International Trade Committee on June 19th, 2018

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much.

There are several issues involved in the NAFTA negotiations, some of which are more controversial than others. You spoke of the work done on the more technical issues in NAFTA. Although they might not always be as interesting or as exciting, those chapters are often very important for those who do business across the border, and have North American supply chains.

Can you tell us a bit more about that?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

That is a very good question. I see that Mr. Verheul is very happy that you asked it.

The team of negotiators and I consider that these chapters are about modernization. As you said quite rightly, these chapters are not as interesting as others to journalists, but they are very important to Canadians who do business with the United States. Before the negotiations began, we consulted enterprises and workers. To them, the most important issues are trade-related. We have made progress on these issues. That is one of the reasons why I am finally optimistic with regard to the NAFTA negotiations.

It is worth pointing out that NAFTA is a good agreement, but it has been in effect for close to 25 years. We are taking advantage of this precious opportunity to modernize it and adapt it to the 21st century. There is good co-operation among the three countries' negotiators on the modernization chapters.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

Those chapters are mainly about non-tariff barriers, correct?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

That is correct. I can provide a few more details.

[The Chair, Liberal, Mark Eyking]

Please give just a quick answer there, Minister.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Fine.

To date, negotiators have concluded discussions on nine chapters: technical and commercial barriers; North American competitiveness; good regulatory practices; sanitary and phytosanitary measures; publications and administration; small and medium businesses; the fight against corruption; telecommunications; and competition policies.

[The Chair, Liberal, Mark Eyking]

Thank you.

Thank you, Madam Lapointe.

We'll move over to the NDP.

Madam Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

Thank you, Minister, for your words today. I would like to thank your and all of the colleagues on the committee for supporting the motion this week. I think it was very important for us to stand united for Canadians to see where we are at.

My first question is going to focus on the immediate concern of workers in the steel and aluminum sector who find themselves.... I have to agree with my colleague, I believe we should have done retaliatory tariffs immediately on steel and aluminium. Now we've put some workers in precarious positions. I know that you've had USW and Unifor calling for support for workers in those sectors.

My question is simply this: what is the government doing? What will they offer to these affected workers?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Again let me thank you for the work we did together on the unanimous consent motion. Thank you for taking such a leading role there.

I agree with you that it is very important for our steel and aluminum workers to know that they have the full support not only of parliamentarians, which I know they have, but also of the Government of Canada.

I, in consultation with my colleagues Navdeep Bains and Bill Morneau, am currently working on ways to support those workers and those industries. I would like to say to this committee and to all Canadians that we absolutely believe those workers, those industries, need our support. I want to point out that the imposition of the retaliatory tariffs is one part of that support. When Canadian workers and Canadian companies now face tariffs selling their steel and aluminum to the United States, it is not fair that their U.S. competitors would not face parallel tariffs selling it to Canada. They will.

The actions that we're taking at the WTO and NAFTA are an important part of the defence. I agree that we need to work on ways to directly support workers and industry, and that work is under way. I would be very interested in ideas you have on the best way to do that.

[Tracey Ramsey, NDP, Essex, ON]

Of course.

I hope that those conversations will include the labour organizations and the workers themselves and what it is that they are calling for.

My second question to you really is as a former auto worker of 20 years. It certainly is an important sector down in my riding of Essex. I'd be remiss if I didn't ask you about the looming potential tariffs from the section 232 decision on auto. TD Economics put out a report yesterday saying that one in five jobs could be lost as a result of the tariffs. We're talking about 160,000 potential jobs lost. It's been said that this will permanently reduce our long-term economic capacity as a country if this sector is decimated.

My question to you is this: What moves are we making to support auto workers and also towards a comprehensive auto strategy that isn't just about a pool of money but is also a strategy across the board in our country to combat the threat of these tariffs?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Okay. It's another really good question.

Just at the end, you said you hoped that anything that we're doing on the steel and aluminium industry includes talking to workers, talking to unions. I agree that this is absolutely necessary. That is something we are doing, and I'm committed to continuing to do it.

When it comes to the car sector and the investigation that the U.S. Commerce Department has begun on section 232 tariffs on autos, this is frankly even more absurd than the notion that Canadian steel and aluminum would pose a national security threat. I have raised the issue with Secretaries Ross and Pompeo, and also with Ambassador Lighthizer. We have made clear the Canadian view, and the Prime Minister has raised the issue directly with the President.

We believe, as has been our motto since the beginning of the NAFTA negotiations, that we need to hope for the best and work for the best possible outcome, but always be prepared for every eventuality. As you heard in the House of Commons yesterday from my colleague Navdeep Bains, that very much includes a comprehensive strategy of working with and supporting our automotive sector. I would also point out that just as we have worked closely with our allies in a response to section 232 tariffs on steel and aluminum, this is an issue that we are also discussing with our allies, including the European Union, Japan, and Mexico.

In terms of support for industries under the impact of tariffs, it is worth thinking for a moment about our forestry sector, another sector that has been affected by U.S. tariffs. The Government of Canada, I think with support of all parliamentarians, has stepped up to support those industries.

I'd like to point out, as I have—

[The Chair, Liberal, Mark Eyking]

Sorry, Minister; the time is up. Maybe you can get to—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—in the United States, that the price of the tariffs have been passed on to U.S. consumers. That's an important point to make.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to move right over to the Liberals again.

Mr. Dhaliwal, you have the floor.

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

Thank you, Mr. Chair.

Minister, Deputy Minister, and Assistant Deputy Minister, welcome, and thank you for the great work that you're doing.

Minister, you mentioned that the Canada-U.S. relationship is very valuable, and the tariffs are insulting. It is not only you who feels that way. In fact, Canadians, American producers, workers, including companies like LMS, the Reinforcing Steel Group, and Bar-Zal Steel Supply Ltd. in my riding feel the same way, and they are concerned about the U.S. decision to impose these tariffs on steel and aluminum.

I know that government has said they will be ready. I heard from my constituents in Surrey—Newton, and they are very proud and I am very proud to see that the Prime Minister and you, Minister, were able to immediately announce the retaliatory measures on May 31 and have the consultation period to hear the views from the stakeholders about these strong measures that ended on June 15.

I know my constituents as well as I would be interested to see if you would be able to share more on these consultations that closed, as well as update industry stakeholders and, of course, the workers.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you very much for the question, Sukh, and thank you for your hard work on trade in general and also on this issue, which I know is extremely relevant for your own constituents and for your own riding. I think it is really important for Canadian steel and aluminium workers to see their MPs stepping up and playing such a strong role.

When it comes to the lists and the consultation, the first point that bears emphasis is that work on these lists was going on very intensively far ahead of May 31, and I would like again to thank Steve Verheul and his team and the Department of Finance. The fact that we were able to come out immediately on May 31 is due to preparation done by very many people. I think it was a strong action on the part of Canada, and I'm glad we were in a position to do it.

The consultation period has also been very valuable and important, and I'd like to thank all Canadians who've provided feedback. It is led by the Department of Finance, which is directly responsible for this particular area. We've received a total of 1,108 submissions. We've received them from industry associations, from large corporations, from small and medium-sized enterprises, from provinces, from private citizens, and from workers.

We are currently hard at work looking at the lists, talking to people who made submissions, and working on refining the final lists. I think it is really important for us to get those lists right, and that is what we are committed to doing. I've heard from members of this committee directly, but I welcome continuing feedback from members of the committee, from all MPs, and from all Canadian stakeholders. The formal consultation period came to an end on June 15, but we are ready to continue hearing from people. It is really important for us to get this right, and that's what we're committed to doing.

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

Thank you. Also, Minister, you know the committee has extensively travelled to the U.S., and I'm sure the members on all sides agree that there has been a lot of protectionism from the U.S. administration about steel and aluminum tariffs. Ultimately, these tariffs are not only going to hurt Canadians but are also going to hurt the American economy as well. As you said, America is in surplus.

Would you be able to elaborate on what kind of long-term economic effect it will have on the U.S.?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Canada is a trading nation. We believe in trade, and we know that trade is a win-win relationship and that both partners benefit when trade happens. When we talk about the section 232 tariffs on steel and aluminum, we make the point about the national security justification being both illegal and absurd, because those are the grounds on which these tariffs are being levied, and it's really important to remind people that facts matter. The law matters. That is why that is where we start.

[The Chair, Liberal, Mark Eyking]

Thank you—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Having said that—

[The Chair, Liberal, Mark Eyking]

I'm sorry. That ends the first round.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Okay.

[The Chair, Liberal, Mark Eyking]

Before we start the second round, I have two short questions for you, Minister.

In Nova Scotia, we have a huge tire manufacturer, Michelin, and they produce tires for cars, trucks, and various things. My two quick questions are these.

One, when they talk about “automobiles”, is this just cars and trucks, and not big trucks? Second, when they talk “content”, is that the whole vehicle, including the tires? Is it the whole package?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Again, I think it's important for us to be clear that when it comes to the section 232 investigation of cars, these are early days. We are at the beginning of the process. While we need to be prepared for every eventuality, it's important for us also to realize that we are in a process.

That said, the investigation as currently framed is on light vehicles, so that's cars and trucks, and it does concern all parts that are in a vehicle.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to the second round.

Mr. Hogg, welcome to our committee. You're from South Surrey—White Rock, which is a wonderful place. I visited there a few months ago and stayed for a while.

Go ahead, Mr. Hogg. You have the floor.