International Trade Committee on May 8th, 2018

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Okay. The agreement, then, would likely come into force in January, and so we would have to push this thing through the House pretty quickly, I would think, if it were tabled in the fall, to be among the first six. Isn't that correct?

[Bruce Christie]

We would certainly have to advance the process expeditiously, and that's what we're doing from our end. Once the bill is tabled, it's in your hands, not in ours, but we're working on our part of the bargain, which is to get the bill to you.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Indeed. Lord have mercy.

I have a question on the wine and spirit provisions. Have you seen any movements on harmonization among provincial bodies that are responsible for regulating alcohol so as to get ready to come into force with the non-markup provision?

[Bruce Christie]

There's nothing specific the provinces and territories need to do to implement their obligations.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Do we have any sort of enforceability framework to ensure that products are priced equitably, or is that something our partners have expressed concern about?

I'm speaking specifically about markup on Australian and New Zealand wine and spirits.

[Bruce Christie]

Well, certainly we have faced challenges by Australian wine producers, New Zealand wine producers, and American wine producers wanting better access to certain markets in Quebec and Ontario and British Columbia, and even, in the Australia case presented to us through the World Trade Organization, including Nova Scotia. Those challenges against Canada's wine distribution and sales systems, however, are being challenged under the World Trade Organization and have nothing to do with this agreement.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Okay, thank you.

[The Chair, Liberal, Mark Eyking]

We're moving over to Madam Ludwig.

You have the floor.

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

Thank you, and a very good morning to all of you.

The questions I want to get started on are around the consultations.

Mr. Christie, you mentioned in your brief that the feedback the government received from our consultations formed the basis of Canada's approach in negotiating the CPTPP. Could you share with us the types of consultation, the messages you heard, and how these influenced the negotiations?

[Bruce Christie]

Well, just briefly, we consulted throughout the original TPP process. Then, once the agreement was concluded in 2015, and we were in the position to move the agreement towards ratification, we really intensified our consultative process. When we then entered into a phase where we were getting serious about negotiating an agreement without the United States, we did the usual consultative triggers. We posted the Canada Gazette notice, and we invited all Canadians to provide comments on what they thought of Canada concluding the agreement of the CPTPP without the United States.

Since then, we've held a series of public consultations. We've held approximately 250 meetings and discussions with over 650 stakeholders comprised of business and non-business organizations, civil society, think tanks, academics, indigenous groups, youth groups, gender-based groups, and various other groups within the general public.

I think that by and large the comments we received were supportive of Canada engaging in this agreement as part of a trade diversification strategy.

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

Thank you for that.

May I ask what type of consultation you had with first nations communities?

[Bruce Christie]

I think we had three consultations that I recall with indigenous communities. Minister Champagne himself engaged in one such session. I personally was involved in one with indigenous groups at the end of last year, not just on the CPTPP agreement, but also to seek indigenous groups' views on what they thought about a possible free trade negotiation with China, during the exploratory process.

Beyond that, I guess the last one was in November of 2016. We held a round table with the Northwest Territories, which was well attended by indigenous businesses. February 20 of this year was the most recent consultative process we held with indigenous organizations on the CPTPP negotiations.

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

Okay. Thank you.

May I also ask, in terms of the consultations that you held, how prepared did you feel Canadian businesses were to venture into exporting through TPP? Did they raise any concerns about the types of products and services that would potentially be imported or exported between those countries and Canada?

[Bruce Christie]

Well, it really depends. The answer is yes, certainly. There are gains and costs in any trade agreement. We felt that the end result of the CPTPP provided overall gains and benefits to the broad Canadian economy, including several sectors.

However, we did hear concerns vis-à-vis products from Japan, specifically on autos. As one of the committee members noticed, the perception was that by eliminating our 6.1% auto tariff, we would see more Japanese cars imported into Canada. Our sense is that, moving forward, once our tariff is eliminated, the higher-end Japanese cars that aren't produced in North America will be imported into Canada directly from Japan and will displace other foreign cars from Europe and Korea.

We also heard concerns about opening up our market to some sectors in Vietnam and Malaysia—some of these are emerging market opportunities—but overall we're feeling very optimistic that the benefits of new export opportunities offset losses.

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

I'm just going to ask you a quick question. In terms of your consultation with youth, what were some of their concerns or the types of comments they had? We had a group in here just recently, and certainly the environment and climate change were key to the young people who were here.

[Bruce Christie]

Absolutely. Those are two areas of focus for the youth groups we consulted with, but beyond that, I think part of it is that it's an educational process. They come at a process, and in some circles there is a perception that trade benefits big corporations and not small producers or SMEs. I didn't participate directly in any of those sessions, but I found the reports I received to be very encouraging because they really want to enter into a dialogue. Yes, labour and the environment are issues that are of vital importance to our youth today, and they wanted to ensure that increasing trade and investment wouldn't do any harm to our labour provisions or our environmental regulations.

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

Thanks very much.

[The Chair, Liberal, Mark Eyking]

We're going to move over to the Conservatives.

Mr. Carrie, you have the floor.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you for being here.

I was interested to note that in your economic modelling, it appears that with the Americans in, there was a benefit of $3.4 billion, but with the Americans out, it was $4.2 billion. It appears, in your modelling, specifically for this agreement, that there's actually a greater benefit of $800 million for Canada, which I think everybody would agree is a good thing.

I want to just dig down a little bit further on the auto and manufacturing sectors. I come from Oshawa, where General Motors is a big employer. I was wondering, comparing the original with the new—and I'm sure you did a cost-benefit analysis—if you did any modelling for job losses. Were there increases or decreases? What would be the job-losses modelling for the old agreement versus the new one, or was that done?

[Bruce Christie]

We didn't do any specific modelling out of our chief economist's office on job losses or gains. It wasn't part of the economic model that we ran. We were looking at the effects of trade and investment between our markets as a result of this agreement.

When you increase trade or exports and increase imports at the same time, there will be job losses and gains. What we focused on was what the overall landscape would be. To answer your question, it wasn't part of the economic modelling done by Global Affairs Canada.

[Colin Carrie, Conservative, Oshawa, ON]

Do you have a sense, an opinion on it?

[Bruce Christie]

Well, my opinion would be that we have to prepare our exporters and producers to take full advantage of the opportunities in these markets. At this point in time, when we're still working on legislation in order to be part of this agreement, it's very difficult to predict what the future will hold. We're confident that there will certainly be benefits to our economy, as indicated in the GDP growth figures. I'm not in a position to say whether, overall, in 10 years from now, there will be aggregate job losses or job gains.

[Colin Carrie, Conservative, Oshawa, ON]

Okay.

You did mention, and I've heard this quite often, the non-tariff barriers situation. Particularly with Japan, you mentioned the right-hand drive. I've also heard it's the network for the dealers; apparently, one of the reasons is that we don't have the dealers over there.

With regard to non-tariff barriers, the government currently would like to legalize marijuana. The Asian countries are very much against illegal drugs being brought into their countries. Have you even discussed what effect the legalization of marijuana in this country might have in other countries? We've heard from some businesses here that they're really worried, in particular, about the United States. I believe the United States has been somewhat clear that it could be a non-tariff barrier. Is that something you brought up, or no?

[Bruce Christie]

To be frank, it wasn't part of this discussion or this negotiation. When or if Canada legalizes marijuana and we have producers who are interested in exporting marijuana to other markets, that will certainly be up to those countries' provisions in terms of whether they would allow for—

[Colin Carrie, Conservative, Oshawa, ON]

I'm not talking about the exportation of marijuana because many of these countries have been clear that they do not want marijuana as a product, that they don't allow it into their country. There are international agreements. I think you're aware that we signed onto three different agreements that we would not traffic or trade in illegal drugs, and marijuana's on that list. I don't believe the government has taken any proactive approach to remove Canada from those agreements, so it's an unknown. The concern is that if people are inadvertently bringing it in, if there are products being shipped, if there's even the smell of marijuana, the dogs at the border can actually stop and slow down trade. Was that something that was brought into the equation, or did you even have that discussion?