Evidence of meeting #107 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I don't know, Dan, whether you have anything to add to that.
President and Chief Executive Officer, Canadian Vintners Association
I don't have a significant amount to add. Just from a worker perspective, we use the foreign worker program because, as Dean knows, the grape growers need these seasoned, experienced workers from abroad. We bring them in not only year after year but generation by generation, workers coming from the same family who come for 20 to 30 years. They are experienced, they understand viticulture, and they are operating multi-million dollar pieces of equipment. We train them; we house them. It's a fantastic and required service for the viticultural industry.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you.
Mr. Williams, it's great to hear your success story. I like to hear these stories. Outside of Mercosur, though, where do you see growth for your company? Mercosur may or may not happen, of course, but you must have some plans for growth that contemplate free trade agreements and also some that don't. Where do you see geographically the most growth potential for your company?
Chief Executive Officer, Redline Communications
Right now we're seeing most of the activity in the Middle East and North Africa. One thing we do as a company is connect the disconnected. Many of these emerging economies that don't have connectivity for their businesses and citizens are looking for technologies such as ours to help them. Much of the business we see coming our way is in those underdeveloped areas. As I say, I think last year we did about a third of our revenue in the Middle East and nearly a third in South America and Mexico, so they are fairly large markets for us.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
That's good to hear.
Mr. Paszkowski, your association represents big and little, I take it.
President and Chief Executive Officer, Canadian Vintners Association
Yes, we represent large, medium, and small.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
There must be some inherent conflicts when you're trying to represent that diverse group of companies. Is there a different attitude when it comes to free trade and Mercosur within your association?
President and Chief Executive Officer, Canadian Vintners Association
I think everybody is generally on the same page when it comes to trade, for those who are interested in trade. It represents a very small percentage of the wineries in Canada. There are different reasons for it. The smaller wineries want access to trade to get exposure to their products in different markets and to get wine writers talking about their products in different markets. In the Canadian wine industry we like to think that a high tide floats all ships, if that's the way you say it. We don't always get along, but we are unique in the way that we believe our craft industry is special and that if you produce fantastic wine, it's going to help all of us.
Liberal
Liberal
The Chair Liberal Mark Eyking
That wraps up the time and the dialogue with the MPs in our first session of the day.
Gentlemen, thank you very much for coming and for good presentations and good dialogue. We will be travelling to these countries, probably in the fall, and will probably have a report at the end of the year. You're welcome to have a copy of it. Thank you for coming.
We're going to suspend for a few minutes to get the next witnesses in place.
Liberal
The Chair Liberal Mark Eyking
Welcome back, MPs. We're going to continue with our study on potential trade with the Mercosur countries. This is the second half of our morning and we hope to have another 45 minutes here.
We have with us through video conference a group from my home province of Nova Scotia. From Halifax, we have LED Roadway Lighting Ltd.
We have the Alliance of Canadian Cinema, Television and Radio Artists from Toronto.
Also with us today we have the International Institute for Sustainable Development. Mr. Vaughan. Welcome.
Folks, some of you have been before committees. We like to keep the presentations to five minutes or under so we can have good dialogue with MPs.
We will go right to the video conferences and start out on the east coast first. We'll go with LED Roadway Lighting.
Folks, you have the floor. Go ahead.
Jeff Libis Vice-President of Sales, International, LED Roadway Lighting Ltd.
Thank you.
Honourable Mark Eyking, chair of the committee on international trade, and honourable members of the committee on international trade, first of all I would like to thank this honourable committee for giving us the opportunity to contribute to the Government of Canada's initiative to evaluate a potential free trade agreement with the bloc of countries grouped in Mercosur.
My name is Jeff Libis. My responsibilities as global vice-president of sales at LED Roadway Lighting include overseeing the company's commercial strategy, sales staff, and worldwide team of representatives and distributors in more than 60 countries globally.
I'm accompanied today by Alberto Capodicasa, who is LRL's manager for business development in the Latin American region, including the Mercosur countries. Both of us have worked extensively in the Latin American market and in the Mercosur arena.
LED Roadway Lighting is a Canadian-owned and -operated clean technology company that specializes in the design and manufacture of energy-efficient LED street lights, smart lighting controls, and smart city sensors. LED Roadway Lighting's primary goal is to create positive environmental change through the development of future-proof products and sustainable, meaningful technology solutions.
Our LED luminaires are designed to provide ongoing maintenance savings, long-term energy savings, and a rapid return on investment for our customers. Our environmentally friendly luminaires improve safety in lighting quality while reducing energy consumption by 60%, decreasing light pollution, and limiting carbon emissions.
LED Roadway Lighting's smart lighting controls and smart sensors for cities offer a leading technology platform to enable applications through the Internet of things. Applications such as radar-based motion-sensing installed on a street light can increase energy savings and overall asset value, while generating valuable data and functionality for the smart city and the smart utility of tomorrow.
Founded in 2007, our head office is located in Halifax, Nova Scotia, with our primary manufacturing facility located in Amherst, Nova Scotia. Our intelligent street-lighting products have been installed in more than 60 countries, including in projects throughout the Latin American market. An example of our involvement in the Mercosur region is the replacement of more than 12,000 street lights in Punta del Este, Uruguay.
It is important to mention that part of our success in the international market has been possible thanks to the support received from the Canadian government through its various agencies and institutions promoting Canadian export activity around the world. A good reference of this support is the trade commissioner service. The trade missions and local contacts made through the trade commissioner service have allowed LED Roadway Lighting to open new international markets with positive results.
Additionally, Export Development Canada, the Canadian Commercial Corporation, and the Atlantic Canada Opportunities Agency have been valuable partners while LED Roadway Lighting expands its business activities into export markets.
Historically Canada has been a major contributor to the energy sector in the Latin American region. The Brazilian Traction, Light and Power Company Limited, also known as “the Light” today, was founded in Toronto in 1904 and quickly became responsible for generating and distributing electricity in Brazil and other Latin American regions as well as for providing street lighting to the region. This Canadian-based investment in the Latin American market continues to highlight Canada as a leading provider of technology in the electrical industry in the region more than 100 years after the original investment.
Several facts about Mercosur highlight the importance that this market represents for Canadian exporters like us. Brazil, Argentina, Paraguay, Uruguay, Venezuela, and Bolivia represent the opportunity to commercialize goods and services to a market of more than 300 million people, more than eight times Canada's population.
For LED Roadway Lighting, Mercosur represents a market of 30 million street lights and a similar quantity of smart street-lighting controllers, offering LRL approximately a $9-billion market. The business opportunity is accentuated by the fact that less than 3% of the current LED street-lighting inventory has been converted to LED technology and that less than 1% of this total inventory has been equipped so far with smart control devices and/or smart city sensors.
Moreover, federal governments in these countries have been accelerating the conversions to LED technology to fulfill international agreements aiming to lower carbon emissions.
Additionally, recent technology developments with the Internet of things and connected communities have exponentially increased the use of smart devices and sensors in street-lighting platforms, optimizing the use of energy and economic resources and improving the quality of life for citizens in Canada and abroad.
These business opportunities also present challenges. In the Mercosur market, import duties can reach values in excess of 100% of the total of our cost of goods, making commercial success for our products and other Canadian exports nearly impossible. Also, a lack of access to financing and financial products that meet local needs, credit risks, and the challenge of finding effective local partners are obstacles that hinder the export of Canadian goods and services into that market.
Signing a free trade agreement with Mercosur that benefits all parties will facilitate the entry of Canadian companies into this market. However, to increase the opportunities for success it is also important to accompany the signing of a free trade agreement with additional measures, such as increasing the availability of resources from such government institutions as Export Development Canada that offer greater understanding of local risks in their financial tools and offerings, developing financial products whereby contracts can be repaid by energy savings and other sources of cash flows, and creating more resources through the trade commissioner service to connect Canadian companies with qualified, relevant business partners in the Mercosur region.
A free trade agreement will bring several benefits for the Mercosur countries, including access to Canadian-developed technology solutions that promote energy savings; a reduction in greenhouse gas emissions; lower operating costs for cities and utilities; access to state-of-the-art technology at a lower cost; potential investments; technology and knowledge transfer; and improvement in the quality of life of citizens thanks to the implementation of different Internet of things devices, using street lights as a platform for smart city applications.
LED Roadway Lighting sees significant potential for export development in Latin America, specifically in the area of clean technology, energy efficiency, and smart city applications. We believe the opportunity ahead will hinge on better access and better alignment to the market for open trade practices and ongoing deployment of trade resources and programs from the Government of Canada to facilitate Canadian business transactions in the region.
Thank you for offering this venue to provide feedback to the Canadian government regarding a possible free trade agreement with Mercosur. LED Roadway Lighting appreciates trade and development support offered by the Government of Canada, and hopes that our comments and feedback today offer a useful resource to support future commercial connections between Canada and Mercosur.
LED Roadway Lighting remains at your disposal. Thank you.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
We're going to go to the Alliance of Canadian Cinema, Television and Radio Artists. Many of us know it as ACTRA. They're coming straight from Toronto.
Elliott Anderson Director, Public Policy and Communications, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Thank you, Chair, vice-chairs, and members of the committee. My name is Elliott Anderson, director of public policy and communications for ACTRA, representing 25,000 performers in English-language media, including particularly for this presentation film and television.
With me is Garry Neil, who is our policy adviser and a global expert on how trade agreements can affect cultural policy-making.
I'll give some background, and Mr. Neil will talk about ACTRA's proposal for a new, innovative, and progressive approach to culture in the proposed free trade agreement with Mercosur. This is an approach that's based on our mutual support for the UNESCO Convention for the Protection and Promotion of the Diversity of Cultural Expressions.
I want to start by noting that for more than 30 years ACTRA has been at the forefront of campaigns to exempt cultural industries from Canada's trade and investment agreements, and for 30 years our governments have listened and our trade negotiators have succeeded in exempting culture. However, these exemptions are far from perfect, and Canada's most recent agreement, the CPTPP, contains provisions that we believe will restrict our cultural policy-making space.
The original trans-Pacific partnership agreement would have been a disaster for Canadian culture. Fortunately, the current government took some steps to address it via side letters with participating nations and changes to the preamble. These are positive steps, but they do not completely solve the fundamental problems of the TPP, which we have outlined in our written submission.
ACTRA believes it is time to take a new approach to culture and trade agreements. It would be based not on a negative exemption approach but on a positive commitment to promote diversity of cultural expressions, cultural collaboration, and exchanges.
I'll ask Garry to explain the proposal.
Garry Neil Special Advisor, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Thanks, Elliott. I'm delighted to be here today. Thank you very much.
Canada and Canadians were leaders in the global campaign that led to the adoption in 2005 of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions. While the convention did not achieve the hoped-for goal of carving culture out of trade agreements, it does provide a basis for parties to take a new and collaborative approach to cultural relations.
Canada was the first country to ratify the convention, and every member of Mercosur has ratified it. We believe that Canada can, under the convention, maintain its flexibility to implement cultural policies while building a more robust cultural relationship between Canada and Mercosur, if we use it as the foundation for that relationship.
Let me just review quickly the key elements to this proposal.
If we use the convention as the legal basis for our relationship with the Mercosur countries on cultural issues, the convention would confirm that Canada, along with each member of the Mercosur group, would have the absolute right to support its own artists and cultural producers. One of the key objectives of the convention is:
to reaffirm the sovereign rights of States to maintain, adopt and implement policies and measures that they deem appropriate for the protection and promotion of the diversity of cultural expressions....
By confirming support for the convention, Canada and the Mercosur members would acknowledge that they each have the right to support their own artists and cultural producers in every sector and every medium and however the works might be distributed to consumers. This is a positive understanding of the broad scope of cultural policy-making and is not limited to current media. It would thus provide far more protection for Canada than even the most comprehensive exemption that we have negotiated in any of our trade agreements.
The convention does more than this and creates new opportunities. It calls on parties to develop more bilateral cultural co-operation agreements in every medium; it seeks to encourage international co-operation to promote cultural development; and it would be based on mutual respect, with the goal of providing greater access to diverse cultural expressions in each of the parties.
With this in mind, ACTRA recommends that the government convene a high-level meeting of leaders of the Canadian cultural sector to consider how to expand our bilateral cultural relationship with the countries of Mercosur. Transforming our mutual agreement around the convention into a legally binding text would provide a new basis for a cultural relationship between Canada and Mercosur while at the same time preserving our right to develop policies and measures that create new opportunities for Canadian producers and artists to export and tour.
Elliott.
Director, Public Policy and Communications, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Thank you, Garry.
Thanks very much to the committee for this opportunity. We look forward to your questions and the discussion.
Liberal
The Chair Liberal Mark Eyking
Thank you.
We're going to move over to the International Institute for Sustainable Development. We have the president and chief executive officer with us here.
Mr. Vaughan, you have the floor.
Scott Vaughan President and Chief Executive Officer, International Institute for Sustainable Development
Mr. Chair and honourable members, thank you very much for inviting me.
I need not tell this committee that your work takes place at a moment of exceptional trade policy uncertainty and instability, and thus we welcome work towards a possible Canada-Mercosur free trade agreement.
As we've just heard, Mercosur comprises over 300 million people. Among the strategic objectives of the current Mercosur agreement is not only the enhancement of trade and economic co-operation, but also the support of democratic governance and rule of law. It's important for Canada to diversify our trade relations and deepen our engagement with hemispheric partners.
We also welcome Canada's support of a progressive trade policy. I want to touch briefly on four points related to that progressive trade policy.
The first is environmental goods and services. Currently, both TPP and CETA agreements commit to identify and deepen the liberalization of environmental goods and services, including through both zero tariffs and the removal of non-tariff barriers. In recent years, as we've just heard from our colleagues from Halifax, green markets broadly have expanded and the pace of that expansion is accelerating since the 2015 Paris climate agreement.
In 2017, estimates showed that global investments in renewable energy alone were $333 billion, surpassing once again global investments in conventional energy sources. The global environmental goods and services market is estimated to be around $860 billion this year, with forecasts showing it could reach $1.9 trillion by 2020. Given this market dynamic, it's important that a Canada-Mercosur environmental chapter carve out an ambitious grouping of environmental goods and services.
The second point is standards. A Canada-Mercosur chapter on sustainable development should also support sustainability standards and amplify the example of CETA's chapter on sustainable development and its inclusion of eco-labelling and corporate social responsibility standards. A Canada-Mercosur agreement should focus not only on clean energy or clean technology standards, but also on a broader range of goods that are important to providing livelihoods to working families, including standards related to sustainable forestry, sustainable fisheries, and sustainable agriculture, as well as a range of other commodities, including sustainable mining operations and their related products and global value chains.
IISD colleagues review voluntary standards on an ongoing basis through the state of sustainability standards report. We're also working with the World Economic Forum and others to examine how voluntary standards are aligning with the sustainable development goals and how trade policy can support these efforts.
Third, Mr. Chair, is gender. The December 2017 Buenos Aires Joint Declaration on Trade and Women's Economic Empowerment, supported by 118 WTO member countries, is a positive step in supporting more women in trade. The challenge is implementation. The International Trade Centre continues to do good work in the area of e-commerce and women, and this could be one specific area in which a new agreement could make real headway.
Finally, honourable members, I want to touch upon investment. No doubt the committee is aware of the regional agreement on investment co-operation and facilitation within Mercosur. Building on Brazil's model development agreement of 2014, the regional agreement offers a new way to spur collaboration on investment and encourage investment flows.
Instead of focusing on investment protection, its primary goal is to facilitate investment flows and co-operation. It sets up a system of dispute avoidance rather than the adversarial dispute settlement through ISDS. As a last resort, the current model provides a state-to-state dispute settlement model rather than a state-to-company one. This approach could also be followed in a potential Canada-Mercosur agreement. In addition, Mr. Chair, Canada could also propose to build upon the CSR provisions included in the Mercosur investment agreement, as well as a sustainable development chapter, to integrate more fully and comprehensively investor responsibility looking ahead.
Finally, honourable colleagues, the Canada-Mercosur negotiations offer an opportunity to update and replace the outdated investment treaties in force between Canada and two Mercosur countries—Argentina and Uruguay.
Mr. Chair, that concludes my comments. Thank you very much.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir, and thank you, witnesses, for your presentations. We're going right to the dialogue with MPs now, and we're going to start off with the Conservatives.
Mr. Hoback, you have the floor for five minutes.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair, and thanks to all of you for being here, both by video conference and in person.
I'm going to start with LED Roadway Lighting.
I had a chance to travel to Brazil with your CEO, Charles Cartmill, back in 2013, I think it was, with Prime Minister Harper. It was such fun to travel with him because he was so excited about his product. I swear that he was going down the street and counting all the street lights that he could sell and replace as he went through the town of Sao Paolo. It was very interesting to hear him talk about his product. It was contagious, how he talked about it, but there was also the fact that he had seen the opportunity in bringing a LED system lighting to Brazil in terms of what it could do for their power rates and power consumption in places such as São Paulo.
You've talked about 5G and other things being attached to lighting systems. I'm thinking about the 5G network that's going to be coming to fruition somewhere down the road. My question for you when it comes to trade is not so much about the tariffs going into Mercosur countries, but about the non-tariff stuff, the regulatory stuff, such as the type of wire you use, the size of steel you put in your lighting, and stuff like that. Are you experiencing any troubles with that? In going into those markets, how are you finding the regulatory side of things?
Vice-President of Sales, International, LED Roadway Lighting Ltd.
As our local content expert, Alberto is probably the most qualified to answer that question.
Alberto Capodicasa Market Manager, LED Roadway Lighting Ltd.
About the limitations of...?
Vice-President of Sales, International, LED Roadway Lighting Ltd.
Yes, the limitations of the product as it relates to certifications and the content possibilities of the marketplace.
Market Manager, LED Roadway Lighting Ltd.
On the technical side right now, several countries, especially Brazil, as you say, are working to have a new certification for street lights and for control systems. Technically, our product complies with the requirements they are asking for, so we haven't seen any big limitations there. There are the local regulations that they are still working on, but so far, generally, on the technical side, we don't see a big limitation for our products in particular.
Conservative
Randy Hoback Conservative Prince Albert, SK
In Brazil you meet that requirement. Does that mean it automatically translates to Argentina, Uruguay, and the other Mercosur countries? Do you have to do it over again? Or if it's done in Brazil, is it done for all?