International Trade Committee on June 18th, 2019

[Randy Hoback, Conservative, Prince Albert, SK]

So you can actually maintain a steady supply to any consumer who wants to purchase it from anywhere.

[John Masswohl]

If we could get the labour to process that, that would be great, too.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to move over to the Liberals, with Mr. Sheehan for five minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

Thanks to everyone for their presentations.

This government has consulted broadly and I was glad to hear from Chief Perry that the first nations, for the first time, have been consulted in a meaningful way in a trade deal. That was very good to hear.

Chief, you know that I'm from the riding of Sault Ste. Marie. We have Garden River and Batchewana there. Sault Ste. Marie and that area has just been a natural area to trade. I liked your comment about how first nations had been trading way before the European settlement came. Sault Ste. Marie was always a natural place because everyone came to fish for the whitefish, and then they would trade. That continues today.

Now, you know that Batchewana has an industrial park. You know that Garden River has movement in their areas. Could you tell me exactly, how might the CUSMA, this NAFTA deal, benefit first nation businesses, in your opinion?

[National Chief Perry Bellegarde]

That's a good question. One way it's going to benefit is through the procurement piece, by having not just objectives, but specific targets with specific numbers in terms of procurement. That's a big thing. That's one way, and that's specifically referenced within the CUSMA as well. There is talk about future economic opportunities down the road. There's still a lot of work to do once this is ratified and to make sure there is full involvement and inclusion. There are 634 first nations across Canada, all at different levels. Some are already participating in the international economy. It's just to build upon the examples like that.

We think that Canada is a country rich in resources, and it is. We want to build the economy and be part of the economy. There's only one economy. It's a national economy but it's a global economy. Where do the indigenous people fit into that in terms of demand and supply and supply and demand? We have to fit into that chain somewhere. I think with the full involvement, the inclusion, there are opportunities that we can build upon. I see it as a start. We have to keep making sure the opportunities are built upon. There are some things there, especially regarding procurement.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That's very good.

Keeping on the consultation theme, I'm going to go to Angelo from Unifor.

Between February 2017 and November 30, 2018, there were 1,245 stakeholder engagements with first nations, unions, businesses, organizations, etc. How important was that consultation during that 10-month period, and do you believe that was substantial?

[Angelo DiCaro]

Yes, I think the lack of consultation for many years has been a real problem. I don't want to speak for the entire union movement and NGO community, but that's been a long-standing grievance.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Can you clarify that lack of consultation?

[Angelo DiCaro]

The lack of engagement throughout these processes left us on the side—

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Are you talking about the previous government, just for clarification?

[Angelo DiCaro]

That's right, and I'd say that up until this moment I think there's been a pretty consistent keeping us out of the loop—CETA, TPP, the Korea deal and right down the line. This was a welcome change, this fact that unions and NGO stakeholders were brought into the fold and had stakeholder engagement sessions like others were used to having. Our union obviously was an active stakeholder. We attended all the different rounds of negotiations.

One thing I will say is that I will commend the civil service, the folks who are working on these and the negotiators who have been doing this for a very long time. There really was an open door with us. We would have a question and could put in a call and get a quick answer. It was very informative, I would say. It really forced us to hone our positioning, and it gave us an insight into how these processes work. Through that, I think we've become much more useful stakeholders through the process.

No process is ever perfect, and I look around the world and I see other situations, including in the U.S., where union stakeholders have extraordinary access to assessing the text. We still can learn from different processes, and we have a long way to go, but I think this experience has been quite fruitful. Hopefully, it was vice versa with more union involvement.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Just specifically, can you speak to the importance of the provisions in the rules of origin that emphasized high-wage labour?

[Angelo DiCaro]

Sure. How much time do we have left?

[Voices]

Oh, oh!

[The Vice-Chair, Conservative, Dean Allison]

You're over your time. We'll give you about 30 seconds.

[Angelo DiCaro]

I'll try to keep it short.

As I said, it's a very unique proposal. It's a proposal that's very much understood as an enhancement of labour rights but that has to be understood within a package of changes that were made. We view this very much as a fail-safe to try to set a benchmark where the tendency was to simply relocate production to the areas of the continent with the lowest possible production cost.

Having a buffer like this.... Again, there are a lot of question marks around how these regulations and uniform regulations are going to be worked out, but it's something that we've not seen before and that can provide us a bit of added security, hopefully, to make sure that production does stay in Canada.

I'll leave it at that.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much, Mr. DiCaro.

We're going to move over to Ms. Ramsey for five minutes, please.

[Tracey Ramsey, NDP, Essex, ON]

Thank you so much, and thank you to another very diverse panel on this massive and important agreement.

Mr. DiCaro, to me, as a former Unifor member, it's been interesting to see the government attempt to paint everyone in labour with one brush and say that they fully support this deal. I think what you brought today was a balance, along with some of the concerns that labour has with portions of this deal.

One of those things that I'd like to have you weigh in on a little further is what you alluded to in your remarks. For all of these efforts—and I do thank labour for the efforts, certainly, that were put forward to see some movement in labour—it's a bit of a best guess as to whether or not in practical terms this will play out in a way that benefits working people.

I say that because I know that the enforcement is very much up in the air as to whether or not there will be any ability to enforce any of the labour provisions that have been sought. I wonder if you would comment on the precariousness, perhaps, of that, and the risk in it when we've seen so many jobs lost under the previous NAFTA.

Also, could you comment a bit on the efforts in the U.S. by Congress and whether there is any attempt to improve labour provisions, the ones that you weren't able to achieve when you were at the table? Does Unifor believe that we should be a partner in that, in trying to achieve even further than what we were able to in the original negotiation?

[Angelo DiCaro]

Thanks for the questions.

I'll take the first one, which I think is a shorter one. The last time I read through the text there was no provision that said we will not see one job lost or any more outsourcing allowed in any of our.... There's always going to be precariousness in an era of free and unfettered bilateral trade. That will certainly continue and it's something to reflect on and understand.

The piece, though, about the labour provisions, when you say “best guess”, that's a good way to put it. There's a lot of disparity across the continent about labour standards. It is not the driving force behind where firms, particularly manufacturing firms, choose to locate production, but it is a factor. We have a situation where in the United States there are various states that essentially prevent the functioning of unions through various measures. In Mexico, it is quite stark. It has a system that is essentially upside down from our own system.

As we engage in free trade with nations in jurisdictions like that, we are always going to be pressured to see our wages drop to those standards. It's usually the carrot and stick. You want to keep your production and you want to keep these facilities operating. We're going to have to balance out the competitiveness, and that competitive imbalance has really hurt us.

The changes made in Mexico are the biggest concerns we had. They are significant. I don't think anybody diminishes that. The language of the USMCA, the CUSMA text, was very strong. Our independent Mexican allies, the independent unions we work with down there, are actually quite encouraged by what this could mean when they pass the Senate bill. However, they are also very skeptical. It is why the Democrats in Congress are trying correct what has been seen for generations: promises broken and reforms to a system that's very deeply entrenched. Whether that will actually yield free and fair collective bargaining, a free escalation of wage rates through arbitrations, the dismantling of a very imbalanced conciliation system they have on their books, remains to be seen. They want to make sure there is iron-clad enforcement.

There are loopholes in chapter 31, and that's where the Democrats are pointed to. Having different mechanisms to get at that through proactive enforcement is something Unifor would support, full stop, if we were able to do that.

[Tracey Ramsey, NDP, Essex, ON]

The words on gender obligations in the original text have disappeared in the scrub. Can you comment on that?

[Angelo DiCaro]

Yes. That was supremely disappointing. It sounded like it was driven by some U.S. political considerations. What were firm commitments to ensure protections against gender discrimination in the workplace effectively were watered down with new language in the eleventh hour that rendered the whole clause meaningless. Of the clauses we were encouraged by, certainly that was one of them. That has completely gone south, and is a black mark on this deal, for certain.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much, Ms. Ramsey.

Mr. Fonseca, you have five minutes.

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

Thank you very much, Mr. Chair, and I want to thank all of our witnesses that are with us today.

It's great. We heard a lot about labour and what this new CUSMA would do for labour. Mr. DiCaro, I want to read into the record what your boss, Jerry Dias, had to say:

This framework delivers significant improvements in auto. Unifor called for increased rules of origin and higher wage thresholds in Mexico to rebalance the auto manufacturing and stem the exodus of good paying jobs from Canada, so we're pleased to see those issues addressed. The auto industry should be absolutely thrilled.

I have a number of quotes here from many different labour organizations.

In terms of this new agreement, CUSMA, in levelling the playing field, that's what we've all been working toward in terms of creating the right new NAFTA. It would be levelling the playing field, ensuring that Canada is in a competitive position, because we know we have the people and we know we have the resources; it's just a matter of levelling that playing field to take full advantage of a new NAFTA.

Do you believe this is the agreement we're bringing forward?

[Angelo DiCaro]

I think that what we've done in this agreement has transformed the expectation of how more strict supply chain regulations ought to work that aim to benefit workers, and I think all in the spirit of levelling the playing field.

What needs to be seen is how this works in practice. I say that because we are in the midst right now of seeing a very comprehensive set of uniform regulations for that rules of origin chapter being developed. I think the rules of origin chapter does things that no other trade agreement has done, and they were very important changes that had to be made—supremely important.

However, these uniform regulations are going to spell out the fine details. We're going to watch that process unfold very carefully. There are issues around, for instance, the $16 threshold that was introduced, where in the text of the agreement it refers to this $16 as a minimum. When you read the footnotes of that chapter, you see that it's actually an average facility: $16. That changes the dynamic. Then further in the uniform regulations, we're going to find out how you're going to calculate that $16.

While I think on the top level our auto membership were surprised, but pleasantly surprised, that we would make such a change in how these rules work, people are also waiting to see all of the t's crossed and the i's dotted on how this is going to work in practice. Are we getting there? Absolutely, but there are a lot of things that still have to be sorted out.

That's what I'll say to that.

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

That's what we heard from the Canadian auto parts manufacturers and others who have presented here. They talked about this potential opportunity for investment now that we've brought more certainty—the access, of course—to the North American market.

I will kick that over now to Bob.

With regard to that certainty and that access, and making sure that we do no harm with the new NAFTA, can you say what kind of potential there is now, in terms of increasing...with investments through your stakeholders, your members?