International Trade Committee on April 20th, 2016

[The Chair, Liberal, Mark Eyking]

Thank you, sir, and thank you for that snapshot of how much Saskatchewan produces. It's a great contributor to our economy in Canada to say the least, and the numbers are amazing.

We will now hear from SEIU-West. We have Catherine Gendron.

Please go ahead.

[Catherine Gendron, Project Coordinator, Service Employees International Union-West]

Good morning, and thank you for the opportunity to address the Standing Committee on International Trade. The SEIU-West mandate is to improve the lives of working people and their families, and together, lead the way to a more just and humane society. That is why our union is taking a stand against many proponents of the TPP. This trade agreement must be seen for what it is, a corporate bill of rights.

In fact, of the 30 chapters in the TPP, only five of them pertain to trade. While there are many areas of concern within the TPP, today our focus will be on the impact on Canadians' access to health care and our right to a democratic society free of corporate rule.

The ISDS system truly embodies the corporate power that's built into the TPP. It allows foreign investors to challenge government actions through lawsuits claiming that these actions, even actions that clearly serve the public interest, expropriate their assets. These lawsuits are heard outside the traditional court system in private tribunals whose decisions are binding.

Therefore, ISDS essentially shifts power from the courts, legislature, and our government meant to represent the people, to foreign investors and a small group of lawyers who are often called upon as arbitrators. This alternative to our court system is available only to foreign investors, thereby raising basic concerns about equality before the law.

In addition to tribunal costs and penalties, Canadian taxpayers pay the price for ISDS in the form of lost sovereignty, lost accountability, and as I outlined, higher health and drug care costs.

Under NAFTA, Canada already knows the disturbing repercussions of this process. There is evidence that Canada has been the target of more ISDS actions than any other developed country. In the pharmaceutical sector, Canada is facing a large lawsuit from a hugely profitable U.S. drug company, Eli Lilly and Company.

The Supreme Court of Canada rejected Lilly's claim for extended patent protection on two of its drugs. In an act that shows contempt for the Canadian justice system and the health needs of Canadians, Lilly has now turned to the NAFTA ISDS process and is claiming half a billion dollars from our government.

Under TPP, Canadians will likely face more costly and frivolous ISDS lawsuits like EIi Lilly's, as well as growing pharmaceutical prices due to longer waits for generic drugs. Powerful pharma companies were not satisfied with the outcome of the TPP negotiations. As a result, we expect that the pharma industry will be even more assertive in demanding the strictest interpretation of the TPP relating to medication.

In the wake of the Panama papers scandal and the recent use of tax inversion strategies by U.S. corporations like the drug giant Pfizer, we see how clearly society is warped to corporate favour, and how easy it has become for the rich and powerful to avoid the laws of democratic countries.

People around the world are recognizing and denouncing this blatant injustice, yet the TPP further entrenches corporate power. TPP will enhance patent protection for pharmaceutical companies that claim they need this enhanced protection to provide adequate financial incentives and returns for their research and development, R and D. These claims ring hollow given the large and growing profitability of the pharma sector, and stats show that the R and D to sales ratio in major pharma corporations actually fell to its lowest since 1988.

The billions of dollars in profits seen by the pharma industry have been fuelled by extremely high medication prices. One in 10 Canadians are unable to fill their prescriptions due to high prices, resulting in inhumane health outcomes for much of our population. High drug costs often lead people to ration or otherwise underuse the prescriptions they do fill. It is estimated that if Canadians were to use their prescriptions appropriately, one in six hospital visits could be eliminated and $79 billion could be saved in health care costs.

In relation to the TPP, ISDS would be a major roadblock to the implementation of a Canadian pharmacare plan. We're the only developed country in the world that has universal health care but no national drug plan.

Currently, two federal parties support a national pharmacare plan, and we know the Liberal government is making drug affordability a major priority. Yet because the TPP enhances patent protection, cheaper generics are kept off the market for longer periods of time. The only feasible way to achieve pharmacare is by ensuring affordable medications.

The TPP also reinforces privatization. If a Canadian government or public authority chose to contract out a public service, a future government with a different viewpoint could not opt to bring that service back to the public without risking a disruptive and expensive ISDS lawsuit. Of concern in Saskatchewan is the potential for further privatization of our health care. Saskatchewan contracted out its hospital laundry services and opened the doors to private MRIs. Public-private partnerships are also becoming more common.

The TPP investment chapter includes a provision on P3s, and although the footnote excludes health care, SEIU-West is concerned that arbitrators will refuse to apply the footnote to health care support systems such as maintenance, food services, admin, and other support services that contribute to the health care team. The risks posed to Canada's public health care system are seen in the European ISDS case that is included in our written submission.

It is distressing to know that a choice made by the people could be subject to interference by a corporation. Big businesses should not be able to interfere in the laws and rules of a sovereign state. If they can, how can—

[The Chair, Liberal, Mark Eyking]

Excuse me. You have 15 to 20 seconds to wrap up.

[Catherine Gendron]

Yes.

If they can, how can it be called a democratic society? It was the Harper government that joined the TPP, and public outcry made this a major election issue. The Liberals were then elected on a mandate of real change, yet here we are in a room with only 12 witnesses, who were mainly invited to speak to business interests. Throughout today's consultation process we are made aware that no individual citizens were invited to speak, yet SEIU-West is aware of many who applied. How can we call this a public consultation? It is no wonder there is a noon-hour rally and public consultation in response to this lack of transparency.

We know that a small representation of civil society, labour, and small business were invited to the negotiating rounds, but it is clear that while we were invited, only corporate interests were heard. We implore the Standing Committee on International Trade not only to hear what is being said, but to listen with intention and consider the people's rights. At this point the TPP does not, so it should not be ratified.

[The Chair, Liberal, Mark Eyking]

Thank you very much for your submission.

As you noted, for anybody who cannot speak directly to us, we take submissions right up until the end of June. We also encourage MPs to do open houses. They can deliver submissions to us also. We're going to try to get as much as we can into our report from all Canadians.

On that note, we're going to move on to questioning. Each member has five minutes and the Conservatives are starting off.

Mr. Van Kesteren, you have five minutes, sir.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Chair.

Thank you all for coming here. I would note very quickly that you said we're not giving the opportunity for people to speak. We invite groups, of course, to speak. If we asked all the farmers to come, there would be 15,000 farmers, I suppose, but I think they're probably busy at this time of year. You represent one group, and there are others who represent other groups. I think we're doing a pretty good job, and I think all committee members would agree with that.

I want to start with Mrs. Neal.

Thank you for doing what you did in Africa. I know you have a real heart for Africa. Thank you also for the work that your advocacy group does as grandmothers. I'm not a grandmother, as Mr. Eyking and I both know, but my wife is, and we have 35 grandchildren. I know your heart for grandchildren.

I've been to Africa five times and I've visited six countries. I have seen the devastation and I have seen the poverty. I've been to the townships in South Africa just recently. I just came back from there. I've seen all parts of it, including South Sudan, one of the poorest countries in the world.

I don't have much time. I just wanted to mention quickly that part of the job that we all do here—and I've had the great fortune of representing my riding for 10 years—is just an incredible learning experience. I've served on a number of committees, and a number of those committees dealt with the very issues that you're talking about. I think I was on the foreign affairs committee when the need for drugs for AIDS was the pressing issue.

I think it's good to note that the Canadian government has made provisions—and I think you would agree with that, too—for AIDS drugs. I know that your concern is for future drugs, but I trust our government. I trust our people. I trust that when that issue arises—and we've had examples of that in the past—we will continue to meet that need.

Finally, I would add that to suggest anybody here doesn't have that same compassion for the poor and downtrodden is just plain wrong. We might have a different idea as to where we're going, but that's why we're here. That's why we're listening to your presentation.

I'll give you a chance to respond, because it's not fair to just make a comment. I'm trying to get right across the whole line here.

The other thing I really want to lay out, which I think has really become evident, is that the people you are talking about, the corporations, for the most part are smaller farmers. We have heard from them—and I'm not saying that has been the only testimony, but specifically here in this province—that there is a real desire for this agreement to take place.

People that you and I both know in the rural areas—and you probably know them a lot better—see this as a huge advantage for farmers and for workers. They talked about the increase in employment that would take place. What do you say to those people?

I guess I'd ask the same to you too, Mr. Boehm. These are the people who are telling us—

[The Chair, Liberal, Mark Eyking]

Just to let you know, you have one minute left, if you want them to answer the question.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Okay. What do you tell your neighbours that are telling us they want to see this agreement take place?

[Jennifer Neal]

When you said all Canadians feel like we do and have this compassion—

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

I'm talking about Saskatchewan.

[Jennifer Neal]

You originally said that Canadians, in general, have the same compassion. You've been to Africa and seen that same compassion. I don't see that coming through and actioned. We have not provided...these countries have to have low-cost medications.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

They do.

[Jennifer Neal]

Well they haven't...a lot of India, at the moment, makes their drugs at low cost and—

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Canadian companies have that compatibility and have the rights to—

[Jennifer Neal]

—Canadians have not done well with that at all. Think about what's going to happen say, to PEPFAR, the U.S. President's Emergency Plan for AIDS Relief. That has been the most successful fund that's supported and given drugs to Africa. That relies 98% on generic drugs. If you're going to have this agreement, that is going to make those drugs a lot less available and people are going to die because of it. There is no doubt about that.

In this country we'll maybe have rising health costs. It could still cause deaths, I'm sure, in this country, but in those countries it will cause deaths in the millions. These countries cannot afford the medications from pharmaceutical companies. You have to have low-cost, generic medications. If you can get them into those countries, you could stop this infection rate, right?

[The Chair, Liberal, Mark Eyking]

Thank you very much.

There will still be time to add some more to what you have.

We have to move on to the Liberals now for five minutes.

Ms. Ludwig, go ahead.

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

Thank you, Mr. Chair, and thank you all for your presentations.

I want to thank you for sharing your experiences, your concerns, and your hopes, not only regarding this agreement but also in terms of Canada, in general. I think that's what we are all here for, to promote our country to be the best that it can be, and to also offer, internationally, the best opportunities we can.

I will say to Mrs. Neal, who is a grandmother—I'm fortunate right now that I'm not, my daughter is only 20—thank you for the work you have done in Africa. My sister was a victim of AIDS, so I certainly appreciate your work. My sister lived here in Canada. When we look at medication costs and others, we do have those issues here as well.

In terms of small business and farmers, we have heard from a number of groups across the country, and as my colleague from the other side has mentioned, they are groups that represent small business. We have heard from national associations that have talked about businesses in Canada, and 98% of our businesses are small businesses. Across the panels, if there's opposition, it's usually about corporate self-interest. I do want to keep in mind, and keep it in perspective, that most of the businesses we're talking about, and are addressing, and have come to us, are representing small business.

As a teacher for international trade for the last 20 years, one of the things I made mandatory in all of my teaching for business plans—and I've won awards for it—is corporate social responsibility. Outside of the agreements, and any trade agreement, as business people and as Canadians, we have a responsibility to do the best thing, and I think many companies do.

In terms of drug costs, yes, there are significant issues internationally, and your voices are definitely being heard here. We, as a committee, are travelling across the country. The treaty has been signed. The agreement has not been ratified, so your voice and your interest are important here today. If you were able to express a message to the country, what would you put in a communication strategy you would like all Canadians to hear on any of the pros and any of the cons for TPP?

Thank you. That goes to all the panel.

[The Chair, Liberal, Mark Eyking]

If the four panellists are going to answer, they're going to have to do it in a half a minute each.

Go ahead.

[Terry Boehm]

One of the big problems—and I pulled out CETA and a good portion of the Trans-Pacific Partnership—is that people who haven't read either agreement are talking about it. I have taken the time to read annexes, associated agreements, references, footnotes, and the agreements. When you do that, you very quickly start to understand that this is not about trade. It is about something completely different.

That is the message I would like to put to Canadians. This is about shifting the possibility of governments to govern in the public interest and blurring that line so that government is actually an enforcement agency for privilege and new rates for the largest corporations in the world.

Agriculture is a bailiwick of mine, but in terms of drug costs, when we extended drug patents in the early 1990s, that was about the time when the debate about the affordability of public health care started to change. That is the single biggest budget item for each provincial government. Over 50% of that single budget item is pharmaceuticals and medical supplies, which we are increasingly sourcing from a very small group of very large pharmaceutical companies that also supply farmers with chemicals and seeds, to a large extent, and they have ratcheted up the price.

We are transferring from the taxpayer directly to international corporations. Then we put caps in these agreements. We restrict them, but we can't do anything about our balance of payments. These are harmful to our countries—Canada in particular, but also the other participants in these agreements. That is absolutely what these things are about.

Read them, please. Sit down and read them.

[The Chair, Liberal, Mark Eyking]

Thank you. Your time is up.

One of the most difficult jobs of the chair is cutting people off, especially when they are on a roll and they are speaking from the heart, whether it is MPs or witnesses.

I remind MPs to keep it short because the witnesses want to answer. Let's try to keep our questions short so we can get enough time in. Witnesses and MPs, I am going to put my finger up when there is a minute left. Then I wouldn't be cutting anyone off in mid-drift.

We are going to continue. If we could keep our questions short, we can have our witnesses.

Witnesses, when my finger goes up, I have to give everybody a chance.

We are going to move over to the NDP now. Ms. Ramsey, you have five minutes. Go ahead.

[Tracey Ramsey, NDP, Essex, ON]

Whether we are talking about farmers or small businesses, we are talking about people, Canadian people. Regardless of whether tariff reductions would help certain industries...we understand that, but what we are talking about is the effect on Canadian people.

There is nothing more concerning than access to affordable medication. There are people in my riding who are making difficult decisions between whether to keep the lights on or pay for their prescription drugs.

The TPP would cripple provincial governments. It would put the costs back onto them, and it would make it very difficult for a government to make decisions about pharmacare or any improvements to any type of pharmaceutical extension that we could do for people. The TPP would greatly limit our ability to govern in that way. I recognize that.

I would like to direct my first question to the Grandmothers Advocacy Network. You talk about the practice of evergreening. I wonder if you could explain to the committee a little more about how this would slow access to affordable medication.

[Jennifer Neal]

At the moment, drugs tend to have a patent of 20 years or so. When you evergreen something, this basically means that you make some slight little change to your formulation. That formulation might not make it any more effective, but that little change would enable you to ask for another patent, and that other patent may be for another 20 years. It basically cuts down any possibility for generic medicines to be in the marketplace.

[Tracey Ramsey, NDP, Essex, ON]

Mr. Boehm, I would like to ask you to tell me a little more about the NFU's concern around the ISDS in the Trans-Pacific Partnership.

[Terry Boehm]

I think that the ISDS mechanisms in particular have been problematic in the assorted iterations, as in chapter 11 and several NAFTA actions, for example, against the Canadian Wheat Board, which no longer exists. This is again the shift of the possibility of governments to act in their own citizens' interests to outside tribunals. They are outside tribunals that actually don't use precedents in their decisions. Each decision is separate. They arbitrarily decided recently to charge compound interest on awards given to complainants.

We're working with a very small group of international trade lawyers, who are selected tribunals of three—each party selects one, and then they agree on a third one—to fundamentally alter important processes and regulations or whatever in the country. An old one, of course, is MMT, a neurotoxin seen as an additive in fuel. The banning of that was reversed.

Anyway, we're very concerned that what we're doing is hobbling our ability to govern ourselves in our own democratic interests. We're giving it out to entities that actually have no responsibility to our citizens or anyone else.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

I'd like to ask Ms. Gendron a question around health care. What would be the impact of the greater protection of intellectual property for pharmaceutical products on patients here in the province of Saskatchewan and on Canada's health care system?