Thank you, Chair.
On behalf of the 40,000 members of the New Brunswick Federation of Labour, we want to thank you for giving us the opportunity to present our views on the impact on Canada of the possible Trans-Pacific Partnership agreement.
I want to begin by expressing my sincere appreciation of your willingness, and that of Minister Freeland and your government, to sustain an open and frank dialogue regarding the Trans-Pacific Partnership negotiated under the previous administration.
It is a deeply flawed agreement, and our view is the cost of the TPP outweighs the limited benefits that might arise from this deal. Proponents of this deal only expect it to boost Canada's GDP by about 0.5%, and that's 10 years down the road. That's about as much as the previous government promised to pay the dairy industry in compensation for TPP losses. This leaves nothing to cover the losses to the auto sector and other areas.
A key study from Tufts University predicted that workers in all 12 TPP countries would lose out because the TPP would increase income inequality. This flawed agreement is about protecting the rights of multinational corporations. It does nothing to help workers or the environment.
The two sectors with the most to lose are auto and dairy. I also want to touch on our concerns with the provision of public services, rising drug costs, and investor challenges to environmental regulations.
First, the automotive sector is essentially important to Canada's research and development, high value-added production in manufacturing exports. In 2014, approximately 40,000 Canadians worked in motor vehicle manufacturing and another 70,000 in parts manufacturing. A five-year phase-out of tariffs on Canada's imports of Japanese vehicles will quickly eliminate the incentive to manufacturers here in Canada. It will encourage Japanese assemblers to import vehicles. Unifor has estimated that the TPP could lead to the loss of 20,000 jobs in the auto sector alone.
The Canadian dairy sector provides high-quality, locally produced food, while supporting small family farms in rural communities. Under the TPP agreement, foreign dairy producers would be able to access an additional 3.25% of Canada's 2016 dairy milk production. This comes at a time when the dairy industry is already under considerable stress. About 250 million litres of milk and subsequent production jobs are at risk annually.
We have many concerns with the model of investor-state dispute settlement. By now, the problems with this model of dispute settlement are well known with the unaccountable and ad hoc nature of the arbitration panels and their expansive definition of what constitutes an investment. The fact is that they do not operate in partnership with national court systems, but above them, and there is an apparent lack of deference to the prerogatives of governments, or even to ask for jurisprudence on any given issue.
With regard to public services, the TPP chapter on public services locks in the current level of privatization with so-called ratchet and stand-still clauses. This makes it more difficult for governments to introduce new public services such as pharmacare or child care without subjecting themselves to an ISDS claim. Canada already has the second-highest per capita drug costs in the world. The TPP would further constrain efforts to reform prescription drug purchasing provisions in Canada.
When it comes to the environment, the TPP also contains broad prohibitions on economic or environmental performance requirements, such as requiring technology transfers or local sourcing to foster green industries. Such restrictions would serve as a chill on governments contemplating steps required to make the transition toward a low carbon and climate resilient economy.
It's time to come back to more reasonable forms of investor protection. These protections should be in line with national judicial processes, should privilege state-to-state settlements, and should emphasize investors' responsibilities just as much as the protection of their assets.
In conclusion, given the high economic and political stakes, Canadians deserve no less than a full and substantive discussion on the potential consequences of this draft agreement.
Thank you very much.