Evidence of meeting #19 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.
9:50 a.m.
Liberal
The Chair Liberal Mark Eyking
I'm sorry, Ms. Ramsay. Your time is up. We're going to have to move on to Mr. Peterson for five minutes.
Go ahead, sir.
9:50 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you, Mr. Chair.
Thank you, everybody, for your presentations today.
It's nice to have a fellow lawyer on the panel, because we've heard a lot of talk about ISDS and, frankly, some of the positions are based on mischaracterization and misinformation on what the ISDS is meant to do. In fact, the ISDS will protect Canadians who have operation overseas as well, so it cuts both ways, like any trade agreement.
I'm not going to suggest that ISDS is not without some risk. There certainly is, but my understanding—and Ms. Wilson, maybe you can elaborate—is that in order to avail oneself of the ISDS provisions, one must be treated in a discriminatory way by a domestic corporation. A multinational can't just willy-nilly sue the Canadian government because they don't happen to like some regulation.
Do you agree with that assessment? Or do you think it's broader and that any corporation can sue the Canadian government or the provincial government because they're regulating trade?
9:50 a.m.
Counsel, Canadian Environmental Law Association
The way that ISDS has worked in the past—and will work again under the TPP—is that private tribunals looking at these issues are interpreting provisions in a way that gives very broad access to companies to sue the Canadian government. We've been, under NAFTA anyway, the most sued country, and I think the Bilcon case under NAFTA provides a good example.
In that case, an American company went through an independent environmental assessment process, a joint review panel out in Nova Scotia. Through a long process, the panel determined that it wasn't an appropriate project to go forward. They made that recommendation to the government. The government accepted that proposal. After that, the company turned to a NAFTA tribunal that wasn't well versed in our Canadian environmental assessment law and awarded damages. So far, we don't know how much, because that part of the hearing hasn't gone forward yet, but Canada lost.
That's the kind of thing that we need to be very worried about, because the idea that they should have gone through the environmental assessment and it should have been a rubber stamp is obviously inappropriate. It's a real process. It should be a real process. ISDS is opening the door to a company's saying that it doesn't like how the environmental assessment process works.
Like a Canadian company, they could have done a judicial review here. Instead, what they get to do is go to a NAFTA panel, which isn't available to Canadian companies, and get money—a lot of money—for it.
9:50 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I've practised litigation for 10 years and, believe me, the judicial process isn't exactly necessarily the best way to settle disputes. There are many private dispute mechanisms in all aspects of life, such as family law. Most divorces are done through private dispute resolution now.
I don't think the private nature of it is necessarily the issue. There may be some more issues there, but I don't think we need to say that because it's a private dispute, it's bad. I don't necessarily think it is. In fact, I think it can be more efficient and we can get better results that way. That seems to be the case through other private dispute mechanisms. There's a lot of talk about ISDS by a lot of people who don't understand ISDS, and I'm happy to hear your input, because as a lawyer you clearly have a better appreciation of it than some others.
On the environment, I want to point you to article 20.4.1 of the TPP, which I'm sure you're familiar with. It's just one line, so I'll read it for you, just to make sure:
...each Party affirms its commitment to implement the multilateral environmental agreements to which it is a party.
From my understanding, wouldn't that reinforce the Paris agreement? If we were a party to it by the time this is ratified, wouldn't that reinforce our commitments to those environmental agreements? How can you say that it weakens it?
9:55 a.m.
Counsel, Canadian Environmental Law Association
The first thing to point out, as you were mentioning, is “to which” they are “a party”, right? It's not providing any new standards. It's not requiring the parties of this agreement to meet any standard that they haven't already signed on to.
9:55 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
But specifically, you said that the Paris agreement would be watered down. To me, this seems to actually bolster our commitment to those commitments.
9:55 a.m.
Counsel, Canadian Environmental Law Association
I think the Paris agreement and any climate change action is going to be watered down, based on ISDS and based on other parts of this trade agreement, which would would put in place barriers to taking strong climate action here in Canada. It's not necessarily this section that's going to do that. It simply affirms our commitment in a way that I don't think has a lot of legal meaning, because we already have a commitment through other agreements.
9:55 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Mr. Hutton, I appreciate what you're doing. Just to elaborate, I think someone who owns IP, someone who creates, should be the person who profits from those creations. I appreciate what you're doing. Others who have testified before the committee think that everybody should have free access to any creation and everything should be free online or accessible, not just music, but other types of IP.
9:55 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I'd appreciate your comment, Mr. Hutton. I think you're going to agree with me. Maybe I'll let you talk for 10 seconds on that point.
9:55 a.m.
Executive Director, Canadian Music Publishers Association
Yes, absolutely, I thoroughly agree with you. I think the notion in the world that we can access things online easily does not mean that we should be accessing them for free.
The reality is that, down the line, if we don't correct this issue, people won't be creating. The reality is that a creative society is not one that imports all its intellectual property; it's one that creates it. We need to have the environment that ensures people continue to create.
9:55 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you.
That ends the first round. Starting off the second round, we have the Liberal Party and Madam Lapointe, for five minutes.
Go ahead.
9:55 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Good morning. Welcome.
I must say that you have made comments that we have not heard to date. I am really glad you are here.
Ms. Falcone, you said that a number of small businesses were working with UPS. Have you estimated how many of your clients are SMEs? Let's say that we skip five years and the TPP is a done deal. You said that, right now, your company is a logistics business that helps transport all the packages from both individuals and SMEs. Do you expect to have more SMEs as clients? Have you made any calculations or forecasts on that?
9:55 a.m.
Vice-President, Public Affairs, UPS Canada
We are in fact working towards that. Five years ago, folks would have looked at UPS and considered us a partner for big business only, UPS being a global transportation company. We've actually made a very focused effort to grow our market share with small and medium-sized businesses, but we're also seeing some good organic growth in terms of entrepreneurship.
About 98% of Canadian businesses are small businesses, I believe. That's why we've made the investment to really focus on partnering with these companies. A lot of them don't get the same attention that other organizations do to help them get started, so we've invested more resources in that.
Right now, it's not the largest percentage of our volume. Our goal is to grow the volume amongst those SMEs, tapping into that organic growth that's already happening, and also working with those that aren't getting what they need from their current service providers.
9:55 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Earlier, you said that you work with the Toronto Region Board of Trade. Did I understand correctly?
9:55 a.m.
Vice-President, Public Affairs, UPS Canada
We do. We are a lead member with their trade accelerator program, which Ms. De Silva spoke of this morning. We act as a mentor for the companies they've selected to nurture and educate on how to go global.
We also work with, as I mentioned, these other companies. Startup Canada is another great organization that's an incubator for very small businesses, micro-businesses, and we've been doing these go global boot camps with them.
10 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Earlier, we heard that 50 companies were probably targeted last November and that results could be noticed after 90 days. Have they started to export? Were you able to see that?
10 a.m.
Vice-President, Public Affairs, UPS Canada
Yes, we have seen some positive momentum there. Typically, the first country that companies export to is the U.S. You'll find that a lot of these companies start to engage there, but once that comfort level is achieved, they tend to go beyond those borders.
Also, a few years ago, we decided to make investments in facilities in Atlantic Canada. We opened up eight operations there. There is significant appetite on that coast in terms of new trade provisions that are going to lower the tariffs on seafood into Malaysia and Vietnam, for example, which are already purchasers of Canadian products. It's only going to elevate that. Again, that's for businesses of all sizes.
10 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
Mr. Hutton, what you said this morning is very interesting in terms of increasing the copyright terms from 50 years to 70 years. You see only benefits from that.
You said that New Zealand and Australia did not see any costs for consumers. Do you have anything to support that, a study, for example, or would you like to make any additional comments?
10 a.m.
Executive Director, Canadian Music Publishers Association
I do not have any specific studies myself, but thank you for the question.
We have looked at those studies in New Zealand and Australia. They're purely based on the notion that term extension will cost consumers because they'll continue to pay for physical products that would otherwise have gone into the public domain. But this is not the case because the market is moving toward a streaming model, a rental model, an online model. People are no longer buying physical products. In the future, they will probably not be buying them at all.
The reality is that these pieces of intellectual property will exist online forever and somebody will be monetizing them forever, however this will not be a Canadian anymore. It will be a Spotify, a Tidal, an Apple that will be exploiting those products online, selling them or reaping the benefit of them from Canadian consumers but not putting any of that money back into the Canadian economy.
That is the fatal flaw of those studies. They don't recognize that this is the way the model works. They assume that 20 years from now we'll still be going to a store where we'll be buying a CD or a physical product, and that things that would otherwise have gone into the public domain won't be free then. I'm sorry but this is just a false notion. That's not the way the world is working.
10 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you.
Thank you, Madame Lapointe. That wraps up your time.
We're going to move on to the Conservatives now for five minutes.
Mr. Ritz, you have the floor.
10 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, Mr. Chair.
Thank you for your presentations today.
Mr. Hutton, I totally agree with you. Everything is digitized now. I download to my iPod. I don't go in and buy the CD. I actually do it on the computer and so on. You're absolutely right that the world is—
10 a.m.
Executive Director, Canadian Music Publishers Association
I certainly hope you're paying for it, sir.
10 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Absolutely, sometimes double. You guys need a little box that says I can actually leave a tip, because I really like some of these performers.
I agree with you on the point that the one thing we're not really looking at is that it's not just about the jobs created; it's about the jobs sustained and maintained, and the possibility of losing jobs. I thank you for that point.
Ms. Wilson, I want to follow up on what Mr. Peterson started. You said you're an Ontario entity?