Evidence of meeting #108 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 canola.
A recording is available from Parliament.
9:10 a.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you.
Mr. Sinclair mentioned innovation. Ms. Olson, I want to congratulate you and your members for putting in the effort and being world leaders when it comes to export.
You mentioned that besides Mercosur, we should be focusing on China and Asia. In Asia, is there a particular country where we would be more competitive and able to meet their demands?
9:10 a.m.
President, Agricultural Manufacturers of Canada
The Chinese government is investing heavily into becoming food-independent, and when we look at Canada's comparative advantage in agriculture, it's our farming practices. Because Canadian farmers and ranchers are growing food in some of the harshest conditions in the world, by necessity, the equipment has to be top-notch. That is what makes our industry so innovative and so strong.
When we look at China, the efforts there, the types of farming they have, are still very manual and the land sizes are relatively smaller, generally speaking. We have encouraged the government and we've spoken with Minister Champagne about this issue specifically, encouraging the government to pursue an agreement with China. Other areas in Asia depend on the type of equipment, so we applauded the signing of the CPTTP but more from the perspective of giving Canadian farmers much broader markets, a stronger financial statement, if you will, and by virtue of that, that will enable them to invest into the latest and greatest farm equipment. In Asia generally, we think there's a great opportunity for the federal government to be pushing and opening up more markets.
Mercosur is unique. Argentina and Brazil are unique because they have tariffs on agricultural equipment. In most markets, Canadian-made farm equipment flows without tariffs, so for that reason, we would like that to continue. In Argentina and Brazil, the tariffs are prohibitive, as our members have identified, and I made reference to in my comments.
9:10 a.m.
Liberal
The Chair Liberal Mark Eyking
I don't think there's time. We're going to have to move on to the NDP.
Go ahead, Ms. Ramsey.
9:10 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Thank you, and thank you everyone for being here today.
To Mr. Sinclair's point, I think this study has been quite unique for us at the trade committee because, for a very welcome change, we're not only discussing dropping the tariffs; we're talking about all the other issues that exist beneath them. If we don't start to address those in trade agreements in a way that's meaningful, then we can open all the doors we want to countries, but we're never going to be able to go through them. Unfortunately, because of our regulatory system, all of those countries have very easy access to Canada. We don't want to see that undermine the success of any of the sectors that are trading, which are essentially all of them.
I want to ask Mr. Sinclair something this morning. You spoke about ISDS. I think there has to be this distinction. We've certainly heard from Mr. Marshall that they are looking for a state-to-state resolution process in terms of being able to resolve issues, but ISDS in the Canadian context has been quite harmful.
Yesterday we saw the result of the federal government trying to push back against a NAFTA Chapter 11 ISDS ruling against us in the Bilcon case, which would essentially see Canada forced to pay $443 million because of future profits that Bilcon says they have lost. This is the largest amount we've ever talked about in this kind of trend up in the losses that corporations are trying to get from the Canadian government.
Can you speak a little bit to that particular case? What other dangers do you see in ISDS and the trend we're on in terms of what's being sought by these foreign corporations? Essentially, we now know, with this ruling, that we are defenceless.
9:15 a.m.
Senior Research Fellow, Canadian Centre for Policy Alternatives
Canada has been the brunt of many attacks against our public policy through the investor-state dispute settlement mechanism. We are the most sued party under NAFTA. We have paid out over $200 million so far in awards and settlements. We have also incurred over $100 million in unrecoverable legal costs, defending ourselves. The majority of these cases, as in the Bilcon case, have been challenges to public policy.
You mentioned the Federal Court ruling yesterday where they weren't looking at the merits of the case, but they were constrained to say, because of the way the tribunal is set up and because of the way the system works, that it did not exceed its jurisdiction, so Canada failed in setting aside that award. Now we will see what will happen in the damages phase.
I think the most insidious impact is the effect on policies—in this case, our environmental assessment process—and the notion that foreign companies can opt out of that process and then attack it.
I also want to say that Canadian companies, and I would say, particularly in the mining sector, have used investor-state dispute settlement abroad in a way that I think brings Canada into disrepute. We've seen three recent cases against Colombia that were to do with setting aside an important natural area that provides much of the country's water. We've seen three Canadian-registered companies bringing challenges under the Canada-Colombia Free Trade Agreement, which is something we predicted would happen.
The availability of third party financing, hedge funds, and others in this area has increased the intensity, and there is a reaction in Colombia. I had a very interesting discussion with a Colombian investment official. They are not happy about this situation. This is not what they feel they signed on for.
9:15 a.m.
Liberal
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
You mentioned that Brazil has never had ISDS, and currently we would have to remove Argentina and Uruguay. How do you envision that process happening where we would be able to have that removal?
9:15 a.m.
Senior Research Fellow, Canadian Centre for Policy Alternatives
We're sitting down to negotiate with them. Argentina has had a very negative experience under investor-state dispute settlement. They are the most sued country in the world. There are outstanding claims of billions of dollars. Either in the context of this negotiation or simply in a straight bilateral negotiation, I think that even their current government, which is more conservative than their previous ones, would be willing to entertain that.
Brazil is interesting. It is one of the most significant destinations for foreign direct investment in Latin America. They have never ratified a treaty that includes investor-state dispute settlement, and many believe that—
9:20 a.m.
Liberal
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you very much, Mr. Chair.
Good morning and welcome, everyone.
I have a question for you, Ms. Olson, concerning your association. You said earlier that there were issues with exports. You mentioned regulatory processes. You also said that there was a lack of protection for intellectual property.
Are there any free trade agreements we could look to for inspiration in order to include in the free trade agreement between Canada and Mercosur provisions that would protect us from that type of situation?
9:20 a.m.
President, Agricultural Manufacturers of Canada
Thank you for your question.
I must speak to the members of the association about that again. Normally, there are no tariffs. The Canada-Mercosur agreement is truly unique because it includes tariffs. However, let me put the question to our members.
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Fine.
The Soucy group, which you mentioned in your statement, is located in the Lower Laurentians, not very far from my area. That enterprise manufactures tractor tracks for export.
You said earlier that there were per unit import tariffs. If the group makes a range of products, does it have to have each one accepted sequentially?
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
If we had a free trade agreement, do you think that would solve the problem?
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Fine.
Mr. Sinclair, I have a question for you.
Earlier, you told us that we should concentrate on the following aspects: support our Canadian businesses, make them more competitive globally, and increase productivity. However, you did not provide information on Canada's export capacity, and on whether we are capable of sending our goods outside the country. I'd like to hear your comments on that.
9:20 a.m.
Senior Research Fellow, Canadian Centre for Policy Alternatives
I think that Canada clearly needs a long-term game plan to increase the competitiveness of our industries and to ensure that we have industrial policy supports, the labour policy, and labour adjustment supports to back that up. We have to ensure that we're selling products that the world needs and that create decent jobs at home and respect the environment, at home and abroad. There is a whole range of issues that require urgent attention. Other countries—China was mentioned—take a very intensive approach. They have planned ahead to identify the industries in which they wish to be competitive in the future. We need to be thinking along those lines as well.
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
My next question is for Mr. Marshall, whom I welcome to the committee.
Earlier, you referred to indigenous peoples. You said that the mining industry is the biggest first nations employer. Do you think first nations were consulted? I am asking you that because the businesses you represent employ many indigenous people.
9:20 a.m.
Vice-President, Economic and Northern Affairs, Mining Association of Canada
I'm sorry, but the translation didn't really bring the question through.
Have the indigenous peoples been consulted in what respect?
9:20 a.m.
Vice-President, Economic and Northern Affairs, Mining Association of Canada
In what aspect?
9:20 a.m.
Liberal
9:20 a.m.
Vice-President, Economic and Northern Affairs, Mining Association of Canada
I think the committee would be best fit to answer that question. How many indigenous people have you brought before the committee as witnesses? I can't answer that question.
9:20 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
No. You said earlier that you were the largest employer of first nations people.