International Trade Committee on Sept. 26th, 2016

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

You're speaking to the evergreening of the product.

[Leticia Adair]

No, not evergreening, just the regular.... The facts have been analyzed in the OECD countries, who pays the most per comparative population for drugs, and we are really in the highest.... It's not necessarily evergreening. Evergreening is the new measure that the companies are thinking about. It is a fact, whether they discuss the measures the companies use or whether it's just the number of drugs that people are being prescribed.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

How do they get away with that in Canada, when the companies that produce are global, the Pfizers of the world, and so on? How do they take advantage of just the Canadian market, when they don't take advantage of some of the other markets?

[Paula Tippett]

We have long patent protection. We allow them to have their patents for a long time. We used to have a program, and we had a good Canadian generic drug industry, a lot of it in Quebec—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We still do, actually.

[Paula Tippett]

Yes, but it's diminished from what it was.

The long patent protection makes it difficult for the generics to make drugs. At one time we had a program where they could pay a fee to the person who developed the drug, to the company—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Pay a royalty.

[Paula Tippett]

—that developed the drug. They could pay a fee to them and make the generic product of that drug. That's the way it should be, because then you have access for the government to buy drugs and for the public.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Ritz.

That wraps up this panel.

Thank you very much for coming, and for the good submissions and the good dialogue with the MPs. It's going to be used in our final report.

Could you stay for a few seconds? The CBC wants to do a shot of all of us sitting around and getting along, as good Canadians do, and having input with parliamentarians.

Our committee has done something different from most committees. At the end we set time aside for any of the audience that wants to comment. If anybody in the audience wants to go to our open microphone, it will be in about an hour and a half.

You will have two minutes. We will need your name and where you're from. Then I can call your name when we're ready to go. That'll be in about an hour and a half, but I'd like to get you registered first with your name and where you're from. When I read your name off, you can go to the microphone for two minutes and tell us what you think about the TPP.

It won't be a dialogue back and forth with us, we're just going to be here to listen at that open mike for what you have to say. It's your time to say what you want. Try to keep it within two minutes.

It's worked quite well. We've done it in every province. In some provinces there were more in the audience coming forward than others, but it was lively and it was good. People expressed right from their heart what they thought about TPP, what they loved about it, what they didn't like about it, and what they wanted changed. It went well.

I don't know if other committees are going to start the open mike process, but it's worked well for us so far. I remind you to put your name down and register.

On that note, we're going to suspend.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Tell them the time that open mike will be.

[The Chair, Liberal, Mark Eyking]

I think it's at two o'clock, Mr. Dhaliwal.

We're going to break for 10 minutes, and then there will be a new panel coming up.

[The Chair, Liberal, Mark Eyking]

We're going to get going here, folks. We're doing well this morning and moving on to our third panel.

Welcome, panellists. You know why you're here. Our committee has been travelling the country on the TPP agreement. We're hearing from Canadians. We're hearing from stakeholders, companies, corporations, unions, and employees. We have over 200 or 300 submissions, and over 20,000 individuals have sent us emails. We're getting a big uptake and we're going to be wrapping it up in the month of October. We're doing Atlantic Canada all this week and we'll have a few more submissions in October. We'll take any submissions from the public until the end of October. Then through November and December we'll put our report together and present it to Parliament at the end of the year.

Thank you for being part of this whole process. If you would keep your remarks to five minutes, we would appreciate it, so we can have lots of time for dialogue with the MPs afterward.

Without further ado, we'll start off with Leigh Sprague from the New Brunswick Union of Public and Private Employees.

Thanks for coming, Mr. Sprague. Go ahead, please.

[Leigh Sprague, Legal Counsel and Chief Negotiator, New Brunswick Union of Public and Private Employees]

Thank you.

The New Brunswick union, headquartered in Fredericton, has about 8,500 members, about 7,000 of whom work in the public sector here in New Brunswick. We are the New Brunswick component of the National Union of Public and General Employees, the 360,000 member NUPGE. We have concerns about the effects of TPP on public services, both as users of the public services and as employees working to provide them.

First, it's that the agreement adopts a negative list approach, meaning that all services and investments are subject to the TPP's provisions unless specific reservations or exclusions are negotiated and identified in the country's specific sections.

Canada has negotiated a reservation in the area of social services, as well as aboriginal treaty rights and cultural industries, and in doing so, and I'm quoting from the text:

Canada retains the right to adopt or maintain a measure for supplying public law enforcement and correctional services as well as the following services to the extent that there are social services established or maintained for a public purpose—income security or insurance, social welfare, public education, public training, health, and child care.

While this appears to be a positive step, our issue is that the phrase “public purpose” is not defined within the text of the TPP. This is problematic, as all governments do not share interpretations of what constitutes a public service. Ultimately, it would be up to the arbitration program, with the dispute settlement, to build up a jurisprudence around what it is that public purpose means. We could come to a time where we find the Canadian government and provincial governments constrained as to what they are permitted to do.

The annex also doesn't include various ancillary services that ensure the ongoing functioning of the social services that I mentioned. For example, in the area of health, it does not identify ancillary health services, such as cleaning services, maintenance and administration, as social services. Therefore, anything in that area would be subject to the TPP.

The negative list also means any unanticipated services that are deemed to serve a public purpose in the future will not be protected by the reservation, and will thus be subject to the provisions of the TPP, because they haven't been identified in the current text. Things that governments in Canada might want to provide as a public service in the future, that are unanticipated as of now because they don't exist yet, governments would be constrained in their ability to provide those services.

An additional concern linked to this is based on the standstill and the ratchet provisions of the TPP. The standstill provision is intended to create an irreversible minimum standard for liberalization through the exclusion of new or additional restrictions. According to this provision, governments are not allowed to implement new regulations or restrictions on trade and investment. Quite the opposite, governments are required to only move toward greater conformity with the provisions of the agreement. As an extension to this, the ratchet provisions prohibit governments from reversing any voluntary privatization efforts.

Not only does the standstill provision create a new standard of liberalization of trade and investment in services, but the ratchet provision prevents government from reducing privatization in the future. Perhaps even more troubling than the potential trend toward privatization is the fact that it will be irreversible. As a trade union, particularly one that has members working in the public service, it's natural that we would be opposed to privatization as a concept, but I think regardless of one's view of whether or not services are best delivered by the public sector or private sector, the irreversible nature of some of the rules here in the TPP around that should be bothersome to all of us, because it potentially constrains governments in the future.

[The Chair, Liberal, Mark Eyking]

Do you want to wrap it up with some final comments?

[Leigh Sprague]

I can. In fact, that was essentially it, the concern around the future autonomy in those areas.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're going to Mr. Peter Johnston from Cavendish Farms. Thank you for coming. You have the floor.

[Peter Johnston, Director, Quality Assurance, Cavendish Farms]

Thank you.

Good morning. My name is Peter Johnston. I'm the director of quality assurance for Cavendish Farms. I focus on food safety and regulatory within our company. I've worked for Cavendish for just over seven years. I've been in the food industry for just over 20 years.

Cavendish Farms is a proud family-owned Canadian company with roots in Atlantic Canada. Our operations began in 1980 in Prince Edward Island. That year we shipped 25 truckloads of product a week. In 2015 we shipped 728 truckloads a week. Cavendish Farms is the fastest-growing retail brand in Canada. For the past two years, most of North America's quick-service restaurants have been our clients. We are also one of the largest private-label packers for many retailers and food service suppliers.

Aside from providing products for the U.S. and Canadian marketplaces, we export to more than 50 countries around the world. We are the fourth-largest frozen potato processor in North America. We have four plants in Canada and one in the United States. We produce more than 1.46 billion pounds of finished product a year. Our current market share in the TPP countries ranges anywhere from nothing to about 3.5%. However, as you'll hear later, we do see opportunity in these markets if the TPP is ratified. Duty rates range from 0% to 40% within TPP countries.

I did bring a handout with me. There are additional details within that handout. I do apologize, but I wasn't able to get it translated very quickly.

Our duty rates on french fries and frozen potato products are currently the same as in the United States. If the United States ratifies the TPP agreement and Canada doesn't, Canadian processors will be at a significant disadvantage. Processors in the U.S. have a slight edge with logistical advantages, as they are closer to ports for shipping and require fewer days in transit. To be competitive, we cannot allow any additional barriers to these potential markets.

I can offer some examples of export challenges in the TPP countries. In Japan, the number one importer of frozen potato products outside of North America, there are non-traditional requirements on food safety and quality. They also require very specific packaging and labelling. In Mexico, one of the top three markets for imports of frozen potato products, they recently passed new laws that require unique packaging as well for retail packaging compared with the rest of the world. In Malaysia, market and cultural sensitivities require unique SKUs, or stock-keeping units. In Chile and Peru, where we believe import opportunities are significant, non-traditional barriers to trade exist, including microbiologic and inorganic tests that are not required in other markets and not traditionally done in the industry. Their process to register a new product is bureaucratic and time-consuming. It can take up to a year to register a product.

In order for Canadian frozen potato products to be competitive, increase exports, and not lose existing market share in TPP countries, the Government of Canada must ratify the Trans-Pacific Partnership agreement.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

That's a lot of french fries; holy smokes. Are you saying it's a billion and a half pounds a year?

[Peter Johnston]

That's correct. All of our facilities combined put out a billion and a half pounds per year. About half of that comes off of Prince Edward Island.

[The Chair, Liberal, Mark Eyking]

Great. We'll be heading there this evening.

We'll move now to Unifor. We have Jessica Smith.

Welcome, Jessica. Go ahead.

[Jessica Smith, Unifor]

My name is Jessica Smith. I'm here before you as a member of Unifor Local 4606, where I represent 1,300 members in the health care sector, predominantly in long-term care. Unifor also represents 30,000 members in Atlantic Canada and 310,000 across the country.

I came to Canada as a temporary foreign worker. I moved here from the United States because, as a country, Canada more closely mirrors my beliefs and ideals, with our universal health care, labour relations, and environmental concerns. All of these things are at risk from the TPP, but what I'm here to talk about specifically is how the TPP relates to being a temporary foreign worker.

It's a stressful time of uncertainty when you work this way. I've heard it called “modern slavery” many times, including by our own media. When you work as a temporary foreign worker, the company that has hired you and paid for your labour market impact assessment controls your future. We tend to be very subservient, and I use “we” because I am past this part of my history, but it's something that's not forgotten. If we rock the boat and our employment is terminated, so is our ability to remain in Canada. It's because of this that we do things for our employers that our Canadian counterparts would speak against. We tend to be moved around our job sites more. We're asked to work overtime more frequently. We work more when short-staffed and even when we're sick for fear of losing our jobs and, in turn, our Canadian future.

Immigration is an important key to the diversity of our nation, and diversity is a huge strength. When developing trade agreements, labour must be a key factor in these talks. Job security is economic security. As economic globalization occurs, we need to progressively look at what this means to our workforces and how we can actively work to get these trade deals to bring all people into the deal while lessening the economic divide that continues to grow apart.

Free trade deals, especially the TPP, actively work to widen that divide. Chapter 12 of the TPP, which the U.S. opted out of, specifically gives rights to the multinational corporations that allow them to completely circumvent Canada's immigration laws. It completely negates the labour market impact assessment, while also lifting the percentage of temporary foreign workers they are able to employ.

Let's start with the labour market impact assessment. This was created to ensure that companies bringing in temporary foreign workers don't abuse the system. It requires that they show proof of an attempt to hire a Canadian first.

As an immigrant, I understand the need for this. No immigrant is coming to Canada to take a Canadian's job. We come to seek opportunities for our future, a future that lets us walk beside Canadians and not see them unemployed. By allowing multinational corporations to ignore the labour market impact assessment, this will not always be the case.

To borrow an example from the report of the Canadian Centre for Policy Alternatives, “Migrant Workers and the Trans-Pacific Partnership”, Japanese automakers could easily move engineers from Japan into Canadian operations under the intra-corporate transferee rule. This could happen even if there's a Canadian engineer, with experience, currently on unemployment. The labour market impact assessment may have its flaws, but it's put in place to prevent this from happening.

Then there is the fact that the TPP lifts restrictions on the percentage of temporary foreign workers in a workplace. This aspect is at particular risk of being abused at places that often “contract-flip”, such as airports or the oil industry. Corporations ought to award these contracts to the companies whose proposals are the cheapest. If the company is from a TPP nation, especially Japan or Australia, they would be able to not rehire any of the workforce that was employed by the previous contract winner and doing the job. Instead, they could bring in temporary foreign workers at a much lower pay rate, with decreased benefits. This makes the employees more beholden to that corporation.

I feel that the TPP is a missed opportunity. We should be looking to negotiate a progressive fair trade agreement that does not allow companies to circumvent our labour laws but enforces and equals them by making corporations truly look at the labour market impact assessment and by offering permanent residency options when a need is truly found for employee migration.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, Jessica. Welcome to Canada. When did you come here?

[Jessica Smith]

It's eight and a half years ago now.

[The Chair, Liberal, Mark Eyking]

Very good.

We're going to start our dialogue with the MPs.

We're going to start with the Conservatives. Mr. Ritz, you have five minutes.