International Trade Committee on May 13th, 2016

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

Yes, I am.

[Malcolm Buchanan]

I think that answers part of your question. It shows that, overall, all of the TPP-zone countries stand to lose employment. As a result, it causes co-ordinating things better and focusing on certain areas but, overall, they are predicting there will be a job loss. In Canada, just in the automobile sector, they are projecting a 55,000 job loss.

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

I understand that, Mr. Buchanan. I am trying to find the balance. In the west, they said we would lose a significant number of jobs in the farming area.

[Malcolm Buchanan]

One of the things.... You have to look at all the so-called trade agreements we have now. You can see that the export-import balance is not right. We export less than we import. Somewhere along the line—to try to answer your question—we have to find those industries and those types of things that are going to improve our export. That is what we need to do. Right now, under the free trade agreements we currently have, it is not working. I have provided the committee with that background.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

That wraps up the time.

Now we're going to move over to the NDP for five minutes.

Ms. Ramsey, go ahead.

[Tracey Ramsey, NDP, Essex, ON]

Thank you so much for your presentations to us here this morning.

The position we're sitting in is yes or no. It's not can we renegotiate, what can we change, can we drop something? We are in this, yes or no.

We are the most sued country under ISDS provisions, as you well know, Mr. Schneiderman.

When we talk about an automotive strategy, maybe a manufacturing strategy that we'd like to implement, in Windsor yesterday there was a huge forum that Ray Tanguay participated in and, I'm sure, many of your colleagues. Under ISDS provisions, if we attempt to put in an auto strategy or a manufacturing strategy, we may be sued under ISDS provisions for being protectionist, so we have these juxtapositions where we'd like to improve the lives of Canadians in terms of the environment and in terms of jobs that are available, but our hands will be tied from doing so under these ISDS provisions.

We have a lot of folks who come before us, but there are lots who have not, and so I'm very pleased to see Malcolm Buchanan here today speaking on behalf of 500,000 retirees and seniors. This is a voice that hasn't been represented so far at this committee, and it's important that we hear from the seniors.

I share the concerns that my colleague had. I thought it was interesting that he was asking you about your pension plan. I'm concerned about your being able to live in dignity as well. I'm concerned about the cost of drugs if we sign the TPP. What will that mean to your 500,000 members? Will they be able to afford increased drug costs in Canada?

[Malcolm Buchanan]

If I may respond to that, I'll give you a classic example. We're facing a major problem in Hamilton, which is my home town, in the steel industry. U.S. Steel basically wants to bankrupt the company down there, and people are being laid off. Retirees have had their pensions cut back. They've lost their indexing. The pension plan that was meant to be resolved years ago has not been. There's approximately a $1-billion shortfall in the pension, and they've now lost their benefits. Now you're talking about the cost to them. They have a choice: pay their rent, pay their mortgage, or pay for their medications. That's how bad it's getting for many of my members across the country where this situation is growing.

Most people think that pensions in the private sector, even in the public sector, are huge. They are not because we're losing the pension ability in the private sector. They're going to different forms, and this is putting more burden on people when they retire so that they rely on the CPP, which is kept, as you know, to a certain amount, and OAS and GIS. It just gets them over the poverty level. Therefore we can see that drug costs—this is why I'm here talking about this issue—is a major concern, especially for surviving spouses.

[Tracey Ramsey, NDP, Essex, ON]

I agree.

I'd like to ask Mr. Wildeboer a question. You mentioned that you want to be where your customers are, and this is a grave concern to a lot of Canadians because we've lost tremendous market share in manufacturing and auto with jobs going to Mexico, another low-wage economy that we have an agreement with. Now we're going to open up even more low-wage economies, and the concern is that automotive and manufacturing will leave to go to those economies. You will join them, and then we will have even greater job loss here in Canada.

My question for you is: how many Canadian jobs will your company create under the signing of the TPP?

[Rob Wildeboer]

As I said, as we grow our business and we finance, we create head office jobs. We've come from 0 to 3,000 Canadian jobs. I know Jerry Dias very well. He's part of CAPC, and we talk a lot, and we're both committed to growing the automotive sector in Canada. The fundamental issue in order to have an automotive sector in Canada, an auto parts industry—and twice as many people work in the auto parts industry as there are in the automotive assembly sector—is to have plants.

With regard to assistance or grants in order to co-invest with companies to build plants here, people do that all over the world. They do it in Tennessee. That's how they got the Volkswagen plant.

[Tracey Ramsey, NDP, Essex, ON]

How many jobs do you think your company would be able to create in Canada by the signing of the TPP?

[Rob Wildeboer]

On the jobs we create or lose in Canada, the TPP, at the end of the day, is not going to create or lose jobs. The reality is going to be where our customers are and whether we are competitive. I would say a couple of things very briefly. If there is a TPP—and we'll see what Mr. Trump or Ms. Clinton effectively does with that. I wouldn't be in a hurry to sign anything until we see what happens with the U.S. If the U.S. doesn't sign the TPP, we shouldn't be there, but if they are there, we should be there because, at the end of the day, to be outside the club is a problem.

[Tracey Ramsey, NDP, Essex, ON]

Okay.

Mr. Lexchin—

[The Chair, Liberal, Mark Eyking]

I'm sorry, your time is up.

We'll move on now to the Liberals for five minutes.

Mr. Fonseca, you're up.

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

Thank you to the presenters for the impassioned, knowledgeable, and experienced-based presentations you've provided us here today. We've heard from all of you from different perspectives.

Mr. Wildeboer, on your last point, you were talking about the growth of your company. Congratulations on all the success you've had since 2001. That's just tremendous.

The auto industry has been one of the very focal points of this TPP agreement. The reason is that this agreement started back in 2006, but Canada just got to the table in I think 2012. We were third to last to actually get to the table on the TPP. A lot of it had already been done, negotiated, etc. That was under the previous government.

Where we found ourselves, when we starting getting through the 6,000 pages of the TPP, was that on auto, when you look at the reduction of tariffs, Canada would have to reduce its tariffs within the first five years. For the United States, our greatest trading partner, our partner where most of our manufactured vehicles go from Canada, their reductions in tariffs will only happen 25 years down the road, and then 29 years down the road when it comes to trucks.

We heard from some other stakeholders like you within the industry, and comments have been made that we wouldn't be landing any more assembly plants here in Canada, because we would not have the climate to be able to do so. Being that our greatest trading partner and friend, the United States, has a competitive advantage on the tariffs, it would be much more likely that a plant would be landing in the United States and they would be getting all that work. Based on what you had to say, where you want to be close to those plants, what would that mean to the Canadian auto industry?

[Rob Wildeboer]

We spend a lot of time working with the federal government and the Ontario government. It includes Unifor, it includes the five automotive companies and the assembly plants here, and it includes the suppliers. I think I indicated that to you. I have some material on that. We spend a lot time talking with the governments.

Ultimately, you're successful on the basis of your competitiveness. If we're not competitive here with assembly plants, we're not going to have assembly plants. When you look at that, you have to look at all-in cost, infrastructure, the cheques that are written, the tax policies, the cost of labour, and, among other things, access to other markets with free trade agreements.

One of Mexico's strengths is not its low wage rate: it's the fact that it has 55 free trade agreements across the world. It's a great place to locate, because you can trade your goods everywhere. That is something we should emulate here in Canada in terms of that.

In terms of the U.S. versus Canada, there's no question that we were not the primary consultant with the United States. They spent a lot of time with Japan.

With respect to the growth of assembly plants, most new assembly plants are going into Mexico. They're going into Mexico because they do a good product, because their all-in competitiveness is there, and because of their access to free trade agreements. That is something we are working very hard with the members of all your parties to effectively make some positive decisions on. Bramalea needs a paint line in order to be competitive for the next two generations, and Oshawa needs a product mandate. That is something we're working very hard on.

Despite where you are on the political spectrum, or whether you're in business, a retiree, in a union, or whatever, we're not negotiating over anything if we don't have an industry. We have pushed way above our weight in the auto industry over the years. We still do 14% to 15% of North American assembly with 8% to 9% of population. I'd like to preserve that. I think every Canadian would want to preserve that. That's the type of thing we have to look at.

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

Thank you.

Professor Schneiderman, the ISDS under TPP is user-funded. Now, governments have pretty deep pockets. Wouldn't that put them in a better position if they were to have to go into that dispute settlement process over a corporation that might not have as deep pockets as you would find with the government?

[Prof. David Schneiderman]

You should look at the list of appearances in these disputes on the investor side. They're really long, sometimes longer than the Government of Canada's representatives. That isn't to say that there are limitless funds available, but you need to have deep pockets to litigate in order to recoup the damages you're seeking. So you're looking at large companies. They're not small to medium-sized enterprises. That's one answer.

A second answer might be this. While states write the rules of the game, investment lawyers interpret it. Everybody gets paid. The investment lawyers want repeat business; the lawyers representing investors and the arbitrators. I try to avoid ad hominem arguments—

[The Chair, Liberal, Mark Eyking]

You'll have to wrap it up, sir.

[Prof. David Schneiderman]

There's a structural bias built in here where investment lawyers who sit as arbitrators will interpret treaties in ways to ensure that investors come back. They can't discourage the people who initiate these claims, so that's a real problem with the system.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

That finished the first round. We're going to go on to the second round. The Liberals are up first.

Madam Lapointe, go ahead for five minutes.

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

I would like to clarify something.

As I was walking around earlier, I heard some comments. The agreement was signed in February. We are studying it to determine whether it will be ratified. People are under the impression that, since it was signed in February, it will definitely be implemented. We are travelling across Canada to make sure we hear from people in all the provinces. I think it is important for people to know that.

I will now ask some questions.

Good morning. Welcome.

Yesterday, in Windsor, we heard from Professor William Anderson. I'm sure you know him. He is at the University of Windsor and has a PhD. He said that, if the TPP were ratified by Mexico and the U.S., Canada would make a huge mistake if it did not ratify it.

Could you comment on that?

Go ahead, Mr. Schneiderman.

[Prof. David Schneiderman]

Thank you for that question.

We'd be making the point that Professor Anderson, is it, made, which was that—

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

It is Mr. Anderson, a professor who specializes in international trade.

[Prof. David Schneiderman]

Okay, so if we don't sign, it would—

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

Suppose that the U.S. and Mexico ratify it, but not Canada.