International Trade Committee on May 29th, 2014

[Ed Fast, Conservative, Abbotsford, BC]

I'm glad you mentioned not only SMEs but SMEs in the context of what Export Development Canada delivers. Many of our Canadian SMEs aren't even familiar with EDC. They're not familiar with the fact that we have an agency of government, an arm's-length agency of government, that actually delivers financing solutions for their exports, that delivers risk insurance, that delivers receivables insurance—

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

Well, there are some who are. The banking institutions will refer EDC or BDC to them. But then when they start doing business with EDC or BDC, there is way too much paperwork and they give up.

[Ed Fast, Conservative, Abbotsford, BC]

Actually, I haven't heard that, Mr. Pacetti. This is the first time I've heard that. In fact, what I hear more often than not from SMEs is that they value what the EDC brings to the table.

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

Oh, absolutely—

[Ed Fast, Conservative, Abbotsford, BC]

Let me finish; as you know, the EDC actually fills gaps that are left behind by the private sector banks and their financing solutions.

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

Absolutely.

[Ed Fast, Conservative, Abbotsford, BC]

To have the EDC there actually plugging those gaps, and supporting our SMEs, is a real bonus.

By the way, the EDC is well known around the world as perhaps the best agency and financing facility of its kind in the world.

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

Absolutely. It's not a criticism of EDC or BDC—I'm a great fan—but I'm just saying that if you want to increase your level of involvement from the SME market, you have to reduce some of the paperwork and infrastructure that's involved there.

On another note, you spoke about trade being linked to investment, and obviously goods, but I didn't hear anything about human rights. We had a bit of conflicting points of view when it came to human rights when we were studying the Honduras free trade agreement. You didn't really mention anything about environmental issues before beginning discussions in signing a free trade agreement with a country.

What's your viewpoint on those two items?

[Ed Fast, Conservative, Abbotsford, BC]

As you know, Mr. Pacetti, our standard trade agreements include quite robust provisions on labour and environment. One of the things we have very much focused on is engaging with countries that are coming out of very troubled histories. You mentioned Honduras. That's a great example, and so is Colombia.

By the way, Chile is also a great example of a country that has come a long way since the Pinochet years, when it was a dictatorship. It might surprise you to know that Canada's approach of actually engaging rather than isolating Chile caused Canada to be the first country to sign a free trade agreement with Chile, back in 1997. Today they have more free trade agreements than any other country in the world. Canada was on the ground engaging with them not only on economic issues, not only on trying to improve their prosperity, which has actually happened, but also engaging on issues like human rights, democracy, security, and capacity building.

That's exactly the approach we've taken in countries like Colombia, like Peru, and also Honduras, all of which have troubled histories. We are part of the solution to that.

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

We've seen criticism of GMAP anywhere from there are too many countries in it to not enough countries. Experts or witnesses have been all over the map, I think, on how they feel about the GMAP.

My question to you is this. You've just been to China. China seems to be a priority, but when it comes to human rights where do you balance your relationship or your future trading relationship with China?

[Ed Fast, Conservative, Abbotsford, BC]

I can assure you, Mr. Pacetti, that when I visit China, and I visit China regularly, I engage with my counterparts not just on economic issues. We raise issues of human rights. I know every minister of your government who travels abroad regularly raises issues of human rights in countries where human rights violations are going on.

At the same time, I will again say this. We have made the decision to engage with countries like China, like Chile, like Colombia and Peru and Honduras because we believe we have many of the solutions. As we engage with them, we're able to share with them best practices in areas such as human rights, labour rights, the environment. In those countries that are impoverished, we also have the solutions to raise the economic outcomes of the citizens of those countries by using trade and investment, and raise more of them out of poverty and into the middle class. That's what engagement is about, and I believe that we, as the Canadian government, do that effectively and will continue to do so.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thanks, Minister Fast and Ms. Bincoletto, for appearing at our committee this morning.

As you alluded in your opening comments, Minister Fast, we're talking about the global markets action plan, or as you mentioned, a landmark plan to help Canadian businesses to expand beyond the United States where we've obviously been concentrating for a number of years. They will continue to be our best trading partner and ally, but we need to find ways to expand.

With one of these initiatives I had the pleasure, and I think the opportunity, to travel to Korea with the Prime Minister for the signing of the free trade agreement, opening the Asian market to about another 50 million potential customers. One of the things I heard from investors on the trip, and we've heard in the committee and from my constituents, is the protection of their investments. You alluded to the Foreign Investment Promotion and Protection Agreement that you recently signed with Benin, a record amount. One of the concerns of Canadian investors going into China, which is number two after the United States and continues to expand, is to ensure their investments are protected.

Can you share with the committee the importance of the Canada-China FIPA, and how that'll protect Canadian investors?

[Ed Fast, Conservative, Abbotsford, BC]

Thank you for that question.

Let me start off by saying that investment and trade are two sides of the same coin. Both of them drive economic prosperity here at home. When a Canadian company invests abroad, that also creates jobs here at home. When we attract foreign investment from another country into Canada, that also creates jobs here at home. So investment is very much part of our government's broader economic agenda. The reason we are negotiating bilateral investment treaties is because in many parts of the world investors don't have the protection of the rule of law. They don't have regulatory certainty. They don't have transparency, the way we do in Canada.

I'll make a comment about Canada. When a foreign investor invests in Canada, once they are invested we don't discriminate against them. We don't say because you're a foreign company investing in Canada we're going to treat you differently from Canadian companies. We treat them fairly. We treat them free of discrimination.

That is not the case with many of our trading partners, which is why we negotiate bilateral investment treaties that set out a clear set of rules under which these investments will be treated once they have been made, and these investment treaties also set out a clear set of rules under which investment disputes are resolved.

Suppose Canada has a company that invests in another country. The investment is made, and now the government of that country discriminates against the Canadian company. If we have no investment treaty in place, there really is no protection. That company is at the whim of the domestic courts in that foreign country. But when we have a bilateral investment treaty in place, the Canadian company's dispute with that government is elevated out of the domestic context and into the international arbitration arena where there is the rule of law, where there are clear rules, where there is fairness, and where you have independent, impartial adjudicators who decide on that dispute.

That's why we're anxious to negotiate more of these agreements. They are in Canada's own self-interest. We need to have them in place to protect Canadian investors, and quite frankly, Mr. Cannan, Canadian investors in Canada have been calling for these agreements, including the one with China, for a very long time, and now we're delivering.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thanks for that clarity on the importance of the FIPAs around the world.

One other area I'd like to talk about is something I'm passionate about, and that is education. My colleague, Randy Hoback, as the chair of the ParlAmericas committee, and some of us on the trade committee, have recently had an opportunity to go to Peru.

Mr. Pacetti talked about environmental issues, human rights. Canada is leading the way on corporate social responsibility in the mining sector and some of these other areas in other countries we've gone to and heard about first-hand. One of the ways is through reciprocal education.

I know that within the GMAP, the global markets action plan, education is an important portion of the GMAP plan. I know the government understands the importance of the economy. I think of my riding in the Kelowna—Lake Country, and of Okanagan College and UBC Okanagan, which have several international students. It has created a real diversity and ambience in our community that has helped from a cultural perspective in a reciprocal way.

Could you maybe elaborate a little bit as far as how education equals peace and opportunity, and the importance of GMAP and trade and commerce to Canada and international partners?

[Ed Fast, Conservative, Abbotsford, BC]

That's a great question. I'm glad you brought up international education. This is a priority sector for Canada. It's one of the 22 priority sectors identified under the global markets action plan.

Beneath that plan, the umbrella of the global markets action plan, we've actually also released the international education strategy under which we have set the goal of doubling the number of students from abroad who will study in Canada over the next 10 years. Why is that important? It is because when international students come to Canada they, of course, enrich Canadian students because they are doing research in universities, they are working together, and they are studying together. Of course, when these students go back home, they become some of Canada's best ambassadors.

I would be remiss if I didn't mention that the international education strategy goes far beyond simply attracting foreign students to Canada. It's also about internationalizing the education of Canadian students. This strategy will have a focus on making sure that Canadian students, say at universities and colleges, spend at least one or two semesters abroad acquiring the language skills, the cultural skills, and the business skills, that will make them more valuable to their future employers. If they do become entrepreneurs and businesspeople, it will make them much more effective and successful within a globalized marketplace.

The reality is that we live in a global economy and we're going to be more effective, our Canadian students will be more effective, if they actually diversify their educational experiences beyond Canada. This is a two-way street and I'm pretty excited about delivering on this strategy.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I have a daughter graduating who had the opportunity to spend a semester abroad. I think the reciprocity is great.

Thank you.

[The Chair, Conservative, Rob Merrifield]

We're going to go into our second round of questioning, but let me say before we do so that my information is that the bells will likely start very soon. I need unanimous consent to continue with the minister for a few extra minutes to get in the second round.

[An hon. member]

Do we have enough time for a second round?

[The Chair, Conservative, Rob Merrifield]

It depends how long we go, but I rather doubt it. But we need unanimous consent for this. Do we have it?

[Some hon. members]

Agreed.

[The Chair, Conservative, Rob Merrifield]

Very good.

Mr. Davies, the floor is yours for five minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Mr. Minister, China and the EU are clearly two extremely large and important markets for Canadian exporters. I'd like to deal with each in turn, if I may.

Respecting China, two years ago your government concluded a FIPA with China and laid it on the table in the House in October 2012. Despite the fact that it's been eligible for your cabinet to ratify since November 2012, your government has declined to do so to date.

I understand that China has ratified this agreement, and we know that the Chinese government is very concerned about Canada's inability or refusal to do so. Could you explain to us why, after one and a half years, your government has failed to ratify the FIPA?

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Davies, I'm very surprised at your question. It was your party that opposed this agreement, and now you're asking us to rush to bring it into force.

[Don Davies, NDP, Vancouver Kingsway, BC]

No, we have concerns about it, but I'm asking why you haven't done it, because you're in favour of it. So why haven't you? That's my question.