International Trade Committee on Dec. 5th, 2013

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you very much.

There's not a lot of time to answer those questions, so my questions will be to you, Mrs. Dyer. Is it Miss or Mrs.?

[Jan Dyer]

It’s Mrs.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you.

I'm not going to elaborate on anything. I'm going to ask the questions directly, to try to get some answers. If there's not enough time, maybe you could respond in writing.

[Jan Dyer]

Sure.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

On the GMO piece again, my questions are: What is left to be resolved on the trace GMO issue? You talked about the technology piece—how do you see these issues being addressed? Should these issues be resolved before the full implementation of CETA?

[Jan Dyer]

Well, that's a very big question. I might take the opportunity to give you a much longer briefing in writing, if I can. All I'll say is that I think the GMO technology debate is really one that's going to happen over a long period of time. It's going to be science based. It's going to take a lot of communication. It's going to take a lot of dialogue back and forth.

There are a lot of initiatives under way to resolve what we call the low-level presence issue, which is about what happens when there are approved or unapproved traits in shipments of canola that we are sending and how you deal with the various tolerance levels of different countries that have different standards in terms of what they'll accept for the products.

In Europe it isn't really an issue in meal, because for most of the animal feed.... In oil, most of our market goes for biodiesel. It really depends on the market.

That's a long-term, multi-faceted discussion, but I think it's a long-term dialogue that we're going to have for a very long time as this new technology works its way into the market.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

So based on what you've just said, you don't see that these issues would be resolved before CETA would be implemented.

I can tell you that certainly even in northern Ontario we're seeing some canola crops, even within my riding of Algoma—Manitoulin—Kapuskasing.

Brian Masse couldn't be here. He usually sits on this committee. I'm replacing him today. He has asked me to ask you these questions.

Previous witnesses from the Canola Council of Canada have stated that when CETA comes into force, exports of Canadian canola could double to a value of $90 million per year. Can you estimate the total increase in Canadian jobs directly related to the increase of Canadian canola exports to the EU? What is the nature of these jobs? Is it cash-crop farming versus processing operations like crush plants? Do you, for instance, see increases in the grain processing sector, like the ADM plant in Windsor?

[Jan Dyer]

First of all, I don't have a jobs number. I think what we've been looking at more are the quality and the stability of the jobs you get from the long-term increase in trade. Most of the jobs in the canola industry go across the value chain. There are a lot of farming jobs, of course, but there are a lot of jobs in the seed industry, which is like the input industry. That's where the biotechnology breeding happens. They're high-quality jobs. They're science-based jobs. They're very stable.

Increasing stability and quality of jobs is a long-term gain. It's not a short-term gain like “we're going to sign tomorrow and we're going to have this many more jobs”. It's going to be supply and demand over time as the technology increases.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Here's my last question. To what extent is current infrastructure in Canada, i.e. the ports, able to accommodate—we heard about rail a while ago—the projected increase in exports of canola to the EU with the signing of CETA?

[Jan Dyer]

Well, I think I alluded to it before. Whenever you sign a new trade deal, there are a lot of things you have to do domestically to be ready for that deal. Infrastructure and institutions are two things that always need to come together to capture the benefits of those deals.

We saw it with NAFTA and we're going to see it here. There are changes under way in the Grain Commission, for example. The Grain Commission now pretty much funds itself on outward inspection for exports. That is putting a very heavy burden on our exporters.

On the rail transportation system, there are still reviews outstanding. There's a commitment to a commodity supply chain table and a review of the grain industry. Those things need to happen, because we need to know how the infrastructure has to change.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much, Ms. Hughes.

You didn't have the luxury of actually coming to Halifax with us as a committee. We saw the capacity of the Port of Halifax, and actually, that could be threefold what it is today. CN also can increase their capacity, as well as air and roads. With capacity and the CETA agreement, we're in a great spot.

Mr. Shory, you have five minutes.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Okay. Thank you.

[A voice]

[Inaudible—Editor]

[Voices]

Oh, oh!

[The Chair, Conservative, Rob Merrifield]

That wasn't subjective. Those were actual facts we saw when we were there.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair, and my thanks to the witnesses also.

It's very interesting to hear your comments, Mr. Curtis. You said CETA will eliminate some tariffs we've been trying to get rid of for 50 years. This is a very encouraging comment, besides your other comments.

Ms. Dyer, you mentioned that once this agreement is ratified, it will result in the immediate elimination of the tariffs on canola oil, which could increase the exports of our oil by up to $90 million per year, year after year. Then after that you talked about the growing population and said that farmers must continue to adopt new and innovative technologies. Do these innovative technologies produce high-paying jobs?

[Jan Dyer]

Yes, the quality of the jobs that we'll see with this agreement will be much more stable. There will be increases in the primary sector, but there will also be increases in investment. If we work through some of these non-tariff barriers in the agreement on biotechnology, then we will see jobs in the seed sector. That is largely about scientific advancement. It's about improving the trades and the science for producing better-quality crops for all markets.

In the food market, we'll have a much healthier oil. In the biofuel market, we'll be able to reduce greenhouse gases much more than we could with conventional fuels or some of the competitors such as palm oil. We may not see a huge increase immediately, but over time those jobs will be much more science-based, and they'll be higher-quality jobs. There will be jobs increased all through the upstream and downstream industries. There will be new jobs in handling, transportation, and all of the related services.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Mr. Hiebert.

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

Ms. Dyer, in your brief to us this morning you mentioned long-standing non-tariff barrier issues, particularly GMO issues. You say the importance of establishing transparent science-based regulatory policy cannot be overstated. Is that comment a suggestion that perhaps GMO regulations are not science-based? Could you elaborate on the impact of these GMO regulations as a non-tariff barrier?

[Jan Dyer]

In the European Union, the regulatory process is extremely slow. Even once the European Food Safety Authority has given a positive opinion on a particular trait that we're trying to get approved in the EU, it can take another two or more years for countries to adopt it and for it to become an approved trait. Even after the science authority for the European Union has said a trait is safe and ready for approval, it takes a long time for the European Union to approve it.

There are various reasons for this. Their regulatory process is very slow; they have many member countries. Member countries sometimes intervene by using what they call a safeguard clause, which is an instrument that allows them to slow the approval process if they put more data on the table. Also, they're dealing with 28 member states, all of which have different regimes. That's why this particular dialogue we're having with the EU and getting this parallel letter in the agreement is really important. The Europeans have committed to try a lot harder to speed that process up. The process of approval for the safety side happens reasonably well. It's the other stuff that's added on that causes long delays, not to mention uncertainty.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

That takes us to the end of this panel. We want to thank you, Dr. Curtis and Ms. Dyer, for being here. The presentations were welcome and the questions good. We will now suspend as we move into our next panel.

[The Chair, Conservative, Rob Merrifield]

I'd like to call this session back to order. We have two presentations in this panel. One from the International Institute for Sustainable Development, Mr. Howard Mann, senior advisor, international law, and we have Mr. Mike Darch, president of Consider Canada City Alliance, together with Bruce Lazenby.

Thank you for being here. We will start with Mr. Darch. The floor is yours.

[Mike Darch, President, Consider Canada City Alliance]

Good morning, ladies and gentlemen. I'm Michael Darch, the president of the Consider Canada City Alliance.

I am pleased to comment today on behalf of 11 of Canada’s largest economic development agencies on the economic benefits we foresee in the Comprehensive Economic and Trade Agreement with the European Union. Joining me today is the president and CEO of Invest Ottawa, Bruce Lazenby. Invest Ottawa is a member of our organization, and Bruce is a board member.

Consider Canada is a new organization that represents 11 of Canada’s largest economic development organizations, and we'll be expanding to 14 in January. Our present members represent Halifax, Quebec, Montreal, Ottawa, Toronto, the Waterloo Region, Winnipeg, Saskatoon, Calgary, Edmonton, and Vancouver. We collaborate closely with each other, as well as with the Department of Foreign Affairs, Trade and Development and with other partners to enhance Canada’s ability to attract foreign direct investment to Canada. We strongly believe that a nation’s ability to attract and sustain foreign investment is best achieved through an integrated approach by all levels of government.

The increasing importance of cities in global economic flows is well illustrated here in Canada. Our members represent approximately 54% of Canada’s population and 56% of its employment base. But in the last five years, we've accounted for 72% of the GDP growth in Canada and a full 90% of the employment growth in Canada.

The signing of the agreement in principle of CETA could not have been better timed for us. The financial crisis in the United States once again illustrated our dependence on that economy. Attracting investment from Europe has always been difficult. First, employment laws in many European countries make it financially punitive to terminate staff in Europe, irrespective of their ability to perform in a new or revised position. That barrier has been removed as the financial crisis in Europe has made it necessary for many European countries to fully rationalize their employment for corporate survival.

Second, with our neighbour to the south being a dominant global economic power, expansion to North America meant expansion into the United States. Although the United States is poised to begin coming out of its financial crisis, its recovery remains an uneven process with few of the sound fundamentals that we have here in Canada. For the first time in decades, conditions have come together to move us away from the glare of the United States to compete for European investment on a more equal footing.

What does this have to do with CETA? First let us look at Europe. Just last Saturday we returned from a five-day investment mission to Europe having visited Madrid, Amsterdam, and Milan. Put simply, there is little growth potential in Europe. Companies looking for growth have to look elsewhere for business. Cultural, political, and economic factors raise the level of risk in many regions including Asia, the Middle East, Africa, and South America. That leaves North America. As I mentioned before, European companies have always looked to the United States. The Canadian Manufacturers & Exporters have identified $800 billion in energy, mining, and municipal infrastructure projects that will be done in the next 10 years. Many of those projects are already under way. Meanwhile, our American neighbour struggles to fully come out of its downturn, and its political system appears to be working hard to ensure that it never does. As Europe turns outward to look for future growth, the U.S. continues to look inward.

CETA places us firmly leading the way for sustainable growth in the new global reality. The agreement looks outward to international collaboration to establish strengths in global supply chains. It addresses the labour-mobility challenges that let companies enter new markets. It recognizes that national wealth and the strength of cities are increasingly built on services and, in particular, on high value-added services.

Investments are made on sound business and market fundamentals, not short-term financial incentives such as those used by many U.S. states.

Many will say that the benefits being touted are conjecture and unlikely to be attained. As I mentioned, we have just returned from Europe and we saw concrete examples of the benefits. We need capital to drive the full potential out of our growth in infrastructure and innovation. We had over 300 business-to-business meetings in the three cities, and these companies were bringing investment.

I brought along our chart from Milan, which shows clearly all cities had multiple meetings, and Toronto and Calgary were double-streamed.

The companies were not looking to create jobs in Europe. Some European workers would come over to train, but the discussion was about jobs in Canada. We are not talking just about jobs in the oil fields and mines. Several companies were looking to bring their R and D to Canada and to establish companies in Canada.

It is also not just about CETA. It is also about our openness and other policy changes that are facilitating business. For example, our immigration laws are encouraging the best, the brightest, and the entrepreneurs. All of our members were approached quietly by individuals having completed or near the completion of the process of becoming permanent residents of Canada. They were looking to open or grow companies here and, I may add, in Kelowna.

Europe is undergoing fundamental economic change. It is doing so because it is being forced. Our strong economic fundamentals let us manage change. As the negotiations are completed and the agreement goes through the approval process, Canada can manage that process to maximize the benefits to our economy. Europe and the United States are seeing their economies change, but they are being forced to change as they react to the impact of new global realities.

Canada has always been a trading nation with our economic prosperity tied to the ability to find our niche in global supply chains. With CETA and NAFTA, we sit in the middle of the largest trading and investment block in the world, with 950 million sophisticated consumers with a combined GDP of over $36 trillion. This combined with immigration, financial, and education policies that keep us open to the world will help us maintain a sustainable economy and continue the prosperity that our nation has enjoyed over the last six decades.

We should applaud the Prime Minister, Minister Ed Fast and all those ministers and individuals who have made this deal possible. We have never had the combination of tools and economic conditions to make the case for foreign investment in Canada that are now available. Last week was but the first step of our members to achieve those benefits.

The Consider Canada City Alliance looks forward to the completion of the negotiations of CETA and its ratification. It will strengthen our ability to attract foreign direct investment, create jobs and prosperity in Canada, and diversify our economy. CETA is a historic agreement and a great one.

Thank you, and we look forward to your questions.