Evidence of meeting #57 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was india.
A recording is available from Parliament.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Okay. That's why, obviously, the foreign investment promotion and protection agreement would provide that certainty.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Thank you for that clarification.
One other issue that's been talked about is non-tariff barriers in trade agreements we've had. Some of us on this committee have just come back from Japan, so it's not isolated to India. From your experience and that of some of your association members, have you identified any of these non-tariff barriers that could create some challenges with an agreement?
As an Individual
The rules of origin, to take an example, have to be clearly identified and addressed in the CEPA because of the Canadian environment of dealing through the North American territory. It has to be addressed properly. In India, as Jason mentioned earlier, the tariff rates are quite steep. To gain that market access and comparative advantage is....
To give you a brief case study, I was recently working with one of the potential investors here. He wanted to source canola oil from here. We went through a lot of areas. That investor spent almost two weeks here, and he saw evidence of opportunity. He came here to source canola, but then he saw that further on the value chain, it has so much potential. India currently is importing only 394 tonnes of canola oil against the overall demand in the thousands of tonnes.
There is a lot of...from the crop side to the crude side to the refining side to the working side, but there is a duty structure. When we worked on the numbers in terms of the costing, the costing was not making sense. If you look at it, the canola prices in Canada have been skyrocketing almost every year, going up 25% to 30%. Right now almost 80% to 85% of that product is going into the U.S. and the Mexico area.
But that investor saw the opportunity, and this is what he said: “I'm willing to invest even a couple of thousand acres of land to start that process, but in the long term I want to make sure that by importing that commodity from here to India, I will be protected with the duty structure. I don't want to make a sizable investment in this country if I'm not sure about it.”
All these things have to be addressed, and it will definitely impact business positively.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you, Mr. Chair.
Thank you, witnesses.
Mr. Thakkar, you seem to know your stuff, but we have you as an individual. What's your background?
As an Individual
I was a chartered accountant from India and did my CGA here. I moved here in 1996. I finished my term as the president of the Indo-Canada Chamber of Commerce in June this year.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you very much.
Could either of you tell me what the average annual salary is in India?
Liberal
Wayne Easter Liberal Malpeque, PE
Well, we have an average mean income in Canada. Do you have any of that information? Maybe somebody in research could get it for us.
From listening to Mr. Langrish, race is a concern with me; I don't disagree with temporary entry of workers for certain skills, etc., and we're looking for labour mobility in the CETA agreement for sure, both ways. However, we're losing jobs now to India in call centres. If I call Air Canada for a lost bag, I call India.
Although I support trade agreements, one of my increasing concerns about trade agreements is that they are not bringing up wage levels to any great extent. For investors, they seem to be doing well, but companies can move wherever they like. They don't give a darn about people or countries. We have to look at these trade agreements, I think, in a way that will build the middle class, and I don't think we're doing that right now.
I have some concerns that I'm increasingly thinking about, I don't mind admitting, Mr. Chair—
Liberal
Wayne Easter Liberal Malpeque, PE
You shouldn't laugh, guys, because I will tell you, we're losing 4,400 jobs in Atlantic Canada from one year ago over the next two. That's a serious matter.
Are trade agreements having an impact? I don't know, but it's something we have to look at.
On the temporary entry, Jason, do you see them coming in because of skills that are required for Indian technology companies in Canada or whatever, or do you see them coming in because the cost of the labour for those individuals is half the price it is for Canadians with the same skill?
Senior Trade Advisor, Canada-India Business Council
I would say in this case it's a skills shortage.
Senior Trade Advisor, Canada-India Business Council
Yes, but it's also a reality of doing business.
For instance, let's say a Canadian company buys an IT platform that's been offered by an Indian company. Even if there is a person who is a qualified IT technician in Canada, it doesn't necessarily mean they're qualified to work on this platform. Also, it doesn't necessarily mean, even if they are to be qualified, in the time it would take them to be qualified, that the demand would still be there.
A lot of times temporary entry is a fairly short period of time.
Senior Trade Advisor, Canada-India Business Council
I think in the EU deal Canada is trying to get two years and I think the EU's position is one year, so you know, we're not talking.... And these are then renewable.
The other angle is an economic needs test, which Canada as a practice has negotiated out of its labour mobility provisions. Those are the—
Liberal
Wayne Easter Liberal Malpeque, PE
I'll not deny that sometimes—my son's actually in IT—the companies do not want people who are going to be with that company for a short time even if they have the skills because of the proprietary rights, etc. I understand that.
You talked about strategic entry tied to investment, Jason. What did you mean on that point?
Senior Trade Advisor, Canada-India Business Council
What I mean is sort of a quid pro quo. I'll go back to Mr. Cannan's remarks on what the advantages are.
I'm going to answer your question, but I just want to preface it with this. India is a big market, but it's not really ready to play the same game as the U.S., European Union, and China. I think it still has a way to go. Canada is sort of a better fit. I think there's more of a comfort level there. The Indians would probably say that they do want to negotiate with the United States, but I don't think they'd like what that negotiation would look like.
What I'm saying is that instead of trying to get this broad, ambitious agreement, go for an ambitious agreement, but don't be so set on it being broad. I think there are a lot of things we'd like to have in agreements, but we won't always get them. I think it's more important to get some institutional framework in place as opposed to getting the perfect deal that never really materializes.
What I'm saying is that one of the key things the Indians are looking for is this temporary entry for IT workers. A big prize for the Canadian side of the equation, or one of the big prizes, would certainly be access to the rapidly expanding commercial banking and insurance market. They would get a first-mover advantage by doing it, which would essentially be a—“reward” is not the right word—return for acknowledging and addressing a key strategic interest of the Indians that's not getting accepted in their other international trade negotiations.
Liberal
Wayne Easter Liberal Malpeque, PE
You're basically saying to at least get a platform from which it can move forward.
