International Trade Committee on Nov. 26th, 2013

[George Malec]

That is absolutely crucial.

The Government of Canada's 50% investment in the $110 million worth of projects that I just referred to, which we're completing now, is essential.

As I mentioned earlier, it's really about reliability and velocity, in addition to the pricing and supply chain. If you cannot turn those marine assets, those ships, fast, then you're taking yourself out of the market. You're just unreliable. There's too much global pressure on these ship lines to maintain the integrity of their sailing schedules.

The profit margins are very tight. If you're not a reliable port that can turn them around because you have the correct “infrastructure”, and you cost them lost time. For example, if they're sailing up the east coast going to the Suez, there's a convoy canal system there. If you blow your ETA on that, you could knock that ship 24 hours off its schedule and then jeopardize its berth windows in other key ports.

It's very important to have the infrastructure that can handle these things.

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

In the trade committee, in 2008, I think it was, we were in Panama. Nobody has mentioned what will happen next year when that port opens up and it creates more competition. I'm glad we're able to partner with a great port authority.

Moving to Mrs. Janega, I appreciate the excellent work of the Canadian Manufacturers and Exporters—Mr. Myers and the thousands of members who represent the businesses and the employees. We appreciate the work that's happening and the partnering with our provinces.

One comment you made in your opening preamble was that growth through exports is possible but desirable.

I wonder if you would expand a little on that, please.

[Ann Janega]

I was referring to the low number of firms that actually export.

I think we can conclude that it may not be obvious to firms that by trading and becoming a trading company they will not only gain new business but may exponentially gain new business.

We need to demonstrate the value proposition that exporting—which does have risks, costs, and other side effects, as mentioned by your colleague at the table—can be worth it. We have to demonstrate that value proposition, and groups like CME will be trying to do that because there are risks and it can be a little scary.

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

This growth is all based on partnerships. There's only one taxpayer and we need to work together.

We had Mayor Savage here this morning, from Halifax. We are working with our provincial partners, and obviously the federal component across the country, which includes our post-secondary institutions. We'll hear from St. Mary's and Dalhousie representatives later this afternoon.

One of the comments we heard from witnesses today, and throughout different testimonies, is the challenge of skilled labour with our aging workforce, not only for the future but today.

From the CME perspective, do you think the private sector can play a bigger role in working with our provincial partners to train up our future workforce so they can get the skill sets upon graduation to be employed, rather than graduate with a piece of paper and not being able to fit into the workplace?

[Ann Janega]

I do agree. I think there is a huge opportunity there for employers.

The graduates are there and the training programs are there, but somehow we're not making the optimal connection. I think that here in Nova Scotia we work very well with the Department of Labour and Advanced Education and a very strong community college network. So the pieces are in place.

You did mention that partnerships are essential. We agree with that, but markets are necessary too. I think we have to start at a basic level and show firms that once they find the markets, these other pieces are available to them. CETA will help us make that market connection.

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

I have a question for both of you based on where we are with this agreement and the partnerships.

One of the comments we hear is on Canada's level of productivity.

Do you think this 21st century agreement with CETA will help the productivity level in Canada?

[George Malec]

First of all, productivity gets very close to the comment I made about reliability and velocity.

The CETA agreement, by strengthening the bilateral trade between the EU and Canada, should help us go to the best models, best cases, best scenarios. We already work very closely at understanding best practices in other ports. The close relationship we have developed as a result of what we've done now, and then building on CETA, should help to foster that.

[Ann Janega]

I would concur with that, and perhaps also make reference to the emphasis on continuous improvement as one of our tools towards productivity. It works well.

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

From your members to date, what do you see as the biggest opportunity?

It's going to be a couple of years before we get to the big drive. I think it has to be translated into 23 different languages, receive the legal scrub, and be passed in Parliament in Canada and in the European Union.

In the next two years, how can the government work with CME to take advantage of this leg-up on the U.S.? They don't have an agreement in place and we're hoping to be first out of the gate, which would be an advantage to Canadians.

[Ann Janega]

I think it's already working in discussions like this. We're improving awareness of our current assets, infrastructure, and opportunities. I mentioned the EUREKA model, CME's program for matching markets. That is there.

The final comment I'd make is that there is a big challenge for non-governmental organizations like Canadian Manufacturers and Exporters and some of the seafood associations. We're going to be working really hard to help translate this information and provide opportunities to our members. As well, it's a bigger opportunity for us to work with government.

But finally, we see it as triggering a spirit of optimism. It is going to be a real help, especially where economies have been struggling in the past.

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

Thank you. I love the optimistic attitude.

[The Chair, Conservative, Rob Merrifield]

Yes, there you go.

Thank you very much.

Brian Masse, the floor is yours.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and my thanks to the witnesses for being here.

Ms. Janega, you quoted a study saying that about 80,000 jobs would be created. That study was done in 2008, with data from prior to 2008. Since 2008, we've had a major global financial crisis. We've had issues in Greece and Europe that have been significant, and the dollar has changed in value.

Why is that study still valid? Is there a particular point of it that continues to give you confidence that we're going to have 80,000 jobs? Of those 80,000 jobs, how many will go to an eastern area like the Atlantic region?

[Ann Janega]

I don't think I can say the specific number we would predict. We can look by sector in Nova Scotia and see the areas that will benefit. I know we've had a lot of discussion about the seafood industry, but we've also heard from the authorities at the Port of Halifax that it is a big customer. So there is a lot of potential for growth already in that area.

Some of the other areas we have available that we haven't discussed are, for example, plastic producers and products that relate to the home-building industry. These are opportunities that will soon be improved, as I understand the immediate benefits of CETA.

Regarding the study you referenced, I think it's probably the most recent one we have to use to reference. I predict, though, that there will be some more coming soon, so we'll have better numbers to reference shortly.

[Brian Masse, NDP, Windsor West, ON]

That would be good, because things have changed since then.

You mentioned plastics. That's an added one. What other products do you have as good examples? Manufacturing is different in my area from out here in the Atlantic area. Can you cite some areas we can target to get some actual action in increasing trade to Europe?

[Ann Janega]

In wood products, we have particle board and strand board. This doesn't sound very exciting, but these are key components in the housing industry. These components currently have a 7% disadvantage, and I know they are manufactured here in Nova Scotia.

[Brian Masse, NDP, Windsor West, ON]

You mentioned that members need more help on this. The government has cut funding to some of their foreign service trade councils and support systems, and they'll continue to cut.

CBSA is another good example. Over the next number of years, from 2012 to 2015, there will be a $160 million cut. They've moved the maritime strategic operations to Toronto, and they've also removed 19 detector dogs from our ports and our border entries across Canada.

Should the government continue to cut these services, or do we need those services to facilitate trade and exports?

[Ann Janega]

Services are required to boost trade, and we have some valuable services already in Atlantic Canada. Perhaps with CETA, as the demand grows, we'll have an added opportunity to make a case for even more resources here.

I would refer to my earlier comment, though, that non-governmental organizations will continue to improve these connections and promote government programs, whether it's at the federal level or the provincial level. That's what we do. We try to facilitate business matters for our members, and we'll continue to do that.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Mr. Malec, with regard to your operations, the Halifax Gateway Council came here saying there was sufficient infrastructure in place to meet CETA and to grow as well.

What percentage of your shipping goes to the United States versus the percentage to Europe?

And lastly, on the Panama Canal and its expansion, will you have the capabilities to sufficiently service both those expected growth needs, if it is as predicted and the results are as sought?

[George Malec]

The trade line right now that we handle with the United States is that approximately 17% of the business that comes in and out of Halifax by containers is destined to originate from the United States.

When we look at the European trade model, and what CETA is the framework for, except for very high-value air carried cargo, that's all water-borne. That's a huge business for us. It sounds simplistic, sir, but I don't think we can underestimate that our Canadian-U.S. traffic is on rubber tires primarily and our European traffic is on the water. For port infrastructure and port operators like us, this is a major play.

[Brian Masse, NDP, Windsor West, ON]

I have 10,000 trucks a day that go through my riding to the U.S.

[George Malec]

So you can see that the trade lanes are completely different in how they are going to be conveyed.

[The Chair, Conservative, Rob Merrifield]

Thank you.

[George Malec]

Am I out of time?

[The Chair, Conservative, Rob Merrifield]

You are.

We'll go to our last questioner, and then we'll allow you a little wrap-up on that question.

Go ahead.