International Trade Committee on April 21st, 2016

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Do you feel that this would displace Canadian workers and maybe drive down our wages here in Canada?

[Sudhir Sandhu]

Without a doubt. Absolutely.

[The Chair, Liberal, Mark Eyking]

That's your time, Mr. Fonseca.

We're going to move over to the NDP for five minutes with Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

Thank you for your presentations today.

I would like to focus on the building trades, as we've not heard from that perspective yet on this committee.

I think we hear clearly your fair point that you support trade, the removal of non-tariff barriers, the removal of tariffs, and having harmonization, all those things that will benefit the other panellists. But when you look at the labour provisions, and in particular chapter 12 of the TPP, which covers these provisions....

I think you highlight for us an example of regulatory chill, which is something we've been hearing a lot but haven't seen an example of so far. Basically, if we deny entry to workers in your building trades coming into Canada, we could be sued under the ISDS provisions and would then have regulatory chill because people who are seeking those workers would automatically go outside of the country because they would fear being sued under the ISDS. Can you expand on that a little bit?

[Sudhir Sandhu]

I talked earlier about the union versus non-union construction sectors. The union sector internalizes the costs of workforce and labour development—training and all of that.

If I'm going into the Canadian market on a project basis, I have absolutely no financial incentive or long-term benefit from investing in the development of the Canadian workforce. Therefore, there is an inherent and built-in incentive for me to bring in a portable workforce to work on that project and move on. That puts Canadian operators and contractors, and quite frankly Canadian workers, at a disadvantage relative to a system that internalizes inordinate costs.

As I said earlier, our workplaces are the classrooms, and that comes at an inordinate cost. Therefore, we'd be leaving those workers on the side.

We talked about aboriginal workers. There's going to be significant investment in engaging a young aboriginal workforce. Therefore, if Canada intends to have specialized programs and to invest in at least engaging those aboriginal Canadians who want to participate in the skilled trades and construction industry, good luck to all of us. We could run the programs, but we couldn't offer them employment, because other parties would have a cost advantage relative to Canadian operators. Quite frankly, why would they invest and why would they go ahead and hire the people we've invested in training if it costs them more?

[Tracey Ramsey, NDP, Essex, ON]

I have another question.

I really believe it's critical that the government supports this competitive Canadian construction industry. How does the TPP expose the construction industry to foreign competition?

[Sudhir Sandhu]

The industry our organization is a part of has unionized contractors, it has project owners, and it has the workers that we represent. That makes up the industry.

We've had significant pressure and consistent pressure from our non-union competition to compete on the basis of cost. Of course, on a straight-up cost basis, they have an advantage because they're not internalizing the essential costs of training and developing a workforce. When you're starting to compete with now global entities...and in talking to our contracting partners and our business partners who voluntarily enter into workforce agreements with us, they're telling us on a daily basis that global competition is increasing as it is without the existence of TPP chapter 12 provisions. They are exposed to greater global competition in the construction universe.

They already have a difficult time matching that competition on a cost basis because foreign competitors—again going back to the point of having to invest in the Canadian workforce—come in, and they can offer a low-cost option because they don't have to bear the same internalized cost as we do. That obviously puts Canadian workers, Canadian contractors, and Canadian businesses at a disadvantage.

[Tracey Ramsey, NDP, Essex, ON]

We heard from the Alberta Federation of Labour about chapter 12 earlier this week, addressing the temporary entry of foreign workers. They said that it confirms fears that the deal allows foreign companies to bring in an unlimited number of temporary foreign workers in certain broad occupational categories without work permits, bypassing all certification requirements and the rules to protect Canadian jobs; and that his will continue to distort the labour market and to displace Canadians and drive down wages.

Do you think that assessment is accurate?

[Sudhir Sandhu]

I wish it weren't, but it is.

It's a very reasonably held apprehension, based on past experiences. Also, given the much more stringent requirements under the TFWP, we have had a number of issues with foreign workers not being treated to the same standards as we expect in Canada.

On experiencing significant wage differentials, going back to a lawsuit with HD Mining in British Columbia, the human rights commission ruled that Latin American workers were being paid less than half of their European counterparts. Those practices exist as it is, and with the addition of much more relaxed entry standards, I think it will just get worse.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Sandhu.

Ms. Ramsey, your time is up.

We're going to move over to Mr. Peterson for five minutes.

Go ahead, sir.

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

Thank you, Mr. Chair.

Thank you, everyone, for being here today and for your informative presentations.

I have a few questions, not surprisingly, but at the outset I want to indicate how difficult a role our committee has. This panel is probably a prime example.

We have Mr. Reimer and Mr. Dickson saying that if we don't ratify it, it's going to result in thousands of job losses. On the other hand, we have Mr. Sandhu saying that if we do, it's going to result in thousands of job losses. I don't think any of you are misleading us at all. This is the dilemma this committee faces. We appreciate your input here. Hopefully, your insight can help guide us in our deliberations.

I have a couple of quick questions.

Mr. Reimer, is the cattle herd here in Manitoba suffering as it is in other provinces? Is it shrinking a bit? Is that a problem here or not?

[Heinz Reimer]

Yes, it did shrink, especially after BSE. The size of the herd shrunk in Manitoba but in the last year we're starting to see some increase in the herds again. You have good cattle prices or a good return on your investment, and people start to come back in.

I will say one thing that I've seen over probably the last year and a half. At the meetings that I go to and so forth, there is a far younger audience out there than there used to be. There are other initiatives, such as price insurance, that we've been able to obtain over the last number of years. That helps producers, especially younger guys. There's a way of getting in and there's quite a bit of optimism out there right now.

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

That's good to hear.

This is an easy yes-or-no answer. If TPP is ratified and you get access to the Japanese market and the growing Vietnamese market, are you confident that you'll be able to meet that extra capacity with your supply here?

[Heinz Reimer]

I hope so. I think it's going to take time. As you know, the cattle industry is definitely different from the hog industry. It takes a lot longer to get a finished animal ready for market than it does hogs or chickens, but I do believe we will step up.

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

I like that confidence; that's good.

Mr. Sandhu, under the TPP there's the labour arbitration provision as well. We all know here in Manitoba there's a labour arbitration process that I'm sure your members and you take part in, unfortunately, probably on too regular a basis than you'd like to. Why do you see the labour arbitration in the TPP to not be as fundamentally just as the one you use here in Manitoba?

[Sudhir Sandhu]

It's a question of how the legal threshold must be satisfied under the legal system, under the courts, and comparing that to the type of international arbitration provisions that are typically part of trade agreements. It's a much different standard. For example, in labour arbitration we deal with the balance of probabilities as opposed to absolute truth, and that relaxes the standard.

I have a background in taking some international trade courses during my academic career. I have a thick book of jurisprudence on international trade tribunals and decisions, and some of them make as much sense as some labour arbitration cases do on either side, whether you're on the employer's side or the union's side. I think just relaxing that standard and the provisions that apply, and ceding Canadian jurisdiction over that matter to a panel of arbitrators is a very tricky proposition under any circumstance.

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

Thank you for that.

Mr. Dickson, I just want a comment. You mentioned briefly the difficult position the Canadian pork industry was put in by coming late to the Korean free trade deal. I think it's fair to say that you probably haven't fully caught up with where we could have been, had we been in at the early stages. Would you say that's a fair assessment?

[Andrew Dickson]

In the last couple of years we're starting to catch up again because the tariffs have come down and our prices now are more competitive with the United States. You get into this issue of the Korean purchaser, in this case he was a major retailer, and its confidence in who it likes doing business with. The Koreans like dealing with Canada. We have an aura of high-quality products and good, strong government inspection measures. We generally are able to meet any product quality or differentiation factors that they want, and we can put it at the right price point for their stores. It's a sensitive business thing, but there are a lot guys who get into this.

The one thing I want to point out, too, about trade agreements and so on—with the CETA, and with this FTA with South Korea, the FTA with TTP, and so on—is that they give our producers assurance about a future. We're in the stage now where our barns are old. We have to invest between $1.6 billion and $1.9 billion alone in this province in the next 10 years on all our barns, all the equipment inside them, and all the stock. We'll also need another half of a billion dollars in working capital to make that work each day. We need to know that there's a good, positive future out there. Otherwise, why are we making this investment? It's not going to be animal spirits that's going to drive us here.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

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

Mr. Sandhu would like to help you with the building of those, I'm sure.

[The Chair, Liberal, Mark Eyking]

Thank you, sir. Your time is up, Mr. Petersen.

That ends our first round. We're going to go to the second round, and it starts off with the Liberals for five minutes.

Mr. Dhaliwal.

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

Thank you, Mr. Chair.

Thank you to the panel members.

My questions are for Mr. Sandhu. We have heard from the beef industry, canola, and pulses, and they're all supportive, but you have expressed some concerns around temporary labour. If we take this chapter 12 about which you have concerns, do you generally support the TPP?

[Sudhir Sandhu]

Thank you for the question.

I indicated right at the very front that when there are fair trade agreements that eliminate artificial barriers to trading partners in a reciprocal way, we absolutely support free trade.

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

I came to Canada as a permanent immigrant, without speaking any English, 32 years ago. Many others like me have come to Canada and have contributed.

When it comes to temporary workers, there is not a day in my office that I don't get a complaint that either the temporary worker is being exploited by the employer or the immigration consultant, or by some other means.

Where are your thoughts when it comes to permanent immigration versus temporary immigration, or the temporary workforce that we bring in?

[Sudhir Sandhu]

We're currently working on a very substantive hydro installation in northern Manitoba, with about 10 billion dollars' worth of investment, and again, with great middle-class jobs for Canadians. We also simultaneously signed an agreement with the project owner that should supply shocks be posing risks to the project, we would support an application under the TFW program to engage a workforce.

TFW workers offer short-term solutions. The long term, of course, is growing the Canadian capacity to deliver these projects. Again, I cannot emphasize enough that we're working with a number of first nations organizations to increase their participation in the workforce. It would be ironic if aboriginal and other Canadians were standing on the sidelines watching Canadian infrastructure being built by a foreign workforce. That's the risk.

Immigration? I absolutely support that as a long-term strategy. In the short term, from time to time, there has been a need for properly structured TFW programs that help Canada as well.