International Trade Committee on Sept. 26th, 2016

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

Thank you so much for raising those points, because one of the opportunities here with the consultation is beyond and much broader than TPP. It's also about what our Canadian companies require to be prepared to enter into export markets. Where are the gaps? Where has there been a lapse in the last even 20 to 25 years?

When I first started working in trade preparation, we focused heavily on trade missions. We focused on qualifying Canadian companies to go off to the trade missions and the significance of the trade commissioner service, but also helping companies become more aware. It is hard for the companies, as you mentioned, that have fewer than 10 employees, and there is work to be done there.

Regarding Cooke, certainly over the last 30 years, Mr. Young, you have expanded your market for employees. As your company entered into more global markets, expanded, and became more integrated into those markets, how have the types of jobs that you have offered changed? How have the training requirements and the investment in training changed? Looking at the wage increases, we often hear trade agreements are about big business, but certainly every business has to start at some size, and Cooke started off as a small business. We in New Brunswick appreciate that you take an integrative role into our small rural coastal communities.

[Andrew Young]

You're absolutely right. You always have to start somewhere. I'll use an example outside of the TPP simply to illustrate what you're talking about. We sold, from New Brunswick.... We had zero sales into China as of two years ago, and having nothing to do with a trade deal, today in 2016 we will sell well over $70 million in China. We're looking at opening up sales offices there. But in order to do that, it requires people on the ground here in New Brunswick to understand how to access the market, how we were going to transport into the market. There are trucks that will leave the Blacks Harbour plant every night on their way to China. But that didn't happen overnight and it did require some retraining. It did require specialized jobs in New Brunswick in order to help develop that market. The same could be said for markets like Japan.

[The Chair, Liberal, Mark Eyking]

Thank you, Ms. Ludwig.

We'll move to the NDP now, and Ms. Ramsey, for five minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you so much for your presentations this morning.

I think on balance, what's facing us here at the trade committee, is that there are benefits for certain sectors, but overall, the deal itself is flawed in many ways. You pointed out some things, Mr. Richardson, around the challenges to Canadian companies to be able to export. I believe the amount was 10.4% of small and medium-sized enterprises were exporting in 2011, so the majority of small and medium-sized businesses are not in these markets at all.

I have one quick question for Mr. Young. How many people are you employing here in Canada at Cooke Aquaculture, and how many Canadian jobs would TPP create here?

[Andrew Young]

Today, we have more than 1,500 employees in Atlantic Canada, so the majority of Canadian jobs would be Atlantic Canadian jobs. There would be a few more outside of that in the rest of Canada.

I wouldn't be able to put a number to job creation as it relates to the TPP. We don't really go by those metrics. We're looking for a level playing field, and access to markets is important to us, and we already know—

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

We have estimates of 60,000 job losses, so we're trying to determine where jobs will be created through the deal as well.

Mr. Colford, you brought up drug costs and the patent extensions. This is one of the most deeply concerning pieces of the Trans-Pacific Partnership to most Canadians. I wonder if you could give us a perspective from your membership, as well as from people in general in New Brunswick how they feel about the cost of drugs being increased through the Trans-Pacific Partnership. You also mentioned pharmacare. How would they feel about the inability of us to create a pharmacare program because we could potentially be sued for doing so?

[Patrick Colford]

The short answer for that, I guess, is that I can give you some specifics.

As most people know, especially in the northern part of this province, a lot of people live well below the poverty range. Actually the same can be said.... As a member here knows, Saint John has some of the highest poverty rates. We're hearing stories of people having to cut their heart medication and other medications in half, into fours, because at the end of the month, it's necessary to make a choice between affording to have their medication or to have their lights on. I know that sounds really, really scary, and maybe a little bit on the fearmongering side, but the extension of these drug patents, I think, only serves to increase that.

When it comes to pharmacare, it's no secret that Canada really needs a pharmacare program. That was the vision for medicare when it was first established in this country. With these possible lawsuits that could happen, that could only serve to really quash a program that we really need here, not only in New Brunswick but in Canada.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

Mr. Richardson, as a former auto worker, I certainly understand what you're saying about the implications for auto. An economic impact study was just released from Global Affairs Canada. It was pretty dire. It showed some pretty negligible growth over the next 24 years, 1.27%. But understandably, it was saying that auto manufacturing will be hurt.

I'm going to read you a line from it:

As a result, Canada’s bilateral trade with existing FTA partner countries is expected to decline under the TPP Agreement. Net Canadian exports to the existing FTA partner countries would drop by US$1.5 billion, largely due to an erosion of NAFTA preferences in the US and Mexico....

Perhaps you could tell us about the implications of that to your membership here in New Brunswick. I also wonder if you have a breakdown of your percentage of exports to the U.S. versus globally.

[The Chair, Liberal, Mark Eyking]

A short answer would be good.

[Joel Richardson]

Sure. On the first question, with respect to the auto industry, I would say there's no impact here in the province. We have no auto industry here in this region, nor in Atlantic Canada, nor do we have any real number of companies that would feed into that supply chain in terms of components or other things. I'd defer to my Ontario colleagues to speak with you about that, if you don't mind, but I thank you for sharing it with me.

On the second piece, New Brunswick's exports, 87% of everything we make in New Brunswick is exported to the United States. The remainder, all other countries, would fit the rest of that. That gives you some idea of what we're looking at.

We already do significant multi-million dollar sales to countries already in the TPP. Irrespective, as Mr. Young said, of China, there are already a lot of sales into those markets.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're going to move to the Liberals, with Madam Lapointe, for five minutes.

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

Thank you, Mr. Chair.

I want to welcome the witnesses who are joining us today. I am really happy to be here with you in New Brunswick.

Mr. Young, I would like to follow up on what our colleague Ms. Ramsey said.

The Trans-Pacific Partnership would lead to an increase in employment. If the agreement was not ratified, could Cooke Aquaculture Inc. experience a decline in employment?

[Andrew Young]

No. To be perfectly blunt, we don't rely on trade deals in order to expand our business globally. We're already out in these countries. The level playing field aspect of trade deals is always helpful to us, but there would not be any job losses if this were not ratified.

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

Thank you.

If this does not work, what countries do you want Canada to focus on in terms of free trade agreements?

[Andrew Young]

They would be the two countries that I mentioned in my submission. Japan is arguably the largest seafood market in the world. Obviously, easier access to that market is going to be helpful. We actually have a sales office in Japan. Then there are other growing markets, such as Vietnam, where we've explored, along with some of the Canadian trade commissioners, accessing markets like Vietnam that are growing. We look to those for future sales.

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

Thank you.

I will ask a more specific question.

Under article 20.16, the signatories will not be able to provide or maintain any subsidies for fishing that negatively affect fish stocks or subsidies given to vessels engaged in illegal, unreported and unregulated fishing.

I would like to hear your thoughts on that.

[Andrew Young]

That has never been raised with me, so I'm not sure how much of an impact that would have. I think it would be minimal. Again, I haven't been part of any internal discussions as they relate to that, so I would say the impact would be negligible.

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

Thank you.

Mr. Richardson, you briefly talked about currency manipulation with various countries in the Trans-Pacific Partnership. I would like to hear your comments on that. Could that kind of manipulation be prevented? What challenges do you think are involved in that?

[Joel Richardson]

I'll couch that in my comments made in an earlier round—looking for ways to maintain competitiveness for New Brunswick companies. If there are any opportunities to maintain competitiveness on the currency side, certainly, I think that's an important consideration. I'll be the first to admit I am not a currency expert; however, I know it is an issue with fluctuating dollar values and securities, so I would just suggest that I'd couch that in maintaining competitiveness for our companies.

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

Thank you.

You also said that our exports from New Brunswick could double by 2030. You talked about the elimination of tariffs on products such as seafood, maple syrup and potatoes. With that elimination, what products would have the most potential in terms of increased sales?

[Joel Richardson]

With this particular agreement, we've looked at it, and we've also looked at some of the provincial data with the Government of New Brunswick. If you look at the opportunity for market access and tariff reduction on industrial goods, metal, mineral products, market access for wood forestry products, other types of paper products, uncoated paper, paper board, duty-free access and removal of tariffs, as Mr. Young said, for the fish and seafood product industry—that includes things like frozen snow crab, herring roe, lobster, salmon—market access for agricultural and agrifood products, potato products in particular.... As Mr. Young said, Japan is a key market for that with, I think, about a 13.5% tariff or something coming off in Japan on the prepared potato side—that's very substantial—and a number of other pieces.

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

Could the demand be met if tariffs were removed for potatoes?

[Joel Richardson]

Yes, I believe we not only have the capacity on the product side, but we have the capacity on the people side. There are approximately 47,000 people in New Brunswick who are unemployed, so there is a workforce available. As I mentioned, we've seen that some of the manufacturing sectors have gone down over the last number of years, and we do see an uptick in growing our export sales as a way to put people back to work, particularly on the goods-producing side.

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

Thank you very much.

[The Chair, Liberal, Mark Eyking]

We're going to move to Mr. Dhaliwal, for five minutes. Go ahead, sir.