Evidence of meeting #6 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
9:20 a.m.
Executive Vice-President, Forest Products Association of Canada
Okay. If you did I'd like you to share it. Thanks.
9:20 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
From a specific industry perspective then, have you looked at it provincially sector by sector? Have you had a bit of analysis from working with COFI for example and others?
9:20 a.m.
Executive Vice-President, Forest Products Association of Canada
I did try to reference—and I hope I did a decent job of this—the fact that some tariffs will immediately fall by up to 10% for some of our subcategories, so this is huge.
We do export an awful lot. I didn't get into the specifics, but pulp and paper would be the bulk of our exports to Europe. The wood products would be second. We're talking fairly large numbers here. Overall it's a billion dollars. It's a 60-40 split between those two big groups.
So yes getting tariffs in the order of 10% off a $400 million export is good.
9:20 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Obviously there is the chance to travel to some parts of Europe—Finland, for example—and share the technology and use our bilateral exchange as well for research and innovation, which segues to my question.
Mr. Casey, coming from BIOTEC, you have about a 250-member organization. Our government's had a drive to encourage private sector R and D in Canada and to go for increased innovation and commercializing innovation. In Canada we haven't done a great job of commercializing the R and D. I'm wondering for your approximately 250 members how CETA will help increase R and D in Canada and whether you see that potential for commercialization being increased and expanding through this agreement.
9:20 a.m.
President and Chief Executive Officer, BIOTECanada
It goes back to being able to draw investment into the country. R and D is going to drive investment. You're entirely correct, the government has been very supportive of the industry through a number of programs to develop its R and D.
At the end of the day, as I said, it's a very expensive process to develop a drug. It's about a billion dollars. It takes a long time, some 10 to 15 years. That's a long horizon for a lot of investors and there's quite a bit of risk associated with that. Anything we can do to provide greater security for that investment is going to be important for the industry in attaining commercialization.
IP protection is certainly one of those. That's the big part of this deal. The patent term restoration essentially gives them a bit of time that they can tack on to recoup some of the costs associated with the development of the drug, if the drug does get tied up in the regulatory process, which it can. It's particularly important for a lot of the companies in my membership because they're in the biologic space, which are complex molecules. That is different from the traditional discussion of generics, where you essentially copy a small molecule. You could copy this newspaper and that's what that would be like, but in the biologics it's like trying to copy what's on this iPad. It's a very complex, very different world.
Sometimes the regulatory process is a little slower with the biologic space. That's particularly important when we're dealing with the orphan drug world. Anything that can restore some of that lost time to the patent holder, to the intellectual property holder, will help them to attract investment.
9:20 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
I appreciate the complexity of the patent and research.
One of the complexities for some small and medium-sized business owners, as my colleague Mr. Holder alluded to, is regulatory. We're trying to have rules-based trading, but it's difficult for some individuals. How do we expand in the market? We have Canadian trade commission services, about 150 offices around the world and across Canada. On the ground we have individuals helping business owners who want to take advantage of the CETA agreement.
One of the concerns is regulatory harmonization. I've had discussions with constituents about genetically modified organisms, GMO, with this CETA agreement, and the labelling issue. What would be a reasonable threshold for low-level presence of GMOs in Canadian exports to the EU?
9:20 a.m.
President and Chief Executive Officer, BIOTECanada
That one came out of the blue.
I don't have any specific comments on the GMO provisions. We're still awaiting some of the details as to what's going to take place on that front. I think we need to acknowledge the reality that we have global population growth that's going to take this world to about nine billion people. We're going to have to find a way to feed those people. Right now when you look at the resources available to us, the land mass that's available to grow protein and other sorts of produce, we're restricted. Genetically modified and genetically engineered organisms is obviously a solution for the industry. Biotechnology is certainly playing a part in that growth. It's an enormous opportunity for Canadian producers. A number of companies in the biotech space are helping producers, whether it's in the agricultural or the aquaculture worlds. This is an important part of the agreement. We're looking forward to seeing some more details about that.
9:25 a.m.
Conservative
November 21st, 2013 / 9:25 a.m.
NDP
Jasbir Sandhu NDP Surrey North, BC
Thank you, Mr. Chair, and thank you for coming this morning.
I come from British Columbia, where my family worked in the forestry industry, so this is very close to my heart.
On November 15, 2011, we heard from a representative from the Forest Products Association of Canada. At that time he said, “ Right now the government procurement process for forest products in the EU is a fairly behind-closed-doors process”—it may have been Mr. Casey at that time—and “We're advocating something that is a little bit more open and that taps into leveraging our environmental pedigree.”
Would the CETA agreement address the forest sector's concern regarding this particular issue?
9:25 a.m.
Executive Vice-President, Forest Products Association of Canada
I'm just confirming that I would like to be the one to respond.
9:25 a.m.
President and Chief Executive Officer, BIOTECanada
I have to resist the urge.
9:25 a.m.
Executive Vice-President, Forest Products Association of Canada
Yes, exactly.
It is with some pleasure that we see that the forest annex, which specifically gets to green procurement dialogue bilaterally, is in the CETA agreement. The only thing I have to say is we have not seen the specific text so we haven't had a chance to deliberate on the details, but we're encouraged to see that it's.... We did provide text and we're hopeful that it's aligned. We think that will be an opportunity for us.
9:25 a.m.
NDP
Jasbir Sandhu NDP Surrey North, BC
CETA will create the bilateral dialogue, but you haven't seen that yet, right?
9:25 a.m.
Executive Vice-President, Forest Products Association of Canada
We haven't seen the forest annex yet, but we understand it's there.
9:25 a.m.
NDP
Jasbir Sandhu NDP Surrey North, BC
It is important to open up markets for forestry, whether it's in Asia or Europe.
You pointed out that you also need enablers, and I totally agree with you. We can grow all the products, manufacture the product, but if we can't get it to our markets it is very difficult to export.
You mentioned trade offices. We've heard from a number of individuals. Being from British Columbia, I think Japan is a very strategic market for the forestry industry, and we've had an office close in Osaka. As you pointed out, you use the offices to further your interests in trade.
You also mentioned the railway industry. What specific issues are you having with the railway industry?
9:25 a.m.
Executive Vice-President, Forest Products Association of Canada
I don't know if we have time to get me revved up on that issue, but I will say that our challenges with the railways exist. They are, generally speaking, related to both rates and service. We are captive rail shippers.
9:25 a.m.
Executive Vice-President, Forest Products Association of Canada
The government has taken some steps by increasing the tools in our toolbox, but, as I have indicated several times in appearances to the transportation committee, we need to do more. We have a terrific imbalance of power between the two railways that operate as monopolies in the forest products industry, and for all shippers, quite frankly.
9:25 a.m.
NDP
Jasbir Sandhu NDP Surrey North, BC
Mr. Casey, the government has made some recent changes to the SR and ED program, which is a tax shelter. How is that going to impact your industry?
9:25 a.m.
President and Chief Executive Officer, BIOTECanada
We're aware of what the government is doing with the changes. The SR and ED is an extremely important part of the investment structure for a lot of members in the industry. I've heard from a number of my member companies from across the country that without the SR and ED they would not be around right now. It has allowed them to get through the valley of death, so to speak. It has proven to be an extraordinarily important measure for the industry. It's recognized around the world as a very important investment tool.
There could be some other changes we'd like to see over time, which would recognize some of the changing ecosystem I've talked about with the industry. There are the large companies that are investing in Canada through the smaller companies and finding ways that they can take advantage of the SR and ED, but that's probably for another table to discuss. Certainly the SR and ED is a very important tool for the industry and for my members.
9:30 a.m.
NDP
Jasbir Sandhu NDP Surrey North, BC
Would you say that this is one of the enablers for your industry, just like the forestry industry, and that this will have a negative impact for your members?
9:30 a.m.
President and Chief Executive Officer, BIOTECanada
No, the industry recognized that the government is doing what it can to fine-tune it and make sure it's working properly. There are pressures on the fiscal situation, and we have to find ways to make sure that the SR and ED is working properly.
There are other ways we can cooperate with government to ensure that it works better for the industry, and we're certainly at the table having those discussions.
