International Trade Committee on April 18th, 2016

[Eric Waltz]

Well, again from our side it would be that.... Right now, if you look at the exports, you'll see that a very small percentage of lumber exports goes to Japan or to the Asian countries. A lot of that has to do with the tariffs on them. That's a global market for those individuals. Asia can buy it from anywhere. They can buy it from Russia. They can buy it from the U.S. They can buy from wherever they want.

If there are significant tariffs on it, they won't buy it from Canada. When you see those go down, you see that trade go up. For me.... Again, I'm not an investor. I'm an employer. For me, what we're looking to do is make sure that we still have good employment for our workers.

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

Thank you.

Mr. Kemp.

[Scott Kemp]

Simply, you can't practise if you're not licensed. At this point, there's no agreement between Canada and Japan. If an architect is wishing to do a building in Japan, it's just not possible.

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

I've heard that right now that market is closed, yes.

This is for Mr. Kemp and Mr. Vernon.

Are there skill sets that currently your firms require for which you cannot find those positions filled in Canada?

[Scott Kemp]

Yes and no. We in the architectural profession are in a profession of ideas. Our members have great ideas, but diversity and communication and sharing of ideas is critical, I believe, to our profession.

If you work in isolation, your solutions are reflective of that. If we can work in an open and collegial and professional manner such that we share those ideas, it's to the benefit of everybody—not just the profession, but the public.

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

Hopefully what won't be my last goes to Mr. Duggan and Mr. Waltz.

When we're looking at the logistics in terms of the ports and other areas for shipping, how prepared are our ports, trucking industries, and cold storage in terms of transportation for an increase in trade both on the import and export? What do we do if TPP, for example, is ratified and CETA is ratified? How do we best prepare logistically for the transfer of goods?

[Terry Duggan]

We're seeing significant investment by our own member companies in the waterfront industry. There's terminal expansion going on right now in the inner harbour, as well as at Delta Port and also at Prince Rupert. These are private funds being invested in that infrastructure.

Clearly, we're looking for strong partnerships with the railways, in that the rail to the water is an important part of the puzzle, as well as with the trucking industry.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to move on to the Conservative Party.

Mr. Van Kesteren, you're up for five minutes. Go ahead, sir.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you for coming and for a most interesting discussion. I love history, and when I visit a place, oftentimes.... I was up in Smithers, and I was looking at some old pictures. I don't know if anybody has been in Smithers lately, but it is probably much the same as many other towns in British Columbia and Canada in general.

It is fascinating to see what has happened in the last 100 years. It is fascinating to see those pictures of men and women working with horses and cutting trees with handsaws, and to see what has transpired. When I fly over British Columbia, I see all these roads. Those were logging roads at one point. To see the infrastructure that we have as a nation is absolutely phenomenal.

When I go to Vancouver and see the port, and what we are capable of doing.... It is incredible how we have moved forward in the last 100 years. I think much of the western world has. We are not unique, but I am seeing that happening in the underdeveloped countries, too. There seems to be a moving forward. We have talked to some degree about poverty in other nations, but I have been witness to places like China and have seen where they have come in the last 30 or 40 years. It is nothing short of staggering.

Two things come to mind that propel this. Number one is energy. They used to pull these logs with horses, and now we have equipment to do that. Number two is markets, because once you have run out of markets, you have certainly run out of places to bring those goods.

In the course of the discussion, and even this morning, we have heard the pros and cons. On the previous panel there was somebody who discussed with us what the split was across our nation. It is somewhat even. I think there is a little advantage on the pro side. It is for that reason we have come as a committee and have discussed these things with professionals, with people who have a stake.

Knowing that this is the way our economy works.... Everybody has benefited. I think we have all come here in cars; nobody has ridden a horse here. We flew here in a plane. We have reaped the benefits of all these things that our society has managed to produce.

I guess I am going to direct this question to Mr. Redlin. If we find, across the course.... That nice lady in the back was asking what licence we have to make this. We are doing these consultations to ask Canadians. If we find that the majority of Canadians think this is a good idea, will you stand behind that majority of Canadians? I guess the same is true if we hear the opposite.

[Blair Redlin]

Well, majorities change, as we learned just last fall. I think public opinion changes based on argument and debate, so we'll continue to advocate our point of view.

With regard to your point about changing technology and contributions to the economy, I think it might be worthwhile to note that with the new economy and the new technology, technology leaders like former BlackBerry CEO Jim Balsillie and Highline CEO Marcus Daniels, here in B.C., have cautioned about what the TPP will mean in terms of intellectual property provisions and what it will mean for Canadian innovators. Jim Balsillie has been particularly pointed in predicting that the TPP will benefit U.S. technology companies at the expense of Canadian technology companies and our national productivity level.

I guess my concern, as I stated, is that I think we'd become more and more a nation of hewers of wood and drawers of water, people who export raw resources. When our technology leaders are warning us that this deal may be threatening to our new technology sectors, I think that's what we should be thinking about for the 21st century. We should be heeding those calls.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Is that where most of our exports are going to come from, or are there opportunities for more areas?

I just lay that question on Mr. Kemp and Mr. Vernon.

[Mark Vernon]

In the architectural services sector, I don't think I can reveal anything that has not already been said here. The TPP will facilitate export of our services and will be helpful. Should Canada not join and other countries were to join, we would be at a disadvantage.

[The Chair, Liberal, Mark Eyking]

Thank you very much. That ends the Conservatives' five minutes.

We're going to move over to the Liberals and Mr. Dhaliwal for five minutes.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

First of all to Mr. Redlin, thank you for your public service as a deputy minister. I'd also like to congratulate you on your advocacy for the Canadian Union of Public Employees.

How does the TPP result in a weakening of the Canadian government's regulatory power? If we ratify this agreement, what should the government do to strengthen those regulatory powers?

[Blair Redlin]

I think first of all the investor-state provisions that we've talked about cause a policy chill for government. Governments, at both the federal and provincial levels, that are worried their public policy measures may result in a lawsuit from a foreign investor will start to change their policies and not proceed with policies they would like to proceed with. A famous example was the Government of Ontario in the 1990s that had campaigned to implement public auto insurance—as a form we have in B.C. and many provinces in the country—and they were told if they did that, they would be facing a NAFTA lawsuit from foreign insurance investors. They decided not to implement public auto insurance.

I think this policy chill is significant. I think it's also that the entire paradigm of these agreements is deregulatory, supply management being one example, and that the entire emphasis is to reduce the regulatory choices of government. Those are not choices being made by the elected government. Those are choices imposed on them by the strictures of this international agreement. You mentioned the public service. I think a concern for those concerned about public services is that these arrangements make it more difficult for governments that wish to end the privatization arrangement to do so. There's nothing in these arrangements that compel a government to privatize a service. Once it has contracted out or privatized, or entered into a public-private partnership for a service, there's a very real—and there's a number of studies that indicate this—risk that foreign investors will sue if the government decides to bring it back into the public sector to re-municipalize or.... I think that's a concern for the public sector and the public service as well.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Mr. Kemp, you talked about architects. I'm a professional engineer and a B.C. land surveyor. How would it positively and negatively impact other creative people in other professions if we ratify the TPP?

[Scott Kemp]

As architects and engineers, we are the guides. We are the ones that set the drawings and set the standards that instruct how things get built. We influence a massive part of the economy. Although we're a small number, we believe our impact is huge. I believe our standards are second to none both within the regulatory world, but also with our built environment standards, public safety...the earthquake that was in Ecuador and Japan recently. We have some of the best engineers and architects in the world. Those skill sets would be hugely beneficial to other parts of the world.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

To Mr. Duggan, I would like to congratulate you for taking steps to hire more women. I've always had discussions with Andy Smith. He was heading to hire more women to bring diversity to the waterfront.

In fact, you say that the TPP will create more jobs. How would you make sure you are able to hire more women in order to bring equality to the waterfront?

[Terry Duggan]

We've negotiated specific recruitment agreements with each local of the International Longshore and Warehouse Union. They're required, under those agreements, to meet the employment equity targets on first nations, on gender, and on disability. There's a very proactive program to ensure that candidates coming into the industry are representative of the society we live in.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

That ties up the time. I've been a little strict on everybody's time, but it's working well for us. It's going to give every member a chance to ask a question.

We're going to go with the final lap, five minutes, to the Conservatives.

Mr. Ritz, it's your turn.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, gentlemen. It's been an interesting discussion. There's a tremendous amount of information out there, some of it on point, some of it not.

I am puzzled by one thing. There seems to be this ideology that somehow we're going to become more hewers of wood and drawers of water than we have been over the past decades. I actually, categorically, don't agree with that simply because of the statistics; we're actually now selling what our customers want as opposed to what we have is more the vogue. I'm speaking from an agricultural perspective. When we do our beef cuts, our pork, even our grains, and so on, there's a lot more work goes into them before they go offshore than there ever was before.

I'm wondering if you gentlemen in the container business and in port are noticing that. I know our container traffic is way up compared with what it was, and that says to me we're sending out a more value-added product than just bulk. What would your container traffic be increasing by?

[Eric Waltz]

We've seen an increase of about 7.1%. That outpaces the GDP, which is good. That means we're outpacing what one would normally think the market would be. I speak of the container trade. When we talk about the container trade, it is normally not what could be considered raw material, You don't put the logs in there. You put the cut lumber or some other type of medium in there.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Exactly. That's the point that I'm trying to make. We are adding value. Certainly, with Canada it's a problem of enough jobs and enough people to do the actual work, but we are seeing expansion of that throughout my part of the world in western Canada. We're seeing it on the east coast too with our fisheries. We're sending out a lot more finished products than we ever did before, and I think that's a good thing because it creates the jobs here that help drive the economy as well.

The other point I would make is that, like any good stock portfolio or any business portfolio, you look for diversity. You make sure that you don't have just one market. When we talk about market share and you have 10% market share, it's not all to one buyer. You try to have as many buyers as you can so that when one is busy and the other one's down, you're not just stuck with the guy who's down.

How important is diversity in our trade portfolio from what you see?

[Eric Waltz]

At least from our standpoint, as I said, the Asian countries are a small percentage of what we're seeing for exports. The largest portion goes to the U.S. If it's going to the U.S., you skip the port industry. You just drive it over the border or some such thing.

When you go to the Asia-Pacific market, you create all those jobs that come with the port industry as well, and those are the markets that we're relatively under-represented in.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes. We're noticing that, again from the agricultural perspective, with regard to all the raw materials we have on the prairies. The Americans are the biggest buyer of raw material, because they want to take it down, make it their own, process it, and so on. But we're also seeing a lot of that change in being rerouted to the Pacific Rim countries. Even though the Chinese economy is growing at only 7% or 8%, it's still growing. Whereas it was at 15% and so on, it's still growing. They're still buying our potash, and they're still buying our lumber, and they're still buying our grains and meat products. I think it's very important that we start to address that we have to look outside of the North American portfolio and diversify accordingly to be prepared for these.

On the architectural front, I had the ability to tour the area in Japan that was hit by the tsunami a few years ago. There was total devastation. It was just like walking on the moon. But there was one bright spot. There was a timber-framed Canadian home that was architecturally designed and Canadian-engineered and that stood in the face of the tsunami. What I found amazing was that most of the damage—you would know this with regard to the moment of stress and all those types of things—wasn't necessarily done on the wave coming in. It was done on the withdrawal, on the wave going back out again. That created suction. But that Canadian house was still standing there. It was amazing to see.

So when you talk about the skill set we have in Canada, the ability to design things that are earthquake-proof or tsunami-resistant—nothing is “proof”—certainly there is a tremendous opportunity for our architects and our engineers, and building right back on through the lumber trade, to develop that timber-frame construction. Great job, guys. Keep it up.