International Trade Committee on May 1st, 2014

[Randy Hoback, Conservative, Prince Albert, SK]

Again this is an area in which I disagree with you, sir. I said that this is one piece in the puzzle that has to be part of it. It is one of the pieces that allow new types of sectors to emerge that are of higher value, that are higher-paying. The reality is that if they don't have market access for these new sectors into the economies of Canada, the U.S., and Europe, they will never develop in Honduras. That's the problem I see.

[Ricardo Grinspun]

They have excellent market access—

[Randy Hoback, Conservative, Prince Albert, SK]

—for existing products. I'm talking about new products.

[Ricardo Grinspun]

I want to reiterate the point, because it has been presented to the committee: Honduras has excellent market access for the vast majority of its products. The average tariff it faces is less than 5%.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Now we're going to split our time. We'll go for about three minutes each.

Monsieur Morin, the floor is yours.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Professor Grinspun, this country has fairly primitive laws and judicial system. A major free zone is located along the Colombian border. Based on what I have read, I suspect that Honduras is not a drug traffic zone but rather a capital traffic zone.

I think the danger for Canada lies in the fact that the structure of the free trade agreement could enable companies involved in drug money transfers to use investor protection mechanisms. Some companies exist for three hours—just enough time to justify a transaction and transfer funds to a tax haven.

What is your opinion on that?

[Ricardo Grinspun]

Thank you.

The FTA reduces the ability of the Honduran state to monitor and regulate foreign investment, which is what is required to address the problem you're mentioning. It needs to be more selective about what kind of investment comes into the country and to be sure that it is actually contributing to the welfare of the people of the country and not to criminalization, securitization, and drug activity.

Actually, Canada's intervention in Honduras already has quite a negative effect in that regard. The mining law that came out in I believe 2012, which was done with advice from Canada, levies a 2% security tax on the royalties of production for security purposes. In other words, the Canadian mining companies are funding the securitization of the country.

And of course, these are sites that create enormous conflict and tension. Although I don't know more details about the topic you're raising, I think the general context points to the fact that the FTA will in no way or form help address that problem and will actually encourage forms of investment that may be quite problematic.

Just to give another example, we are aware of the—

[The Chair, Conservative, Rob Merrifield]

The time is really tight so I won't allow the example you're about to give.

We'll go to Mr. Shory for the last three minutes.

Go ahead.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Witnesses, thank you for your views on this issue.

I'm a bit confused. We had witnesses here at the last meeting, I believe, and one of the Canadian companies actually on the ground was also here. They told us that it would be beneficial if this Honduran free trade agreement were ratified. Those companies also appear to have well-developed corporate social responsibility policies. They were able to describe for me some of their activities in Honduras with respect to medical care, poverty, poverty reduction, and other areas they operate in.

Mr. Grinspun, you mentioned security contribution. I'm a little puzzled here because, in my understanding, if security in a country is improved, that is good for the population of the country and that is good for society in the country.

My question is about expanding our presence in Honduras. By the way, this witness also told us that they pay way above the minimum wage in that country and that they have all kinds of facilities to improve the life of Hondurans.

If the culture is changed in a country from narco-trafficking to work culture, is it bad or is it good?

[Ricardo Grinspun]

I don't think the FTA will achieve that, sir.

I know that's the message, but I have said that those messages are public relations messages. They serve the interest of those specific business sectors in Canada that will have some benefit from this agreement. I think they contradict the larger interest of Canadians and certainly of Hondurans. In terms of security, we need to understand the role of the Honduran government and the Honduran security forces. The new forces created recently, as mentioned by my colleague from Berkeley, are actually contributing to the level of conflict and violence in the country. When Canadian companies are contributing funds to these forces, they're not contributing to a more secure environment. There is no evidence that it's getting better. It's getting worse.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Do you believe in leaving them in isolation?

[The Chair, Conservative, Rob Merrifield]

Thank you very much. We'll leave it at that.

I want to thank you both for joining us by video conference from California and Toronto. It's been a very interesting session. I appreciate it very much.

With that, we will suspend and set up our next panel as we move into our clause by clause.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

I call the meeting back to order.

From the department, we have Cameron MacKay. Thank you for being here. We also have Stacy-Paul Healy and Pierre Bouchard as we go through the bill clause by clause.

Pursuant to Standing Order 75.1, consideration of clause 1, the short title, is postponed. We will be looking at clauses 2 to 53.

We'll ask Mr. Caron to open with a couple of words.

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

Thank you, Mr. Chair,

I am not a regular member of this committee, but I am my party's deputy international trade critic.

Regarding the study the and debates held in the House on the free trade agreement, the NDP's position on trade agreements is clear. We have established three conditions. The country we are doing business with should have a good human rights record, and it should be a strategic partner. The third condition has to do with the agreement's content, once it has been disclosed.

I think it's clear from the witnesses' points of view that Honduras is far off the mark with its human rights record. I recognize the arguments that the government side has brought forth, but which, after having been repeated so often, I think we should raise the burden of evidence for. For example, they have been saying that a trade agreement with a country with a poor human rights, record actually improves its human rights or has the potential to do so. Well, I haven't seen any significant evidence of that happening in any deal we've signed before.

There are major problems in Honduras, be they governance or the quality of the judicial process. Those cannot be explained only by narco-traffic. I think it would be a failure to try to explain it that way.

I know my time is limited and I don't want to block the process as we move to clause by clause. For all of these reasons, the NDP side will be voting against each and every clause. Surprise, surprise. You have not made case for CETA or a free trade agreement with South Korea so far.

[Erin O'Toole, Conservative, Durham, ON]

For Korea?

[Some hon. members]

Oh, oh!

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

You haven't made that case, but in this case we won't be debating but voting against each clause.

[The Chair, Conservative, Rob Merrifield]

Very good.

Let me put it to the committee. I think we can look at all clauses, 2 to 53.

Shall the clauses carry?

(Clauses 2 to 53 inclusive agreed to on division)

Shall schedule 1 carry?

(Schedule 1 agreed to on division)

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

What's the difference between on division and no, basically?

[The Chair, Conservative, Rob Merrifield]

The only difference is that it's carried on division but is recorded as not being unanimous.

Is that right?

[The Clerk of the Committee, Mr. Paul Cardegna]

Yes.

If you were to vote for or against, you'd do the yeas and the nays and we'd note the number of yeas and nays. If you say “on division”, it's agreed to on division. That's what we note in the minutes.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

That's fine.

[The Chair, Conservative, Rob Merrifield]

Fair enough.

Shall schedule 2 carry?

(Schedule 2 agreed to on division)

(Clause 1 agreed to on division)

Shall the title carry?

[Some hon. members]

Agreed

[An hon. member]

On division.