Evidence of meeting #8 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 ceta.

On the agenda

MPs speaking

Also speaking

Mike Savage  Mayor, Halifax Regional Municipality
Gus Etchegary  Chairperson, Fisheries Community Alliance, As an Individual
Fred Morley  Senior Vice-President and Chief Economist, Greater Halifax Partnership
John Risley  President and Chief Executive Officer, Clearwater Fine Foods Inc.
Rick Clarke  President, Nova Scotia Federation of Labour
Winston Fiander  Advocate, Community Fisheries, As an Individual
Colonel  Retired) John Cody (As an Individual

9:05 a.m.

Conservative

The Chair Conservative Rob Merrifield

I call the meeting to order.

I want to thank our witnesses for coming forward. Again, we're continuing our study of the Canada-European Union free trade agreement. We have with us an exciting panel.

We have someone who is no stranger to most of the committee members, the mayor of the Halifax Regional Municipality, Mr. Mike Savage.

Your Worship, it's good to have you with us. We look forward to your testimony.

We also have with us, appearing as an individual, Mr. Gus Etchegary, I believe from Newfoundland, who is the chairperson of the Fisheries Community Alliance.

I believe you have with you Mr. Fred Morley, who happens to be a representative of, and senior vice-president and chief economist for, the Greater Halifax Partnership.

We'll start with you, Mr. Savage. The floor is yours.

9:05 a.m.

Mike Savage Mayor, Halifax Regional Municipality

Thank you very much.

It's nice to be back at a parliamentary committee. I've done a few of these over the years.

Rob, you and I spent some time on committees together.

It's a pleasure to be back with everybody and to welcome you to Halifax, along with Mr. Chisholm, who is also from here. I hope you're having fun while you're here.

I want to thank you for the opportunity to share our perspective on the Canada-European Union comprehensive economic and trade agreement, CETA. I also want to let you know that I do have Mr. Fred Morley with me. Fred Morley is the executive VP and chief economist of the Greater Halifax Partnership. If you hear a “GHP” in my presentation, that's the Greater Halifax Partnership.

I want to emphasize that municipalities have appreciated the opportunity to provide their views through the Federation of Canadian Municipalities, the FCM, and the Department of Foreign Affairs and International Trade Canada working group, and to be kept informed of negotiations by our federal and provincial counterparts. I think the FCM has appeared before this committee on a number of occasions in the last few years, specifically related to this deal.

We believe that CETA holds real potential for stronger economic partnerships between municipalities, businesses, and other levels of government, and among countries. In recognition of its impact on communities across Canada, the FCM has developed seven negotiating principles on agreements that impact Canadian municipalities, those being: procurement thresholds, which are of particular importance; streamlined administration; progressive enforcement; Canadian content for strategic industries or sensitive projects; dispute resolution; consultation and communications; and reciprocity.

Until the full text of CETA is finalized, it's not possible to assess the entire impact of the agreement, including its impact on municipal operations, but we appreciate the dedication the federal government has shown in respecting the FCM's seven negotiating principles.

For the Halifax Regional Municipality, CETA will have impacts in two key areas: economic opportunity and municipal procurement. Those are the things I'd like to address with you today.

Municipalities are increasingly being recognized for the strong role that we play in economic development, and I can tell you that here in the HRM we have made economic development a priority. I believe that CETA will help us grow our economy by opening up new opportunities for businesses, entrepreneurs, individuals, universities, and other organizations.

As many of you know, Halifax is a city that is built on trade. That is our tradition, from the early merchant mariner days to the present, and much of that trade was legal. Some of you will know what I'm talking about.

9:05 a.m.

Voices

Oh, oh!

9:05 a.m.

Mayor, Halifax Regional Municipality

Mike Savage

The EU is currently Nova Scotia's second-largest trading partner. With CETA, we're able to open up markets to 500 million people, giving Canadian and Nova Scotian businesses preferred access to EU markets.

Products such as seafood, forestry, pulp and paper, agrifoods, chemicals, and plastic products are worth over $445 million annually in exports for Nova Scotia's economy. The EU is the largest importer of seafood in the world, with 40% of trade activity in that industry. Some of you know that we have seafood in this part of the world, and hopefully you've tried it in the last couple of days.

CETA will lower tariffs on forest and wood products, metals and minerals, and fish and seafood. This trade agreement holds new potential for our seafood export sector with the elimination of the 8% tariff on fresh lobster, frozen scallops, and other seafood. Once CETA comes into force, 96% of EU tariff lines for fish and seafood will be duty free, rising to 100% by CETA's seventh year.

With approximately 18% of EU contracts linked to business services, this agreement also opens up opportunities in the fields of architecture, engineering, construction, environmental services, technology, and marketing consultancy, among others.

Through our port, railway, and world-class airport, Halifax is well positioned to be the departure and the receiving point for European goods. I know that Nancy Phillips, who is a colleague of Fred's at GHP and is very involved in the Greater Halifax Partnership and gateway council, presented to you yesterday some of the benefits to us as a gateway. Be assured that the potential as a gateway, not just for Halifax but regionally, is very real.

As we look to uncover opportunities for increased trade and investment as a result of the $115 billion in megaproject activity currently under way or slated to be under way in Atlantic Canada, Europe is a key market for many of the project components, labour, and supplies. Halifax would be the natural receptacle and transshipment point, making the best use of the Halifax Stanfield International Airport, which is an award-winning airport. Last year it opened up its new runway, which allows us to receive the largest cargo planes in the world and, perhaps with this deal, opens up the possibility of our having better air access into major European airports. We have great potential.

We have two super post-Panamax container terminals, CN Rail, a strong logistics and warehousing sector, and excellent class one highway infrastructure. Our city can effectively move goods in and out of the Canadian marketplace and beyond. Through CETA we can build on $4.6 billion worth of imports from the European Union that were cleared in Nova Scotia as recently at 2010.

On procurement, while CETA has positive implications for our port, the gateway, and business generally, we're also watching CETA's impact on procurement processes in many ways. We appreciate that defence contracts, including for us the $25 billion Irving shipbuilding contract, are protected under CETA, as procurements and shipbuilding are excluded from coverage for both the EU and Canada. Non-defence shipbuilding could see more European competition in Canada due to decreased tariffs.

There is an apparent imbalance that's of some concern as are implications from municipal procurement policy and practice. The majority or HRM's construction projects will fall below the $7.8 million threshold for construction-related tenders and so will not be subject to CETA regulations. That said, the goods and services and utilities-related thresholds are somewhat lower than those sought by FCM, as you know. This means that our procurement processes may take longer because of the requirement to put opportunities to market for a longer period to ensure EU suppliers have an opportunity to respond.

CETA also means that HRM's ability to implement a buy-Canada or buy-local preference is somewhat restricted to purchases and tenders below the CETA threshold. Halifax Regional Council has recently requested a report from staff on the buy-local provisions. We don't have that yet. It is coming this winter and it will outline the impacts in more detail. I do note that CETA appears to protect our discretion to use local criteria in evaluating submissions for municipal tenders and requests for proposals, if we choose to go that route.

It is my hope that this agreement, once fully realized, will be the beginning of a strong new relationship, not only among countries, but between municipalities and the federal government, and will bring new opportunities to Halifax. Our municipality appreciates the federal government's commitment to respecting FCM's seven negotiating principles, and we will monitor those closely. While full details remain to be confirmed, we are optimistic that the final agreement will address those principles.

Cities are increasingly being recognized as not only the home of most of Canada's key infrastructure requirements, but also as key partners in economic development. All parties in the House of Commons have recognized that municipalities control approximately 60% of Canada's infrastructure but only collect 8% of total tax revenues, and I think that all parties understand that we must work collectively to address that imbalance.

Actions taken by any level of government affect the others, and we need to consult and work with each other. I am pleased that FCM has been involved in the evolution of CETA and look forward to further interaction as this deal develops. All levels of government will need to work hard to ensure that Halifax and other Canadian municipalities are ready to take best advantage of the opportunities presented by CETA and, I would add, a significant marketing effort should be taken to help Canadian businesses get exposure in European markets as well.

Thank you very much.

I look forward to any questions you may have for either me or my colleague, Fred Morley.

Thank you.

9:10 a.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much. We'll get into the questions soon, but before that we'll let Mr. Etchegary have the floor.

The floor is yours, sir.

9:10 a.m.

Gus Etchegary Chairperson, Fisheries Community Alliance, As an Individual

Thank you, Mr. Chairman, and thanks for the opportunity to appear before the Standing Committee on International Trade.

We are here, representing the Fisheries Community Alliance of Newfoundland, to discuss CETA and its impact on the Newfoundland and Labrador fishery and its participants.

Our organization was formed in 1992 to bring to public attention the negative impact of the moratorium that was imposed on the Canadian fishing industry off the east coast. It was a two-year moratorium that has lasted 21 years because of mismanagement by the Canadian government and overfishing by the European Union nations.

When we entered Confederation, the Newfoundland and Labrador fishery was huge and diversified, one of the largest in the world. It elevated Canada from 14th to 6th place in the world as a fish-exporting nation. That's when we joined in 1949.

Now, with the limited information we have, we can agree there's great benefit for the country with the CETA agreement, but it can be detrimental to others, and in the specific case of Newfoundland, it really is detrimental. It has a terrible negative impact. I hope sometime we'll have time enough to explain exactly how this will occur.

On the basis of what we know and our long and bitter experience with the disruptive European Union fishing nations, we are really concerned about the agreement. We understand clearly the benefit of the tariffs, and we can understand specifically Nova Scotia gaining great benefit from it, but that is not the case in Newfoundland.

We know one of the conditions of the CETA agreement is the removal of the minimum processing regulations. This has been well publicized by our Newfoundland government. That's a major victory for the European Union, and it's something they have been trying to gain access to and get agreement on because they lost a substantial portion of their participation in our fisheries in 1978 when our jurisdiction was extended.

Please understand that the tariff on seafood was applied with the understanding by the European nations.... They had one objective in mind, and that was to use it at some later date to regain entry into the fisheries adjacent to Newfoundland and Labrador. That's all part of the plan, and it has been aided and abetted by some of our own politicians and bureaucrats in order to reach an agreement.

In 2007 at the North Atlantic Fisheries Organization annual meeting in Spain, which included, incidentally, prominent Canadians, the European Union introduced three amendments to that organization that have played a real role in these negotiations. That actually started the process of their regaining access and re-entry into our fisheries. These three amendments raised concerns at the time, to such an extent that we were able to present our concerns to the House of Commons Standing Committee on Fisheries and the Senate Committee on Fisheries, and both committees condemned the amendments as being detrimental to the Canadian fisheries, particularly in Newfoundland.

After the discussion between these two committees, they were able to bring it to the House of Commons, and at that time there was a four-hour debate, at the end of which there was a vote. The vote was 147 to 142 by the elected members of the House of Commons from B.C. to Newfoundland condemning and defeating the amendments. The following day the Prime Minister and the Minister of Fisheries ratified the same amendments on behalf of Canada. True democracy at work. This irresponsible action by both was noted and applauded in the free trade negotiations that were going on at the time.

Mr. Chairman, if CETA is approved as is, with the MPRs or minimum processing regulations removed, the European fishing nations will have reached their goal through CETA. It is inexplicable that a Canadian would offer up the future of the Newfoundland and Labrador fishery to achieve an agreement. Who is responsible for this reprehensible act?

The removal of the MPRs will easily provide access—and this is important—for the European factory freezer trawlers fishing the Grand Banks at the present time, allowing them to come to Newfoundland ports and purchase unprocessed fish directly from the fishermen. More especially, it will result in Canadians and foreign-owned factory vessels harvesting Canadian fish quotas and selling them in an unprocessed state directly to European Union plant operators, who will process them and sell directly into the EU market, thereby eliminating thousands of primary and secondary jobs in Newfoundland and, in the process, completely removing us from contact with the EU seafood market, which we have had for 60 years.

Our Newfoundland government is trying to shed responsibility for this. Their justification is that they have accepted advice and direction from the Newfoundland Association of Seafood Producers Inc., including the FFAW, a union that is determined to limit and reduce the Newfoundland fisheries to only offshore factory freezer operations. Those who support this ill-advised removal of the MPRs are motivated by their own narrow and short-term objectives and it will be very detrimental to the ailing industry. In addition to losing contact with the market, we will lose thousands of jobs. Further, that will prevent any hope of a real recovery of the resource to the level that we delivered to Canada in 1949.

The veil of secrecy on this whole CETA deal as far as the Newfoundland people are concerned is unacceptable. We, and others with us, will continue to do all possible to expose the truth to Canadians. May I remind you that in 1950, shortly after the Great War ended, the Europeans assembled the largest fishing armada in history. It totalled 1,400 ships and 60,000 seamen. They descended on the Newfoundland and Labrador fishery, overfished it in an unrestricted and uncontrolled manner for over 40 years. It caused the collapse of the fishery.

Fortunately, it's a renewable resource and so important in a world where a million people are dying of starvation these days. If given the chance, the resource will recover, but it will never recover if we permit them to get back into our fisheries through CETA, with their unrestricted fisheries, and to get free access to unprocessed fish at the expense of thousands of jobs for people.

By the way, they're out there today on the Grand Banks, outside 200 miles, overfishing the same species that are migrating from inside the 200 miles to outside. I hope somebody has a question on that point because I'd like to add to it.

How can Canadian negotiators justify agreement with CETA, acceding to European demands, presenting them with free access to our badly needed resources? Having struggled so hard as we have for the last 50 years to rid ourselves of those marauders, we find the government of our country, and particularly our own government in Newfoundland, who've got another agenda, behind our backs presenting this gift on a silver platter.

Our negotiators are presenting renewed access to our fishery to the same EU nations who have destroyed our fishery and thousands of jobs, and caused the loss of 15% of our population—that's what the collapse of the fishery meant. They imposed unreasonable tariffs on us and then used their influence at the UN to prevent Canada from extending fisheries jurisdiction over the total continental shelf. Had Canada done it, we would never be here this morning with this message.

Anyway, Mr. Chairman, CETA, with MPRs removed, is unacceptable to our people. In the days ahead, you can rest assured that we will be doing everything possible to make this story and its impact known to the people of Newfoundland and Labrador, and also to the people of Canada.

Thank you very much for the opportunity of speaking.

9:20 a.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

That should be good stimulus for some questioning, and we'll start with Mr. Davies. The floor is yours.

9:20 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Thank you, Mr. Chairman.

And thank you to all witnesses for being here, Your Worship, Mr. Morley, and Mr. Etchegary.

Mr. Etchegary, I'm going to start with you. The technical summary we have says that minimum processing requirements on exports of fish and seafood to the EU will be eliminated three years after the entry into force of CETA. Just so I'm clear, does only Newfoundland have minimum processing requirements, or do other Atlantic provinces have them?

9:20 a.m.

Chairperson, Fisheries Community Alliance, As an Individual

Gus Etchegary

Quite frankly, I'm not sure. I don't believe they exist. Quebec has them, I believe, but I'm not sure about Nova Scotia. But you see Nova Scotia and Newfoundland have two completely different fisheries. The Nova Scotian fishery is primarily shellfish. In Newfoundland, we are what we call a ground fishery, and it's completely different, and that's why we need special recognition for the problems we have.

9:25 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Second, you mentioned that thousands of jobs are at risk. Can you give us a more precise estimate? How many processing jobs in Newfoundland do you think are at risk from this provision of CETA?

9:25 a.m.

Chairperson, Fisheries Community Alliance, As an Individual

Gus Etchegary

Well, it's complicated in the sense that we now have a resource that is roughly 10% of what it was when we entered Canada, according to the scientists, and this is a very careful assessment of the state of the resources by scientists—and good ones too, Canadians.That's 10%, okay? We're 22 years into a moratorium, which is supposed to be a rebuilding program, and Canada as a country has failed to deal with the problems in rebuilding the resource. But once it's rebuilt, we go back to where we were. There was something in the order of 20,000 jobs.

When a new company took over from the company I operated for 40 years, it had one plant that employed, let's say, 1,000 people. Those 1,000 people, I remind you, are the equivalent of 26,000 jobs in Ontario on a per capita basis. Our population is 500,000, so you can imagine what the impact is of the loss of 1,000 jobs in one community. That was not alone. There were others that employed less than 1,000, like 500, 400, and so on. But altogether, as I said, the onshore activity was in the vicinity of 20,000 jobs. In addition to that, you've got the goods and services industry that's added to it, and I won't go into that number because I don't know it, but the university tells me that for every full-time job, it's roughly 2.2 jobs in the goods and services industry.

9:25 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

My final question to you is this. People will say that Canada got the European Union to eliminate about 95% of its tariffs on Canadian fish and seafood products, and in exchange for that we give up our minimum processing requirements. Is that a good bargain in your view?

9:25 a.m.

Chairperson, Fisheries Community Alliance, As an Individual

Gus Etchegary

It's a good bargain if we didn't have removal of the MPRs, because ever since the extension of jurisdiction in 1978, which pushed the foreigners outside 200 miles, they have been striving to get back by every means possible. This gives them the opportunity of not only getting back but also having access to whatever fish is harvested in an unprocessed state, which means that all of it can conceivably go to European production units and, therefore, go into the market on the basis of the primary and secondary products coming out of European plants, not Newfoundland plants. So in a sense the reduction of the tariffs is so important—we recognize that—but to Newfoundland in this specific case, it's a disaster. It's as simple as that.

You might very well ask how in the name of God a government of Newfoundland can be supportive of that. And it is. I could read you things from our government that would shock you. But why? Because there's another agenda, another agenda called Muskrat Falls.

I'll leave it there.

9:25 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Savage, is the ability of your municipality to set local job creation or local goods and services procurement important to the City of Halifax?

9:25 a.m.

Mayor, Halifax Regional Municipality

Mike Savage

Of course, it is. Economic development is very important, so we want to make sure that local companies are doing well, not only here, but around the world as well. As I said, in terms of a buy local policy and supporting local businesses, we're having a look at that as a municipality. But I think it's also important that a number of our businesses do very well exporting around the world, and we think this might be of assistance to them.

9:25 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

I want to pick up on procurement. If I heard your testimony correctly, you said that CETA appears to preserve municipalities' ability to implement local economic development policies. You also said you can't really assess the impact of CETA procurement until the details are known.

Would you agree with me that further details on this are important in order to assess whether or not you do have the ability to implement local economic development plans?

9:30 a.m.

Mayor, Halifax Regional Municipality

Mike Savage

Yes, we would have preferred the thresholds to have been higher, but in the case of Halifax, they're probably sufficient. We don't have a lot of construction-related projects over $7.8 million, for example. Most of our goods and services and utility-related services are within the threshold. But, yes, we would like those thresholds as high as possible. And FCM certainly, on behalf of all municipalities, feel like they've had some input on that, but we'll be watching.

9:30 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Okay.

We've been told that nothing in CETA will require the privatization of any public services like water or sewer. But it's unclear whether CETA will impair or prohibit the retaking of such privatized services into the public sphere, if somewhere down the road you want to take them back. Do you have any concerns or comments on that?

9:30 a.m.

Mayor, Halifax Regional Municipality

Mike Savage

I don't.

Fred, do you have any comments on that?

9:30 a.m.

Fred Morley Senior Vice-President and Chief Economist, Greater Halifax Partnership

No, that's something that I guess we haven't looked at. So I would have no comment.

9:30 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

I think the City of Hamilton did. They privatized their sewer and water services for 10 years, and then found that the service and price went up, so they took it back. In the public sphere, there's concern about whether CETA will impair that. We're not clear on that.

On the single point of electronic access, CETA says they're going to require a single point of electronic access for procurement within five years. Have you looked at whether that will increase any costs to the city, or had any conversation about that?

9:30 a.m.

Mayor, Halifax Regional Municipality

Mike Savage

We've asked our staff to have a look at CETA and come back with any concerns they have, and their concerns don't include that. So I don't think I have any comment on that.

9:30 a.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Could you maybe share that report?

9:30 a.m.

Conservative

The Chair Conservative Rob Merrifield

The time has gone.

Mr. O'Toole, the floor is yours for seven minutes.

9:30 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Thank you, Mr. Chair.

I'd like to thank all of the witnesses today for joining us.

It is important for members of Parliament to leave Ottawa and speak with key people. Certainly, we would like to get to all provinces, but we're also constrained from a budget standpoint and want to get to all regions. So we appreciate particularly the gentlemen from Newfoundland and Labrador for joining us here today.

I'm going to try to ask a couple of questions.

Thank you for appearing, Your Worship. Specifically, on the procurement side, one of your comments was that opening up procurement for larger scale infrastructure projects may take longer because it would be a wider RFP. Do you have any detail on why you think it would be longer?