International Trade Committee on May 11th, 2016

[Éric Tétrault]

The answer to your question is yes.

[The Chair, Liberal, Mark Eyking]

Are you finished? I've only got half a minute if you want to make a comment.

[Randy Hoback, Conservative, Prince Albert, SK]

In the pork sector, when we've seen country of origin labelling come into play, how did that affect your sector? Again, if you don't have these agreements in place, if you don't have a dispute-settling mechanism in place, what would you look like today if you didn't have that in NAFTA?

[David Boissonneault]

The advantage of trade agreements is that they establish the rules of the game. For us, it is key to set up a familiar business environment in which to invest. There can certainly be vested interests. There are more strategic players who will use protectionist strategies, but having trade agreements allows for rules on which we can rely to ask for the situation to be corrected. This is the advantage of a trade agreement; it is not perfect, but at least it provides a foundation for the rules.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to have to move on. We're going to have two short sessions.

Madam Lapointe, you have three minutes. Go ahead.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

The discussions we are having this morning are very interesting. We could certainly go on for a long time.

In my riding, a lot of concerns were shared with me regarding the transfer of companies. People are close to retirement and have very good businesses. You are surely aware of La Petite Bretonne, in Blainville. That company exports to a lot of places in the world. The owner of the company is close to retirement, and she is not the only one. Other businesses are in the same situation, and that is a cause for concern.

If we had the opportunity to make minor changes to the TPP agreement, what changes would you like to see?

My question is for Mr. Tétrault first.

[Éric Tétrault]

As I said, the lowering of tariffs must be equally profitable for both Canadian and American manufacturers. Right now, the American manufacturers have a slight advantage.

I would like to see a better defence mechanism against currency manipulation exercises. Honestly, it's true that the TPP strengthens NAFTA and it's true that it provides a window to South America, but Asia needs to be included too, first Japan, but also Australia. Australia must not be overlooked. It has a free trade agreement with China.

First, I don't think we could stay out of the agreement. I think the U.S. has tried to start establishing the rules of trade in the Asia-Pacific region before China, but we must continue to use the momentum, so that China can join us some day in accordance with the provisions that will have already been set out in the agreement.

However, we fear that China is manipulating its currency again and continues to do dumping. We cannot benefit from such an agreement if those issues are not resolved.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Do you have anything else to add?

[David Boissonneault]

I agree with what Mr. Tétrault said because we have the same concerns about that.

Let me turn to another issue. You talked about the next generation. In addition to the trade agreements, the government must have a comprehensive strategy. It must be supported by other policies. Other levels of government and other departments have a role to play in supporting businesses, so that we can fully benefit from those agreements. For our part, we are thinking about research and risk management programs that will support investments and the next generation in our industry.

We are coming to the end of a generation of entrepreneurs and farmers who started their business in the 1970-1980s. Now, there is a period of consolidation during which young people could seize those opportunities. I think the Government of Canada could play other roles, in addition to the agreements.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to give the last few minutes to Mr. Van Kesteren.

Go ahead.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Chair.

Thank you all for being here. It's very interesting.

When I was a boy, I remember studying Two Solitudes in school. I think you're probably familiar with it. I thought about it just this morning and about how Quebec has changed. I was thinking about how in the last election we took quite a beating, but there's one bright spot, and that is the group of Quebeckers who came to join our caucus, led by this man. I'm not just saying that because he's sitting beside me, but I get excited, and most of us do, because these guys, I'm telling you, are rock stars. They get it; they understand. They, to me, signify the new Quebec, and the new Quebec is really something to behold. I just want to tell you that, because I'm so impressed with how you've taken on markets, how you've taken on industry. You're doing such an outstanding job.

It appears to me, though, that we have another solitude today, and we have witnessed it cross-country. It's not just in Quebec. There appears to be a consensus among those who are involved in business that trade agreements are a good thing, that this is going in the right direction, but there's another segment of society, primarily labour, sometimes otherwise referred to as society.

I wondering whether you want to comment on that. How do we bridge that gap? Are we missing something? Are we seeing something that maybe we're blind to, when we just can't seem to convince labour and some of these other organizations that this is good for our country and good for our society?

Does anybody want to comment on that?

Mr. Tétrault?

[Éric Tétrault]

I might comment on it.

I covered the two solitudes as a reporter formerly for the Canadian Press. Let's remind everybody, before we go further, that in 1988 Quebec was the strongest supporter of the trade agreement with the United States. That's a fact, and it won't change.

Business gets it, as you said. Labour, I would say.... My simple explanation is that you must be aware that labour unions sometimes follow political fracture lines here in Quebec. It's a fact.

I said I'm the strongest supporter in Quebec for the energy east project right now. What's the difference between Quebec and Canada on it? It's that business people get it in both Quebec and in Canada, and the labour unions are ready to support the project in Canada—I had a meeting as late as yesterday in Ottawa on it—but we know that the labour unions won't support it in Quebec because it's not a good thing. It's a Canadian project. It's a rest-of-the-country project.

There's probably a form of, I would say, anti-capitalism here that goes deep in our roots, so I'm not sure we can count on the labour unions as far as free trade is concerned.

We're lucky we have them on board for our automatization projects, and our revitalization projects as well, because we finally convinced them that a stronger economy will in the end create more jobs, but it took us years to get them aboard for these. It's very difficult to get them on board with projects, and it's even more difficult to get them on board when they perceive them as being a Canadian initiative or an American initiative or anything like that.

Search no deeper than that. It's simple and complicated at the same time.

[The Chair, Liberal, Mark Eyking]

Thank you.

We'll have to wrap it up there. That ends the panel. Thank you, guests, for coming here. It was a good back-and-forth dialogue with the MPs.

We're going to break now for 10 minutes, and then we'll finish off with our last panel.

[The Chair, Liberal, Mark Eyking]

Bienvenue. Welcome, everybody. Welcome to our parliamentary trade committee from Ottawa.

As you're here talking, you know what we're doing now is our study on the TPP. We're reaching out to Canadians, stakeholders, and individuals on repercussions, advantages, and disadvantages in how the TPP can affect Canadians.

We've done the western provinces already, and we've been doing Quebec these last two days. Then we're going to Ontario. We'll finish up with the Maritimes and Atlantic Canada, and then the territories.

We're also talking to people in Ottawa and representatives of companies. We're talking to representatives of other countries.

We're trying to get a snapshot of how TPP impacts Canadians, and we'll be presenting this report to the House of Commons.

I welcome our guests in our final panel, panel three, this morning. We have with us the Canadian Union of Public Employees, the Organization of Democratic Unions, the Confederation of National Unions, and the Québec Port Authority.

Folks, each group has five minutes. Try to keep to five minutes, if you can. After that we'll have a dialogue with the MPs.

We're going to begin with the Union of Public Employees. Who will start off?

Mr. Bolduc, go ahead for five minutes, sir.

[Denis Bolduc, Clerk-treasurer, SCFP-Québec, Canadian Union of Public Employees]

Mr. Chair, committee members, thank you for inviting us to talk about the Trans-Pacific Partnership agreement.

My name is Denis Bolduc and I am the general secretary of the Canadian Union of Public Employees in Quebec. With me today is Mathieu Vick from our research branch. We represent over 110,000 workers who deliver the public services all Quebec residents depend on. CUPE is Canada's largest union, with 635,000 members.

CUPE's goal is to protect and improve public services with the aim of creating a more equal and just society, where no one is left behind. With this in mind, we have to recommend that the Government of Canada not ratify the TPP. We all know, of course, that Canada is a trading nation and that international trade is vital to every level of our economy. Good trade agreements put the interests of people ahead of the interests of multinationals, promoting job creation and social development.

But since we know that trade between Canada and the other TPP countries is already 97% tariff-free, this agreement is clearly intended instead to enhance the powers and profits of the largest corporations, to the detriment of workers, governments, taxpayers and all citizens.

Here are a few of the main reasons Canada should reject the TPP.

First of all, the Conservatives negotiated the TPP in secret, without input from the opposition or the general public. The TPP gives foreign multinationals the right to challenge, or even overturn, public policies adopted by democratically elected governments. Take, for instance, Ethyl Corporation, the American company that, under NAFTA, won the repeal of a Canadian law banning MMT, a toxic fuel additive, while at the same time receiving $13 million in compensation.

With its expanded investor-state dispute settlement mechanism (ISDS), the TPP allows the wealthiest multinationals to sue Canada for hundreds of millions of dollars through a tribunal rife with conflicts of interest. That tribunal, presided over by arbitrators who have a financial interest in interpreting the provisions as broadly as possible, operates entirely outside of our domestic legal system. It cannot be accessed by either Canadian companies or the general public. Canada is already the industrialized country most often sued in the ISDS context. There have already been 35 claims against Canada under the NAFTA mechanism, which operates much like the TPP mechanism, and our country has paid out over $200 million in penalties.

Second, the TPP threatens public services in a number of ways. First of all, there are the ratchet and standstill clauses. The ratchet clause prevents backtracking once a service has been privatized or a standard eliminated, even if the outcome is catastrophic. Under the standstill clause, a government cannot further regulate an industry, or contract-in a privatized service at the time the agreement was implemented.

Both clauses promote privatization and tie the hands of future governments. Shouldn't a government be able to regulate an industry to protect the health of its citizens or meet its greenhouse gas reduction targets? Shouldn't a government have the option of bringing a service back in house if outsourcing costs more and isn't delivering the expected results? Shouldn't it be possible to broaden the scope of a universal service like medicare for the good of our citizens?

Roy Romanow, the premier of Saskatchewan between 1991 and 2001, once said that Canada would never have had its public health care system if NAFTA had been in force in the 1960s. Drug prices will also go up by $800 million per year under the TPP, putting pressure on provincial budgets and on the budgets of large employers that offer drug coverage, which will affect services and may lead to contracting out or layoffs.

[The Chair, Liberal, Mark Eyking]

Sir, perhaps you could just wrap it up, if you want to do your conclusions.

[Denis Bolduc]

This agreement, which Nobel laureate economist Joseph Stiglitz called the worst trade deal in history, will do nothing to reduce inequality. Our workers will now be competing with workers in Vietnam and Malaysia who earn just a few dollars a day. And instead of improving working conditions and strengthening protections for these workers, the TPP maintains the status quo. Foreign companies will also be able to bid on Canadian public contracts and, in may cases, provide labour from their own country.

For these reasons and many other reasons, CUPE is asking the Government of Canada to reject the TPP.

[The Chair, Liberal, Mark Eyking]

We'll move over now to the organization of democratic unions for five minutes.

Go ahead, sir.

[François Vaudreuil, President, Centrale des syndicats démocratiques]

Thank you, Mr. Chair.

Thank you for this invitation. With me today is Normand Pépin, who is responsible for Research Services of the Centrale des syndicats démocratiques, or CSD.

Before making comments, I would like to tell you that CSD is an organization that represents a little over 70,000 people in Quebec. We work mainly in the private sector, and a very high concentration of our members are in SMEs and in the regions.

As for the TPP, I will start my intervention by providing a statement from former French prime minister Lionel Jospin. Following negotiations for the multilateral agreement on investment, the MAI, Lionel Jospin stated, after seeing confidential documents—the agreement had been negotiated in secret, as it always is done—that, while it may be normal for a country to be able to transfer aspects of its sovereignty to an international government organization, it is out of the question that it would hand it over to private interests. I think that's a guiding principle that should be adopted in analyzing a free-trade agreement.

What hurts the various trade agreements, and the TPP is no exception, is the clause protecting foreign investors. This clause gives multinationals unreasonable and disproportionate powers that deprive governments of some of their powers. We think that is unacceptable. We will be told that a new standard on the protection of investor rights in trade agreements emerged from the agreement negotiated with Europe. However, analyses of this new version that appears in the agreement with Europe show us that, since all the lawsuits against the Government of Canada would be replicated with this new version. You will understand that we believe this is simply unacceptable. We are referring to them as trade agreements, but they aren't trade agreements; they are treaties to protect foreign investments. This is very bad and very unhealthy.

Let me give you the example of New Brunswick, which has already thought about the possibility of establishing a public auto insurance plan but, further to pressure from American insurance companies, quite simply decided to back off. Even though there apparently were not many complaints under Chapter 11 of NAFTA, it is important to remember that governments are increasingly cautious. They hesitate to take action that would protect the common good and would create a society in which labour rights and environmental rights would be recognized as fundamental rights that cannot be touched.

So we are very worried and, based on what we have been able to analyze and observe since the free trade agreement with the United States, we think that Canada should not ratify the TPP agreement, mainly because of the provisions protecting foreign investments.

[The Chair, Liberal, Mark Eyking]

Thank you, sir. Thank you for being on time.

We'll move on now to the federation of national unions.

Go ahead, please.

[Francine Lévesque, Vice-President, Confédération des syndicats nationaux]

Thank you, Mr. Chair.

With me today is Jean Dalcé, who is an economist at the CSN. We thank you for allowing us to take part today in the TPP consultations. We will set out the main reasons we think the TPP is a bad agreement for Canada and, as a result, why Canada should not ratify it.

First, the negotiation process has proven to be opaque. This enormous lack of transparency disrespects our democratic values.

Second, the TPP includes the investor-state dispute settlement mechanism, the ISDS, which enables companies to sue governments when the public policies put in place impede their investments, be they policies intended to protect public health, public services, the environment or working conditions. Canada is the developed country with the highest number of lawsuits in the world. In 2015, it was sued for over $6 billion under the ISDS, and most of these complaints, which may well be paid out through our taxes, involve the environment. The ISDS limits the ability of our governments to make legislation on matters of public interest, but it also deters the adoption of new policies. But Canada is proud of the changes we have managed to make to the comprehensive economic and trade agreement with the European Union on this, but these changes aren't in the TPP, which can no longer be amended.

While the Canadian government just signed the Paris climate agreement, it allows multinationals to influence, if not define, the country's environmental standards through the TPP.

Third, the TPP doesn't contain any binding measures on the environment or human rights. Canada should use a TPP to promote decent work with some signatories, including Vietnam, Malaysia and Mexico, where labour rights are systematically violated. In addition, aside from basic labour rights, no reference is made to other human rights. We think it is unacceptable in 2016 that we are not protecting the rights of indigenous peoples or the rights of communities regarding natural resource development.

We are concerned about the repercussions of the TPP on our manufacturing sector. Canada's trade balance has been steadily deteriorating in recent years. The Canadian economy is characterized by an expansion of exports of raw materials and a decline in exports of manufactured goods. We think that the TPP would put increased pressure on the manufacturing sector, which is already deteriorating, while exports of manufactured goods from countries in East Asia are growing steadily.

With the elimination of tariffs, our products are more likely to become less competitive than goods produced by other TPP countries. The example of the trade agreement signed with South Korea is a very good illustration of this. Our exports dropped by 3.9% one year after we signed the agreement, while imports of Korean goods increased by 10%.

With the arrival of these new players, we also fear having more and more difficulty on the U.S. market. The TPP certainly has the potential to encourage the export of our agri-food products, including pork, maple syrup, fruit juice, beef and so on, but overall, we think it will have a negative impact on our trade balance.

Lastly, in the cultural sector and in the area of public services, once again, this was illustrated by predecessors. We think that any new service may be threatened in this regard, too.

In conclusion, the CSN cannot support a trade agreement that gives multinational corporations the right to sue governments, that threatens our public services and our culture, and that would be signed with governments where human rights and union rights are systematically violated. The way these agreements have been negotiated and their evolving nature is really plunging us into total obscurity, while we are going to live with the consequences of many aspects in the decades to come. Obviously, we find this situation completely unacceptable.

[The Chair, Liberal, Mark Eyking]

Thank you for your presentation.

We're going to move now to the Québec Port Authority.

It's great to be here in Quebec. We enjoyed some of the hospitality and good food here last night. It's a beautiful city, and very vibrant.

Please go ahead. You have five minutes.

[Patrick Robitaille, Vice President, Port Business Development, Quebec Port Authority]

Good morning. My name is Patrick Robitaille, and I am the vice president of Port Business Development with the Québec Port Authority. I am accompanied by Alain Sans Cartier, director of Public Affairs and Communications, also with the Québec Port Authority.

It is my turn to welcome you and thank you for being here in Québec to allow us to discuss the important issue of the Trans-Pacific Partnership agreement.

The Port of Québec plays a vital role for Canadian and North American industries through its unique combination of comparative advantages. Its water depth of 15 m at low tide, its complete intermodal connections and its strategic geographical location are assets that are unmatched along the St. Lawrence and in eastern Canada.

These advantages give the port a character that is unique in Canada and make it a fundamental link between the industrial and agricultural heart of North America and the rest of the world. Each year, the port has exchanges for our goods with 200 to 300 ports in around 50 to 60 countries. Since Québec is the only deep-water harbour in eastern Canada to be able to carry out these operations, it is mainly competing with ports on the U.S. east coast and in the Gulf of Mexico.

As one of five major Canadian ports, the Port of Québec generates wealth not only for the Québec community, but also for the entire country. At the community level, Québec's maritime activities generate nearly 8,000 direct and indirect jobs and $730 million in economic benefits annually.

At the Canadian level, KPMG estimates that Québec's port and maritime industry generates over 13,000 jobs and $1.3 billion in economic benefits. The Port of Québec works in the transport, petrochemicals, steel, energy and agri-food industries, and focuses on solid and liquid bulk transhipment.

It plays a unique role in the supply chain of several Canadian exports. For example, nickel extracted from the Raglan mine in northern Canada passes through the Port of Québec by ship, is sent by rail to Sudbury for primary processing, and returns to Québec before being shipped to its final destination in Norway.

Ontario-produced wood pellets are transported by rail to the Port of Québec before being transported by ship to the UK to supply thermal power plants. They are replacing coal, among other things.

On the import side, the Port of Québec is also essential for the transportation of jet fuel, which comes from Europe, and elsewhere, to Quebec City by ship before being transported by rail to the Toronto Pearson Airport.

With a relatively small domestic market, the Port of Québec must rely on its role as a transhipment facility for Canadian and North American imports and exports. Given this fact, the major trade agreements signed by Canada over the years have certainly contributed to the port's development and allowed it to fulfill its mission.

The Port of Québec must be able to count on a business environment favourable to international trade, since most of our operations are related to export or import with 50 to 60 countries, as I mentioned a little earlier.

Our current volume of trade with the countries joining the Trans-Pacific Partnership is already very considerable. In the last 10 years, 50 million tons transited through our docks to or from these countries, for a total value of $22 billion. Even omitting our American partner, the figures remain impressive, with just under three million tons and an average annual value of $300 million. Singapore, Mexico and Chile account for 87% of non-U.S. transit volume.

Finally, our trade with the signatory countries centres around the transport, petrochemical, energy and steel industries, with 62% import and 38% export. In addition, the new Panama Canal, which is open or will be shortly, allows passage for ships with a draft of 15 m—previously limited to 12 m. It will doubtless expand trade potential from the Pacific for ports with access to the Atlantic, like the Port of Québec.

In this perspective, the Québec Port Authority wants the Canadian government to ratify the Trans-Pacific Partnership to strengthen and diversify international trade opportunities. International trade agreements ratified by Canada have always had a positive impact on the port's development, since it is first and foremost an international port. Ratifying the Trans-Pacific Partnership will definitely strengthen and diversify our international trade opportunities.

On behalf of the Québec Port Authority, we thank you for giving us the opportunity to present the Port of Québec and our thoughts on the Trans-Pacific Partnership. We would also like to reiterate the willingness of Québec's port community to play a key role in the development of Canada's international trade.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you.

My thanks to all panellists for your presentations.

We're going to move on to have a dialogue with the MPs. We're going to start with the Conservative Party and Mr. Lebel.

[Denis Lebel, Conservative, Lac-Saint-Jean, QC]

Thank you very much, Mr. Chair.

Thank you, ladies and gentlemen, for being here today to discuss this matter.

I will make a comment before asking questions.

Since yesterday, we have listened to various witnesses who have told us about “secret” negotiations. I don't think that unions, when they prepare their intervention strategies during election campaigns, do so publicly. When we are negotiating global free trade agreements with 11 other countries, we can't reveal information to the media during the negotiation process and can't refuse to participate. Furthermore, I will soon ask you what the impact would be if Canada was not involved in these negotiations.

Yesterday, we heard from milk producers, UPA producers and representatives from the affected sectors. They told us that they were in Hawaii, that they were in Atlanta, that they had heard what was said and that they had been aware of everything set out in the agreement. In the case of sectors specifically concerned, those people were at the negotiation table.

What do you think the impact would be if Canada did not sign the agreement? We spoke about the fact that trade between Canada and the TPP countries was already 97% tariff-free. The United States is looking for another way to get by. We all know the current situation: an election campaign is under way and protectionism is at the forefront. The United States was trying to renegotiate part of NAFTA through the TPP. You have figures illustrating the impact of participating in the agreement. You surely also have figures on the impact of not participating. What do you, ladies and gentlemen from the union groups—I will talk to the port authority representatives soon—think the impact of not participating in the TPP would be?