International Trade Committee on April 20th, 2016

[Randy Hoback, Conservative, Prince Albert, SK]

You'd work with a partner in Japan, for example, on what their requirements would be from the pulse sector. It might be flour. It might be lentil soup. Is that fair to say? Then that partner, because he's part of that development, has a commitment to buy from you, is that correct?

[Tim Wiens]

Because they know what the local population requires, they can provide very technical assistance, saying, this is what you need to do to make it acceptable for the palates in this country.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

On the beef side, I assume that the cuts we like in North America may not be the cuts they want in other parts of the world. How do you work in those markets to make sure you get what they want? I suppose there are even products that we won't eat here that other markets will eat. How does that impact you?

[Ryan Beierbach]

Probably the best thing about trading beef to other markets is that there are many products we don't eat here or that are of very low value, which are a high-value item in other markets. The way we take advantage of that is that we have an organization called Canada Beef, which markets around the world. Canada Beef has offices in different parts of the world that understand those markets and what the local people prefer. They work hand in hand with the retailers and the wholesalers. We also have a centre in Calgary that was set up really to bring international people in and show them how to prepare Canadian beef in the best way, so that when they do buy our beef they get the maximum value out of it.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Youzwa and Ms. Tranberg, on the research and development side there is nothing more exciting than looking at canola and where it has come from, from the original days of something called rapeseed, now to canola.

Then, we have just signed UPOV 91. What has that meant for research and development here in Saskatchewan, in the canola sector and other sectors?

[Janice Tranberg]

It makes us more competitive, obviously. In Saskatchewan we spend 40% of our budget—this is money that we get from our 26,000 canola producers across Saskatchewan—straight on R and D. We have a leverage capacity of about five, so for every dollar we bring in, we can leverage another four dollars.

UPOV has really just allowed us to be competitive. First of all, I should say that this 4:1 ratio involves, I would say, 90% public dollars. It's not private dollars, so you can add that on to.... But it does allow those breeders to come in and protect their seeds. It hasn't hindered innovation. It hasn't hindered a farmer's being able to save their seed, if they should want to do that, but it has allowed the breeders and the innovation that's being put into it to be protected.

[Randy Hoback, Conservative, Prince Albert, SK]

Then we can look at the canola sector, at the yields per acre. It used to be that if somebody said he got 40 bushels to an acre, I'd say, “Well, maybe you did; maybe you didn't.” Now they're saying 65 bushels an acre, and it's true.

[Terry Youzwa]

I'd like to add to that. It has improved our productive ability, but it has also helped us improve the footprint we leave behind us. We are farmers. We are concerned about the future as well as about today. We need to be viable today, but we want to leave our ground in a better state for the next generation than we found it. We practice good stewardship. This helps us do that.

[Randy Hoback, Conservative, Prince Albert, SK]

All these things—research and development.... If you didn't have trade, if you didn't have a place to sell this stuff, it wouldn't exist. Is that fair to say?

[Terry Youzwa]

Absolutely. You have an opportunity today, in the very near future, to do a larger agreement than by doing separate bilaterals. That's very significant and a very unique opportunity. We're 90% to 95% export-driven with our products. In comparison with other nations, Canada is a small nation and our province has a small population. We export those products, and you have an opportunity to develop one much larger agreement than to try to go to each of those countries individually. You have a unique opportunity and we encourage you to take advantage of it.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

I forgot to mention that Mr. Ritz, as many of you know, lives very close to here. We appreciate being here in your neck of the woods too, Mr. Ritz.

That wraps up this panel. We thank everybody for coming. Not only do you produce produce products, but you represent many people who produce food for Canadians around the world. Good luck with your growing this year and your prices. May everything go well for you.

Thank you again.

[The Chair, Liberal, Mark Eyking]

We're going to commence this session.

In this second panel we have with us the Grandmothers Advocacy Network, the National Farmers Union, the Saskatchewan Association of Rural Municipalities, and the Service Employees International Union-West.

We have a large panel, here, and I'd appreciate it if you can keep to under five minutes. Then we'll have lots of time for everybody to ask questions and to give answers.

We're going to start with the Grandmothers Advocacy Network.

Jennifer Neal, welcome and go ahead.

[Jennifer Neal, Member, Leadership Team and Regional Leader for the Prairies, Grandmothers Advocacy Network]

Thank you very much for providing the Grandmothers Advocacy Network the opportunity to comment on the TPP.

We are a multipartisan network of volunteers from across Canada, who advocate in Canada and internationally for program and policy changes that can improve the lives of sub-Saharan African grandmothers and the vulnerable children and youth in their care.

We are going to be a little different, because we oppose this agreement—we strongly oppose it—because of the impact it will have on access to medicines worldwide. We also oppose this agreement because it puts corporate profits before people's lives.

We're here to speak up for the millions of people who need affordable medicines to treat diseases like AIDS in the world, particularly in sub-Saharan Africa. HIV continues to be a major global public health issue. It has claimed 34 million lives worldwide, and sub-Saharan Africa has the largest proportion of the world's infected, with 66% of new infections in this region.

At the moment, only 41% of HIV-positive adults are receiving antiretroviral treatment, and only 32% of children. I spent two years in Durban, South Africa, doing volunteer work in two hospitals, in 1999 and 2002. I saw first-hand the devastation of this disease. I saw people lying there just waiting to die, and the absolute hopelessness when there is no treatment.

I'm glad to say that in the years since, AIDS has gone from being a death sentence to being a chronic but treatable disease, thanks to the development of antiretroviral drugs and the reduction in price due to competition with generics. The cost of the medicines has actually declined. In 2000, it used to be $10,000 per patient, but now it has reduced to about $140 per patient per year.

We have two major concerns with the TPP. Our first concern is the intellectual property provisions, chapter 18, which would strengthen and prolong the private monopoly rights enjoyed by the pharmaceutical companies and in consequence delay the competition that brings medicine prices down.

It will do this in a variety of ways. One way is through expanding the scope of patents by “evergreening”. This means that companies can make a small modification to their drug, even if it has no real therapeutic benefit to the patient, or even add a new use for a known drug, and can extend their monopoly for years—maybe another 20 years on top of the original 20.

Also, for the first time they're requiring countries to give eight years of monopoly to makers of biologic drugs. These are some of the most up-and-coming drugs and some of the most expensive ones. Again, they're going to be unavailable to a majority of the world.

Third, there's extending patent linkage to all TPP countries. This allows patent drug companies to block generic drugs from being approved for marketing. This has already led to needless delays in generic production.

Our second concern is the investor-state dispute settlement, chapter 9, which would allow investors to sue sovereign nations if they believe their future profits are threatened by domestic laws or regulations. This would have extreme negative consequences for Canadians. Already under NAFTA Canada has had 36 challenges. It has been challenged way more than the U.S. and Mexico have. So far we've paid out $250 million, and that's not including the cost of actually opposing them.

[The Chair, Liberal, Mark Eyking]

Just to let you know, you have one more minute.

[Jennifer Neal]

Okay.

People in developing countries will die as a consequence of the TPP. It's a critical time in the fight against the AIDS pandemic. We now know that early aggressive treatment with ARVs can almost completely suppress the virus and prevent its transmission. It's now possible to imagine a world free of HIV/AIDS, but only if low-cost medications are available to the world's poorest people.

MSF, Médecins Sans Frontières, have said that the negative impact of TPP will be enormous, making it much harder for us all to get the life-saving medications we need. Canadians will also feel the impact here at home. We at the moment have the second-highest drug prices in the world, and patent protection will mean more costly medications for Canadians too.

Canada's foreign aid is committed to helping the poorest of the poor. Recently, on the world stage as a responsible global citizen, we have stated our support for the UN's sustainable development goals, and Prime Minister Trudeau openly stated support for the UN 90-90-90 targets for HIV/AIDS reduction.

[The Chair, Liberal, Mark Eyking]

Sorry—

[Jennifer Neal]

I'll just finish the sentence.

If you believe those two things, you cannot be supporting this agreement. We should be standing up for a voice against this agreement, because it puts people's lives at risk in the service of profits.

Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thanks very much for your submission and your compassion. Is there a grandfathers' group out there?

[Jennifer Neal]

There isn't, but they're welcome to join GRAN. We're not exclusive in any way.

[The Chair, Liberal, Mark Eyking]

Okay. I'm a grandfather now, so....

Okay, we have the National Farmers Union, Terry Boehm.

Welcome. We've seen you around before in Ottawa. It's good to see you and be in your neck of woods here.

Sir, you have five minutes. Go ahead.

[Terry Boehm, Chair, Trade Committee, National Farmers Union]

I would like to thank the committee for the opportunity to speak to this trade agreement, and for their travelling outside of Ottawa to meet with us today.

NAFTA, WTO, CETA, Trans-Pacific Partnership, FIPA, TAFTA, TTIP—these are all a progression of agreements that are essentially ceding national sovereignty to so-called trade agreements. The agreements are largely anti-democratic, and one of the biggest reflections of this is in the secrecy of the negotiations. I recall the debate over the Canada-United States Free Trade Agreement, and then later NAFTA. This was debated openly, and the text was published openly at the time.

Now, we have seen a shift in how citizens are regarded in the process of negotiating these pieces. These are really corporate constitutions. Trade liberalization is a political philosophy, replacing the state with private enterprise and markets. It's not about deregulation or liberalization, but free regulation in the corporate interest—and of the largest corporate interests in the world.

Canada is adjusting legislation just to enter into negotiations. For example, UPOV 91 last year was commissioned in order to get into this. New Zealand is required to adopt it within three years of the Trans-Pacific Partnership being instated.

We are giving up sovereignly to investor-state dispute settlement mechanisms, as we previously have in NAFTA in chapter 11, and this leads to a regulatory chill. But this new breed of agreements is now penetrating to the subnational level, both to the provincial and municipal levels. All provisions of earlier agreements giving “most favoured nation” status are grandfathered into the next agreement.

What is “most favoured nation” status? Well, you cannot give a local supplier of a good or service any more favourable treatment than you would give to any other party that is kin to these agreements. Of course, one agreement also leads to any other. TPP says that if you have granted to any other party favoured-nation status in any other regard, you have to grandfather it into this one. Of course, this has detrimental effects for those local businesses, and then the taxpayers who are paying for the projects.

Government procurement is a big issue. At the federal level, $135,000 is the threshold at which this agreement will apply, and at the provincial and municipal levels it is $335,000, which is not very much. It's $5 million for construction projects.

Along with this, there's the prohibition of offsets in these agreements.

How is an “offset” defined? An offset means any condition or undertaking that encourages local development or that improves a party's balance of payment account, such as the use of domestic content, the licencing of technology, investment, counter trade, and similar actions and requirements. Fundamentally, if you're in a balance-of-trade deficit position, never except for a very short period of time in an emergency situation can you do anything about it with another trading party.

Then we get into expropriation or tantamount-to-expropriation regulations. Again, regulation in the public interest could be construed as a tantamount to expropriation, preventing a private entity from exercising its rights over its property. Again, this leads to a regulatory chill for the individual nation state.

Intellectual property in these agreements is extended to third parties. There's privacy of data, but local food policies are jeopardized by cover procurements, whereby government entities, municipalities, universities, schools, hospitals, etc., would procure local food but would be restricted from the most-favoured-nation status requirements.

In conclusion, we used anti-combines legislation in the past to break up private near-monopolies because the government saw the harmful impact on our economies. Now we have international corporations that are dwarfing these earlier entities, and we put trade agreements in place to bolster their strength economically and politically.

The two are not separate. These behemoths are fragile and often inefficient, but they need governments to enforce their power and privilege against their citizens. We give up to a large extent our ability to govern in the public interest.

I'll close there by concluding that in the agriculture sector I represent we've gone through a number of these agreements over time, and we've seen a reduction in the number of farmers, an increase in the average age, and a massive increase in the average debt load. I would challenge the presumption these have been beneficial to the agriculture sector. I would endorse the previous person's comments.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

Thank you for your submission.

We're going to move over to the Saskatchewan Association of Rural Municipalities, and Mr. Raymond Orb. Welcome.

[Raymond Orb, President, Saskatchewan Association of Rural Municipalities]

Good morning, ladies and gentlemen.

It is my privilege to speak to the House of Commons international trade committee this morning. My name is Ray Orb, and I am the president of the Saskatchewan Association of Rural Municipalities, also known as SARM.

SARM represents all of the 296 rural municipalities in Saskatchewan. Rural municipalities are home to farmland, oil and gas, potash, and other natural resource industries that are important to both Saskatchewan and to Canada.

According to the 2011 census of agriculture, Saskatchewan accounted for just over half of the canola area in the country, about 48% of the spring wheat area in Canada, and approximately 40% of total farm area in Canada. With such vast farmland, and so many farm families contributing to our communities, SARM has a keen interest in the TPP because of what it means to the economy and the benefits it would bring to farm families.

For Saskatchewan's economy, the TPP region represents 45% of total exports in 2014. During that year, Saskatchewan totalled $13.9 billion of agricultural exports, which is a 19% increase from 2013. The province is well on its way toward its goal of $15 billion in agricultural exports by 2020.

Saskatchewan is also the second largest beef producer in Canada, producing more than a billion dollars' worth of beef annually and approximately 4.3 billion dollars' worth of value-added products that are shipped annually. The value-added processing will increase with the TPP agreement.

The TPP represents not only a great opportunity for Saskatchewan's economy, but also for producers, as they would gain better access to markets through the reduction and removal of tariffs that would be phased in with the TPP. Growth and investments would increase in the value-added sector as well through better access to the Pacific markets for processed products, including canola oil, beef, and pork.

SARM has taken opportunities to promote and raise awareness of the importance of the TPP. This includes a news release in October 2015 and a letter of support to both Premier Wall and the Saskatchewan Minister of Agriculture. During SARM's Ottawa lobby trip, which took place this last February, some representatives met with members of Parliament and department officials.

Agriculture has been, and continues to be, a consistent contributor to the economy even during times of economic downturn, as seen now in the oil and gas sector. Ratification of the TPP would support and bolster the agriculture sector in Saskatchewan and across Canada.

While the TPP would provide benefits to the agriculture sector and market, it is important the infrastructure be in place to support the increased activity that would occur. As Saskatchewan farmland is dispersed across the province, rail level of service is a vital mechanism for us to get our products to market. We have seen what occurs when the rail level of service is unavailable or is unable to meet the demand. Shipments are delayed by weeks and contracts aren't honoured. It is important for Canada to be able to efficiently meet its trade obligations, and it is equally important for product to get to markets so farmers can support their farms and farm families.

The infrastructure needs aren't limited to the rail level of service either. Funding for rural roads and bridges is necessary for ensuring that products get to key points for shipment, such as grain terminals and loading facilities. If these supporting projects aren't completed there will be serious challenges in the future. SARM is hopeful the Canadian Transportation Agency review and subsequent discussions will produce initiatives and amendments that contribute to a world-class rail system.

For SARM, the TPP represents a positive opportunity the many farm families across the province and the country can enjoy. It also reminds us of the importance of ensuring that we have the necessary—

[The Chair, Liberal, Mark Eyking]

I'm sorry. If you want to wrap up, you have half a minute.

[Raymond Orb]

—infrastructure in place to be competitive traders and producers.

Thank you for the opportunity to speak today.