International Trade Committee on April 18th, 2016

[Chris Brand]

If the TPP were limited to reducing tariffs and trade barriers, I would support it. Unfortunately, it appears to have been co-opted as a convenient mechanism for policy-laundering a wide range of other regulatory changes.

Patents and copyrights are government-granted monopolies introduced to address problems with the free market. We need to ensure that these monopolies are absolutely necessary and that they are as narrow in scope and short in duration as possible while still overcoming the identified market failure. I believe that the TPP agreement in these areas fails this test.

I don't believe that criminal penalties are appropriate for copyright violations, as mandated by article 18.68.

With trade secrets, any increase in penalties for misappropriation, as in article 18.69, decreases the likelihood that a whistle-blower will reveal corporate wrongdoing, and the good of society is likely better served by encouraging whistle-blowing.

In 2009 the Canadian government considered extending the copyright term as in article 18.63 and rightly chose not to. Term extension was also not part of the Canada-EU trade agreement. I'm unaware of any evidence that increased copyright terms result in more, better, or cheaper works. There is considerable evidence, though, that increasing the copyright term results in a decrease in works available to the public and an increase in the prices of those works.

When our Copyright Act was amended to make the circumvention of technological protection measures a violation, the government was careful to include safeguards, but article 18.68.4(a) of the TPP seems to disallow.

Regarding patents, articles 18.46 and 18.48 would increase patent duration, significantly increasing the cost of drugs. Article 18.52 would lock in the eight-year term of exclusivity for biologics, when the need for any protection at all is still unclear and the optimum term has certainly not been identified.

Over the last two decades, Canada has granted ever-increasing monopoly rights for pharmaceutical companies, and their R and D expenditure in Canada has dropped from 11.7% of total sales in 1995 to just 4.4% today. Again, I'm unaware of any evidence that increasing patent duration has a positive effect for society as a whole.

It is, of course, vital to remember that Canada is a net importer of both copyrighted works and patented inventions. Any increases to the scope or duration of these monopoly rights will always be to Canada's disadvantage.

One of the most contentious aspects of the TPP is the investor-state dispute mechanism, ISDS. NAFTA was the first trade deal between developed countries to include an ISDS mechanism. Since it came into force in 1994, we've spent millions defending cases, we've paid out millions in settlements, we've repealed legislation, and we still face billions in claims. Two-thirds of claims against Canada involve changes of environmental protection or resource management.

While it's clear that nothing in the TPP's ISDS mechanism actually prevents Parliament from adopting legislation, it's equally clear that any government would think twice before risking subjecting the country to a multi-billion dollar claim. The presence of ISDS mechanisms and the increasing willingness of foreign corporations to use or threaten to use them act as a chilling effect on the government, making them err on the side of protecting foreign corporations rather than Canadians, particularly as the costs are significant even if the case is won.

With the Eli Lilly case, we have a foreign company effectively trying to use an ISDS challenge to overrule the Supreme Court of Canada, demonstrating that foreign corporations will continue to push the bounds of what can be fought using ISDS mechanisms. It would be extremely unfortunate if we were to ratify the TPP only to see the resulting increase in GDP overshadowed by increased health care costs and ISDS settlement payments.

Finally, it's worth noting that the agreement doesn't come into force until both the U.S. and Japan ratify it. As most of the costs would materialize as soon as enabling legislation is enacted, the benefits would only start when the agreement comes into force. It's clear that it makes no sense to enact any of the TPP until both the U.S. and Japan have done so.

[The Chair, Liberal, Mark Eyking]

Thank you very much, Mr. Brand. You did it on time and were very precise. Thank you very much.

Now we're going to move to OpenMedia with Ms. Sali.

[Meghan Sali, Digital Rights Specialist, OpenMedia]

Thank you for having me here today to speak as a witness to the Standing Committee on International Trade.

My name is Meghan Sali. I'm a digital rights specialist with OpenMedia. Founded in 2008, OpenMedia is a community-based civic engagement organization working to safeguard the open Internet and bringing citizens' and innovators' voices into Internet policy-making processes.

My hope is that through these public hearings the committee will finally begin to understand the depth of the Canadian public's concern about the Trans-Pacific Partnership and the scope of citizens' disillusionment. We have a right to participate in the decisions that affect our daily lives and yet have been entirely excluded from these negotiations.

Over the past four years, OpenMedia has engaged more than 130,000 Canadians, who have shared their concerns with us on the intellectual property chapter and its serious implications for digital commerce, free expression online, and access to knowledge.

I'd like to note that our work to educate Canadians about the TPP was no easy task, as the details of this agreement were kept secret until the full text was published less than six months ago. Our only means of information was reading the tea leaves of leaked documents and mining information from inside sources. From when the TPP was published, on November 5, 2015, until it was signed, on February 5, 2016, Canadian experts and the public had less than 90 days to assess the impact of over 7,300 pages of this agreement.

I had intended to bring the whole 7,300 pages with me today for reference, and it would have cost me over $1,100 in printing alone. I'll be the first to admit that I've been unable to read the agreement in its entirety, and I suspect that none of the members of this committee has done so either. Today I'd like to speak to just two issues, in relation to the IP chapter, which I do have here.

The first is what the TPP means for Canada's Internet. If ratified, the TPP will bring 20-year copyright term extensions to Canada, which have been widely shown by numerous experts in multiple international studies to cost consumers money and will actually make it more difficult for the next generation of artists and creators to create new works.

The Canadian government speaks sweepingly about promoting and protecting Canadian art and cultural heritage, yet the TPP will ensure that less Canadian culture is shared here at home and with the world. Additionally, the TPP will cement restrictive rules around digital locks, rules implemented in advance of Canada's entry into the TPP negotiations and later shown to be a price of entry demanded by the U.S. government.

These draconian digital locks will eliminate individuals' autonomy over their legally purchased digital devices, making it illegal, with potential criminal penalties, to modify, repair, recycle, or otherwise tinker with the digital device or its contents. These rules will further disadvantage communities whose interests we already fail to consider: the deaf, the blind, and persons with disabilities, who are often locked out of the necessary means to access knowledge—and culture, even—when trade in these necessary circumvention technologies is criminalized.

Additionally, the flawed notice-and-take-down system in the U.S. will be extended to all TPP nations. While Canada has secured an exception for our superior notice-and-notice system, this came at the price that no other TPP country, current or future, will be allowed to follow Canada's lead and work to strike a copyright balance that respects users' rights to share and collaborate while ensuring that artists are fairly compensated for their work.

In fact, this regime will see Canada's Internet censored, along with all of our TPP partners. As more and more art and culture are held captive and copyright regimes treat the rights of corporations as paramount, more legitimate legal speech will be taken down from the Web and we will see our collective cultural exchanges weaken and shrink.

As many of you may be aware, in 2017 Canada will undergo a mandatory copyright review, and none of the problems I've mentioned will be easily fixed as we live with the regulatory chill that comes along with the looming threat of multi-million- or even billion-dollar lawsuits from the TPP's ISDS mechanism.

Now, briefly I'd like to speak to the negative impacts for our economy and for Canada's digital future. We sit here today a stone's throw away from Vancouver, home to one of the fastest-growing sectors of our economy, technology and innovation. The tech sector in Vancouver alone generates more than $23 billion in revenue and $15 billion in GDP, according to Vancouver's economic commission.

Canadian innovators from BlackBerry co-founder Jim Balsillie to the CEO of Canadian tech success Shopify have raised concerns about the IP regime that serves to entrench American dominance in the innovation sector and about an agreement negotiated by a government that made no effort to consult or engage with leaders in this industry.

In particular, the anti-competitive DRM provisions block experimentation and innovation and coupled with restrictive trade secrets provisions threaten entrepreneurship and lack the necessary safeguards to protect against the abuse of these rules.

These are only two of the myriad issues that Canadians have been raising with the committee over the past month through a cooperative campaign to educate and engage Canadians through consultation on the TPP. Our tool can be found at LetsTalkTPP.ca, and already over 15,000 messages have been sent to members of Parliament, the Standing Committee on International Trade, and the international trade ministry.

OpenMedia is just one of dozens of organizations in Canada sounding the alarm about an agreement that violates our sovereignty under the cloak of secrecy and tells us that we can have our say only now, after the deal is already done.

I am here to speak to you today about the intellectual property in the Trans-Pacific Partnership, but there are larger issues at play. Right now, the government is involved in a process that lacks basic, democratic legitimacy.

I am honoured to be one of only a handful of chosen witnesses from the 35 million Canadians who make up this country, but five minutes to speak to the egregious flaws in a 7,000-page agreement that took nearly 10 years to negotiate is not enough. It is not enough that Canadians are now being asked for forgiveness after being excluded from the process when we should have instead been asked for permission and our input in a manner befitting our democratic traditions.

In closing, OpenMedia and the Canadians we have consulted are eager to share more of Canada with the world through open trade policies that are developed through debate and participation by those impacted, but we are against trade agreements made in secret and closed off from the public, especially those that will negatively impact our freedom of expression and compromise our digital future.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to go to our last panellist for the day.

Mr. Green, you have the floor for five minutes.

[Tom L. Green, Ecological Economist, As an Individual]

Thank you.

That's going to be a tough act to follow, Meghan.

I'm Tom Green, an ecological economist, and I'm probably the first ecological economist that you've had here today or maybe during all if your hearings. I was doing a radio interview recently and the interviewer had a problem putting those two words together. That's precisely the problem. Most economists are trained without any understanding of the environmental sciences or the feedbacks between the economy and the environment and how a degraded environment eventually affects our economic prospects and human well-being.

I also feel a lot of pressure, since I'm one of a couple of individuals selected not because I represent someone, but just because I wanted to come and speak to you as an individual.

I also have a Ph.D. in ecological economics, so maybe I'm not just an ordinary middle-class Canadian. I'm associate faculty at Royal Roads University. I also prepared a written submission but didn't have time to get it to you to have it translated. You'll get that eventually.

Ecological economics arose out of a collaboration between economists and ecologists in response to the growing ecological crisis of the sixties and seventies and realizing that these two disciplines needed to speak to each other much more effectively. Our theoretical framework offers a broadened lens for looking at things such as trade policies that are usually omitted from conventional economic analysis. The problem as I see it now is that basically it's like having an accountant who just loves adding up all the asset side of things but is not so interested in looking at liabilities, and that's not going to be very useful for you in deciding whether you want to invest in a company or give them a bank loan or whatever.

Most analysis done of these trade agreements has paid too little attention to the environmental externalities of trade, such as trade's impacts on greenhouse gas emissions, for instance, and the extraction of resources. I was really impressed with Brenda Sayers' comments about all these companies talking about how this trade agreement will affect them but forgetting that it involves the lands, the indigenous lands, where these resources are being extracted, often without prior and informed consent.

We broaden the lens, and I think that's why I wanted to be here today to speak to you. We also tend to emphasize that just because GDP increases, it does not mean that human well-being is increasing. In fact, the reality is that since about the mid-seventies in rich countries in the world, GDP has been going up and human well-being has been flatlined. I think that's partly because we have the problem that most of the wealth is accruing to the one per cent, and also because we've seen the general implementation of a very neo-liberal approach to the economy, where the powers of corporations are ever stronger, and the ability of nations to regulate as they need to in order to secure human well-being, and to create resilience for communities and so on, is given ever less room.

Even when one looks at this agreement from the conventional economic lens, it's not that good. I think Krugman is right in pointing out that “the elite defense of globalization is basically dishonest”. It's overstated, and the downsides are often forgotten. We already have a world with a lot of free trade because we've had so many regional free trade agreements, and we've had the GATT round and all those kinds of things.

Tufts University did an estimate and said that Canada would lose 58,000 jobs between now and 2025, but for me, as an ecological economist, that's not the key concern. The key concern is that at this moment in history we are facing a critical climate crisis. This trade agreement should be drafted in a way that ensures we can take the measures necessary to deal with that, to reflect the Paris commitment, and to reflect this current government's ambitions regarding that.

Instead, the investor-state dispute settlement provisions that my colleagues have referred to reduce the leeway to do that. On the environment, the chapter 20 wording is completely unenforceable and not meaningful.

[The Chair, Liberal, Mark Eyking]

Excuse me. Could you please wrap up, sir?

[Tom L. Green]

Yes.

In other words, I would suggest that this committee recommend that this agreement not go ahead, and in my submission I have some recommendations for some things to fix it.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, witnesses. We're going to start our questioning by the MPs, who have five minutes each. We'll start with Mr. Hoback from the Conservative Party.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, witnesses.

It's very interesting, and I'm going to start off with you, Ms. Sali. You talked about not being able to be involved in the process. That really concerns me, because in January or February of 2014, the trade committee was in Vancouver and had hearings just like this. Anybody could have come and listened to those hearings.

[Voices]

No.

[Randy Hoback, Conservative, Prince Albert, SK]

We were there. It's on the record—on the Internet, actually.

I guess my question to you is this: what attempts did you make to get involved? Were you turned off or turned away and told, no, you can't participate? Were you willing to sign a non-disclosure agreement so that you could actually be part of the process, which a lot of organizations signed so they could actually see what went into the agreement and have input into what went into the agreement? Did you look at that, or were you involved in anything like that?

[Meghan Sali]

OpenMedia, over its four years of working on the TPP, has attended multiple Trans-Pacific Partnership negotiating rounds. I've been to two myself; my colleagues have been to some. We've attempted to set up meetings with all of the negotiating partners who are international organizations, so we've met with many of the different negotiators from lots of different countries. Most recently, I met with them in Washington in December 2015.

I think it's worth noting that 600 corporate lobbyists were allowed access to the full text and probably wrote many of the provisions that we now see in the Trans-Pacific Partnership. But inviting people to a public hearing, while it's fantastic that we're actually taking this step, doesn't necessarily involve their input into drafting the agreement. I think it's worth noting that even the Canadian negotiator wouldn't meet with OpenMedia, an organization founded in Canada, with hundreds of thousands of Canadians speaking out about this issue. They refused to meet with us. They refused to hold up their promise to not degrade Canada's copyright legislations when our executive director, Steve Anderson, met with her in Auckland in 2012.

So we have been taking every opportunity.... In fact, when Steve was in Auckland in 2012, what they called the stakeholder meeting was basically a group of kettled protesters standing outside of the hotel. I think the concept that folks haven't engaged properly or haven't looked for those channels isn't necessarily it.

To your last question, we wouldn't sign a non-disclosure agreement because we believe that Canadians have a right to know about what we're discussing and what kind of negotiations we're having. Although, I will mention that we were accidentally sent a non-disclosure agreement by one of the other negotiators, and we had a good look through it. That was interesting to us to see what kinds of restrictions were being placed on the public officials, even of other countries, to not tell their own citizens about what was going on.

[Voices]

Oh, oh!

[The Chair, Liberal, Mark Eyking]

I'll remind the audience to just take it cool a bit, because we're going to bite into a whole lot of time here. You want to probably hear a lot more that we're not going hear otherwise.

Mr. Hoback, you still have at least two minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Actually, Chair, I don't mind. I think this is one thing about Canada that's great. We can agree and disagree and we can cheer our positions. It makes our country great. I've been in a lot of other regions in the world where they can't do that, so if that cuts into our time, so be it. I just want to make sure that what we're hearing here today, what everybody's hearing today, is actually fair and balanced, and not a perception based off one side or the other.

That's why I'm concerned, Ms. Sali, when you say you weren't part of the consultation process, and then I find out you've been attending the different sessions. You've been able to be involved for the four years and to be part of the process for being there. You went to these meetings. You met in Washington. You were involved in every aspect of it.

You also have access to your local member of Parliament. You have access to a lot of other people to whom you could say, hey, I have some serious concerns.

Who would be your local member of Parliament here? Would it be Mr. Davies, or—

[Meghan Sali]

My local member of Parliament is Jenny Kwan, Vancouver East.

[Randy Hoback, Conservative, Prince Albert, SK]

I guess that's what I'm trying to say. There's always that venue: to go through your member of Parliament to have access to what's going on. There's always that—

[Voices]

Oh, oh!

[Randy Hoback, Conservative, Prince Albert, SK]

Well, there should be. There is in my riding, I'll tell you that. I listen to everybody. I don't care who you voted for. If you come into my office and you want help, you get help. So yes, that concerns me.

Mr. Brand, you talked about different parts of the agreement in great detail. This agreement's done. Basically, it's signed. It was signed in New Zealand by the minister. It was finished off in November, so whether you're a Conservative or a Liberal, you were part of seeing this deal come forward. It's not a—

[The Chair, Liberal, Mark Eyking]

I'm sorry. Your time is up. You're going to have to let your partner ask that question when he gets a shot at it.

Ms. Ludwig, you're up for five minutes. Go ahead.

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

Thank you for your presentations.

According to Global Affairs Canada, “The inclusion of environmental commitments in free trade agreements provides assurance that any increased economic activity as a result of” these agreements “will not occur at the expense of environmental protection”.

That's according to Global Affairs Canada. How and to what extent could increased trade between Canada and the TPP countries negatively affect the environment in Canada?

[Tom L. Green]

First of all, I appreciate your bringing their analysis of it, because I went to the website and read through their technical summary of the environmental chapter. I honestly thought they were referring to a different agreement, because if you actually read the text of chapter 20, you see that it's completely unenforceable and meaningless. It just doesn't make sense. Yet what's written here—I have it right here in front of me—is that it “[p]rovides ambitious environmental obligations” and so on. That's just not the case.

As an ecological economist, let me say that there's good trade and there's bad trade. You definitely need trade happening in the world. I'm not suggesting that you wouldn't want it. You want trade in solar panels going to places that are now burning coal, so that's great, but the TPP has very little about changing the amount of trade by changing tariffs and that kind of thing. It's about throwing in a whole bunch of other things that are deeply problematic, including the fact that you reduce the ability of different states to take action on climate change. That would be my assessment.

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

Okay. So on that one, what would you suggest, then, as provisions to be included in the environmental chapter of TPP in order to ensure enforcement of environmental laws in the TPP countries?

[Tom L. Green]

The first thing I would do is go over the investor-state dispute settlement chapter and make it crystal clear that you're not reducing the regulatory space of states to take action on climate change and other things. The other thing I would do is get a good environmental lawyer, of which there are many in this country, and have them redraft the text to make the text go from this nice language of motherhood and apple pie to actual stuff that has legal content. I'm sure that as people who draft the laws that we now are under, you understand the difference between “should” and “shall”, for instance.

I'm sorry that I can't give you a whole range of specific actions. That's not really my expertise in terms of legal drafting.

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

The Trade Justice Network has stated that the TPP could erode Canadian cultural protections such as foreign ownership restrictions in broadcasting and publishing.

That said, according to Global Affairs Canada, the TPP “[i]ncludes a broad reservation under Services and Investment for existing and future programs and policies with respect to cultural industries that aim to support, directly or indirectly, the creation, development or accessibility of Canadian artistic expression and content”.

How could the TPP lead to an erosion of Canadian cultural protections?