International Trade Committee on May 1st, 2018

[Alberto Capodicasa]

Each country has its local regulations. Generally, they're very similar between the countries. When you compare Argentina with Uruguay and Brazil, you see that they are all based on international standards. They are adapting those international standards to the local reality, but basically all of them are pretty similar.

[Randy Hoback, Conservative, Prince Albert, SK]

Have you been in a situation where a standard has suddenly changed and for no reason other than change? Have you faced that scenario? I've heard other companies talk about that exact scenario. They've had a product go down into that market, but all of a sudden there's a change in the regulations or standards and they can't ship it there. Have you experienced anything like that?

[Alberto Capodicasa]

We have had that experience in the past. In Latin America, it's very common to see changes depending on the government. I'm not going to say no, but it depends.... We have seen in the past that when they change governments, they sometimes change regulations. That has happened before.

[Jeff Libis]

Yes. I think there's a standard basic level of certification you need for your product to qualify it for sale within the marketplace, such as electrical certification and safety certifications. That stuff is fairly universal. Of course, when it comes to street lights, as you mentioned, as street lights become more complicated with regard to different types of communication protocols and to different applications within the context of the smart city, the smart grid, the specifications and their scope as they relate to that specific marketplace start to change.

Part of what we've been able to do—Chuck might have mentioned this to you when he was travelling—is that we've created what we call “future-proof” technology. It's part of our approach: to create a platform that can accommodate and change easily to meet the requirements or changing environments of a market. That has boded very well for us as a technology company, because it has allowed us to be quite competitive and easily reactive to some of the changes that I think you're alluding to. It gives us a flexible way into those markets in the Mercosur region.

[Alberto Capodicasa]

I would like to add that in those countries they are in a learning process. The advantage here for a Canadian company is that in many cases we are teaching them about the technology, because they don't have the deep knowledge about the technology. They are learning with us. That's an advantage for us.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to go over to the Liberals.

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

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

Thank you, Mr. Chair.

Welcome to the presenters.

I'll carry on with LED Roadway Lighting Ltd.

Congratulations on being the leaders in this particular field.

You mentioned that there are 300 million people and $9 billion in the market. Do you see this as positive—moving forward with this free trade agreement?

[Jeff Libis]

I'm sorry. Can you repeat that?

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

If we move forward with this free trade agreement, is it going to help your company?

[Jeff Libis]

It will definitely help. It will definitely help our company in the context of making the market more accessible. There is a huge opportunity for both sides of our company's product offering—for the LED street light side of it and on the smart city, smart grid side—mainly because the infrastructure in the Mercosur region is in need of replacement. Energy rates are fairly high. Maintenance costs are increasing. There's a real need to look at utilizing this technology in that marketplace to help mitigate their exposure to some of the bigger trends that are out there in the form of additional costs for energy, additional costs for labour, an antiquated infrastructure that needs to be updated and replaced, and access to global funding from a development bank perspective that's allowing them to enable the conversion of some of this technology today.

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

Besides Mercosur, do you see any other nation that we should have the free trade agreement with that will help companies like yourself?

[Jeff Libis]

One of the areas where we've found some very favourable response to Canadian technology is the Southeast Asian marketplace. Recently we've done some work in Malaysia, Vietnam, and Thailand, and we've found that the Canadian technology, specifically, is very well received by the stakeholder group that we're talking to. Our reputation as a country and an area where product is of good quality and good performance and is backed by good warrantees has really percolated out into those areas and is very well received. So, Southeast Asia would be an area that I think would be another region that we could be looking at as a Canadian company.

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

Recently we travelled to Malaysia, Singapore, and Thailand. Do you face any hurdles when you do business in Southeast Asia compared to Latin America or here in Canada?

[Jeff Libis]

Actually, the Southeast Asian market and the Latin American market are quite similar in some of the challenges that we encounter as an organization. Part of it is that, generally, they're culturally different in similar ways. Local expertise, local understanding of how business transactions are conducted and facilitated is an important resource for us as we've entered into those markets.

The requirement for good local partners to help us facilitate our business in that marketplace is also a paramount concern for us as an organization in both of those markets.

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

Thank you.

This question is for ACTRA.

Diversity of culture is key to Canada. You said that the government has protected cultural industries for the last 30 years. Besides CPTPP, you don't have any concern with this particular agreement moving forward?

[Garry Neil]

Historically, we have adequately protected our cultural policy-making space, but in the last five or six years, we have not. We have begun to move in a direction away from a general cultural exemption, and this, in my observation, is going to cause us serious concerns. The backslide began with the comprehensive and economic trade agreement between Canada and the European Union, where, instead of a general cultural exemption, we sought to exempt culture on a chapter-by-chapter basis. We have continued that model in the TPP, and it's a very weak model because a chapter-by-chapter exemption in the TPP is a unilateral exemption by Canada. It's not a mutually agreed exemption between the partner countries. It's a unilateral exemption by Canada. It's not underpinned by any strong provision in the preamble or by anything in the right to regulate section. We're very concerned about that.

The changes that were made to enable us to sign the CPTPP are simply not adequate to overcome those problems. The side letters are positive, and they do recognize that we have certain additional rights, but basically all they do is eliminate the restrictions we put on our own cultural exemption. We restricted our cultural exemption, and the side letters seek to eliminate those restrictions.

The new preamble provision is fine. It recognizes the importance of cultural diversity and of promoting it, but unfortunately, preambular language, as this committee knows, is not binding. It does not overturn a clear provision of an agreement. It's simply used as an interpretative tool. So, in fact, we are very concerned.

[The Chair, Liberal, Mark Eyking]

We're going to have to leave it there. Thank you.

Your time is up, Mr. Dhaliwal. Those were good questions.

We're going to go over to Ms. Ramsey.

You have the floor for five minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you, everyone, for being here today.

I want to continue the line of questions that my colleague started to ACTRA. Certainly we hear your concerns about the CPTPP, and I believe you had submitted as well, in October 2017, to the public consultation process around that.

In that submission, you spoke about the need that “Any future trade or investment agreement involving Canada must fully preserve Canada's unrestricted right to regulate for the protection and promotion of cultural industries and cultural diversity.”

I want to ask how Canada's producers and consumers of cinema, television, and radio will be affected if we don't preserve the ability to regulate in this manner.

[Garry Neil]

We have very strong cultural industries in Canada. The film and television industry is very robust. Last year, there was about $8.6 billion of production activity in Canada, and about $4.6 billion was Canadian content production. All of that production is underpinned by very strong public policy measures: everything from Canadian content quotas through Canadian programming expenditure requirements, broadcasting regulations, rules that govern cable television. We have public agencies, Telefilm; the public-private agency, the Canada Media Fund.

All of these agencies and policies and measures are what underpin our strong cultural industries. Frankly, many of them are a violation of the kind of normal rules that you have in trade agreements.

Our co-production treaties, by their very nature, violate the most favoured nation provisions. Our content rules violate national treatment obligations that are typically contained in trade agreements. It's fundamental to have an exemption for the cultural industry so we can continue those.

What we're saying is that it's time to move away from that negative concept of “an exemption” to something that's more positive, that says we should be having more forms of international collaboration in the cultural industries, around diversity of cultural expressions. The UNESCO convention can provide that positive approach and move us away from the negative exemption approach.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

You also mentioned new technology. At the committee here, we have just completed a study on e-commerce, which certainly had a cultural component to it as well.

I'm wondering if you can speak to what sort of concerns you have with regard to culture and new technology platforms.

[Elliott Anderson]

Well, it's simply in the sense that right now we're witnessing a pretty dramatic change in the film and television industry in terms of the platforms on which it is being viewed. We're moving now to a market where players like Netflix, for example, are increasingly dominant. That is problematic in one sense. We're certainly witnessing this in the NAFTA negotiations, where it was written in an era where these changes weren't even contemplated.

Part of the reason why we think that establishing a positive enforcement that grants the absolute right to protect culture is that—I can suggest and Garry can jump in on this—a positive commitment would then enable us to in essence future-proof things. I would say that the world we're watching now, where streaming is becoming increasingly a dominant way in which Canadians and people around the world are watching the cultural products that our members help make, isn't something that was foreseen earlier. The problem with a negative approach is that we can't future-proof it, so to speak.

[Garry Neil]

The e-commerce chapters that we're beginning to see in international trade agreements don't differentiate between the nature of the product or the service that's being transmitted and sold electronically, and that's a problem. Cultural goods and services, while they do have an economic value, also have a profoundly important cultural side. The agreements, in taking this broad-brush approach, treat the distribution of travel services and the sale of refrigerators and other goods, and cultural goods and services, in exactly the same way. They don't acknowledge that Netflix is primarily producing, primarily distributing, Hollywood product.

It has a look and a feel.... It may be telling stories from other countries, but they're doing it in an American way of storytelling rather than a form of storytelling that you would see from other parts of the world. To have our own material available electronically to do that, we require strong public policies.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

That wraps up your time, Ms. Ramsey.

We'll go over to the Liberals. We have time for one more MP.

Madam Ludwig, you have the floor.

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

Thank you.

My questions will first be directed to the gentlemen from LED Roadway Lighting Ltd. I represent New Brunswick Southwest, so we're not so far apart. My daughter is actually an oncology nurse in Halifax.

We've heard from a number of different witnesses about specifically the opportunities to develop new talent. I notice, Mr. Libis, you're a graduate of Acadia. That's where you got your first degree. In terms of local content or local hires, are you hiring many from Atlantic Canada?

[Jeff Libis]

I'm sorry, there is an echo in the communication. Could you repeat that question?