Evidence of meeting #78 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 tpp.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Michael Geist  Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual
Isabelle Des Chênes  Vice-President, Market Relations and International Trade, Forest Products Association of Canada
Charles McMillan  Professor, International Business, Schulich School of Business, York University, As an Individual
Michael Hart  Professor and Simon Reisman Chair in Trade Policy, Norman Paterson School of International Affairs, Carleton University, As an Individual

3:30 p.m.

Conservative

The Chair Conservative Rob Merrifield

We'd like to call the meeting to order. We want continue our study on the benefits for Canada of the Trans-Pacific Partnership.

We have before us today two witnesses in the first hour, including from the Forest Products Association of Canada, Isabelle Des Chênes. Thank you for being here.

We also have Michael Geist, the Canada research chair in Internet and e-commerce law at the University of Ottawa.

I understand, Mr. Geist, that you're first, so I will yield you the floor. I just want to mention that we'll save about five to ten minutes for some committee business at the end of our second hour, when we will go in camera.

The floor is yours, sir, go ahead.

3:30 p.m.

Dr. Michael Geist Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

Thank you very much. Good afternoon.

My name is Michael Geist. I'm a law professor at the University of Ottawa where I hold the Canada research chair in Internet and e-commerce law. I'm also a syndicated weekly columnist on law and technology issues for the Toronto Star and the Ottawa Citizen. I've edited several books on Canadian copyright and appeared many times before committees on copyright and trade policy, but I appear before this committee today in a personal capacity representing my own views only.

I greatly appreciate the invitation, as I have some very serious concerns about Canada's participation in the TPP. I should start by noting that I'm not anti-free trade. I support the government in its efforts to explore opportunities to expand markets for Canadian businesses.

That said the TPP raises some concerns. I would like to focus on some of the TPP's substance, particularly the copyright provisions in the draft agreement, as well as address some concerns related to process.

Let me start with the substance. Given the limited amount of time available, I'll focus primarily on the copyright provisions, though copyright is only part of the broader intellectual property issues raised by the TPP. You heard recently from Scott Sinclair on some of the patent issues, and if you're interested I'd be happy to discuss the implications of the TPP for governance of the domain name system in Canada.

As members of the committee know, Canada recently completed a long, difficult copyright reform process. Over a decade of debate ultimately resulted in Bill C-11. Virtually all stakeholders would say that the bill, which received royal assent last June, was imperfect. Yet it did reflect a genuine attempt at compromise, with many made-in-Canada provisions that are often cited as progressive, effective, and forward-looking digital copyright rules.

My single biggest concern is that the TPP will undermine the Canadian compromise that the government struck, and require radical changes to our national copyright law.

I should preface the analysis by noting that last year DFAIT conducted a public consultation on Canada's potential participation in the TPP, in which copyright was the top issue cited by individual respondents. No public report summarizing the responses was ever published, yet according to documents I obtained under the Access to Information Act, the government was overwhelmed with negative comments urging officials to resist entry into the TPP and the expected pressures for significant intellectual property reforms as part of the deal.

In addition to tens of thousands of form letters and e-mails criticizing the TPP, the government received hundreds of individual handcrafted responses that unanimously criticized the proposed agreement. In fact, a review of more than 400 individual submissions did not identify a single instance of support for the agreement; rather, those submissions focused specifically on copyright-related concerns.

Now based on a leak of the draft intellectual property chapter, let me provide four examples that lie at the heart of the public concern.

First, Canadian law now features a notice and notice approach on Internet provider liability, or ISP liability. This approach establishes the obligations for Internet providers and intermediaries when there are claims of copyright infringements, and grants copyright holders powers to raise allegations of infringement with the sites and their subscribers.

Moreover, it protects the privacy of subscribers and does not result in takedowns of content based on mere allegations. During the debates on Bill C-11, Canadian Heritage Minister James Moore repeatedly pointed to notice and notice as an example of a positive Canadian-specific approach. Yet according to leaked documents, the TPP would require that Canada drop its approach in favour of a more draconian takedown system that could stifle free speech and result in the removal of content without the need for any proof of infringement.

Secondly, the term of protection for Canadian copyright is presently the life of the author plus an additional 50 years after his or her death. This term meets the international requirement as established in the Berne Convention. The TPP would require Canada to add an additional 20 years to the copyright term. The extension in the term of copyright would mean that no new works would enter the public domain in Canada at least until 2034, assuming that the agreement takes effect in 2014. Many important authors would immediately be affected, since their works are scheduled to enter into the public domain in the period, let's say, between 2014 and 2034. These include Canadians such as Marshall McLuhan, Gabrielle Roy, Donald Creighton, and Glenn Gould, as well as non-Canadians such Robert Frost, C.S. Lewis, T.S. Eliot, John Steinbeck, J.R.R. Tolkien, and Ayn Rand. Given the potential to make those works more readily accessible to new generations once they enter the public domain, extending the term of copyright as potentially required by the TPP would have a dramatic negative effect on access to literature and history, particularly Canadian literature and history.

Thirdly, Canadian copyright law now features an important distinction with respect to statutory damages, as it contains a cap of $5,000 for all non-commercial infringements. While the reforms have been unsuccessful in stopping thousands of potential lawsuits against individuals, they do ensure that individual Canadians won't face the threat of hundreds of thousands or even millions of dollars in liability for non-commercial infringement.

The government, I think quite rightly, consistently argued that the reform was the right thing to do, yet the TPP would require Canada to drop the non-commercial cap and restore statutory damages that could climb into the millions of dollars for individual Canadians.

Fourthly, the digital lock rules were the most contentious aspect of Bill C-11. The provisions were widely criticized, but the silver lining, in an approach that, I have to say, went far beyond international requirements, was that the government kept the door open in the legislation to future reforms and exceptions to the digital lock rules. The TPP would close that door, increasing the penalties for circumvention and restricting the ability of Canada to create new digital-lock exceptions.

The copyright provisions in the TPP threaten a Canadian compromise that took a decade to achieve and that was strongly defended by the current Conservative government. I think undoing that compromise would constitute an enormous setback for Canadian sovereignty and for our long-term digital cultural policy.

I would be remiss if I did not also raise process concerns involving the secrecy associated with the TPP and the creation of a two-tier approach that involves special access to TPP information for some insiders.

The TPP negotiations have been ongoing for years, yet there has still been no official release of the draft text. To conduct a hearing on the benefits of the TPP without public access to the draft text forces participants to rely on leaked information that has not been officially confirmed. Canada should be demanding that a draft text be made available for all to see. Instead, it is deeply troubling that DFAIT has established a secret insider group, with some companies and industries associations being granted access to consultations as well as opportunities to learn more about the agreement and Canada's negotiating position.

I realize that Minister Fast denied the existence of such a group when he appeared before you last month. However, the documents I obtained under the Access to Information Act indicate that the first secret industry consultation occurred weeks before Canada was formally included in the TPP negotiations, in a November 2012 consultation with telecommunications providers. All participants were required to sign confidentiality and non-disclosure agreements.

Soon after, the circle of insiders expanded with the formation of a TPP consultation group. Representatives from groups and companies such as Bombardier, the Canadian Manufacturers and Exporters, Canadian Agri-Food Trade Alliance, and Canadian Steel Producers Association all signed a confidentiality and non-disclosure agreement that granted “access to certain sensitive information of the Department concerning or related to the TPP negotiations.”

I have copies of the signed NDAs right here that make specific reference to the TPP consultation group. The creation of a secret TPP insider group suggests an attempt to shy away from public consultation and scrutiny of an agreement that could have a transformative effect on dozens of sectors at a time when we should be increasing efforts to gain public confidence in the talks by adopting a more transparent and accountable approach.

I believe the TPP's highly secretive and non-transparent approach runs counter to Canadian values of openness and accountability. We should be actively encouraging participants to increase TPP transparency and should lead by example by ceasing the two-tier insider approach to trade agreement information.

I welcome your questions.

3:35 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

We'll get to those, but before we do that we'll move to Madame Des Chênes.

The floor is yours.

3:35 p.m.

Isabelle Des Chênes Vice-President, Market Relations and International Trade, Forest Products Association of Canada

Thank you.

On behalf of the member companies of the Forest Products Association of Canada, I'd like to thank you for the opportunity to present to you today.

With mills in almost every province, FPAC's members manufacture a comprehensive line of primary and secondary pulp, paper, wood, and bioproducts. The Canadian forest sector represents 12% of the country's manufacturing GDP, and FPAC members account for about 60% of its total manufacturing capacity. The industry is also one of Canada's largest employers, operating in 200 communities across the country and providing 600,00 direct and indirect jobs.

As you're all aware, the industry has been emerging from one of its most difficult periods in a generation. It became very clear to our members that business as usual was simply not an option. As a result, a significant effort was undertaken to implement an economic competitiveness strategy and rework the business model by improving productivity and competitiveness, diversifying products and markets, building world-class environmental credentials, and looking for ways to produce innovative products from wood fibre. That hard work is beginning to pay off.

Last year, FPAC unveiled vision 2020, an ambitious plan to drive the industry forward with aggressive goals around performance, people, and products. First, we hope to deliver a further 35% improvement in our environmental footprint. Second, we want to renew the workforce by about $60,000 recruits, including women, aboriginals, and new Canadians. Finally, we want to generate an additional $20 billion in economic activity from innovative products and by growing markets.

Vision 2020 builds on all of the hard work of recent years. We've increased our productivity and operating efficiency. We've established world-class environmental credentials that are second to none. We're making technological breakthroughs and producing new innovative products, from cosmetics to clothing to car parts, all made from wood fibre.

Our initial efforts to diversify our markets have been incredibly successful. Canadian wood product exports to China, for example, were $1.4 billion in 2012. That's a dramatic 44 times increase from 2001. If you add pulp and paper to that figure, total forest products become Canada's largest export to China, at over $4 billion. Throughout our transformation, the government has supported the industry as a strategic partner, in particular with initiatives on the trade front: opening up new markets and helping us market Canadian wood products globally.

Canada's forest products industry annually exports nearly $30 billion worth of products to markets around the world, making it one of the countries leading export industries and one of the most successful exporters of forest products globally. The continued expansion of existing markets and diversification into new markets remain an essential component of the industry's economic competitiveness strategy and vision 2020. For this reason, the industry is supportive of the government's trade agenda, including the negotiation of new trade agreements and focused program spending to help secure opportunities in new markets.

The Trans-Pacific partnership presents a unique opportunity to build on our relationship with the United States, our largest export market, and to expand our trading relationship with some of the world's fastest growing economies. As a bloc, TPP countries imported more than $18.3 billion of Canadian wood, pulp, and paper products in 2012. The combined sales of Canadian forest products to TPP countries, not including the United States, amounts to $1.8 billion, making it the industry's third largest market.

The industry's competitive position will be further enhanced by secure and open access to the TPP market as its transformation accelerates and it introduces new biochemicals, biofuels, and biomaterial products to the market. In addition to obvious offensive interests, participating in the TPP will allow the Canadian forest products industry to protect its competitive position, particularly in the critical $1.3 billion Japanese market, where New Zealand and Australia are significant competitors. All told, the TPP represents an important opportunity for the Canadian forest products industry and the communities it supports.

As negotiations proceed, we recommend that the government consider the following points related to forest products.

Several TPP members currently levy tariffs on Canadian pulp, paper, and wood products, ranging anywhere from 1% to 40%. These render Canadian exports uncompetitive vis-à-vis competitors that face a reduced or no-tariff rate on the same product lines. The architecture of the agreement should ensure that non-tariff environmental trade barriers are not used as means of blocking the Canadian industry's access to markets.

Moreover, the deal should recognize as being equal all three forest certification standards that are used in Canada, as well as recognize Canada as a low-risk jurisdiction with respect to illegal logging.

To the greatest extent possible, the agreement should expedite regulatory approvals for the use of Canadian forest derived products in TPP member states, once they have been approved for safe use in Canada. This should apply to solid and engineered wood products, forest fibre derived fuels, chemicals, and specialty products.

Finally, the U.S. Lumber Coalition has pressured the U.S. administration to address NAFTA chapter 19, and elements of Canada's timber pricing and forest management systems as part of the TPP negotiation process. We urge the government to continue to hold firm on chapter 19 and other existing trade remedy protections.

Expanding international trade relationships helps the forest products industry to grow and diversify its markets and products mix. Ultimately, a successful negotiation of the TPP will help sustain Canada's forest communities and the hundreds of thousands of jobs the sector supports across the country.

Thank you once again for the opportunity to be here today.

3:45 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much for your presentation.

We'll now move to question and answer.

We'll start with Mr.Caron.

The floor is yours, sir, for seven minutes.

3:45 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you very much, Mr. Chair.

I'll be alternating between French and English, if you don't mind.

Mr. Geist, you mentioned that your research and some documents that you received prove the existence of an insider consulting group. I'd like to re-enter into the record what Minister Fast said on May 6. At this committee he said:

...we also seek the advice of stakeholders on a very regular basis. There's no stakeholder who is told that they can't have input into the process.

He also said:

I seriously challenge your insinuation that there's this insider group, but I make no apologies for meeting regularly across a broad, diverse cross-section of stakeholders to seek their input. We'll continue to do that.

He mentioned that he was meeting with stakeholders but denied the fact that there is such an insider group. How do you reconcile the information you have with his statement? Can you do that?

3:45 p.m.

Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

Dr. Michael Geist

In some ways that question is better posed to the minister.

I look at these documents and to me it's readily apparent what this is. There are opportunities to discuss either Canada's position or perhaps other positions with respect to the TPP, and that's granted only to a select few who have signed these declarations of confidentiality and undertaking of non-disclosure. It's obtained under access to information. It's even described as a TPP consulting agreement. I don't have access to that, the general Canadian public doesn't have access to that. From my perspective, that means we're dealing with an environment where there are two tiers, those who have this access and those who don't.

3:45 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Do you have these documents with you right now? Would you be willing to table them for this committee?

3:45 p.m.

Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

3:45 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you very much.

So you are going to receive the documents? Very good.

Thank you very much.

You talked a lot about substance, and we'll get to that.

On the matter of transparency, you said something to the committee that you've also mentioned in articles you've written. With respect to the TPP negotiations, you said that transparency may be an even bigger concern than the substance of the agreement. Could you elaborate on that? In discussing a trade treaty, we usually focus on its substance, but you raised the issue of transparency, as well. I'd like you to comment further on that, because it's a very important consideration.

3:45 p.m.

Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

Dr. Michael Geist

I think the issue of transparency is hugely important.

For example, if you take a look at the Anti-Counterfeiting Trade Agreement—the trade agreement that Canada signed along with the United States, Europe, and some other countries—which was defeated in Europe as the result of the protests of hundreds of thousands of people, much of that centred around the lack of transparency.

I think there is a public sense, particularly when you're talking about some of my issues.... I recognize that in some trade agreements it's a give and take and a commercial negotiation. When you're talking about issues that involve cultural sovereignty, things like intellectual property, which for a very long time haven't even been included in these kinds of agreements, but are instead typically negotiated at places like the World Intellectual Property Organization in a much more open forum.... For example, just next week Canada is going to be participating in a diplomatic conference to create a treaty for the visually impaired, with special exceptions for the visually impaired to copyrighted materials. That takes place in an open environment where all stakeholders have the ability to see draft text, provide input, and ensure that their interests are adequately represented and that we get the best possible outcome.

In the context of something like ACTA, or now in the context of TPP, that's not what happens. The only thing that the public—experts in the field or the general public concerned with these issues—have access to is that either they happen to be invited to become part of these sort of groups and then sign these NDAs, or more likely, are simply kept out of the process and the entire thing is presented as a fait accompli, as in, “Here's the agreement, take it or leave it.”

I think that lack of transparency fundamentally undermines future public support, such that it's in everybody's interest to blow this open.

3:45 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

If I could summarize what you said, the difference in transparency between the TPP and something like CETA, for example, is the fact that we are actually currently negotiating things that we never traditionally put on the table.

3:45 p.m.

Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

Dr. Michael Geist

Well, that's been the issue. It's not that there were never intellectual property issues in prior trade agreements—although this one here goes right down to the domain name system and other issues which, in the past, we haven't addressed. It's that it delving into a different area that conventionally has been held in a much more open forum. With the TPP, that's just not happening.

3:50 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Okay.

Ms. Des Chênes, I'm going to be quick about this.

Actually, how much time do I have, Mr. Chair?

3:50 p.m.

Conservative

The Chair Conservative Rob Merrifield

You have two minutes.

3:50 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you very much.

Ms. Des Chênes, has the Forest Products Association of Canada been consulted so far in the negotiating process and has it received a briefing from TPP negotiators?

3:50 p.m.

Vice-President, Market Relations and International Trade, Forest Products Association of Canada

Isabelle Des Chênes

We take part in group briefings whenever a round of consultations comes to an end. Ms. Hillman and her team hold a teleconference, and we receive instructions at a high level.

We have also had the opportunity to sit down with the negotiators to share our concerns with them, but we haven't received anything in writing.

3:50 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

You're saying that the Forest Products Association of Canada was consulted during a group briefing. Other groups took part as well?

3:50 p.m.

Vice-President, Market Relations and International Trade, Forest Products Association of Canada

Isabelle Des Chênes

Yes, other groups took part. It was a consultation of industry stakeholders.

3:50 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

I also assume that you probably signed a confidentiality agreement regarding the content of the briefing.

3:50 p.m.

Vice-President, Market Relations and International Trade, Forest Products Association of Canada

3:50 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Very good.

Mr. Geist, you spent a lot of time discussing the copyright issue specifically, and the fact that the treaty could extend the copyright term by 20 years.

Have other trade agreements extended the copyright term by that much, despite so little consultation being done? I'm referring to agreements between countries, not necessarily to any specific agreements.

How will the 20-year extension impact consumers and the cultural industry?

3:50 p.m.

Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual

Dr. Michael Geist

I'll answer the second question first in terms of the impact. If we extend the term of copyright, works that would otherwise be made available to the public, which could be used without permission in classrooms and in a range of different environments, would simply fall out of the public domain, in effect, if we extended that term of copyright, creating all sorts of restrictions. We've seen that in the United States, which did extend the term of copyright so that there are works today—Orwell is an example—that are in the public domain in Canada, but not in the public domain in the United States. They can be more freely and openly accessed in Canada because it is open in a way that it can't be in the United States. So there are real costs.

The U.S. has tried to incorporate this extension in the term of copyright in its bilateral trade agreements, but this is the first time that we're entering into these kinds of negotiations and facing that sort of pressure from the United States.

3:50 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

Mr. Holder, for seven minutes.

June 3rd, 2013 / 3:50 p.m.

Conservative

Ed Holder Conservative London West, ON

Thank you, Chair, and I'd like to thank our guests. Welcome back, both of you, to our committee.

I appreciate your testimony. It gives me some opportunity to reflect on how I want to understand better your probably divergent thoughts on the TPP.

We've studied this. We've had folks who have made representations to us before on a variety of trade agreements that we've looked at. It's interesting, and CETA is a good example. You made a brief reference to it, Mr. Geist. CETA is an example where the provinces are in step with the federal government. They've been consulted. I'm not hearing any leaks from the provincial governments about what they like or don't like about the CETA agreement. I certainly hear some things from the municipalities, but certainly not from the provinces. I'll presume that they've made certain commitments in their dialogue. I'm not sure if these are consultations or briefings or a mix—frankly, I don't know—but at certain points when a government wants to get more information from an organization or share some information to get more information, I would presume that kind of thing would be in confidence. It would seem logical to me that you would sign some kind of privacy or confidentiality agreement, because I wonder....

Maybe this is a question for you, Mr. Geist. I'm trying to understand this better. Perhaps you could give me some insights on this. What do you think the diplomatic fallout for Canada might be if we were releasing TPP documents or segments when several other countries involved aren't participating, particularly before there's a final draft. Do you have any sense of...? I presume you've been involved in negotiations before, but what impact would that have on Canada's negotiating position, or even its credibility?

That's a very sincere question. I'd appreciate it if you would give me your thoughts on that.