International Trade Committee on April 20th, 2016

[Tracey Ramsey, NDP, Essex, ON]

Have you looked at the impacts of that?

[Kent Smith-Windsor]

I'm not a solicitor; however, I think that the primary emphasis is like-in-kind investment, and it deals with non-discrimination between an investor from one jurisdiction against others, so to the extent to which there is distortion, they probably impact more adversely on their own community.

What is more encouraging from our perspective is the recognition of non-tariff barriers as being an issue that is addressed in this agreement in ways that others haven't. We had some discussions around phytosanitary mechanisms and the like. The fact that we're speaking to those elements of trade improves the situation not only at the local level but internationally.

[Tracey Ramsey, NDP, Essex, ON]

Yes, I hear the tariff argument but I think what I'm trying to address is the ending of fracking and—

[The Chair, Liberal, Mark Eyking]

I'm sorry, Ms. Ramsey, you're over six minutes, unless the Liberals want to give you another five minutes. I've never seen that happen yet, so I don't think it's going to start today.

[A voice]

I don't think you're going to see it happen.

[The Chair, Liberal, Mark Eyking]

Mr. Peterson, you have five minutes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Thank you, everyone, for being here and taking the time out of your schedules to present this information to our panel.

I have a few questions. I'm just going to start with Ms. Stinka.

Can you just elaborate a bit on how we get potash to market now? You say all the recipient countries are already tariff free. I'm hearing there are benefits beyond the non-tariff in this agreement that you think will benefit your organization. Can you just elaborate on that, on how that will benefit your processes in getting those products to market?

[Natashia Stinka]

Canpotex is responsible for marketing and delivering potash on behalf of our shareholders, the potash producers here in Saskatchewan. We have marketing experts who are located close to our customers in overseas markets. We have been operating for over 40 years, and the folks we have in the field have a deep understanding of communities, and the cultures and the businesses in those markets. They have a good understanding of how to sell potash and what the agricultural needs in those communities are.

We do something that is unique. It is a very competitive sector. There are eight other international competitors in the world. One of our competitive advantages overseas is our ability to deliver potash on time in the quantities that our customers want. What we've built in Canada is a fairly sophisticated logistics supply chain, and we've taken care of essentially our first and our last mile. We take ownership of potash at the mines, and it is loaded into custom-designed railcars that were built and designed at National Steel Car in Hamilton, Ontario.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I know it well.

[Natashia Stinka]

We've invested over $500 million since 1999 in this fleet that allows us to ship more potash to our terminals. They go on to port, and we have three terminals where potash is loaded onto vessels. One is at the Port Metro Vancouver. Now there is one at the Port of Saint John, and we also have one at the Port of Portland. The potash is loaded onto vessels, and on any given day there are 40 vessels of Canadian potash on the oceans going to ports. We make about 600 port calls each year, and that's how it gets to our customers.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you. That is very informative. I appreciate that.

I'm hearing from you that there won't necessarily be an increase in volume because you're already shipping tariff free, but there are other features of the agreement that will make doing business easier. Even under the ISDS, it probably will afford even more protections in those countries where you're already doing business, where you already have assets in place, and you have operations in place.

[Natashia Stinka]

Yes, what the TPP would offer is a great deal of predictability and stability for the long term in these markets so that we would be assured there is a path forward should there be any issues that arise in the future, and for how those issues could be dealt with.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Okay, thanks. I appreciate that.

That segues me to another question, and all three of the panellists can pipe in if we have enough time. Should the TPP come to fruition, the trade deal only opens doors. I take it your organizations and your members will want to take advantage of those benefits. Is the infrastructure in place to get increased volume and goods to those TPP markets? If not, what should we be doing about that?

[Kent Smith-Windsor]

The conduit through STEP is one that their organization and ours has fought with since that organization was formed, and we continue to explore other opportunities. I think that two of the elements that we're paying particular attention to is support for small-sized and medium-sized enterprises. I think the most recent federal budget speaks to that. I don't know that STEP has yet tried to absorb that from an internal perspective.

Perhaps the most powerful piece in this is the service trade, where we're finding components that are not as commodity based in our economy that are exploring other markets. We didn't have an opportunity in the time constraints to talk about the intelligence component of Saskatoon's or Saskatchewan's economy, so the service trade, in terms of telecommunications information and Internet-based marketing and reputation management, are very significant. Those businesses are growing at a quite significant scale. Right now, they're focused on the United States. We think there's a genuine opportunity for those to stretch into these other markets.

[Brad Michnik]

Yes, it's not quite there for the ambitions we had, I guess. For example, it was the province's intent to double our exports by 2020 and all that. Right now, it seems like the economy has slowed a bit, so the infrastructure is caught up, but when we've been in better times we've seen an absolute deficit on the entire infrastructure. It's all aspects. Ken touched a bit on it. We've had issues with the rail lines but, certainly, in the value-added industries where you go a lot more to trucking freight, for example, simply the fact that we don't have an interstate straight south in Saskatchewan creates extra costs for companies who ship goods into the United States, so nothing is too direct.

We see challenges there that are never-ending.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

Time is well up, Mr. Peterson.

We're going to start the second round and it is the final round.

We'll start off with Mr. Dhaliwal. Go ahead, sir.

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

Thank you, Mr. Chair.

My question is to Madam Stinka. You said there's not going to be a volume change when it comes to export markets on potash. Is that correct?

[Natashia Stinka]

That's not one of the key benefits of the TPP that we've identified.

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

Besides the TPP countries, is there any other country that's not part of the TPP, but if it were included in the TPP, would benefit potash and Saskatchewan in general?

[Natashia Stinka]

Are you asking, is there a market in the TPP that we would now enter?

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

No. Besides the TPP countries, beyond the TPP countries, is there any other country that you can see, for example China or India or any other nation, that's not part of the TPP?

[Natashia Stinka]

We're currently operating in 35 different countries and, as you know, that's in a number of overseas markets.

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

Is that good enough for you, do you think?

[Natashia Stinka]

We would make our marketing decisions based on customer needs and that sort of thing. Off the top of my head, I can't give you an example of a new market that we would be looking at.

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

Thank you.

Mr. Michnik, what are your thoughts on diversity planning? You were mentioning something to do with China as a second trade partner or India as a third trade partner. Do you view them as being part of the TPP?