International Trade Committee on Aug. 18th, 2016

[Tracey Ramsey, NDP, Essex, ON]

Would you be able to give us an idea of the last time they were consulted?

[Martin Moen]

Sure.

[Tracey Ramsey, NDP, Essex, ON]

Do you report to them and they report back to you on an ongoing basis?

[Martin Moen]

There are ongoing consultations in two ways.

First of all, there are very specific targeted consultations as issues arise. I can give you some examples of these. We also have ongoing consultations with a broad swath of industry through the Business Advisory Council and with the provinces.

In terms of specific outreach, last month we had a discussion with the B.C. government and representatives from the First Nations Summit, the Union of B.C. Indian Chiefs, the B.C. Assembly of First Nations, the B.C. First Nations Forestry Council, and the Carrier Sekani Tribal Council, as examples of consultation with aboriginal groups.

[Tracey Ramsey, NDP, Essex, ON]

And the small producers as well then?

If you could just provide the committee with that list, it would be great. It would be easier than going through it.

[Martin Moen]

Sure. We can provide that.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

You mentioned that at the same time you're pursuing this, you're also looking at a contingency and some measures if we are enter into another harmful round of claims against us with this date looming.

Can you tell us what you have planned to prevent those damage claims from impacting Canadian companies and forestry workers if we fail to reach a new agreement?

[Martin Moen]

I think it would be best to turn to the representative from the legal bureau to talk about the kind of preparation we're doing and what we envisage could happen.

Keep in mind that absent an agreement, we don't know exactly what U.S. industry would do and when. Certainly, the risk that they would take a petition is high. They've done that in the past and they've said they would likely do so.

[Robert Brookfield, Deputy Legal Adviser and Director General, Trade Law Bureau, Department of Foreign Affairs, Trade and Development]

Let me start by saying that we're not going to be in position to prevent harm. What we can do is try to reduce it.

Let's assume that the scenario is no negotiations are successfully concluded and litigation—let's call it broadly—is initiated in October. There are a lot of steps that we've already been working on for the last year or more. I would group them in three broad categories.

The first is data preparation, if you will. There's a lot of work to make sure that our numbers are in order. That's involved working at the federal government level with provincial governments, with experts, and stakeholders to make sure that we have the best situation, in terms of the numbers, to address potential claims.

Second, there is the legal preparation with our U.S. counsels, not only the Canadian federal government's U.S. counsel, but also the U.S. counsel for the provinces and territories and for industry groups. Essentially, it's U.S. litigation. With a process starting in the U.S., it involves how we could best initially respond to the investigation, how we could put our best case forward, how we could challenge it in the first instance under U.S. law and then further under NAFTA processes, which are essentially an elaboration of U.S. law.

The third element is more strategic, if you will. That would be looking at ways whereby we can challenge elements of the existing U.S. practice and the way this practice might be applied in the future that is inconsistent with international law obligations but consistent with U.S. laws. That concerns primarily the World Trade Organization. We're presently intervening in a number of cases brought against the United States and some others for a variety of reasons. One of the primary reasons is to make sure, or try to do our best to ensure, that the law is more favourable to us on various issues. I can get into the technicalities of that, but there are various practices of the U.S. that we want to reduce.

[Tracey Ramsey, NDP, Essex, ON]

That's okay.

[The Chair, Liberal, Mark Eyking]

I'm sorry, but the time is up.

We'll have to move over to the Liberals.

Madam Lapointe, go ahead for five minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us this morning. We really appreciate your being here. We are confident that you are working very hard on the negotiations, that many things need to be done and that a number of them have been done already. We have faith in what you are doing.

Let's come back to the concerns of our colleagues Mr. Doherty and Ms. Ramsey regarding small and medium-sized businesses. They seem to be sure that a number of communities are affected.

If I have understood correctly, you said earlier that one of the main concerns for small and medium-sized companies were value-added products and further processed products.

What kind of consultations have you held with small businesses? I would like you to expand on that, if you can.

[Martin Moen]

Thank you for the question.

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

You can speak in English if you want to. I like to speak in French, because I'm French.

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

Are you?

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

Yes, I am.

[Martin Moen]

In Canada there are, of course, small businesses engaged in this sector that could be negatively affected by a dispute, and they do a wide variety of things, but most of the smaller businesses tend to be in the value-added sector. The mass production of structural timber tends to be done by larger businesses. But there are single-mill operators or specialized operators who also do structural timber work. We have been working with them as well. Their concerns are similar to the broader group's, but they also have some particular circumstances.

For example, in Quebec, there are some medium-sized producers—I wouldn't characterize them as small—that source primarily from either Maine or from private land. They had an exclusion under the previous agreement, and this is an exclusion that we are seeking in any future agreement. That's an example.

But I would say that across the country in our consultations with the smaller producers we've heard issues related to product coverage. Some of them have said that the products they produce are very high value, or very low volume, and in that regard we have been discussing with the U.S. how we can adjust the product coverage to make it different from the previous agreement, to make it more focused. We're also discussing how to ensure that these higher-value products are appropriately treated even when covered.

That's the kind of situation we're in. I don't have much to add right now, so I'll leave it at that.

Thank you.

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

Thank you very much. That somewhat clarifies the issue for us.

I have a comment about today's meeting.

My Liberal colleague Sukh Dhaliwal requested a study on softwood lumber. We have met with people from western Canada, central Ontario and Quebec. We have also produced a report with recommendations, which the department has received.

I have to say that I was upset. Going back to this discussion is a waste of time and money. I see that negotiations are ongoing....

[Randy Hoback, Conservative, Prince Albert, SK]

Wasting time and money? With 350,000 jobs at stake...wasting time and money? Are you serious?

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

Let me speak, Mr. Hoback. I'm not done with what I have to say and I have some time left.

I also care about jobs, and these people are working very hard. They must be given the time they need. Recommendations are taken into consideration. I am disappointed with this whole situation. It's not that I did not want to come to Ottawa. I'm very happy to do it. I am privileged. But I do want you to know that these are things we have done already.

Thank you.

[The Chair, Liberal, Mark Eyking]

Madam Lapointe, you have 45 seconds. I would recommend that we keep the questioning to the officials. I know it gets a little testy back and forth here, and we're still in the middle of summer, but let's keep the questions to the officials for the rest of the meeting.

You have half a minute left.

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

No, it's okay. I'm done.

[The Chair, Liberal, Mark Eyking]

Okay, we're going to move to Mr. Peterson for the second round.

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

Thank you, gentlemen, for both being here today.

Mr. Moen, you mentioned in your opening remarks that we're still far apart on several issues. Can you elaborate on what those issues are, obviously without necessarily prejudicing our negotiating position? Is there an overview you can give us, and steps we can take to close that gap?

[Martin Moen]

We're still, of course, in the middle of a negotiation. One of the difficult things when you have a negotiation like this is that there are many interrelated pieces. It's often the case that we're apart in some areas and together in others, but they all interrelate. Even though something may appear to be settled, that may not be the case if something else turns out to be different, so there are some complexities involved there.

Nonetheless, given that, we still have not reached agreement on the details of the structure that we're going to use or details of market share. That's still under discussion. We do agree, as was outlined in the leaders' statement in June, that we are developing an agreement that is focused on market share. Obviously, in how you manage towards that market share, it's going to be very important for Canadian producers to ensure that they have the flexibility, but also the predictability, they need. Also, of course, the market share itself is something that will be very important. These are issues that are still very much under negotiation.