have a visiting group from the European Union. They are the European Economic and Social Committee of the European community.

I think the committee will be provided with some documentation.

The European Economic and Social Committee is on a visit to Canada. We're very pleased that they were able to find some time today to join us briefly.

I hope at least that we can have an opening statement from our guests and perhaps establish some context so that members of this committee will have friends in Europe to ask questions of when we go over there.

I'm going to now introduce the members, but first I think we'll take a moment to set up translation for those who may need it.

Thank you to our committee and witnesses.

I will let Sandy Boyle, the president of the international relations section of the European Economic and Social Committee, explain who they are and what brings them to Canada at this time. We're very pleased that they are here, and I think that the members, on the eve of our visit to the European Union, will get some real benefit out of this.

I don't think there's going to be time for a lot of questions. It may be a bit unusual, but I'm going to ask you to extend your opening remarks a little bit to give us some background. I think members might benefit from that greatly.

I will introduce the members from various parts of the European Union. As I said, the president of the international relations section is Sandy Boyle. He's joined by Rose D'Sa, from the U.K.

I'm sorry, Mr. Isaias; I didn't catch what country you're from.

[José Isaías Rodríguez García-Caro, Member of the Committee, European Economic and Social Committee]

I come from Spain.

[The Chair, Conservative, Lee Richardson]

Yes, it's Spain. Exactly. I knew that.

Jean-François Bence is also a committee member. Welcome as well.

With that brief introduction, I'm going to ask Mr. Boyle to carry on and give us a bit of background.

[Sandy Boyle, President, International Relations Section, European Economic and Social Committee]

First of all, thank you very much indeed for the opportunity to be here.

As you correctly said at the beginning, we are here on a relatively short but very, very intensive program, which is representing the European Economic and Social Committee, of which the three of us are members. Jean-François is the director responsible for, among other things, external relations, but he also covers the key areas of agriculture, transport, and energy, which of course in many ways are central to some of the discussions we are having during our three-day visit here.

You asked me to be brief. I will try to be as brief as possible.

The European Economic and Social Committee is as old as the European Union itself, and I think therein lies an important message, because the founding fathers, which were only six countries, put in place a structure to ensure that civil society.... And can I say that it's the European definition of civil society? I understand that in Canada it can have some different implications, but civil society as we define it is three very distinct groups.

We have the employers group, of which José Isaias is a member and indeed a vice-president. We have the employees group, which, until I took over as president of external relations, I was a vice-president of. And we have the various interests group, which brings together quite a diverse grouping, but key players such as lead players in agriculture, consumers, and NGOs. Cultural groups and other groups come in there. But I wish to emphasize that we are talking here about predominantly mainstream European groups in terms of these three essential component parts representing now not the six countries that formed the EU, but the 27 countries that now form it.

We are a very large committee. It's done on a proportional basis between the three groups, equally divided, and the largest countries have more members than the smaller countries, but in total we number 344, so it's a very large grouping. Indeed, it's such a large grouping that we need to meet in Brussels when the European Parliament meets in Strasbourg, because we need to use their premises. Unlike here, we talk in 22 different languages, 21 of which are active in many meetings, so it's quite a diverse grouping.

The principal purpose of our visit here to Canada is that we were involved in an opinion on EU-Canada relations--that was heavily involved also--and commented on the trade agreement and the negotiations on the trade agreement. The unanimous view of our plenary, which carried the opinion, was favourable towards a trade agreement, and a substantial trade agreement, between the EU and Canada.

We also made specific recommendations on two components that we believe to be important, one being the need to address the question of sustainable development, which is now very much part of the EU agenda in trade agreements. The second, given our definition and how we value the role of civil society, is the hope that the EU-Canada agreement can replicate what has been the recent trend of finding a body that would be a joint body between the EU and Canada, made up of employers, of employee representatives, and the types of various interest groups that I have described, which could act as the body. It will not negotiate. It's not part of that process. It is part, then, of the ongoing evaluation and implementation process of the whole trade issue going forward.

I have tried to be as brief as I can. My colleagues will obviously wish to perhaps amplify if there are any questions, but in the interests of brevity, that is perhaps in a nutshell what we do.

The only other thing I would say is that in our external relations field, we now have 15 very formal structures, with bilateral arrangements with countries such as China, Brazil, and India, where we have our round tables. We're in the process of establishing a structure with Russia. Also, we are active on a regional basis in areas like Africa, the Caribbean Pacific, and Latin America, where we have specific forums that in many ways mirror the parliamentary structures in Europe. We become involved with civil society organizations, as I've defined them earlier, on this basis of mutual cooperation, exchange of views, and working on a common path together.

I will stop there in the hope that perhaps we can have a brief dialogue at what I know--for you and for us--is the end of a very long day. Thank you very much indeed.

[The Chair, Conservative, Lee Richardson]

Thank you very much, Mr. Boyle, and thanks to all of you. I know that it has been a very busy visit to Canada. They really have stacked your agenda. I hope you get as much out of it....

In the interests of time, and as members have other matters on their schedule, I think we're going to do a quick round. I think we'll take one question from each party. I'm going to ask each party to keep it to two or three minutes.

That doesn't do you justice. I very much appreciate your coming, but also for bringing in this information, which has been very useful. You've established a contact with these folks, who may want to pursue those contacts with you further.

Mr. Boyle?

[Sandy Boyle]

I'm sorry to interrupt, but it was remiss of me when I was rushing: I should have stressed that we are an advisory body.

[The Chair, Conservative, Lee Richardson]

Yes.

[Sandy Boyle]

I just wanted to make that clear, because Jean-François correctly drew to my attention that I had not, and we have a clear role in terms of where we are consulted by the Parliament on legislative programs, etc.

My apologies for interrupting. I just wanted to clarify something it was remiss of me not to say at the beginning.

[The Chair, Conservative, Lee Richardson]

That is helpful. This is new to this group as well. I would ask that you might just have in the back of your mind that as we conclude I'd like you to give a very brief wrap-up as well. That may come as early as ten minutes from now, but nonetheless....

We're going to start with Mr. Silva of the Liberal Party, for two minutes.

[Mario Silva, Liberal, Davenport, ON]

Thank you very much.

I apologize that we have to all be very quick here, but unfortunately our meeting ends at 5:30.

Thank you very much for being here.

I just want to clarify one thing. When you said “civil society”, you mentioned employees. Is that trade unions representing the employees? How does that work? Is that the case?

[Sandy Boyle]

Yes.

Do you wish me to answer them as they come...?

[Mario Silva, Liberal, Davenport, ON]

Well, if you can, that's fine. Maybe I'll go—