International Trade Committee on Oct. 23rd, 2012

[Don Davies, NDP, Vancouver Kingsway, BC]

Well, you said it's not as bad as it seems, but it's not a good thing. Wouldn't you agree that generally a country would want to have a balance of trade, or perhaps even a surplus, that a growing economy would rather be exporting its goods and services to the world than be a net importer?

[Joy Nott]

I would say yes to that. That being said, it depends. We have to take a look at the types of imports that are coming in and what they're being used for, with the qualifier.

[Don Davies, NDP, Vancouver Kingsway, BC]

Yes, and I was just thinking that, because the deficit in manufactured items has exploded six times in that same time period. It was about $17 billion of deficit in manufactured items in 2006. That's over $90 billion today.

The figures I've seen also show that the percentage of our exports that has been growing in terms of raw or unprocessed goods is now reversing. It's going the other way. What we're doing, in short, is we're exporting more raw or barely processed items and we're getting an exploding deficit in manufactured items. I take it, as an importer-exporter, that's not a good thing either for our country. Would you say that, or do you think it's a good thing?

[Joy Nott]

I'm not going to say it's either a good thing or a bad thing. As I said earlier, to the companies that are our members, importing and exporting is a continuous flow. From their perspective, they don't actually think of the deficit in trade. When a company is making a decision, for example, of where to place a factory or where to place a distribution warehouse, that's not what they're considering. They're looking at supply chains. They're looking at a continuous flow process.

What I would answer to what you're saying is I agree, and I am familiar with those statistics as well. There are two things I would say to that. I would say on a lot of the goods that are coming into the country now that Canadian consumers want lower end products. They want to be able to buy them.

[Don Davies, NDP, Vancouver Kingsway, BC]

They want good jobs, too, don't you find?

[Joy Nott]

Yes, they do. They want jobs. What we're saying is that imports of consumer products don't necessarily eliminate jobs because there are distribution warehouses that are required. There is trucking that's required to get those goods. There are jobs that are created. They might not be manufacturing jobs, obviously, but there are jobs that are created.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm just going to stop you. I have one more quick point for the railway people.

You've mentioned, and we've seen these figures, the top five exports: coal, seeds, grain, livestock, forest products. We're importing automobiles, construction machinery, computers. There's definitely a pattern with trade between Canada and Japan of our sending raw goods to Japan and Japan exporting heavily value-added goods back.

Do you have any suggestions as to how we might address that balance?

[Michael Bourque]

One of the trends that I talked about, which is the most important trend in the transportation business, is supply chain integration. One of the key factors in that has been containerization. If you look at what's happened with containerization, we've started to import a lot more product from different countries in containers. That has created empty containers, which has created a business opportunity for North Americans to export to other countries.

What we're seeing is that there is an opportunity in forest products, for example, to upgrade their products, put them in containers, and the cost factor of shipping those containers back to those countries is now there. I would agree with Joy when she said that it's not necessarily a bad thing when you start with a high number of imports. What that does is it creates the possibility of new trade on the way back. I agree we should add more value to our products on the way back, but having the trade patterns, the flows, and the agreements in place help that process.

[The Chair, Conservative, Rob Merrifield]

Mr. Holder, perhaps you would finish this off.

[A voice]

No, it's Russ.

[The Chair, Conservative, Rob Merrifield]

It's not who I had, but that's okay. Russ, go ahead.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

You think exports and imports need to be considered as one process in your opening remarks. What change would that accomplish? What would result from viewing it in that perspective?

[Joy Nott]

I think it would emulate what actually happens in business. In business, of course, the ultimate goal is to have satisfied customers, and satisfied customers give you money. It's as simple as that. In the importing and exporting realm, when you're actually standing back as a business entity and looking at your supply chain, international borders become very blurry because you're focused on something other than international borders, which is very different from what we're doing here.

What I was saying earlier is that, unfortunately, Canada's not alone in how imports and exports are viewed as being on separate sides with different ministries. It's true in the United States as well. All I'm saying is that the first governments that recognize the way that business has changed in the past 20 years and emulate the business model, I think, will leap-frog.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Mr. Bourque, what increasing traffic would you expect if an EPA with Japan was concluded successfully?

[Michael Bourque]

One of the things we're doing is moving a lot of auto parts. Don't forget that Japanese cars are made here. Toyotas and Hondas are made here. We're importing auto parts in the creation of those vehicles and shipping those vehicles to global markets. Again, it's a snowball effect.

From the railway supplier standpoint, they would love to have the opportunity to become part of other supply chains globally, and I think this offers that opportunity.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

What do you expect it to be as a percentage?

[Michael Bourque]

I wish I had the president of the railway suppliers here who could answer that question for the suppliers.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you.

Ms. Yako, before I get cut off, you talked about the need for a performance metric so truckers don't waste time at the ports. How could that kind of metric be incorporated into this process? Is it part of your truck terminal team negotiations?

[Louise Yako]

It certainly is.

I take Mr. Bourque's recommendation that we try to come up with something voluntary, and that's certainly our intent.

Because there is no direct relationship between terminals and trucking companies, creating that relationship within the context of a supply chain is what we are trying to achieve.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I want to thank the witnesses for coming forward. This has been a very interesting hour of presentation as well as questioning.

I thank the committee.

With that, the meeting is adjourned.