International Trade Committee on Nov. 19th, 2013

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

That's an interesting aspect. We have Mr. McGuinness who doesn't know if it'll create a single job for his industry and we have Mr. Dias who represents 300,000 jobs and over 1,000,000 people and their families together, probably the most affected group of any party. I don't blame you for wanting to see the text or having some reservations. We all know the story of NAFTA. The story of NAFTA is that it killed the Auto Pact. It killed the Auto Pact, reduced our auto industry from second in the world to ninth, and we're losing more footprint than ever before. That's the reality of what we have. These are value-added jobs that we have been losing over the duration. I don't blame you for wanting to see the text.

My first question would be, is it the text that's completed? All we really have right now is a pamphlet. We have a brochure. But if we were able to get the auto industry text, would that be sufficient, or do you need more of the other text? We know you represent many more diverse members now than ever before.

[Jerry Dias]

We represent members in 20 of the largest sectors in the country. So there's no question. We want to see the text as it relates to the forestry industry. We want to see the text as it relates to the fishing industry. We can start to walk right through it. It's more than just the auto industry.

[Brian Masse, NDP, Windsor West, ON]

With regard to the auto industry and tariff reductions, we're at the top right now, with 22% tariffs on Canadian parts and vehicles going into Europe despite having a significant trade imbalance and their having a lopsided trade into Canada.

Why do we have three, five, seven years to meet Canadian tariff reductions? Why shouldn't we have those tariff reductions at zero right away since they already have the net advantage? Has the government approached you about that? Have they told you the reason for their slow approach to reducing tariffs on Canadian vehicles and parts going into Europe versus getting rid of tariffs right away? We're at a disadvantage right now. As you noted, our vehicles aren't really suited to European markets.

[Jerry Dias]

As to the argument on the tariffs for our vehicles and auto parts going to Europe, whether there was a 20% tariff, a 10% tariff, or no tariff, it won't make a difference, because demand for specific vehicles is very different in Europe.

[Brian Masse, NDP, Windsor West, ON]

So that's probably the reason, then. The three, five, and seven years are a throwaway, because they know they're not going to benefit from it anyway.

[Jerry Dias]

The bottom line is, if they double their importing into Canada—let's say they bring in another 100,000 vehicles—that's a full shift in an assembly plant, with about 2,000 direct jobs and probably another 18,000 indirect jobs.

[Brian Masse, NDP, Windsor West, ON]

I'm going to switch a little bit here to drug prices and negotiations, something that I don't think gets a lot of attention.

Given the diverse workforce you represent, and the issue over drug pricing and benefits, how do you think this will affect negotiations across this country, be it the public or the private sector, if drug prices are going to...and patents are going to be extended with regard to that?

[Jerry Dias]

It just made Canada more expensive. It makes our products more expensive. It makes it more difficult for us to export. It does all of the things you say that you are trying to change. You're trying to create more opportunities to export, on one hand, yet you're making the products more difficult on the other hand. It will make collective bargaining more difficult. It will also make government more difficult, government that takes care of seniors. It's a problem all the way around.

[Brian Masse, NDP, Windsor West, ON]

If your members don't get a good drug benefit plan, or a decent one, or one at least as.... It all depends on that. Where do they have to go to get their drug costs covered?

[Jerry Dias]

Our members would pay out of pocket for the drug costs. Seniors go to the government.

[Brian Masse, NDP, Windsor West, ON]

Exactly, it's back to the public sector, back to the taxpayer.

[Jerry Dias]

That is correct.

[Brian Masse, NDP, Windsor West, ON]

With regard to auto imports as well, are there non-tariff barriers we're faced with when trying to sell vehicles in Europe?

[Jerry Dias]

This is not going to help the Canadian auto industry. It's not a tariff issue as it relates to the auto industry. The types of vehicles we build here in Canada, the Europeans aren't going to buy them. The only ones who will buy....

If people want to buy a toy to keep in the garage to drive on a Sunday, they might take a Barracuda or a Camaro. It will be a niche vehicle. The reality is our vehicles are not made for the European market.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you, Mr. Chair.

I'd like to thank our guests for being here. I'm sure glad I just bought a Cadillac last—

[Jerry Dias]

Nice car....

[Ed Holder, Conservative, London West, ON]

Very nice car, the ATS. That's not a formal endorsement, by the way, Chair. I just thought I would share that with you.

I've listened to testimony from all three of you, and I appreciate it very much.

Mr. McGuinness, you talked about the fisheries and why it matters in terms of stabilizing your business.

Mr. Dias, I've heard you talk at some length. I appreciate your candour, so I'm going to be candid back.

The pork industry supports this free trade deal. The beef industry does. The fisheries industry does. The lumber industry.... Provinces and territories are supportive. The job creators of this country are supportive. The ones that your industry....

And frankly, to be fair, not just the auto manufacturers but also all the supportive industries in manufacturing that go along with that, and all the lifestyles that means...your role is an important one.

Where I get confused is this. You were asked a few moments ago whether you supported any deals. You said you didn't support free trade with the United States. Then you said you didn't support NAFTA. Frankly, I'm looking back at something, and it is kind of interesting, because actually it's one of your predecessor organizations, CAW, back in April 2012. It's the union that did this. And I apologize. You may not have a copy of this. But I'll just read from the text, because I think it is important. It's on page 39 of “Re-thinking Canada’s Auto Industry”. This is a quote, “Cease free trade negotiations with the EU, Japan, Korea, and Thailand.”

You've already mentioned the United States. You've already mentioned NAFTA. We're committed to having a rules-based system that, frankly, ensures fairness. It ensures labour rights among the countries we do free trade deals with. And we have done quite a few. We talk about environmental laws to go with that, all that it implies.

But it strikes me that the real answer.... And I say this.... I'm not sure if it's a philosophy; maybe you can educate me.

But why is it there's not one agreement, ever, that your union has supported? Please help me understand that.

[Angelo DiCaro]

I'll let Jerry wrap it up.

It's probably not going to come as a surprise. One of the deals we have historically been in favour of, because of the outcome of what it provided for our country and our industry, was the Auto Pact. Eyes roll, and all that stuff, but the fact is, that was a deal that was based on outcomes that had reciprocal market access and offset conditions that said that if you're going to sell here, you have to build here.

Then along came the WTO and sort of an ideological bent on what trade deals should be. Then that whole spirit became anathema to what we're doing. So in all these deals now, rather than even considering what a reciprocal market access provision could be and becoming creative with innovative policies on how to make that work on an outcomes basis, all we seem to be concerned about is the blanket elimination of tariffs and then crossing our fingers and hoping that good things will happen.

[Ed Holder, Conservative, London West, ON]

Mr. DiCaro, this is not going to be a debate, but it strikes me that we've all lived through the worst global recession of our lifetimes. No one has gone through a worse time than we went through in 2007-08.

You also know that the integration of the auto in Canada and the United States is very significant, and we know what that cross-border impact means. I come from southwestern Ontario and believe me I have a strong sense of what it means.

The tragedy in that, and I don't get this—sometime I'd like to have a private chat with you, Mr. Dias—is not just automotive, but to your earlier point, so many organizations in southwestern Ontario: London, Strathroy, St. Thomas have been absolutely decimated and the common denominator, and I don't get it, was the CAW. I got so frustrated at one point that I said they're really good at negotiating severance packages, but they're not very good at negotiating employment packages, quite frankly.

Those are my people. Those are the people who live in my riding and in my city and they're your people as well. What I don't get is why there can't be more opportunities. I apologize if this isn't quite getting back to this deal, but it comes back to the point of embracing trade, finding the positives from it. We have pretty bright people on this side as our guests. Why can't we find ways to make it work for Canada's sake, to have a rules-based system that makes it work, because we trade with every country in the world already?

When we trade—

[The Chair, Conservative, Rob Merrifield]

You time has gone. I will ask for a very short answer.

[Ed Holder, Conservative, London West, ON]

There was a question in there.

[Jerry Dias]

I'll gladly sit down with you because the reality is that a Canadian auto worker is priced the same as an American auto worker. The last set of negotiations when we put in a 10-year hiring-in grid makes us even cheaper.

Two things have really negatively impacted the auto industry. Number one is one-way trade. You talked about Japan and South Korea. The reality is they dump on our markets and we have no opportunity to sell in theirs. The issue isn't free trade. It's fair trade. We want you to talk about fair trade.

Number two, on the whole issue of the CAW, you will find that during the auto recession an equivalent number of plants in Canada were affected, as they were in the United States. So there isn't some big, heavy slap at the CAW that somehow we chased jobs out of town.

The auto industry crisis was caused by the banking industry crisis. When Lehman Brothers went bankrupt and when the financial sector collapsed, we went from 17 million vehicles to 7 million vehicles. Plants are going to close. It's about economics.

[The Chair, Conservative, Rob Merrifield]

It sounds as if we've opened up a deeper discussion that will maybe take more time than what we can allow.

I want to thank the witnesses for coming forward. That takes us to the end of the first hour. We will pause as we bring forward our next panel.

Thank you for being here.

[The Chair, Conservative, Rob Merrifield]

I will call the meeting back to order.

I want to thank our next round of panellists. We have from the Canadian Pork Council, Mr. Vincent and Mr. Rice, I believe. We have from the Canadian Manufacturers and Exporters, Mr. Jayson Myers.

We will start with the Canadian Pork Council. The floor is yours for 10 minutes.