Evidence of meeting #5 for International Trade in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A recording is available from Parliament.
4:55 p.m.
Bloc
Claude Guimond Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
We have to take a stand. That is a slogan we are used to.
Mr. Caron, let me ask you the same question. What do you think about Canada using the principle of reciprocity? In your organization's view, and in your own, how do you think the Americans would react?
4:55 p.m.
National Representative, Special Projects, Communications, Energy and Paperworkers Union of Canada
Honestly, it is difficult for me to say anything else than what Mr. Shrybman said. We have seen the same thing in the past. The exemptions provided for presently are not something that the United States will let go.
Last week, Mr. Grenier traced the history of trade negotiations between Canada and the United States, including the origins of this treaty on government procurement. He explained clearly why Canada did not sign off on and accept reciprocity: there were too many exemptions and they were too expensive. It was impossible to reach an agreement that works to the benefit of Canadian businesses. They would have been at a disadvantage compared to American firms wanting to bid here. To be honest, I do not see how that could happen in the future and how reciprocity could be achieved.
4:55 p.m.
Bloc
Claude Guimond Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
In your opinion, would this agreement, the one we are discussing today, allow us to do so if we wanted?
4:55 p.m.
National Representative, Special Projects, Communications, Energy and Paperworkers Union of Canada
Once again, we are talking about what the United States is going to want eventually. In the last 20 or 25 years, the United States has shown that it wants none of it. There are exemptions that they refuse to let go. The agreement that we have here will not allow us to go that route.
4:55 p.m.
Bloc
Claude Guimond Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Ross, in this seemingly open market, have you lost contracts in Canada to Americans because of the threshold we were talking about earlier?
4:55 p.m.
General Manager, Cherubini Group
The short answer is no.
I think the Americans are probably less interested in our market than we are interested in theirs. They have a bigger economy, so there's a lot more down there for us to do, at least in our business.
In dealing with Americans, for the most part, for side trade agreements, negotiating contracts is all about the dollar and the lowest dollar. They rarely have preferences for where the materials are coming from, as long as the dollars work for them. So we've developed some pretty good relationships by simply being competitive. For the most part, in the business we deal in, it's just about the dollar, who can do it for the least cost, and that's what attracts them.
I think they look at our market here--at least in the area where we work and where we come from, the eastern side of Canada--and we just don't see the competitiveness from American companies because they're just not interested in our market.
March 23rd, 2010 / 5 p.m.
Conservative
Ed Holder Conservative London West, ON
Thank you very much, Mr. Chair.
I'd like to thank our guests for being here today. We certainly have a variety of views. I think we have two distinct views.
As I reflect on our time today, I'm going to take a line from Mr. Julian, because he quoted past guests at these hearings.
We certainly heard from Jean-Michel Laurin from the Canadian Manufacturers and Exporters, who said that Canadian companies were used to facing competition from the U.S. and other parts of the world in our procurement markets here in Canada. I'd like to stop right there, because I heard something that Mr. Caron said, that this process certainly means that the lowest cost will be the only factor in the discussion.
Mr. Ross, I don't know you, but you're from Nova Scotia, which is near Cape Breton, which is a very good thing. My Cape Breton mom would have been proud.
5 p.m.
Conservative
Ed Holder Conservative London West, ON
It's a great compliment.
Are you afraid to compete with the Americans?
5 p.m.
General Manager, Cherubini Group
It's funny you should ask that question, because when we first started in the U.S. market back in 1997, we were intimidated because we thought they were so much better at what they do and we were just a small fabrication company trying to do work in Boston. What we found out with time is that what we do is really on a par if not better than what they do. So it took away the fear of the marketplace as far as the fear of the competition.
Then we came to realize that if you're pretty good at what you do, you can compete anywhere. As long as we have a fair trade, level playing field we have no problem competing with anybody.
5 p.m.
Conservative
5 p.m.
A voice
Dartmouth.
5 p.m.
Conservative
Ed Holder Conservative London West, ON
Dartmouth, which is even better.
I think the point you make is there's no reason why Canadian companies being competitive and aggressive and knowing what it is to compete with Americans--we've been beside them for a long time.... It strikes me that we have the ability not only to compete but to win, both within Canada and in the United States.
Is there any part of what I've just said that you wouldn't agree with?
5 p.m.
General Manager, Cherubini Group
No, I think I agree fully. Because we went through a period, certainly in the early eighties and early nineties, when we were just afraid of American competition. But then we realized, knowing what we do and how we do it--and not only our industry, but a lot of Canadian industries--that we're actually quite good at what we do. It's all about competitiveness, and we learn to get lean and mean and efficient in what we do and we can compete with anybody. We're not afraid of the competition. We're all for free competition.
5 p.m.
Conservative
Ed Holder Conservative London West, ON
I share your confidence in the ability of Canadian companies to compete. I applaud you, and I say from the heart, well done.
Mr. Buda, could I ask you a question?
I appreciate your confidence. You said it's good news for municipalities because we think of where we've been. You mentioned one city, Halton Hills, that originally raised some concerns about protectionism.
How many of your member cities had restricted U.S. bidders before this agreement?
5 p.m.
Director, Policy and Research, Federation of Canadian Municipalities
It's a good question, and to be honest we don't have a precise answer.
I actually wanted to make this comment in response to several other comments I had heard today. I think someone had made this comment earlier. The vast majority of municipal procurement in Canada is actually open, just like the vast majority of procurement in the United States and at the state level has been open.
I know that among many of our members who are really trying to represent the interests of their constituents, their position on Buy American is, look, the situation before Buy American was not ideal, there was not open and complete access to the United States market, nor was there open and complete access to the Canadian market, but at least let's roll back the clock to 2007-2008.
As I said, I don't think our judgment is complete here, because all the information isn't in, but our analysis thus far is that this agreement helps to roll back the clock. It helps to stop the precedent that Buy American was going to set to encourage similar sorts of procurement practices to spread amongs United States municipalities, just like it could actually spread to Canadian municipalities.
To answer your question, there are high-profile examples of Canadian municipalities that, for some very good reasons, were exempting certain procurement projects from U.S. competition, just the same as their counterparts were doing in the United States.
Really, our position is that the clock be rolled back. It won't be perfect, though, if we do that.
5:05 p.m.
Conservative
Ed Holder Conservative London West, ON
Thank you, and I appreciate the candour, sir.
I thank you all.
5:05 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Earlier Mr. Trost raised a good point, in that we ought to be talking about what the next steps are in terms of the Canada-U.S. market. It strikes me that we have to be making the case in the U.S. on an ongoing basis that, with our deeply integrated economy, and with the fact that 40% of Canada-U.S. trade occurs between divisions of the same companies, any artificial barriers to the movement of goods, people, and trade between our countries will cost American and Canadian jobs ultimately.
The competition coming at us is from the emerging economies. Frankly, in the Asian countries now we're seeing trade barriers coming down in more deeply integrated economies and approaches to that.
Mr. Shrybman, you're sort of positing the idea that Americans are perfectly correct and in fact doing the right thing to protect American jobs by implementing protectionist measures. That's exactly the kind of thinking that led to this Smoot-Hawley Act that turned a recession in the 1930s into a global depression, as the Americans did that and other countries reciprocated. Are you serious that we should be encouraging the Americans to pursue that course of action, and we should be reciprocating with more protectionism here in Canada?
5:05 p.m.
International Trade and Public Interest Lawyer, Council of Canadians
I think there's a misapprehension about the Smoot-Hawley Act and what it was about. It was about international trade. Procurement isn't about international trade.
The Buy American provisions we're complaining about were actually established during the New Deal in 1933, and the U.S. economy recovers after those local preferences are established. So I challenge your history, I'm afraid, Mr. Brison.
5:05 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
The Smoot-Hawley Act was protectionist and Buy American issues are protectionist.
5:05 p.m.
International Trade and Public Interest Lawyer, Council of Canadians
Well, I don't agree with your definition. It's not protection to say that our procurement market is open to everyone but whoever wins the contract will use recycled goods from our community in that process. That's not protectionism, by my definition.
5:05 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Sir, we'll go back to my question. You seem to be affirming what I thought you were saying earlier, but I just want to go back to it. Are you saying that in fact we should be encouraging American protectionism and should be doing the same thing here? Is that what you believe to be the correct approach?
