International Trade Committee on May 13th, 2016

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that.

Mark, I have a quick question for you. I appreciated your comments too about what impact it would have on your members. As you may know, we've been travelling across the country and have spoken to a lot of farmers and a lot of agri-food producers from Saskatchewan, Alberta, even Quebec and Ontario, who think that TPP will actually generate a lot of value-added food processing here in Canada as they're preparing products for the new markets.

Have you given any thought to that? That presumably would create some jobs for your members.

[Mark Hennessy]

Yes, we have definitely. Through our analysis we have realized that there might be some uptake in certain industries, such as in the pork and beef sectors for sure. Unfortunately, we don't have enough analysis from some of the other trade agreements that have already been signed, which said the exact same things, but from which we didn't see very much difference in actual real jobs on the ground being created out of—previous trade agreements such as the Korean trade agreement and so on.

Again, the cons rather outweighed what was already there as positives already.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you. I appreciate that.

Jan, I have known of the program you mentioned for a couple of years, but it's really great to hear the success stories. I think they speak to the fact that companies that export in Canada tend to be more profitable and tend to create higher-paying jobs. The difficulty is in maintaining the ability to export, and Joy spoke briefly about the regulatory regime, which is sometimes difficult, especially for small and medium-sized enterprises. It's sometimes just very cumbersome.

Have you all given any thought to helping exporters in the board of trade navigate that world?

[Jan De Silva]

The trade accelerator program does just that, but I think the next generation of what we want to do with it is what I would say is, adopt a sector. For each of our competitive clusters, we want to be able to put support for them to identify which of the markets around the world are most important to them and how do they navigate them, so that we can deal with them as a cluster rather than company by company. That helps both the outbound and inbound missions, as well as forums and opportunities here.

I was speaking with Mark just before this event, and I think on the food side, agri-business is one cluster that we're positive about in the context of TPP. There is a huge demand for the value-added products we offer here. I was on Mayor Tory's trade mission to Asia, albeit not on TPP. It was in China, and we signed a memorandum of understanding with Greenland Group, a U.S. $100-billion company. They're setting up a Canadian purchase centre here in Toronto to source Canadian food products for their international grocery stores in China. They'll take care of all the importation, the clearance, and the retailing. I visited one of their stores with city councillors, and I was grumpy about how many Australian food products they had on the shelves. We should have Canadian products there, so I wanted to show how, in the context of TPP, that's an important sector for us.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

We're going to move on to the NDP, and Ms. Ramsey for five minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you, and thank you for your presentations.

I found it fascinating, Ms. De Silva, because we have heard around the country that businesses are unable to access it, or are not doing it well. They don't see the TPP as being a great opportunity because they can't get there in a real way. What's been highlighted to this committee over and over is that we're not prepared to be part of this trade agreement in any way that would see benefit, because we don't know how to reduce and protect the import control issues that we have around poultry and different sectors, around the interprovincial issues we have, and around access to those markets. I think what you're doing is good.

It's important to understand that we're already 97% tariff-free with the TPP countries. Interestingly enough, Ms. Nott, what you said is something we hear as well, in that this isn't really about tariffs. When we go to agriculture, what we're looking at are those non-tariff barriers. You spoke a little bit about that and the hurdles people have to climb over with the non-tariff barriers. Can you let us know what some of the non-tariff barriers are that are issues for those you represent?

[Joy Nott]

We were mentioning the food sector, so I'll speak to some food examples. One example that would be probably known to everyone in the room would be country-of-origin labelling that we just went through with the United States. That's a perfect example. I think often non-tariff trade barriers are not brought up by either the Canadian government—because sometimes we do it to ourselves—or foreign governments as a means to intentionally be a non-tariff trade barrier. I don't think anybody sits there with that thought, because they don't necessarily overlie the international trade implications on what they're looking at, but that's how you get there.

[Tracey Ramsey, NDP, Essex, ON]

We have limited time. Do you have any specific non-tariff trade barriers? We've heard about phytosanitary and sanitary issues in the agriculture sector. We've heard about diafiltered milk, and we've heard about specifics. Do you have anything specific?

[Joy Nott]

You'd have to pick a country and then, yes, all of those things that you said, but they differ from country to country. As Jan is referring to, you have to pick your country and then get educated on that one country. Just because one country is in TPP doesn't mean you can take the learning that you've had from TPP in one country and automatically transfer it to another.

[Tracey Ramsey, NDP, Essex, ON]

Okay.

Mr. Johns, I have one question for you, too. To what extent is it likely that Magna will increase its investments in new and existing manufacturing facilities in Canada as a result of the TPP? What types of jobs would you potentially create here in Canada?

[Sean Johns]

Our investment decisions still are highly driven around where our customers locate their assembly operations.

[Tracey Ramsey, NDP, Essex, ON]

If they move to Malaysia, you move to Malaysia. You follow them, right?

[Sean Johns]

Not necessarily. I think if they move to Malaysia, it depends on their requirements for proximity. It depends on the types of components that we manufacture. Where things that are well defined in one of the schedules in this agreement for larger assemblies, things like stampings, welding assemblies and chassis, and some of the larger axle components, are things you need to locate close to assembly facilities.

[Tracey Ramsey, NDP, Essex, ON]

I think our concern is that there'll be this shift. There are lower-wage economies in the TPP, and there'll be a shift similar to what we saw with NAFTA to the southern U.S., into essentially Mexico. It is one of the concerns we have.

My other question will go to Mr. Hennessy. Can tell us how many members you represent? Do you see potential losses in some of those sectors, such as you're identifying with dairy and poultry?

[Mark Hennessy]

For each of the sectors, we have about 546 in the auto parts sector, just over 10,000 in the poultry sector, and just under 1,300 in the dairy sector.

Our biggest concern would be the poultry sector. The local union deals with those employers, similar to the considerations that Magna would have to go through, and those employers would take those same considerations into account when deciding are they going to move, are they going to stay, or are they going to move around.

[Tracey Ramsey, NDP, Essex, ON]

We've heard from the poultry sector that they'll lose $150 million a year in perpetuity under the TPP. Dairy will lose $400 million per year, and it's unclear whether or not there's compensation that sits there for them. That would definitely impact those that are working underneath you, if you will.

Do I still have time?

[The Chair, Liberal, Mark Eyking]

You have half a minute.

[Tracey Ramsey, NDP, Essex, ON]

Mr. Hennessy, you identified some other issues and ISDS is something that we hear over and over. We had 32 individual Canadians come and present in the last three cities. Nearly all of them mentioned ISDS as a concern for Canadian sovereignty. Can you speak about ISDS to us, please?

[The Chair, Liberal, Mark Eyking]

It'll have to be very brief, please.

[Mark Hennessy]

As I said in my presentation, that's one of the pieces we oppose the most. Any time we allow a corporation to sue a government, but the government is not allowed the ability to reprimand or take action against that corporation, it seems weird. We're allowing a corporation to supersede elected governments across the country, and it's a major problem for us.

[The Chair, Liberal, Mark Eyking]

Thank you, and we're going to move over to the Liberals now.

Mr. Fonseca, you have five minutes. Go ahead, sir.

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

Thank you, Mr. Chair.

Thank you to all our witnesses for your excellent presentations and for your perspective on the TPP, as well as international trade. We live in a multicultural country. We pride ourselves here in the GTA as being a microcosm of the world, with all of our diaspora communities, but I think we have failed to tap into those communities in terms of international trade.

My question is to Ms. De Silva. At Toronto Board of Trade, how are you doing that? Do you have a model for that? How are you attracting them?

I see that in many of our communities, they are importing many products from countries that were their previous homelands, but I'm not sure if that's going in reverse. We are also exporting many Canadian products to those countries, as you've cited on your trade mission.

[Jan De Silva]

I would say one example where we are succeeding is in human health sciences. The diaspora and the diversity we have here in Toronto is enabling us to do research and development for citizens around the world.

If I look at some work that we've been doing with the City of Brampton, they're looking at a foundation researching diabetes for the Indian diaspora. They have a partnership now with another teaching hospital in India where they're going to be collaborating on this. What gets developed here in the Toronto region is something that will be developed for export. That's a good example of how our diaspora can be engaged.

When we went into TAP GTA, that was a big piece we were trying to solve, because I don't see us taking full advantage of the breadth of diversity we have in our communities. Part of our TAP advisory council has gone out to all of the different communities, like the Canada India Business Council and the Canada China Business Council to be part of our advisory group. I hope we will find a solution for that. I don't have the perfect answer, but it is a problem to be solved.

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

Thank you.

With the 50 or so companies that have had some success, you mentioned one that was having success with Italy. What other countries of those 50 would they be tapping into, and what markets?

[Jan De Silva]

Interestingly enough, China was a big market. We thought there'd be more of a fear factor, but we've seen a lot looking at China. For some of the examples we've had, we've been able to connect them with students studying at U of T who are from Hong Kong. In some cases they've been able to set up distribution partnerships to represent them in that market and get them up and running. A good example would be a company like New York Fries, which is a Toronto group. They're being built out in China by some former Hong Kong students who studied at U of T and found the product there.

They also have a good vodka out of Oakville. I'm not sure their parents want to know how they found out about the vodka, I think the fries business was easier, but those are good examples where we can take advantage of foreign students coming in to help access markets.