International Trade Committee on May 11th, 2016

[Denis Bolduc]

During the years the Conservatives were in power, from 2006 to 2015, Canada signed 10 free trade agreements and 25 agreements on investment. Our research service prepared some statistics. The conclusion is that during that period, our trade balance deteriorated considerably. Exports to partners with whom we signed free trade agreements grew by 1.1%, but increased by 6.8% with those with whom we did not sign agreements.

We cited South Korea as an example earlier. After the agreement was signed, our imports increased by 9% and our exports decreased by 4%.The statistics show that the situation did not improve after the agreements were signed, but got worse. You ask what will happen if Canada does not get on board with the TPP. My answer would be that here we have 35 agreements that did not produce the expected results.

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

In the middle of the worst global economic crisis, the Conservative government also signed NAFTA, and all of the witnesses we heard, regarding the impact on jobs...

However, I want to know what the others think. I also want to hear Mr. Vaudreuil.

[François Vaudreuil]

As far as we are concerned, Mr. Lebel, Conservative or Liberal governments are not the issue. We do not systematically oppose free trade agreements. I want you to understand that. What we do say, however, is that trade agreements must respect human rights, labour rights and the environment, and especially, not prevent governments from legislating to preserve what is generally referred to as the common good.

That is our point of view. We consider that these agreements give far too much power to multinationals. They are being allowed to get around all of the rules we have given ourselves as a society. I am referring to charter 11 and the following ones in the North American Free Trade Agreement. These provisions are beyond the pale because they may jeopardize other rights, you see.

We say yes to free trade, but it has to be controlled. It must respect the social rights I have just listed. I said earlier that our members were from the private sector. A free trade agreement is not a panacea. The economic environment is completely different from the one that existed when the first free trade agreement was signed with the United States. Business competition is at a whole new level. Several phenomena are emerging. The combination of all these elements mean that today we are facing enormous competition, and we have to fight with the market every day and win to keep our jobs. As a union, we do not only focus on working conditions, but also on jobs. The new environment is forcing us to work on another level.

Of course free trade agreements are important. But beyond the labour market, there are social rights that appear to us to be fundamental, and they must be preserved.

That is our vision, and the principles that guide us in building the fairest and most cohesive society possible.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

Your time is well over, Mr. Lebel.

We're going to have to move over to the Liberals. We'll begin with Madame Lapoint for five minutes.

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

Good morning, and welcome. We are very pleased to welcome you today.

My riding, Rivière-des-Milles-Îles, is located north of Laval. It includes Deux-Montagnes, Saint-Eustache, Boisbriand and Rosemere. There are some good businesses there.

I have a question for Mr. Vaudreuil.

You say you represent 70,000 private sector people, especially from SMEs. What kind of SMEs are they?

[François Vaudreuil]

They are SMEs from every sector, such as the agri-food sector, construction and wood, trade and services, in short every sector of the economy.

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

Are there some from the manufacturing sector also?

[François Vaudreuil]

Yes, of course.

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

The representatives of the boards of trade who have testified here support the TPP agreement. They think that the agreement provides an opportunity for increasing jobs and production. I am a little surprised to see that you, who represent employees, are against it.

[François Vaudreuil]

Mr. Bolduc explained it very well earlier in his reply to Mr. Lebel.

We have examined studies and analyses on Canada's balance of trade. We concluded that our trade balance in the countries with whom we do not have free trade agreements was clearly better than with the countries with whom we did sign free trade agreements.

What I mean is that we have to be aware of the nuances and assess the files differently. A free trade agreement is not a panacea for everything that ails us. It will not solve Quebec's competitiveness problems. Those problems are of another order.

Earlier with Mr. Tétrault you raised the issue of the new generation in SMEs, and the managers of the new generation who are going to take over the reigns. Those are the issues that concern us greatly with regard to employment.

If we go back to the free trade agreement...

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

Please be brief as I only have five minutes.

[François Vaudreuil]

I am going back to the free trade agreement.

Earlier I explained clearly the grounds and guiding principles that underlie our opposition, and I quoted a statement by Lionel Jospin. We believe that if the text of the TPP agreement remains as it is, the Government of Canada should not ratify it.

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

Thank you.

Ms. Lévesque, you said earlier that the agreement did not contain any measures about the environment and human rights. What would you have liked to see in it regarding the environment?

[Francine Lévesque]

In fact, we would like the legitimacy of governments to be protected so that they may continue to legislate in that area.

We note that agreements signed in the past have exposed us to lawsuits, even from Canadian companies who used their branches in other countries to call into question environmental policies adopted here, in Quebec and Canada.

We care about this a great deal. Legitimately elected representatives could be sued for having exercised democratic powers on issues that concern the whole of the Canadian population. That is what we challenge in this treaty, which in the final analysis gives multinational companies the right to make free trade the only value.

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

Thank you.

I would like to put a question now to Mr. Robitaille, who is accompanied by Mr. Sans Cartier, to whom I extend a warm welcome.

Earlier, you said that the Panama Canal would be deeper, which would allow certain products to enter the port of Quebec and others to leave. You referred to petrochemistry.

What would be the advantages of the TPP for the port of Quebec?

[Alain Sans Cartier, Director, Public Affairs and Communications, Quebec Port Authority]

What my colleague said earlier about the Panama Canal is that until now it could accommodate vessels with a 12-metre draught. As of this spring, this will go to 15 metres, which will allow merchandise to transit from the Pacific to the Atlantic seaboard, in addition to making vessels more competitive. With a deeper draught, the competitiveness of the ships will be increased by 30%.

The basin of the port of Quebec is 15 metres deep at low tide. Over the past few years, most of the American ports on the Atlantic coast—New York, Charleston and Savannah—invested massively in order to also have basins that are 15 metres deep at low tide.

And so we think that if Canada does not ratify the TPP and if the United States does, our competitors, that is to say the American ports, will have a competitive advantage. They will be able to benefit from advantages we will not have if Canada does not participate in the agreement.

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

Thank you.

[The Chair, Liberal, Mark Eyking]

Your time is up.

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

I think so.

[The Chair, Liberal, Mark Eyking]

That's okay. It was a good question.

Now we're going to move to the NDP and Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

I'm in Quebec City, but I feel very at home. We had manufacturers in the previous panel, and labour was also represented. I'm a 20-year union member, so I'm very pleased to see labour represented, and I welcome the members from the port who are here to present.

I think it's important to be reminded of the secretive nature of this deal, the way this deal was negotiated. I don't think Mr. Lebel is being completely transparent about who was and who wasn't in that room. Mr. Ritz, who sits on this committee, has told us many times that hundreds of industry people and lobbyists were included in those conversations. Missing were labour, aboriginal people, environmentalists, civil society, youth, and human rights groups. Many of the groups excluded from the negotiations could have contributed in a way that might have changed the conversation we're having today, and that's unfortunate.

I'd like to talk about some of the things that you brought up. With respect to ISDS, not only is there the ISDS provision whereby we can be sued, but there is also an effect. Madame Lévesque, you well highlighted the regulatory chill and gave us a great New Brunswick example of how that chill can impact communities, not only on the border but in all of Canada as well.

I'd like to ask Monsieur Bolduc if he could speak a little bit about the ratchet and standstill. It's something we haven't really dug into in this committee. You represent public sector workers, and this aspect of the agreement would definitely impact, for instance, our ability to have a pharmacare program in Canada. Could you speak about those two clauses?

[Mathieu Vick, Union advisor - Research, SCFP-Québec, Canadian Union of Public Employees]

Thank you, Tracey.

Earlier, our colleagues were talking about free trade agreements and international trade treaties. We are entirely in favour of them. We want trade to happen, as Canada is a trading nation. However, the fact of including provisions such as the dispute settlement mechanism in these agreements changes them completely.

The ratchet effect, as well as what we call the status quo effect, are not necessary in an agreement. In fact, there are three elements that should really be withdrawn from the agreement in order to better protect public services.

On the one hand, there is the ratchet effect,which means that a service that has been privatized cannot be made public again. This means for instance that if the privatization of a health service is a failure, we cannot make that service public again. The Liberal government has said that it wants to create a national and universal pharmacare system, but we could not create a pharmacare program if the ratchet effect were applied. A part of the market would then be expropriated, and foreign insurance companies would rush in to fill the space.

On the other hand, the status quo effect means that we cannot add further regulation to a liberalized sector, which means that we could not establish new standards to protect the environment, for instance.

Regarding the protection of public services, this would not be the first agreement that contains a list of negatives. We are in an economy that is evolving fast, and it could happen that the government would want to offer some new service for the greater well-being of the population. However, according to the agreement, no new service may be public without exposing the government to liability under the dispute settlement mechanism.

That is why, if ever this agreement or a similar one were to be renegotiated, certain provisions need to be added. We do not need the ratchet effect, nor do we need the status quo effect.

[Tracey Ramsey, NDP, Essex, ON]

Would anyone else like to speak to the ISDS and the implications? I know you mentioned it in relation to the environment. Would you like to expand on that?

[Francine Lévesque]

I want to get back to the issue of medication, particularly.

Thanks to the protection of patents and intellectual property, the pharmaceutical industry will be able to continue to make enormous profits and, God knows that the cost of medication in Canada is among the highest in the world. It is as though the pharmaceutical companies want to use the agreement to prevent governments from exercising some control, from regulating the cost of medication, facilitating the making of generic drugs and facilitating access to medication. Those companies seem to think that such measures threaten their business, and so this could lead to lawsuits on their part. We think that this is very serious, because we are talking about public health policy, public services. We absolutely must protect our governments' power to make policy.

[Tracey Ramsey, NDP, Essex, ON]

Yes. It's very serious in my riding. I hear from many people who are already struggling with drug costs. I assume it's the same across all of Canada that people are already struggling with the high cost.