International Trade Committee on Nov. 21st, 2013

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

Thank you, Mr. Chair.

Thank you to the witnesses for coming today.

My question is going to be the same for both witnesses, but my first question is for Mr. Casey.

On more than one occasion you alluded to investment dollars as being the main criterion. In your case, you're going to need investment dollars to carry out your second phase, or whatever phase your biotech companies will be in when it's time to go to market. But you also said that your industry is transportable, so I'm a bit worried that if you do find investment, it would probably be easier to find investment in Europe; because of bigger markets, there would be more money available there.

Won't the industries that you represent be easier to transport and take the jobs away from Canada? Even though the scientific and the research end is successful here in Canada, why would you want to maintain the manufacturing side if your investment is going to be coming from overseas?

[Andrew Casey]

There are other factors that go into the decision as to where you're going to locate your company. So you may get capital, but there are other advantages to being in Canada that this industry enjoys. We have a fantastic, very highly educated workforce. We have great universities. We have a number of organizations emerging in this country that are allowing for the transfer of technology and are assisting with commercialization. There are incubators that are bringing together the innovators as well as the large investors and the large companies. So there are a number of other advantages in Canada that will factor into your determination as to where you are ultimately going to do your business.

But the other part of the question is, if you have intellectual property, if you're a Canadian innovator, why wouldn't you want to stay here? This is where you're located, this is where you discovered your product. You're going to want to stay here and try to develop it here.

We also have a fantastic—

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

One of the reasons would be that you would be closer to your market there. It's only because your industry is transportable, as said yourself. That's the idea—

[Andrew Casey]

The idea is transportable. Ultimately the manufacturing is going to take place where it's most economical at the end of the day, no matter what.

I'm not going to put a huge number of jobs on the table. I'm not talking about that here, but I am talking about the innovation and the practicalities such innovation does bring for the Canadian population. It's also for the flow-back into the universities here—you can't underestimate that—but also for health care and the advances there—

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

Sorry, my time is limited.

Are any of your members universities?

[Andrew Casey]

Yes.

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

They're actually universities, or companies working with universities?

[Andrew Casey]

They are the universities, and also the organizations that are partnering with universities. So UBC, for instance, and the CDRD, the Centre for Drug Research and Development, would be an example.

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

Are any of your member organizations doing business now in Europe? Is it a market that has already been penetrated and exploited?

[Andrew Casey]

It depends on how you define doing business. A lot of my small members are going to European conferences to seek out investors, so there is that partnership taking place. The larger members are of course multinational corporations, and they are definitely doing business in Europe and selling [Inaudible—Editor].

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

For the ones that are not doing business, is there a reason? Are tariffs the main reason? Or are there other reasons like regulation getting in the way?

[Andrew Casey]

The ones that are not doing business are pre-commercial. They are not selling things right now in the marketplace. That's the reason. The other ones are accessing those markets without problems.

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

So if you have a proper product to commercialize, the European market is accessible and it's being accessed right now?

[Andrew Casey]

Absolutely. You're looking at global population growth. We need these pharmaceuticals. We need the drugs. We're discovering new diseases every day.

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

So what would the agreement bring in? If you already have a good product and it's already going to Europe, would the difference be capital as you were saying?

[Andrew Casey]

It's the domestic security. This is different from the forest products industry and other industries that Mr. Holder referred to, which are growing the markets and securing markets. What I'm talking about here is securing the Canadian policy framework for innovators in this country. That's the more important part of it for us.

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

Thank you.

Ms. Cobden, I'll ask the same question to you in the sense that your industry is going to require investment dollars. Are those going to be available?

[Catherine Cobden]

The first question is whether we are going to be able to incent the investments to be made here in Canada. There are investment dollars out there for sure.

The question is, again, how do we assure ourselves—and this is something that I must confess to being personally obsessed with—that we will make the investments in our rural communities here in Canada versus, for example, in the southern United States where we have seen large Canadian companies? They now run about 20% of the southern United States forest industry, and they are growing.

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

Canadian companies do?

[Catherine Cobden]

Yes. We have a very global reach, but my point is that we want to compete with the investment climate of these other nations.

Now to the point my former colleague made, the trees are indeed here in Canada, but there's a lot more we need to look at in order to be cost-effective.

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

You also—

[The Chair, Conservative, Rob Merrifield]

Your time is gone, Mr. Pacetti.

Mr. Cannan.

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

Thank you, Mr. Chair.

Thanks to our witnesses.

I appreciate the preamble to the discussion to date. I just wanted to remind the committee that the United States is going to continue to be our number one trading partner and we will continue to work closely together reducing red tape and harmonizing regulations, working and streamlining the border with regulatory reform with the CBSA and the Department of Homeland Security.

I was just in Washington last week with the chair of the trade committee and we were working with other sectors as well and discussing the importance of the forest industry. Coming from British Columbia as do Mr. Sandhu and my colleague Mr. Hiebert, we know it's about 3% of our provincial GDP, about 170,000 jobs. It's a big economic employer and stimulus for our province and other parts of Canada.

Ms. Cobden, in your opening comments you mentioned that by 2020 you want to have a $20 billion increase. Right now there is about $1 billion in wood, pulp, and paper products going to the EU.

With CETA, have you been able to do any preliminary estimates indicating how much of an increase you might anticipate from this to help accomplish your goal of $20 billion by 2020 and what percentage of increase of growth that would be?

[Catherine Cobden]

I have not yet actually. As I said I think there will be more opportunities from CETA. I don't have the figures for the extra differential. I was hoping to be able to crunch them. I think part of it is that we don't actually have all the final fine print so we haven't been able to read the fine print of the final text.

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

We don't have it either.