International Trade Committee on June 18th, 2019

[The Chair, Liberal, Mark Eyking]

Your time is up. Sorry, Mr. Carrie. We wouldn't want you taking any time from Ms. Ramsey now, would we?

[Colin Carrie, Conservative, Oshawa, ON]

Not at all.

[Tracey Ramsey, NDP, Essex, ON]

Good luck trying.

[The Chair, Liberal, Mark Eyking]

She only has three minutes.

Ms. Ramsey, you have the floor for three minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

I'll pick up on that theme of my colleague. You know, 400,000 manufacturing jobs have been lost in Canada. It's so significant, and without government at the table in a real way to attract that investment, I don't know that anything we put in any agreement will be able to address this really serious fundamental challenge that we have.

For my question, I want to go to Ms. Dey.

We talked about regulations, about regulatory co-operation and practices, which is chapter 28. Trade deals routinely limit the ability of countries to regulate and limit how we regulate in certain areas, such as public health, food safety, rail safety, and workers' health and safety. There are a lot of rules in trade agreements on how governments can make policy and regulations. The new NAFTA, the CUSMA, has been criticized for going even further.

I wonder if you could comment on this, please.

[Sujata Dey]

This is what we were talking about, that most of the trade agreements have very little now to do with tariffs. Traditional trade agreements are going more into the regulatory space. You see that with ISDS, the investor-state dispute settlement, which is in quite a number of trade agreements, including CETA and CPTPP, which give corporations the ability to sue governments when policies or rules are changed. The new trend has been within CETA, within TPP, and with NAFTA—somewhere in the old NAFTA we also have regulatory co-operation councils outside of NAFTA—that with each agreement, this regulatory co-operation is becoming more and more intense. With CETA we see it as a voluntary thing, where the two sides meet and talk about regulations, and there are committees. With the CPTPP it becomes much more intense. With the new NAFTA, this becomes even more intense.

Now we've gotten rid of the ISDS, so we can no longer sue when regulations get in the way of profits, but you have now a dispute settlement. When a corporation or an interested party doesn't feel that the regulatory co-operation things have been respected, they can go to state-to-state dispute settlement. Now they have a mechanism to challenge regulations.

The other thing they have is kind of a back door. They have a process where their stakeholders are consulted at the beginning and towards the end, while the regulation is being hatched. That means a regulatory body is being forced to, first of all, defend its rule. It has to do a cost-benefit analysis. It has to defend whether it has to legislate in the first place. It has to defend whether these rules are so-called science-based. Now, it might [Technical difficulty—Editor], but what it means is that we cannot use the precautionary principle, and therefore the burden is on the regulator to say, “This regulation will harm person X.” It's not on the company to say, “My product is safe.”

These are very important ways in which regulatory co-operation can affect how a regulation sees the light of day. The problem with that is that these are semi-transparent committees. Civil society does not have the same mechanisms or the same resources to sit on these committees and hatch the rules. This is an extra-parliamentary space. This is a space above our democracies where corporations from three countries actually have a say on our rules and have a dispute settlement mechanism if they don't like them.

[The Chair, Liberal, Mark Eyking]

Thank you.

We have time for one last questioner.

Mr. Sheehan, you have the floor.

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

Thank you very much.

Thank you very much to the presenters today.

I'll pick up on what the last panel was talking about, and that is, how critical it was to have the lifting of section 232 tariffs on steel and aluminum and how important it was to have the lifting of the counter-tariffs we put in place. I think more Canadians and Americans are extremely aware of the integrated market we have between the United States and Canada as a result of what had happened. I will use Algoma Steel, as an example. In Washington and other places.... Product is sourced from four states. Iron ore comes from Michigan and Minnesota, and coal comes from Pennsylvania and West Virginia. It's put into the transportation network to send it up to Algoma Steel where it's made into steel. In terms of the steel produced at Algoma and many other steelmakers in Canada, basically one-third goes into the auto industry, one-third goes into energy, and one-third goes into manufacturing.

I guess I'll start with you, Mr. Volpe, because you have a good Sault Ste. Marie name. There are lots of Volpes there. How important was it to your membership to get the tariffs lifted?

[Flavio Volpe]

You know, the tariffs were a fair bit of madness. Somebody decided to put a tariff on a good that would be borne by consumers in his own country to prove a point that nobody understood. The fact of the matter is that for 10 months we all paid it. The Canadian counter-tariffs, which I thought were tactically important to do, in some cases were more disruptive to some of our members' business because of the very nature of that cross-border trade. We were able to get them lifted, but it took a while. It's a big relief on the industry on both sides of the border to have them gone.

I would also point out that what was unique about it was that I think it was the first rupture between the Republican senators' caucus and the White House. They felt enough pain from our retaliatory measures that they worked; it was important enough. But 10 months of lost productivity for some very important facilities will take a while to undo.

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

I agree with that.

I'm going to Toronto now. Mr. Adams, I'm glad to see that you could make it into work after that big traffic jam for the Raptors party.

For you, sir, the chair mentioned that we met with Honda and Toyota as well. In some of the conversations I've had not only with them but with other automakers, some people alluded to Trump's saying that he was going to rip up the free trade agreement. However, he did not do that, but he did introduce a sunset clause of five years. How important was it to the auto industry not to have a five-year sunset clause?

[David Adams]

Well, it's like anything else. I think certainty is key, and long-term certainty is key. Having a five-year sunset clause is a very short time frame in the overall scheme of automotive investment and automotive planning. I think that not to have that in place was very important at the end of the day. I'll just leave it at that for the sake of time.

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

Thank you very much.

I guess the obvious question is what I asked before about section 232 and if it were ever extended to the auto industry, the ramifications...just to get it on record from you, please.

[David Adams]

Yes. I think the fact that the side letters are in place right now and not waiting for the ratification of the agreement is important. They're not ideal, but I think they do provide protection for the automobile manufacturers in the Canadian marketplace.

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

With the auto manufacturers and also the parts, and overall on your opinions of the deal as it is today versus where we were 10 months ago, would you suggest that we do this as soon as possible? What kinds of time frames would you suggest the government follow in a ratification process?

[David Adams]

I think it's already been mentioned that the holdup is not Mexico and the holdup is not Canada. The holdup is actually the U.S. Congress. It remains to be seen what's going to transpire down there, but as has been mentioned by other panellists, I think it's important to put our best foot forward and to show a clear indication that Canada is willing and ready to ratify this agreement.

On the exact specificities around the timing, I'll leave that alone, I guess, but I just think it's important to ensure that the message is loud and clear that we're ready and willing to ratify this agreement.

[The Chair, Liberal, Mark Eyking]

That's your time, Mr. Sheehan.

That wraps up this panel.

We've had good dialogue, good presentations and good questions.

Witnesses, thank you very much for coming. It was short notice that you had to make yourself available for this meeting.

Have a good day, everybody.

We're going to have another panel coming up. We're going to take a short 10-minute break. We're going to come back at 11:30. We will also get some submissions from the public if they have any.

You're welcome to see our report when it comes out. Thank you very much.

We're going to suspend for 10 minutes.

[The Chair, Liberal, Mark Eyking]

Good morning, everyone.

Welcome to the Standing Committee on International Trade. Some say it's the most vibrant and active one on the Hill. We get a lot of things done.

We've been very busy the last few years with the various trade agreements. We did a lot of travelling, especially all through the United States in the last couple of years, dealing with this agreement.

Today we're talking about Bill C-100. We're doing the pre-study. This is the third panel we're having.

Welcome, folks. Thank you for making it here on such short notice. Many of you travelled across the country to be here with us today. It's an important agreement. It has a big impact on many Canadians.

Many of you have been here before. We hope you will do a presentation of around five minutes, give or take. That gives us lots of time for dialogue with the MPs.

Without further ado, I think we'll get right into it.

We'll start off with Chief Perry Bellegarde from the Assembly of First Nations.

Welcome again, sir. It's not your first time here.

[National Chief Perry Bellegarde, Assembly of First Nations]

Thanks, Mr. Chair.

[Witness spoke in Cree]

[English]

To all the distinguished members of the committee, I'm very happy to be here acknowledging you all as friends and relatives. I also acknowledge the Algonquin peoples for hosting this on their ancestral lands. For me, from our AFN, I'm happy to be here.

I want to share some perspectives. I'm very honoured to speak here on behalf of the Assembly of First Nations regarding Bill C-100. I'll also say a few words about the process to negotiate, ratify and implement the Canada-United States-Mexico agreement.

Trade in resources and goods in this land, I always say, began with us, the indigenous peoples. The participation now in 2019 in international trade should not be seen merely as part of history. Going forward, how do we get more involved?

As self-determining peoples, we have interests and rights respecting today's international trade agreements. We've always said that for far too long we have not seen the benefits from international trade flow to our businesses or to our communities as first nations people. These facts should form a part of legal and political frameworks when Canada explores new free trade agreements. I've always said, from a first nations perspective in Canada, that whenever Canada goes out to negotiate or discuss anything from softwood lumber to trees, anything from potash in southern Saskatchewan, to uranium in the north or any oil, coal, or whatever natural resource it is, indigenous peoples should be involved and should be participating, because there's respect or reference that we still have unextinguished aboriginal title and rights to the land and territory and resources. It's a simple fact. So we need to be involved.

When Canada, through Minister Chrystia Freeland, welcomed me to be on the NAFTA advisory committee, it was very important, because to date, indigenous peoples haven't been involved. We also had indigenous officials working as part of the working group. In the end, we'll say that this work resulted in the most inclusive international trade agreement for indigenous peoples to date. It's not perfect, but to date it's the best that we have in Canada.

With the ratification of the Canada-United States-Mexico agreement, we would take a step to making international trade more aware of and more equitable in its treatment of indigenous peoples, and especially for indigenous women entrepreneurs. We still have more work to do.

We believe the Canada-United States-Mexico agreement is a step in the right direction with the new general exception for indigenous rights with respect to inherent and aboriginal and treaty rights. As well, with specific preferences to carve out procurement benefits and other opportunities for indigenous businesses and service providers, there's also a promise of future co-operation to enhance indigenous businesses. As well, importantly, the investor-state dispute settlement process, which was a threat to indigenous people's rights, will be phased out for Canada. This is the groundwork for positive change.

While the Canada-United States-Mexico agreement is a new example of the difference it makes to engage with indigenous peoples at an early stage, there must be increased opportunities for first nations participation not only in international trade negotiations but also in trade missions.

Canada should extend an official role to first nations in negotiations of all international agreements on trade and investments that impact inherent treaty aboriginal rights. This would better reflect the nation-to-nation relationship and the whole-of-government commitment by Canada to implement the United Nations Declaration on the Rights of Indigenous Peoples. In addition, the inclusion of first nations leads to better decisions and better outcomes.

With regard to Bill C-100, what I'm recommending to all the committee members here is that there should be in place a non-derogation clause. It's a safe clause, that nothing in this agreement will affect existing aboriginal treaty rights, which are affirmed in section 35 of Canada's Constitution. I'm making that recommendation as well as that it be interpreted and implemented consistent with those rights in section 35. It's good to have it ratified by Canada, the United States and Mexico on one hand, but each nation-state will come back and do some sort of legislation with the implementation. That's the piece we're looking at making the recommendation on. I'm not advising that we open up the agreement; no, leave it the way it is, but move in tandem with the other two countries to get it ratified. We have to be careful to be not too fast and not too slow, because if one of the three countries doesn't get it ratified, the deal is not going to be implemented.

It's not just that international trade and investment agreements can impact our rights, but also how the agreement is implemented through domestic regulatory and policy matters. That has to be looked at. Once the agreement is ratified, we must work together to realize the economic gains and ensure the provisions related to indigenous peoples in international trade agreements are implemented in a manner that brings greater economic equity to first nations peoples.

The first area where indigenous peoples can see the benefits from this agreement is government procurement. Procurement is always a big thing. Everybody says this should be easy, that it's low-hanging fruit. Canada must move from policies and objectives to mandatory requirements for procuring goods and services from first nations businesses. The Assembly of First Nations is ready to work with Canada to make sure we develop legislation together for social procurement that benefits first nations and other indigenous peoples.

The only other thing I'd like to share here before concluding is there are three or four very important bills we want to see passed before this week is up. Bill C-91 on languages, Bill C-92 on child welfare, and two private members' bills, Bill C-262 and Bill C-337, all need to be passed. If in the event the legislature is called back, those should form the priority. But we're hoping and praying that all MPs, all the leadership here on Parliament Hill, will get behind and pass those pieces of legislation as soon as possible.

That's it, Mr. Chairman. Thank you for the time.

[The Chair, Liberal, Mark Eyking]

Thank you.

I have one quick question for you.

You said this is one of the first agreements that the indigenous people of Canada had a big role in. What about the other two countries? Did you see anybody at the table in the United States and Mexico with their indigenous people? Were they involved or did you have any dialogue with them?

[National Chief Perry Bellegarde]

With our counterparts in the United States, the National Congress of American Indians, I went down and made a presentation to the chiefs and they passed a resolution to support the inclusion of an indigenous peoples chapter within NAFTA 2, the USMCA. That was brought to the table through negotiators. Even meeting with the vice-president, and even a year ago when the negotiators were meeting, the U.S. negotiators weren't aware of the NCAI resolution to support. Our negotiators from Canada said they just happened to have the evidence that they do support it. A resolution was passed. We've included that portion. We went down there, as the AFN, to make that presentation. It was a little more challenging with the indigenous peoples in Mexico. It's not as organized or unified. We haven't done that piece of work, but there is definitely support from the indigenous tribes on the United States side for this USMCA, and it's done via a resolution.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to our next panellist.

We have Madam Drouin from the music industry of Quebec.

You have the floor.

[Francis Drouin]

Thank you for having me at this important meeting on Bill C-100.

I'm here as a representative of the music industry in Quebec, but we represent most of the Canadian francophone artists in Canada. The people I represent are the entrepreneurs. They're not artists, but they're associated with the artists. I'm also here in my capacity as the co-chair of the Coalition for the Diversity of Cultural Expressions, an association that represents 30 organizations in Canada in all cultural milieux: music, movies, literature and so on. I have the two hats on my head when I talk about that.

My presentation is mostly in French.

It's a pleasure to be here with you. It is common for people in the music and cultural industry to sit at the same table as indigenous representatives, but it is less common for them to sit at the same table as representatives from the automotive and pharmaceutical industries.

This negotiation, in which all sectors were represented, has a very significant impact on the cultural community, of course. We are very pleased to have been involved in the negotiations at all stages of the process.

From what I have heard today, we are very proud of Canadian companies, both in the automotive and pharmaceutical sectors and in agriculture, as well as their products. It goes without saying that it is important for the Government of Canada to protect these companies so that they continue to contribute to Canada's wealth.

The cultural community expects the same from provincial and federal governments. In the cultural sector, there are talented artists, and entrepreneurs who support them. As in other sectors of the economy, we need to have a place to exist, prosper and reach the public.

In Canada, we have understood this for many years. For 40 or 50 years, we have been implementing cultural policies as issues arise, so we are envied around the world. Canada is doing very well in terms of implementing cultural policies.

As an example, let me mention a cultural policy that you may be hearing about and that is very important for our sector: the famous quotas for French-language vocal music on the radio. Since 1970, French-language radio stations in Canada have been required to make French-language vocal music 65% of their broadcasts, and it is essentially Canadian music. For us, this has been an important element in the development of our culture, so it has been copied by our friends in France. In 1996, they introduced quotas of 40%. Since then, they have seen a boom in the production and promotion of French artists.

All this was possible because Canada had kept intact the power to establish its own cultural policies despite the signing of several agreements over the years, which are intended instead to liberalize trade and prevent countries from taking specific measures in favour of their nationals. The cultural exemption was first negotiated in 1987 in the Canada-U.S. Free Trade Agreement. It has been renewed over the years and is present again in new negotiations with the United States and Mexico. We are very proud that the government has maintained this exemption.

[The Chair, Liberal, Mark Eyking]

Madam Drouin, your time is up, but if you want another minute or so just to wrap up your presentation....

[Francis Drouin]

Yes, I will wrap up.

If, in the past, the cultural exemption was important so that Canada could retain the possibility of establishing its own cultural policies, it is even more important today in the context of electronic commerce.

I have heard several members of the government say that culture is not negotiated in a trade agreement because it is a vector of identity and value. We are very pleased that Canada has maintained this cultural exemption.

We invite you to take care to ensure that, throughout the agreement, the exemption for cultural enterprises is really maintained, even when we talk about e-commerce.

Thank you.

[The Chair, Liberal, Mark Eyking]

Merci beaucoup.

We're going to the Canadian Cattlemen's Association.

Welcome, folks. I hope the calving went well this spring.