International Trade Committee on Sept. 26th, 2016

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

Thank you to the presenters. It's always great to come to Atlantic Canada. There's always a warm welcoming hospitality from the people in Atlantic Canada.

My question is for Mr. Young.

Mr. Young, since 2002 there has been a 47% loss in the global market when it comes to the aquaculture industry. I understand that you're looking for a level playing field to compete on the international scene, but if we ratify the TPP, do you think we will be able to gain some of that market we lost since 2002?

[Andrew Young]

I can't speak for the industry overall. I can only speak for our company's experience.

I think what you're getting at is there are really different levels in the market. When you compete at the higher end of the scale, it's much different from when you compete at the lower-quality products.

A lot of the products that get imported into Canada and the United States typically tend to be on the lower end of the quality scale and pricing scale. Again, that's not part of our competitive network. We tend to be on the premium side. On our end, again, access to markets is important. Again, we're not impacted very much at all by the imports coming in.

Unfortunately, I can't speak to the industry as a whole. I can only speak to our own experience.

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

Mr. Colford, you talked in general about the auto industry and whatnot. We are in New Brunswick today. You said it's a flawed agreement, but on the other hand, if I look at it this way, we are in a free enterprise and workers always gain when opening up to different markets.

Could you focus only on New Brunswick and how it will help your members if we ratify the TPP, or how it's going to negatively affect them if we go for that as well?

[Patrick Colford]

Thank you very much for the question.

I think it's going to harm our members a little more than benefit them. As Mr. Richardson had alluded to, there may be more jobs, but my worry is that on that level playing field, if you will, in order to make products and things sustainable, we'll have lower wages. It will become a race to the bottom.

Again, I'll come back to the auto industry. We're already seeing that with jobs and manufacturing being shipped to Mexico, because the wages are lower there, and there is more of a profit margin to be made, if you will.

All in all for New Brunswickers, I don't see this being a great deal whatsoever for our members and New Brunswickers.

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

Mr. Richardson, you mentioned new and emerging markets. Do you see any other country that is not part of the TPP, or is part of the TPP and we'd have bilateral agreements, that would benefit people in New Brunswick?

[Joel Richardson]

I think there's been a substantial effort made by the federal government and the provinces on working together, particularly for the countries involved with CETA, with Europe. We do see that. CETA is holding some promise for New Brunswick as well. CME has been very supportive of that, as have many New Brunswick companies. We have been part of that negotiation as well.

Again, many sectors within New Brunswick, particularly on the agriculture and aquaculture sides, could benefit substantially from increased exports into European countries as well, along with other value-added types of products in the forestry industry, high-end industrial equipment, and a number of other areas.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Dhaliwal.

We'll move on to our last MP for this round.

Mr. Van Kesteren, you have the floor.

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

Thank you for having us here in Saint John. It's a wonderful place. As was stated, we're learning lots. It's great to visit the area to get a proper perspective. We thank you for taking this time to be with us.

Mr. Young, I want to go to you first. Your industry is fascinating. Of course, your focus is on farms. Do I have it right that as this industry increases, there will be less stress on wild stock? Is that a correct assumption?

[Andrew Young]

That's definitely part of the aquaculture business proposition. Just so you know, 30% of our global sales are non-aquaculture. That's a growing segment of our total business. But in terms of your question, yes, that is one of the major benefits of aquaculture. It takes stress off of wild stocks, which, as most people know, have been declining drastically over the last 25 years.

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

It's very heartening to hear that. Are we seeing a reversal in areas where we've seen overfishing, where your industry has been able to compete against that, which is subsequently better for the environmental picture?

[Andrew Young]

To use salmon as an example, there hasn't been a commercial Atlantic salmon fishery since the early 1970s. Salmon aquaculture actually only started in earnest in the 1990s. It fills a void that exists in the market. There's also a wild salmon fishery, of course, on the west coast in both Canada and Alaska. Those fisheries coexist very nicely in terms of meeting the demands of the consumer today. But definitely there's a big demand for farmed salmon from consumers.

I can speak anecdotally about the argument of aquaculture versus wild, but I can't speak as an expert as it relates to the net benefit of having aquaculture as an industry globally.

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

So it's a good-news story.

As a little sidebar, I come from southwestern Ontario, as my colleague Ms. Ramsey does. Wheatley is in my riding. I don't know if you're familiar with Wheatley, Ontario, but it's the largest freshwater fishing port in the world. There's a fair fishing industry there as well.

I visited a processing plant, and they, too, have quite an expanded trade with China. However, that is for processing. Is that the case with you as well? Do they buy stock and then process it in China?

[Andrew Young]

Our sales into China are right to things like supermarket chains and distributors for restaurants. The product literally comes out of the ocean here, is processed here in New Brunswick, and is sold fresh into China. We're not part of the reprocessing where we're sending it to China and then it's coming back. We're actually selling fresh fish into China.

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

You're doing processing here.

[Andrew Young]

It's being processed here in Blacks Harbour. All of it is certified in Blacks Harbour and then it gets put on a truck and goes to Montreal. It's flown to Doha and then it goes from Doha into the Chinese market.

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

How much of the processing labour is done by foreign workers as opposed to domestic workers?

[Andrew Young]

In that plant, we have very little access to foreign workers. It's almost exclusively domestic. That plant needs more workers. We have a very hard time finding labour. We could put through a lot more business in our plant in St. George if we had greater access to labour and foreign workers.

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

Am I running out of time?

[The Chair, Liberal, Mark Eyking]

Yes, you're out of time. I'm sorry. I know you're on a roll.

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

That's a shame. I'll look forward to having a quick discussion afterward, but thank you very much.

[The Chair, Liberal, Mark Eyking]

That wraps up our first session this morning.

Gentlemen, thank you very much for coming in. It was very informative, and there was good dialogue with the MPs and good questions from the floor here. I wish you continued success. You're welcome to stay throughout the day. We have many presenters here.

Just a reminder to the audience, you cannot take photographs during the session, but in between sessions you can take photographs and even talk to some of the MPs, if you want.

We're going to break for 10 minutes now, and then we're going to go to our next panel.

[The Chair, Liberal, Mark Eyking]

We're going to begin the second panel that we have this morning.

Welcome, panellists and stakeholders. If you were here earlier, you might have heard my opening remarks. Our committee has been going across the country and we've done six or seven provinces so far. We're finishing up Atlantic Canada and then we'll have a video conference with the territories. Over 20,000 emails have come to us from Canadians. We're going to be receiving emails until the end of October. We've had 125 briefings and 265 witnesses, so we're hearing a lot across Canada. We started early in the year.

The other issues that our trade committee is facing are softwood lumber and trade with the United States and we have a European agreement. Our committee is fairly busy. We have committee members from right across the country.

When we finish consulting with Canadians at the end of October, we're going to put a report together. That will take us a month or so, and at the end of the year, we're hoping to put a report in front of Parliament.

Welcome and thank you very much for coming here today and being part of this whole process.

In this group of panellists we have Connors Bros., the Council of Canadians, and Grand Manan Fishermen's Association.

We'll start with David Lomas from Connors Bros. Welcome, sir. You have the floor.

[David Lomas, Vice President, Marketing and Business Development, Bumble Bee Seafoods International, Connors Bros. Clover Leaf Seafoods Company]

Connors Bros. Clover Leaf Seafoods Company is one of Canada's oldest companies. We've operated a sardine and herring cannery in Blacks Harbour since the 1880s. We currently employ about 600 people at our Blacks Harbour facility, and are one of the main employers in Charlotte County, New Brunswick. In addition, we operate an international sales and marketing office in Saint John, New Brunswick, which sells seafood through our own brands in over 50 markets around the world. Our Canadian head office is in Markham, Ontario. We're responsible for just under half of all canned seafood sales in Canada just through our own brands, Clover Leaf and Brunswick. In addition, we have a sushi-quality frozen seafood food service business through our affiliated Anova unit. We are affiliated with Bumble Bee Seafoods in the United States, with its headquarters in San Diego, California, and we are owned by Lion Capital, a U.K.-headquartered private equity firm.

I'll skip to the main concerns that we have with respect to the TPP. Connors Bros. Clover Leaf Seafoods Company has several concerns related to the proposed TPP FTA with respect to our Canadian operations. The current herring resource constraints from Canada mean that there are no market outlet advantages gained by the TPP for our company with production from our Blacks Harbour canning facility. We currently have to procure finished goods mainly from Europe to meet our overall corporate requirements for branded sales in Canada, the United States, and other international markets. Labour cost differentials among many of the TPP parties such as Mexico, Malaysia, Peru, and Vietnam put our continued production at risk in New Brunswick. Our labour standards and obligations are also disproportionately higher than many competitive sources supplied by TPP partners, which further affects our competitiveness.

The simple elimination of tariffs, without addressing other regulatory issues affecting our operations in Blacks Harbour, may be a threat to the competitiveness of that operation. This results from operating requirements imposed on Blacks Harbour for regulatory compliance under a number of Canadian regulatory bodies, including CFIA and DFO. One example is with respect to import restrictions on raw material being processed in Blacks Harbour. We are currently unable to import herring from Sweden to offset our shortage of locally available fish. The concern is that this may be a vector for marine diseases being spread through the Bay of Fundy region. To our knowledge, several TPP parties where canned sardine products are produced are not similarly constrained and freely import and process fish harvested from outside their territorial waters.

We are unclear on what implications the TPP will have with respect to NAFTA. We currently export canned sardines from Canada to the United States and Mexico, and our affiliated company, Bumble Bee Seafoods, has major concerns about the TPP with respect to its operations and its market position in the U.S. market. Bumble Bee Seafoods is the largest branded canned seafood company in the U.S. market.

Those are the essential concerns that we have.

[The Chair, Liberal, Mark Eyking]

Thank you very much, sir, for staying within time.

We're going to move over to the Council of Canadians. We have Leticia Adair and Paula Tippett.

You have five minutes together. You can split your time or do it whatever way you want to do it. Go ahead.

[Leticia Adair, Saint John Chapter, Council of Canadians]

All right. Thank you.

Chair and members of the Standing Committee on International Trade, thank you for the opportunity to address the committee on the issues that concern us.

Both Dr. Tippett and I are health care professionals and have more than 30 years of experience each in the field, she as a family physician, and I as a registered nurse. We are also here representing the local chapter of the Council of Canadians.

Although it is not really possible to predict how the TPP will be interpreted or enforced, we are left to draw on our experience with previous trade agreements, such as NAFTA, and their impacts, such as the use of dispute resolution procedures.

Canada has suffered the most under investor-state dispute settlements. Our country is in first place among developed countries for the number of ISDS lawsuits against us. This has cost millions of dollars in damages. The TPP builds on the NAFTA model, but goes well beyond the traditional free trade issues.

It's very important for us to keep in mind that this was a made-in-America deal and that it was negotiated behind closed doors between U.S. corporate advisers and officials, not parliamentarians like you from participant countries.

As we are understanding now, the TPP will affect us in many ways. We want to really convey to your committee the negative impacts that the TPP will have on New Brunswickers, Canadians, and global citizens to access affordable medications.

According to a Health Council of Canada study, 21% of Canadians with the lowest income report not filling a prescription because of cost compared to 2% of those with the highest income. Rising prescription costs lead to negative health outcomes, and we have experienced it ourselves. Some studies have demonstrated that increased out-of-pocket costs for prescription drugs have resulted in negative health outcomes. Older patients were less likely to fill their prescriptions when they had to pay for them. This resulted in increases in the rate of hospital admissions, emergency care, and visits to physicians.

Health Canada has stated that high prescription drug costs will rise under the pending free trade agreement. The TPP and similar trade deals will add more than $800 million to prescription drug costs in Canada at a time when our drug prices are already 26% higher than the Organisation for Economic Co-operation and Development median.

If the TPP is ratified, many more Canadians will experience higher costs, and this will represent a significant financial burden relative to their income. Some additional individuals will be faced with the difficult choice between putting food on the table and taking necessary medication.

The TPP requires extended patents and facilitates evergreen practices, allowing pharmaceutical companies to stay in monopoly protection for drugs whose patents are about to expire by adding new uses and modifying formulas.

Canada has made important contributions to the world's health by contributing to the development of affordable vaccines and by investing in the Global Fund to fight AIDS, TB and Malaria. The TPP will undermine these contributions when the provisions in it drive medicine prices up. The hardships that this agreement will impose on the poor and sick in developing countries that are part of this agreement are reason enough for Canadians to reject such abuse of intellectual property provisions.

The TPP will have profound effects on the criteria that Canada uses to decide on drug safety and effectiveness, how new drugs are approved or not for marketing, market surveillance and inspection, the listing of drugs for unpublished formularies, and how individual drugs are priced in the future.

Drug prices need to be affordable so our patients and millions of others still waiting for treatment can get the medicines they need. It is our understanding that generic competition in the production and distribution of health technology saves lives by reducing price and increasing access.

I will let Paula continue.