International Trade Committee on May 11th, 2016

[Line Lagacé]

Even if we acknowledge the benefits of that kind of partnership, we also have to understand that an SME needs coaching to enter the international markets. The programs we offer may involve coaching for a period of 12 to 18 months, at a minimum. The first steps on the ground are really the end of the process, but first there has been coaching, which must be personalized and relatively long-term.

Preparation is what will guarantee success for companies in a foreign land. In this case, we want them to avoid grasping at opportunities too hastily, and rather to prepare for opportunities. That is the stage where companies need ongoing support. Here, we are talking about training in relation to information, the first steps taken into another country, and access to business networks. All of that has to be brought to bear. Financial support is also necessary to provide companies with security as they move forward.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Many of the communities in my riding are similar to yours. You mentioned that many of them are communities of less than 2,000 people.

I'll give you an example, and I'm wondering if it's similar here. The companies that have been involved in export over the long term tend to weather the storms, they typically branch out and hire the services of other local companies, and they tend to be the ones that are most likely to give back and promote the environment to others, maybe because they can.

Is that the situation here in Quebec as well?

[The Chair, Liberal, Mark Eyking]

I'm sorry, but you're not going to have time to get that question in. We can do a yes or no.

We're going to move on now to the Conservatives and Mr. Van Kesteren for five minutes.

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

Thank you, Chair, and thank you all for being here. It's wonderful that we're able to be part of this.

We obviously could have asked you all to come to Ottawa, but one thing I find very important when we travel is that we get a glimpse of the place we're in when we're asking these questions. The bus ride from Montreal to Quebec was a real eye-opener. I'd never done that before, and I was talking to somebody about that.

What struck me was the incredible number of SMEs groups that popped up along the corridor. I drive from Chatham to Ottawa, and we have nothing on you. This is simply amazing. I see a culture of entrepreneurship that I've always known existed in Quebec, but to really see it is astounding.

Because I'm a bit of an agriculturalist as well, I was watching the farms, and I see you're even reclaiming some of the land at this point. This tells me there's a market for your...I'm suggesting that you're into corn, soybean, and wheat here as well. You have the heat units to do all that, and your farms are getting bigger, and they're looking for markets. I saw some pork operations, some poultry operations, and a huge dairy operation along the way as well.

I'm not looking for.... In a court of law, they'd say I'm leading the witness, and I guess in a sense I am. Having seen all that, I think it must be important for your farmers to access markets. Am I correct in that assumption?

[Alain Gagnon]

Quebec has diversified agriculture. It's important for us to be able to export products such as pork and also to preserve the dairy sector. The agricultural market around the world is exploding with the increase in the population. You're right in saying that agriculture is also moving north with the changing climate. The potential for agriculture in Canada and Quebec is fantastic.

What we can do to preserve the productions that are under supply management is important, but TPP has also brought an equilibrium into production that will allow us to export and expand.

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

We'd heard from credit unions in the past that the FCC was, as we say, mowing your grass. Is that an issue here in Quebec as well? Are you having some competition from Farm Credit that you feel is...?

[Alain Gagnon]

Farm Credit is a fierce competitor here, as it is elsewhere in Canada. It's a little less in Quebec historically, because we have a competitive provincial program, but still it's a fierce competitor here.

[The Chair, Liberal, Mark Eyking]

You have a minute and a half left.

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

The other thing we've heard repeatedly is the question of dairy.

I mentioned yesterday that dairy is very interesting. I have a son who would love to get into dairy, but he simply can't afford the quota system. Is it realistic for an operation that would have, say, 39 cows, in today's age?

I need an answer because I'm an auto dealer, and a number of years ago our manufacturer made me spend a million dollars just to do a facelift. That's reality today. The result was that we sell many more cars now than we did 10 or 15 years ago. Is it realistic for a farming operation to expect to stay in the same environment that his grandfather or father was in, or are we moving forward? Is that a reality that we have no control over?

[Alain Gagnon]

I think we can preserve the family farm, and we do—

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

I'm not suggesting preserving the family farm, but is the family farm changing?

[Alain Gagnon]

It is changing, definitely. It is getting bigger, but there's still a place for smaller units, sometimes with diversified products. We do non-relative farm transfers every day. It's more complicated. It's a little bit less easy to do, but we do it every day. I think that in Canada, especially with supply management in dairy—that's your question—we can have the best of both worlds. We can preserve the family farm and we can also offer an environment where if someone wants to milk 500 cows, he can do so.

[The Chair, Liberal, Mark Eyking]

Thank you.

We only have enough time for two short slots. We're going to go to Madam Lapointe for three minutes.

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

Thank you.

The discussions we are having are very interesting. You certainly all know that a presidential election is underway in the United States. It will eventually have an impact on the situation in Canada.

Mr. Serinet, earlier, you made a comment, that we should be more proactive economically. I would like you to clarify your thinking.

[Pierre Serinet]

We have to acknowledge that, over the last two years, in the manufacturing sector, the Canadian and Quebec economies, among others, have had problems. This is confirmed by the trade deficits. As I was saying earlier, for four years out of six, we have had a trade deficit.

The TPP, in itself, promotes imports of value-added manufactured products and promotes exports of natural resources. Agriculture is one of those resources, but there are also oil, gas, and so on. The agreement does not stimulate sectors where innovation takes place and does not promote industrial policies. We can actually be much more active and proactive in developing an industrial strategy. I think this is what we have to work on, on a national level.

However, these are also societal choices. We have to decide what elements are part of a system in which they will interconnect. That is why I suggested, at the outset, that we move away from the winner-loser concept. We have to set aside the idea that one side's loss is the other side's gain, that there are winners and losers, pork producers versus dairy producers. We need to rethink an entire strategy. I believe that the various actors, not just economic actors, but also social movements, have to be able to participate in the discussions.

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

So, if we were to go back to the negotiating table, for whatever reason, you would want to see a change made, to include economic innovation.

[Pierre Serinet]

We have to give ourselves some latitude when it comes to industrial policy. We have to reserve a right to regulate, a right that the TPP takes away, or remove the investor-state mechanism in the agreement in its entirety. It cannot just be given a new coat of paint. We also have to preserve our levers, our social pillars, like public services and culture. We have to exclude those areas from the agreement, because they should not be bargained away. We believe these are assets that contribute to the dynamic. We have to avoid adopting a commercial rationale when it comes to public services and social services, culture, and the environment. They must be preserved.

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

If the changes you want to see were adopted, we could then consider ratifying the agreement.

[Pierre Serinet]

Some elements would have to be radically amended, and we could participate in the discussion of the aspects to be changed. For one thing, I think that the entire system of excessive protection granted to foreign multinationals is particularly an issue to be raised.

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

Thank you.

Unfortunately, I have not been able to hear all of you.

[The Chair, Liberal, Mark Eyking]

Thank you, Madame Lapointe.

We just have three minutes left and we're going to give the time to Mr. Lebel.

Go ahead, sir.

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

What I would like us to do is compare the figures, from 2005 to today, in relation to investment in research and development, but that discussion would take too long, Mr. Serinet. So I will just say this: in order for 97 per cent of the tariff barriers not to apply, we have to be a party to the agreement, because otherwise, they will be reinstated.

[Pierre Serinet]

I can answer that, though. We are exchanging opinions.

You know that we already have trade agreements. We have agreements with Chile, with Mexico, with Peru, with Singapore...

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

If we are not a party to the agreement...

[Pierre Serinet]

No, I'm sorry. Those agreements are already in place.

You know that we have now been operating under the NAFTA rules for 25 years. The United States is our biggest partner. The countries I just mentioned already cover 76 per cent of the market. For the rest, there are Vietnam, New Zealand, Malaysia, Brunei and Australia. For Japan, in the automotive sector, massive imports are being promoted, and that will have a major impact on jobs.

The markets are already 97 per cent open, under previous agreements. So there is no economic cost to not signing the TPP.