International Trade Committee on Feb. 18th, 2016

[Kirsten Hillman]

I'll answer that one first. In terms of our market share, please take this as a general sense of mine and not empirically substantiated yet. Our market share theoretically should improve where we achieve in the TPP greater conditions of competition compared with our competitors. In a sector where Canada competes against a non-TPP country for an export, and we have achieved a tariff elimination....

If we compete against a European country into Japan, for example, and Europe and Japan don't have an FTA, and we get a 20% tariff reduced to zero but France doesn't, we will have a competitive advantage. That's a hypothetical example, but any scenario like that will give our exporters a competitive advantage.

[Tracey Ramsey, NDP, Essex, ON]

Canada and Japan signed a side letter to the TPP agreement on Canadian exports of raw logs. According to that letter, on request, and following the procedures set out in Canada's Export and Import Permits Act, Canada would issue permits for the export of logs to Japan. The letter also indicates that Canada and Japan would create a committee on forest products to review the requirements for safeguard mechanisms in relation to forestry products.

Does this side letter change Canada's policy on the export of raw logs and does it grant Japan additional access to raw logs from Canada?

[Kirsten Hillman]

No, it doesn't.

[The Chair, Liberal, Mark Eyking]

That was a short answer.

Thank you, Ms. Ramsey.

We have about 10 minutes or so left here with the officials. It worked well yesterday, so if the committee is willing, we'll do it again. I was just thinking we could maybe have three minutes from each party for whoever wants to ask a question. We'll start with the Conservatives, then the Liberals, then the NDP. Take three minutes roughly, and that'll tighten up. Then we'll hear from the parliamentary secretary who is going to be here for about 10 minutes. It won't be in camera for the parliamentary secretary. Then we're going to go in camera for the last 15 minutes, for future business.

We're going to start with the Conservatives. Are you guys ready for a three-minute question?

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Chair.

As we discuss this, I personally think, and I think if we polled everybody here too, I think we could all agree, there's a feeling that we have people in charge who are really looking out for the interests of Canada. That's important, because we've all just gone through an election and we've heard some attacks and some really scary scenarios.

I'm going to throw you one, if I could, Ms. Hillman. I'm a free-market thinker. I understand all these concepts. You've reinforced all of my beliefs. What stops this whole process from...?

I remember the days—not to be critical—when we thought we did the right thing when Mr. Chrétien paraded off all the Canadians to China. The end result was that a lot of these industrialists took their shops and put them in China.

What is stopping that kind of movement from happening? I think that's probably the NDP's greatest fear. I'm looking at the industry in Canada. What's to stop us from saying after five years, “My God, what have we done? We've lost all our industry”?

Can you help me, as a free-market thinker, get around that and settle my mind on that?

[The Chair, Liberal, Mark Eyking]

In 30 seconds or less.

[Voices]

Oh, oh!

[Kirsten Hillman]

Okay.

Canadians operate in the Canadian economy and succeed in the Canadian economy because of a variety of factors. We invest here. We work here. We get ourselves educated here. We do business here. There are a variety of factors that have a lot to do with this being a country in which we want to live, grow and invest, and which we want to develop economically and support. I don't think there's anything in a trade agreement that's ever going to change that. It's not going to make Canadians all of a sudden want to move to Vietnam, China, the United States, or anywhere else.

Trade agreements are a tool that is designed to respond to the concrete needs, requests, and input that we get from Canadian businesses around what it is that makes it more difficult, more expensive, more unpredictable for them to go out into the world and do internationally what they do very well here.

It's not designed to change what they do, and it's not a request from them to provide an environment where they would get up and leave Canada. It's quite the contrary. It's saying, “Look, we're doing things well here. We have a highly educated, highly motivated, highly sophisticated society that's doing really well. We just want to do more and we want to open ourselves to the global economy.” That's the purpose.

I think one always has to remember that we're not doing this in a vacuum. We are doing this in response to specific input that we get from those Canadians we are trying to help. As Ms. Bincoletto was saying the other day, fundamentally, her job is to try and get them out there taking advantage of these opportunities. We listen to what it is they say isn't working that well for them and we try and respond to that.

As I said, it's very much a first baby step. It's just setting the foundations. There's so much more that has to be done to enable our businesses to really take advantage of these....

[The Chair, Liberal, Mark Eyking]

Thank you, Ms. Hillman, and thank you, Mr. Van Kesteren.

Ms. Ludwig, go ahead for three minutes or so, or whatever you need.

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

Thank you, Mr. Chair.

Thank you for your excellent presentation. I have about 15 questions, and so I have to narrow this down.

One of the things I hear about often in my riding is the protection of sovereignty on the export of Canadian water. Is that a component, or has that been discussed in terms of the TPP?

[Kirsten Hillman]

I have a quick answer for you.

It was not discussed in TPP. Water is not a good under a trade agreement. The only time water becomes a good is if you put it in a bottle, put a fancy label on it, and charge $5. Then water is a good. Bulk water is not considered a good under a trade agreement, and so it is not susceptible to these rules.

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

Thank you for that answer.

I have another quick question.

What are the opportunities or projections in terms of not only the mobility of labour, but also wages?

[Kirsten Hillman]

For the projections in terms of the benefits for Canadian wage earners, I have to defer to some internal work that has been done. I can't answer your question.

In terms of labour mobility, what is your question exactly?

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

It is in terms of the opportunity.

For example, for about seven years I worked back and forth with Cuba. Yes, there was an embargo with the United States, but under the area of education professors were allowed to go back and forth, as well as journalists.

[Kirsten Hillman]

There is a chapter and commitments on what's called temporary entry for business people in the TPP. This is what we have in most of our FTAs.

For the benefit of the committee, as we increase our desire to provide and trade in services internationally, or to invest internationally, there is a strong desire—for the reasons you obviously know well—to allow the people who are required to go and deliver those services in those markets a bit of an easier time getting there. We make commitments with respect to specific high-skilled professionals on a reciprocal basis with TPP countries.

For example, if there is a desire for teachers, and we have some opportunities in Japan or wherever, then they would like you to go and negotiate with them to have easier terms of access. We do that on the condition they provide that access back to us, and the TPP includes it.

We can answer any questions you have with respect to specific professionals, but we have different obligations per country, depending on what the market access interests were expressed to us by Canadian service providers and investors. If you have any specifics, it's probably the best way to go about it.

The thing I would like to say to the committee—and I think this is important based on some of the conversations that are happening around TPP—is that we proceed carefully in this area. We always work to ensure the labour market in Canada is taken into account. What that means is that for any of these commitments we make there is a requirement to have a pre-existing contract, like an offer of employment, and a certain education standard. The wage being offered in terms of incoming has to be the prevailing wage in that region.

There are a number of safeguards to make sure that this is a commitment, and that this commitment will be used in the way it's designed, which is to facilitate for Canadians the provision of services or the servicing of investments abroad, and likewise for those people coming into Canada.

[The Chair, Liberal, Mark Eyking]

Thank you. Your time is up.

Do you have a short question, Ms. Ramsey?

[Tracey Ramsey, NDP, Essex, ON]

I would like to speak a bit about temporary foreign workers.

The provisions in chapter 12 of the TPP will make it easier for companies to bring in temporary foreign workers to Canada, and in some cases lift requirements to pay these workers a fair wage. Not all TPP countries listed in the annex to chapter 12 are included, for example, the United States. Why is this?

[Kirsten Hillman]

To the first part of your question, or the premise of your question, as I was saying just a minute ago, there are specific high-skilled professionals that are listed in the TPP, such as investors and professionals with certain education requirements such as post-secondary education requirements. These have to have a pre-arranged contract. They have to be under one of these specialized professions. They have to meet the education requirements. They have to meet certain experience requirements. They must receive a salary that meets the prevailing salary for that level of professional with that level of experience in the Canadian marketplace, in that region, whether it's Alberta, Toronto, or Victoria. That's the way in which it's calculated.

[Tracey Ramsey, NDP, Essex, ON]

I'm speaking about non-professionals. I'm talking about temporary foreign workers that come in.

[Kirsten Hillman]

There are no specific commitments in the TPP—

[Tracey Ramsey, NDP, Essex, ON]

To lift the wage requirement.... Okay.

I have another question. What is the expected impact of increased labour mobility on the wages of Canadian workers?

[Kirsten Hillman]

That's precisely why the safeguard is there, isn't it? Again, perhaps we can take it back to the policy intent of these kinds of commitments. Foreign service provision for Canadians abroad is a good thing and it contributes to our economy. Investment into Canada, or service providers coming into Canada, is also something that we seek in order to create jobs and in order to provide economic benefit. It's very difficult sometimes to attract that investment or those service providers if we don't let them send their managers or their professionals who are going to make some contacts, on a temporary basis, for a short period of time, and get that investment up and running. That's the purpose of it. Right?

[Tracey Ramsey, NDP, Essex, ON]

I think we're speaking about different things. You're speaking about a skilled technical workforce. I'm talking about unskilled labour.

[Kirsten Hillman]

We don't have any—

[Tracey Ramsey, NDP, Essex, ON]

There's nothing in there that addresses workers coming into minimum wage types of jobs or any type of employment through the temporary foreign workers.