International Trade Committee on April 18th, 2016

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that.

I have a couple of quick questions for you, Mr. Redlin.

You pointed out there hasn't been a full economic assessment yet of the impact of the agreement on Canada as a whole. There have been, as we all know, a number of studies showing both the benefit and the detriment, and showing either a net positive or a net negative effect on the country as a whole. If there is an assessment showing this is a net positive for Canada, will your group support the agreement?

[Blair Redlin]

I guess it's a matter of net positive in what regard? Part of what I've been trying to point to is that I don't think the economic case has been made, and that the detailed study we do have available has indicated the loss of 58,000 jobs.

We're familiar, for example, with environmental assessment processes on things like resource projects. They are much more extensive in terms of the assessment that is done of the economic and environmental impact of a single project than has been done with regard to the TPP. It seems to me incumbent on the Government of Canada to at least devote that level of attention, energy, and resources to studying an agreement that Nobel-Prize winning economists and independent researchers are indicating may be damaging for our economy.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

It also seems to me that a lot of the analysis is assessment as between a non-TPP and a TPP. But I think it's incumbent on us, as the federal government, to assess the consequences of not being in the TPP if the TPP were to exist.

Maybe I'll start with Mr. Duggan and Mr. Waltz. If your organization has taken a look at it, what impact would that have on you?

I know we're short for time, but if anyone wants to chime in after, I'd be happy to hear your thoughts on this as well.

[Terry Duggan]

I think one of the best examples is the amount of U.S. cargo that moves through Canada on its way to the States. That cargo is referred to as discretionary cargo. LA Long Beach, of course, is the giant among container terminals on the west coast, in terms of volume. Every ship that calls in a B.C. port instead of a U.S. port brings with it hours of work and hundreds of jobs. Not participating at a time when the U.S. is participating would severely disadvantage us in that regard.

[The Chair, Liberal, Mark Eyking]

Sorry, maybe they can chime in at another time. Time's up for the Liberals.

We're going to move on to the NDP and Ms. Ramsey for five minutes. Go ahead.

[Tracey Ramsey, NDP, Essex, ON]

The first thing I'd like to do that I didn't do in the first panel is to acknowledge that we are on unceded Coast Salish territory.

I think this panel has really been having a conversation about good jobs. I hear that your particular association provides good-paying jobs here in the region. Canadians are really struggling. They're looking for these good jobs across the country. They're piecing together two and three part-time minimum wage jobs. We're being driven down. Losing 58,000 good-paying jobs would have a massive impact on Canada.

Mr. Redlin, you mentioned that our wages are being driven down. Minimum wages right now in Vietnam are 60¢ per hour. In Malaysia, they're $1.18. In Peru, they're $1.27. These are extremely low poverty wages. We've been experiencing the driving down of wages in Canada resulting in low minimum wage and precarious work becoming the standard, which has resulted in staggering income equality and poverty. Can you speak a bit more about the agreement with low-wage countries and the impact that will have on Canadian workers?

[Blair Redlin]

Thank you for that question. I think it's a very good point.

Agreements like this will very much advantage those corporations that wish to compete on the basis of cheap labour or lower standards. We saw the experience with NAFTA of good-quality manufacturing jobs going to a lower-wage jurisdiction in Mexico, from both Canada and the United States, and then those companies leaving Mexico and moving to China and to Vietnam and others competing on the basis of lower wages.

I don't think that's a basis that Canada can compete on successfully. I'm concerned about those aspects of the TPP. These countries have very limited labour protections and labour rights.

We have experience here in British Columbia with this as well. There's often a lot of discussion about the manufacturing heartland of Ontario and Quebec, but many of us here in British Columbia remember prior to NAFTA when we had a thriving fish processing industry in this province. That has essentially, for all intents and purposes, disappeared. We used to have a thriving garment manufacturing industry in this province.

I think the other thing this kind of a deal does is that it makes us more dependent on raw resource extraction and export. That's been the tendency in Canada since NAFTA, and I think Canada will have to position itself as even more resource-dependent if we go into this kind of an arrangement.

[Tracey Ramsey, NDP, Essex, ON]

You mentioned the many environmental challenges we've faced under Chapter 11 in NAFTA. Sometimes we've been sued when trying to sustain and protect our environment here in Canada. We're trying to address the issue of climate change and meet the Paris target. How will ISDS provisions affect our ability to implement those goals when it comes to our environment?

[Blair Redlin]

To the extent that corporations from the TPP zone feel that we are taking measures to deal with climate that reduce their potential for future profit, then we face lawsuits.

We're facing new environmental lawsuits now. A well-known one is by Calgary-based Lone Pine Resources, which is suing Canada under NAFTA because it's registered in Delaware, even though it does all of its business in Canada. This Canadian or American company is suing us under NAFTA because of the moratorium on fracking in the St. Lawrence valley in the province of Quebec.

That is an example of how this investor-state system is fundamentally challenging our democracy, because in that example in Quebec, the Parti Québécois ran in an election campaign and said they would like to implement a fracking moratorium. They won the election, they implemented the moratorium, and they fulfilled their campaign promise. Now we're facing a $250-million lawsuit.

We will face more examples like that, I would predict.

[Tracey Ramsey, NDP, Essex, ON]

In February we had Canada's chief negotiator for CETA testify before this committee, Steve Verheul:

Domestic courts have no authority to adjudicate obligations in international treaties. If we're going to have any kind of form of redress for breach of an obligation in the investment treaty, we'd have to go to some other mechanism like an investment dispute resolution process.

A few weeks after this, the Canadian government announced a revised ISDS mechanism for its CETA, claiming they strengthened the sovereign right of democratically elected government to regulate, including in essential areas such as the environment and labour. Could you comment on the claim that domestic courts have no authority to adjudicate obligations in international treaties, and do you believe there is a difference between the ISDS mechanisms in TPP and CETA in terms of strengthening the rights of government to regulate in areas of public interest?

[The Chair, Liberal, Mark Eyking]

Sorry, Ms. Ramsey, your time is up.

I have to remind all members of Parliament: Be careful loading up your question because if there is not enough time for the witness to answer it, you will have to wait for the next time around. In fairness to everybody, I just remind everybody to keep the questions short so the witnesses can have enough time to answer. Maybe there will be another time, in another round, to answer those questions, but we have to move on now.

We are moving on to the Liberal Party, and we have Mr. Fonseca for five minutes.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Gentlemen, thank you for your presentations and your insight.

My first question is for Mr. Kemp.

Mr. Kemp, an industry such as yours, in the service sector, could potentially see great gains through a fully implemented TPP agreement. Where do you see the biggest gains in such an environment? You can talk about your sector, but you can also talk about others. You already have agreements with a number of countries within the TPP—with Australia and New Zealand. What other countries within the TPP...? Where do you see these gains?

[Scott Kemp]

An example is Japan. Mark and I went to Japan last year to meet with them to talk about an MRA, a mutual recognition agreement. They subsequently came back to us and said they would not do anything until the TPP has been ratified. That negotiation is now on hold subsequent to this process.

Again, we believe very strongly that we have a strong skill set in our architects in the country. It is a skill set that is recognized around the world. We're very active in doing that and, again, the TPP would help us in that process that we're already well engaged in.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

To maximize these potential opportunities in your sector and the service sector, are there any barriers in front of us that are beyond the TPP? Would it be innovation or how we're doing things, how we do business?

[Scott Kemp]

Not so much barriers, but opportunities. My colleagues are some of the leading designers with regard to sustainability and environmentally friendly design. That's a skill set that's lacking in a lot of countries. They would benefit greatly from the skill sets we can bring to them.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's great, thank you.

My next question is for Mr. Duggan. Mr. Duggan, at the time of publication of the Asia Pacific initiative, a shortage of skilled workers was seen as a top threat to taking advantage of the opportunities of the Asian market. Does this situation still exist today?

[Terry Duggan]

To a certain extent, yes, it does. The short answer is that in the last three years we've recruited 2,000 new workers in the waterfront industry across British Columbia. We're turning increasingly to new areas for recruitment. For instance, the number of women working on the waterfront has expanded over the last three years from about 300 to about 600 workers, now making up 10% of our workforce. The days of the strong back and big sack on your shoulder are long gone. Longshoring jobs these days are all about operating very sophisticated equipment, and there's no gender barrier in that kind of work at all.

The other area in which we've been quite successful, particularly in the north, is in working with first nations. In Prince Rupert, close to 40% of our workers are in fact first nations in the Prince Rupert area.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Redlin, a publication that is accessible on the Trade Justice Network states that “One of the most difficult issues for Canada concerns the fate of the supply-managed sectors.” Can you please provide insight into how the supply management could be affected under the TPP?

[Blair Redlin]

The supply-managed sectors of dairy, poultry, and eggs are very much under threat because of the negotiated provisions of the TPP. The previous government was dealing with that by promising to provide—now maybe you can help me with the number—a very large sum of money for compensation to the dairy sector for—

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

My colleague says $4.3 billion.

[Blair Redlin]

Yes. I guess my question about that is we have a successful supply management sector in Canada that provides stability, certainty, and reasonable access to healthy food. Certainly in British Columbia, in the Fraser Valley and many other parts of the province, they rely on supply management.

Why should our taxpayers pay such a large sum of money to compensate people to allow us to get out of a system that is working very well for us now? We could save that money and retain our supply-managed sectors.

[The Chair, Liberal, Mark Eyking]

You still have half a minute. You'll pass?

Okay, we're going to move on to Ms. Ludwig for five minutes.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

My first question is for Mr. Redlin. You mentioned the potential loss of 58,000 jobs if we ratify the deal. In terms of the study that was done—so I'm going to use the counter on this now—how many jobs potentially would be lost if we didn't ratify but the U.S. did?

[Blair Redlin]

I think that scenario is unlikely because it's less likely the U.S. will ratify than anyone else in the current configuration. We still will be members of the North American Free Trade Agreement. We will still have all the access that we have now under NAFTA to the United States.

With regard to the other countries in the TPP zone, I've not seen any study or indication of what the problem is in terms of our trade with Japan, for example, or Australia. Are there giant impediments to our trade with Japan right now? Those have not been brought forward. The type of argument tends to be, we need to be in the club or we'll be outside the club, and we need to trade because we're a trading nation. Well, that's a given, but I don't think the problem has been clearly identified for us. I don't see huge trade barriers to many of these Pacific Rim countries. We in British Columbia have extensive trade as has been identified with the Asia-Pacific region, and it's very beneficial to us. I just go back to my point. I think 97% of our exports to the TPP zone are already duty free. I think this is mostly an investor protection agreement, and that's really mostly what it's about.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you for that response. Considering what you said, I'd like to pose that question now to the other presenters. Are there impediments to trading currently with Japan, and what would they be?