International Trade Committee on April 20th, 2016

[Brad Michnik]

For example, Indonesia has expressed an interest in joining TPP at some point, and that's certainly a key market that we see for Saskatchewan. We see China; it's a key market today. We've had extreme growth in our exports to China in the last five or six years, from almost $1.2 billion to over $3 billion of exports, so those are key markets.

Outside of the agreement, we had the recent experience where we were sort of a little late to the table in coming into a bilateral agreement with South Korea. As a result we lost a lot of market in South Korea to Australia and the United States, who are our big competitors. We saw our exports slip to the point now where as the implementation agreement comes into place, we aren't even sure we'll get the business back so we have a share in the market. We hate to see that in countries like China and so on, who may join us. If Canada is not at the table on the first go-around then we do feel we would be at a disadvantage, particularly if some of those big economies come in.

Obviously, there are key markets in TPP right now, in particular Japan. We have bilaterals with a number of the countries in TPP today, but we see Japan offering the biggest gains to Saskatchewan.

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

The Minister of International Trade's mandate is to consult as many organizations and people as she can. Are you satisfied that you have been consulted on the TPP by the Minister of Trade's office, either through David Lametti or the minister herself?

[Brad Michnik]

Yes.

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

When you had that consultation together, did you discuss corporate social responsibility, for example, when it comes to human rights, the environment, and other considerations that are good for people's lives, or did you just consider the big corporations in those consultations?

[Brad Michnik]

I would say most of our perspective was from a trade and export position.

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

What would you do to bring in a balance? On the one hand, we have to have economic growth, but on the other hand, we have to make sure we don't sacrifice the environmental and social responsibility that we all cherish as Canadians.

[Brad Michnik]

We heard that around the table. When we did the round table, a number of companies raised the issue of raising environmental standards in other countries as well. It was certainly raised by companies, as there would still be a net benefit. Certainly, we think that we are quite responsible here in Canada when it comes to the environment, and the TPP will enforce that in other countries as well.

[The Chair, Liberal, Mark Eyking]

You have only half a minute left, Mr. Dhaliwal.

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

What are you doing to bring awareness to the people who are not aware of the advantages of the TPP agreement?

[Brad Michnik]

I think with our—

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

Out to the general public, to every Canadian....

[Brad Michnik]

I would say that we are mostly speaking for the export community in the province, and that is where our messaging is coming from.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Dhaliwal.

We are going to move over to the Conservatives, and we have Mr. Hoback for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

Thank you, witnesses, for being here.

It's interesting. I used to work in Saskatoon. I worked for a company called Flexi-Coil, which was bought out by Case and Holland. The manufacturing facility is at the north end of the city. It would have been nice to take the bus to the north end of the city and just look at the growth that is going on, because of manufacturing, in the north end of Saskatoon, in Regina, and in the communities around Humboldt, St. Brieux, and places like that.

Brad, how many members does STEP...? What is the size of the companies that belong to STEP? Are they huge companies, multinationals, or are they small companies? What is the average number of employees?

[Brad Michnik]

About 75% of our membership would be companies that have annual sales under $5 million. I think that would be very representative of the overall business size in Saskatchewan. We have three membership categories. About 10% would be over $20 million, about 15% between $5 million and $20 million, and then the remainder 75%.

[Randy Hoback, Conservative, Prince Albert, SK]

This blows the theory that it is only for big, multinational companies right out of the water, because you have all these small and medium enterprises—$2 million to $5 million and even less—wanting this agreement to go through. I find that very interesting.

Maybe Mr. Smith-Windsor can comment on the next question.

The companies that are exporting are one thing, but there are also the companies that are supporting all those companies that are exporting. What is the trickle-down effect, in your experience, here in Saskatoon? Give us an example of what it looks like.

[Kent Smith-Windsor]

Probably in excess of 90% of our members would have five or fewer employees. Virtually all businesses in the service sector would be dependent on those that are export-oriented.

STEP commentary alluded to the fact that about two-thirds of our GDP is dependent on trade. If you were to talk about the business sector, with the exception of those that are providing services to governments, virtually all of them would be heavily attached to the ability to export goods and services far past our borders.

[Randy Hoback, Conservative, Prince Albert, SK]

Natashia, you talked about the importance of.... In your situation, it is not the tariffs that you want in the agreement. You want security and market access. You want to know that if there is a dispute, you have a proper mechanism that is fair and predictable that you can utilize. It may come your way one day, and it may not another day, but at least you know you have a process to go through. Is it fair to say that this is why you support the TPP?

[Natashia Stinka]

Yes, it is, among some of the other reasons I outlined. Things like transparency.... There isn't a dollar value attached to that type of benefit, being able to access up-to-date information in foreign countries. That is something we probably take for granted in Canada, but this predictability and the clarity of the rules in these markets offer a long-term predictable market for us.

[Randy Hoback, Conservative, Prince Albert, SK]

I want to change angles a little bit here.

Brad, you have a strong mining sector here in Saskatchewan. Of course, Chile and Peru are two of the major players in TPP. We have Saskatchewan companies now that are actually exporting machinery in the mining sector into those areas. If they didn't have access to those markets.... I understand we do have bilaterals, but even through TPP there is that security. There is an impact there on our manufacturing sector and the mining sector and how we've been able to take a leadership role because of trade agreements.

[Brad Michnik]

You hit the nail on the head. We'll be in Chile next week with a mining trade mission with companies in the mining supply and service sector. The Americas are a very important market for us as well. You had some good examples. We're doing some good business in countries like Chile and Peru, and you have other countries. It really shows the effect of tariffs and freer trade. Brazil, for example, is a major export destination for Saskatchewan, and 98% of that is potash. It should be a huge market for Saskatchewan for agriculture and many other areas, and it's zero just because of the tariffs. That just shows how tariffs can take you out of the market.

[Randy Hoback, Conservative, Prince Albert, SK]

Let's take it a step further. We have these Canadian companies in Chile and Peru building mines. In fact, a lot of the Chinese state-owned enterprises are actually hiring Canadians to do the corporate social responsibility aspect of those mines. Is it not fair to say that trade has actually brought up the level of social responsibility in those communities?

[Brad Michnik]

For sure it has. Even in a number of our missions, we have Saskatchewan companies with expertise. For example, we're dealing with first nations on corporate social responsibility. They're coming on these trade missions passing that expertise and creating value back here in Saskatchewan. We have the knowledge and the expertise and it's something that's happening already, particularly in Peru and Chile.

[The Chair, Liberal, Mark Eyking]

Thank you very much, sir.

Thank you, Mr. Hoback. That wraps up your time.

We're going to go over to the Liberals and Ms. Ludwig for five minutes.

You have the floor.

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

Thank you.

Thank you for your presentations.

I represent the riding of New Brunswick Southwest, so you know where I'm going with this, Ms. Stinka.

What are the opportunities for potash to resurface again in New Brunswick? My riding borders Sussex, where the Picadilly mine was. Most of the people actually live in my riding.