Evidence of meeting #21 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.
A recording is available from Parliament.
Liberal
The Chair Liberal Mark Eyking
Good morning, everybody. Thank you for coming early this morning. Our committee has been very busy between softwood lumber, CETA, and our cross-country travels to talk to Canadians on the TPP.
I'm glad to see the minister here. Before the minister starts with some comments, the parliamentary secretary has a word for us.
Liberal
David Lametti Liberal LaSalle—Émard—Verdun, QC
On a personal note, I just wanted to thank all of you. This is the first time I've been back since my mother passed, and I wanted to say thank you to each and every one of you for the card and the donation to the charity. It's very much appreciated, and it meant a great deal to me, so thank you.
Liberal
The Chair Liberal Mark Eyking
Thank you, Mr. Lametti. We're a team.
It's great to see the minister back here after all her travels. We have some of her staff and the deputy minister here also.
Without further ado, Minister, you have the floor.
Chrystia Freeland LiberalMinister of International Trade
Good morning, Mark, and good morning, colleagues. It's great to be here with you this morning. As Mark has already said, I am joined here by Christine Hogan, my wonderful deputy minister with whom I very much enjoy working, and, equally wonderful, the department's chief financial officer, Arun Thangaraj.
Let me make a few opening remarks to set the stage and give people a sense of where I'm coming from and where the government is coming from when it comes to trade.
Canada is a trading nation. International trade and investment are essential to our standard of life and to improving the standard of living of people all over the world. That's a really important point for us. As everyone here knows, trade helps us open markets to Canadian goods and services, create really well-paying jobs, and give Canadian consumers more choice and lower prices.
Trade is equivalent to more than 60% of Canada's GDP. One out of five jobs in Canada is tied to Canadian exports, and—something that for me is a really crucial point—exporting companies pay 14% higher wages than companies that are not involved in international trade. That's one reason trade is such an important part of our middle-class prosperity agenda.
Free trade agreements don't only connect Canada to the rest of the world—important as that is—they also are an essential driver of economic growth. Consider NAFTA. According to a University of Toronto study, that agreement has added 3.4% to Canada's GDP. When you think about where our GDP numbers are now, that's a significant boost. Or consider CETA. According to a joint Canada-EU study, that agreement is expected to increase Canada's GDP, once implemented, by 0.77%. That's a real driver of growth. At a time of stagnant growth around the world, the importance of trade as a driver of growth really can't be overstated. It's important across all regions of the country.
In the Atlantic provinces, trade represents almost 74% of GDP. In Ontario, trade as a total share of GDP is 71%. In B.C. 40% of exports are destined for the high-growth Asian markets that maybe we'll have a chance to talk about later today.
In Quebec, exports account for 45% of the province's GDP. Canadians are a trading nation and our government vigorously supports trade. Our party was elected thanks to a program based on trade, and we will continue to seek out outlets and to promote high quality trade agreements.
When the United States adopted discriminatory labelling practices that disrupted supply chains for our beef and pork producers, it was the enforcement of WTO international trade regulations that allowed our government, working in close co-operation with Mexico, to fight against American protectionism. And we won. I am very proud of that. It was a victory for multilateralism, a victory for Canada, and a victory for beef and pork producers. I am proud to have taken part in that struggle and to have won the battle, and only eight weeks after our government took power.
The protectionist measures imposed by our trading partners are damaging to Canada's economy.
It is essential that we maintain an open, predictable and fair international trading system. Canadians understand that reality and want to take part in the conversation about it.
Important questions have been raised on many occasions about the way we negotiate trade deals. Canadians felt that the previous government did not consult them enough. That is why our government attaches so much importance to the establishment of a solid political consensus around what I call progressive international trade. This democratic and consultative approach is the only way to maintain public support for trade in this era of protectionist measures, and it is the right thing to do.
Consider CETA. Our work on this landmark agreement should leave no doubt about our commitment to free, fair, and progressive trade, and our ability to get deals done. Early in our mandate, we recognized the importance of our relationship with Europe, and as I once sat around this table as a member of the committee and as the Liberal trade critic, I think people will remember that we supported CETA when we were in opposition.
We also recognized the clear need for progressive improvements if this deal were to actually get implemented. We responded to Canadians, to EU citizens, and to our businesses. We responded to concerns about fairness and transparency. As a result, this progressive trade agreement now enjoys wide support on both sides of the Atlantic. For example, just yesterday, I met with a key figure in the CETA debate, the president of the European Union Parliament, Martin Schulz, who is a leading German social democrat. This was President Schulz' first trip to Canada, and his strong support for CETA is going to make him a crucial ally in the ratification effort by the European Parliament.
In the investment chapter of CETA, we strengthened the right to regulate. This is something I was very pleased to do. The sovereign right of democratically elected governments to regulate, in particular on issues like the environment, is something Canadians believe in, and so do Europeans.
The second area in which we made important modifications was to the dispute resolution process. We made the system more ethical, more fair, and more transparent. These are important changes, and this is an area in which Canada, working together with Europe and also on our own, is going to be championing work in the international trade arena. I'd be happy to discuss them further.
Last month I travelled to Brussels and to Berlin to promote CETA, and I was very encouraged by what I heard. I was delighted to meet with Germany's vice-chancellor, Sigmar Gabriel. He is also the leader of Germany's social democrats, and so again, a very key person in the discussions of CETA in Europe.
Mr. Gabriel had previously publicly voiced concerns about CETA but we did a public press conference, Mr. Gabriel and I together, in his office in Berlin, and at that meeting he said, and I quote, “This is simply a good agreement.” He called the new CETA a sign of good governance, consumer protection, environmental protection, and employee rights. Let me emphasize that this is support coming from the German social democrats.
We also now enjoy support from the French government and therefore from the socialist party in France, another really important decision-maker on CETA. In June of 2015, Matthias Fekl, France's Minister of State for Foreign Trade, said that if France's proposals on the dispute settlement mechanism were not taken into account, there would be no majority in France to ratify this treaty.
Now, because of the work that we've done on CETA, within the past couple of weeks, Mr. Fekl has come out strongly in support of CETA, as has François Hollande, and Mr. Fekl has said that CETA is a good agreement. Again, this is really essential European support.
Our work on CETA should leave no doubt as to our government's commitment to trade and our ability, crucially, to get deals done.
Another essential area for us is our trading relationship with the United States. As I know everyone on the committee appreciates, more than 70% of Canada's trade is with the U.S. This is an essential market, an essential relationship. Consider, for example, Ontario's manufactured goods. I know one of our members has a very particular interest there. More than 90% of Ontario's manufactured exports go to the U.S., so this is a really key relationship. As you know from my mandate letter and from our government's focus, building, strengthening, and deepening that relationship with the United States is a key focus for the government overall. It's a key focus for me as trade minister, and as chair of the Canada-U.S. cabinet committee. Two weeks ago, I was in Washington for a trilateral meeting of the NAFTA trade ministers. My Mexican and American counterparts said it was really great to have Canada back at the table. That was the first meeting of that group, which ought to meet annually, in nearly two years, and of course we are really pleased that we'll have the NAL summit—again, this was missed last year— here in Ottawa in June. It's an important event for Canada.
Let me now turn to the Trans-Pacific Partnership Agreement, about which I spoke at length last week. I must commend the leadership all the honourable members of this committee have shown, as well as the consultations you are holding with communities all across the country.
I'd really like to underscore that point. I think this committee has been probably the most active committee, travelling around the country, talking to Canadians, and, crucially, listening to Canadians.
I was really struck by the importance of your work when the portrait of our 21st Prime Minister, Paul Martin, was unveiled last week. People who have seen that portrait will note that it is a painting of Mr. Martin standing in the House of Commons. He talked about that in his remarks. He said that he asked to be depicted in that setting because of the importance he places on Parliament as a central organ of our democracy and as a place where a big national debate should be held. He spoke specifically about the importance of parliamentary committees, and said that committees need to go out and talk to people. He spoke about, and I quote, the “inherent strength of a Parliament that sends its committees out to meet the people”.
That is what this committee is doing, and I salute those efforts. I think they are really an important part of building a progressive trade agenda and maintaining the national consensus in Canada around being an open economy.
We have also as a government been actively consulting on the TPP. To give a shout-out to my excellent parliamentary secretary, David Lametti, we have held more than 400 stakeholder consultations across the country on TPP. I personally will be doing a couple more over the coming weeks, in Toronto and Montreal. Those will be public and open-mike.
Consulting on the TPP is particularly important because of concerns Canadians have about the transparency of this agreement and because of the groups that weren't consulted previously. In particular, labour wasn't part of previous consultations, and neither was the academic community.
I'd also really like to emphasize for the record, and for members of this committee, that we have the time to have this important national debate. None of the other 11 TPP countries has yet ratified this agreement. That's a fact that I personally confirmed on Tuesday morning when I was in Arequipa, Peru, and I attended a breakfast of the 12 TPP trade ministers. We all discussed the domestic debates in our countries. No one has yet ratified the agreement. Other countries are conducting extensive debates and consultations, and in countries with parliamentary systems, extensive committee study of the agreement. I'd also like to remind members of this committee that all the TPP signatory countries have two years from February 4 to debate and discuss the deal.
Trade is essential to our prosperity, our quality of life, the growth of our country and the creation of well-paid jobs for the middle class. Holding an open, transparent and fully democratic debate to develop an inclusive approach to trade is the only way to guarantee Canada's success as a modern trading nation, and fight the protectionist trends that affect many other countries.
Thank you very much.
I would now be pleased to answer committee members' questions.
Liberal
The Chair Liberal Mark Eyking
Thank you, Minister.
We have 45 minutes. We'll try to keep everybody to five minutes, and maybe we can get every MP to have dialogue with the minister.
Without further ado, we'll start off with the Conservatives for five minutes.
Mr. Hoback, you have the floor.
Conservative
Randy Hoback Conservative Prince Albert, SK
Minister, thank you to you and your staff for being here this morning. It's always great to have the minister here.
On the TPP, Minister, I just want to maybe get the record straight. The reality is that there was a prestudy done in the last session, and that prestudy you did not attend. Your colleague Mr. Pacetti attended on your behalf.
I also want to get the record straight that Don Davies—Mr. Merrifield was the chair at the time—held receptions after every meeting. To those receptions Mr. Davies invited organized labour, the Chamber of Commerce, and other groups. Not only did they have the formal presentations, where they actually had witnesses like we do in a normal hearing, they actually had the informal consultations. I think if you had been there, you would have realized there were extensive consultations.
The concern I have now is that we're doing another prestudy. They call it consultations. You can call it what you want. You have a majority; I can count. But the reality is that we're going to do a prestudy, and then I'm assuming you're going to bring legislation somewhere in the future. Are we going to do the study over again? This will be the third time. I'm not even talking about the number of studies the Senate has done on this, or the agriculture committee, or any other committee on this file.
How many times do you want committees and Parliament to be wrapped up in the TPP? Isn't it the reality that you just don't want to do anything until the U.S. does something? And do you want Donald Trump to dictate Canada's foreign trade policy?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
Thank you very much, Randy.
Let me talk about a couple of different elements of that question.
First, on the point of consultations and the negotiation process itself, I think we'll agree about a lot of things. I think collectively we'll all agree about the importance of free trade in principle. When it comes to the TPP negotiations, my strong view, and this is very much based on direct conversations, and particularly with labour, but also the academic community—
Conservative
Randy Hoback Conservative Prince Albert, SK
In fact our colleague, Ms. Ludwig, asked labour in Quebec City if they had ever been in favour of a previous trade deal, and they said no. They're going to give you that answer every time you ask them.
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
If you let finish, Randy, you'll hear the end of my answer.
Conservative
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
The point was, and labour leaders are very much on the record on this, they were not included in the consultation process by the department in formulating the deal and in negotiating that deal.
Conservative
Randy Hoback Conservative Prince Albert, SK
They had every opportunity to be a part of the consultations—
Liberal
Conservative
Conservative
Randy Hoback Conservative Prince Albert, SK
If she'd answer correctly that would be fine, but she's not.
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
Correctly, Randy?
I don't think I'm going to answer in the way that totally agrees with you.
I'm happy for Randy to take up the time with his comments, if he prefers.
Liberal
The Chair Liberal Mark Eyking
Just go ahead. MPs, let the Minister answer the question, and if the Minister could be as quick as possible then we can get going.
Conservative
Randy Hoback Conservative Prince Albert, SK
I'll ask a very simple question.
Do you think the U.S. should dictate our foreign trade policy?
Right now we are not doing anything on TPP until the U.S. does something. That's reality. That is the known word out there. Is that appropriate or should we show leadership?
How many other countries have introduced legislation on the TPP?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
You asked a number of questions, Randy, and I'm going to go back and answer those questions in order.
On the point about consultations, my view—and this has been confirmed publicly on the record by Canada's labour leaders—is that labour was not adequately consulted during the negotiations. I think that is a big mistake. It's not the approach of our government. We think it is important to talk to labour as we are doing trade agreements. We can't go back and change time, but we can certainly include labour in the discussions of TPP, and that is essential.
Another group that was left out of the process, and we acted immediately to include this group, was Canada's academic community. They are academics in the intellectual property space. We now have one of them as our parliamentary secretary who has strong and intelligent points of view on TPP, and on intellectual property in particular. That's a community that was insufficiently included in the discussions ahead of the negotiation, and I've been pleased to include them.
In terms of the consultations and the review now, the previous discussions of this agreement happened before we had the final text and before we knew what was in the deal. As you know very well, we didn't know what was in it until it was concluded, because this was a complex negotiation. It is not just appropriate, it's essential for us as a country—
Conservative
Randy Hoback Conservative Prince Albert, SK
Usually, the committee, when the legislation is there, we take the deal, and we do exactly what we're doing right now on TPP. We go across Canada and we get that input from Canadians. This is the final document.
Are we going to do this all over again? Is that what you're suggesting?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
I'm glad, I always love talking to Randy.
The time is up. Okay.
Liberal
The Chair Liberal Mark Eyking
The time is up.
We're going to have to move on to Mr. Dhaliwal, from the Liberals, for five minutes.
Go ahead, sir.