International Trade Committee on Sept. 27th, 2016

[Rosalind Waters]

We have a disproportionate number of seniors living on Prince Edward Island, and many of those seniors do not have private insurance. They're living on quite low incomes. It's those people who are going to be getting hit twice. They will pay once through their taxes—well, that's if there's any compensation of course; if there's government compensation to the provinces for the cost, then we'll be paying for that—and they'll also be paying at the drug store when they pick up their medication.

Do you want to add anything?

[Ron Kelly]

I think we've seen from past trade deals that there has been a similar impact from the Canada-U.S. trade agreement, NAFTA. Even though, if I remember correctly, there was the promise of a drug prices control panel 20 or 25 years ago—maybe even longer now—I don't believe it had the effect that it claimed initially of decreasing prices. We've been paying for that ever since. We anticipate that that will continue under this trade deal.

[Rosalind Waters]

Of course it will also impact insurance premiums most likely, because the insurance companies are going to be paying out larger amounts of money to cover people's drug costs. The interesting thing is that after patent protection was extended as a result of NAFTA, brand-name manufacturers pledged to invest 10% of their sales earnings in research and development in return for the patent extension. Since about 2002, they've consistently failed to meet that commitment, so it's not a good arrangement in any way.

[Tracey Ramsey, NDP, Essex, ON]

Agreed. I think they promised 10%. They got up to 11% and now they're down to four.

[Rosalind Waters]

Five—

[Tracey Ramsey, NDP, Essex, ON]

They're not reinvesting in new drugs. The evergreening is also really concerning. They can re-patent drugs on a constant basis because they tweak the formula very lightly.

Something else that you talked about are NAFTA cases, which again speak to the ISDS provisions and our concerns around that. When you ask most Canadians about the TPP, this is one of the provisions they talk about. They are concerned because we're the most sued country under these provisions. You mentioned one case in New Brunswick, public auto insurance. I wonder if you could expand on that a little bit and tell us what ended up happening there.

[Rosalind Waters]

Well, they never got their public auto insurance.

It was an election issue, and the new government came into power on the promise of making auto insurance public. My understanding is that there was both the threat of a nation-to-nation suit and an investor-state dispute. They were threatened with two disputes. Presumably that was from an insurance company. The long and the short of it was that the government backed down and never implemented the policy.

[Tracey Ramsey, NDP, Essex, ON]

What you just described is the regulatory chill, which is something that we've heard about at this committee. It's not that we were actually sued; it's the threat of being sued that prevents us from creating legislation that benefits Canadians, our public health, our public safety, things like public auto insurance, and these types of programs. It is a very serious concern.

Something else that you mentioned is the labour mobility chapter. It is very concerning. We can't compete with Malaysia at 11¢ an hour. It's just impossible. When Mexico is afraid of Malaysia, we should be concerned, because we've bled jobs to Mexico under the NAFTA provisions, certainly in manufacturing, but in other sectors as well.

I wonder if you could speak a little further about—

[The Chair, Liberal, Mark Eyking]

I'm sorry, you're not going to have time to ask a question. Your time is up. We have to move on.

Mr. Dhaliwal, you have five minutes.

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

Thank you to the panel members.

Mr. Richard and Mr. Kelly, you said there's not going to be any positive or negative impact of the TPP on the aerospace industry, particularly not in P.E.I., but congratulations on the great achievement of diversifying the economy here.

Is there anything that you see might help your industry to grow in the future?

[Lennie Kelly]

Some of our members are already in the markets that would be encompassed by the TPP. When we called for input into the hearings a month ago or so, we did not hear anything from our members who are already in those markets, as to whether or not ratification of the TPP was going to be helpful or not. I guess our position, then, would be that it's not a major game-changer; otherwise they would have let us know.

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

Mr. King, you mentioned there might be some labour challenges. Could you elaborate on those please?

[Dennis King]

Our issue for the last couple of years has been that most of the facilities that we represent are in rural Prince Edward Island, so we've been facing the standard challenges that many rural locations face, which is youth migration and an aging population. In the past couple of years we have had as much as 40% of our workforce reduced to the point at which it has been impacting production, intake production, and we have used programs such as the temporary foreign worker program in the past to fill up some of that missing area.

Our industry would be the first to suggest that perhaps we will be coming to rely on that, so over the last 18 months we've really undergone a thorough look within. We've increased wages by a couple of dollars per hour. We've worked more diligently on recruiting. We had a program this year in conjunction with the Government of Canada and the Government of P.E.I. through which we hired high school students and college students for areas. I think 225 was the uptake on that, it was a great program.

We do think that for us to remain competitive in this business, though, understanding where we're located and the changes in the population, we're going to need some type of workforce addition. We don't particularly like the temporary foreign worker program. We would love it if the foreign worker program could be a more permanent avenue for us.

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

Thank you for that. I have the same feeling.

I came to this country as a permanent immigrant. The way I look at it, your need is not necessarily to have a highly trained technical workforce. You probably need a workforce that can sustain the farming communities, just like in B.C..

[Dennis King]

All of these facilities would need some type of skilled labour. We would say it's a skill but it's probably not a skill that would be defined under a standard program. People have to be efficient and work well for longer periods of time standing up. They're pulling meat out of shells and they are operating equipment. There is a certain amount of skill to it, but I guess for the government classification under the temporary foreign worker program, it would be called a low skill.

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

Ms. Waters, you mentioned that it might have a negative impact. Now I see the contradictory remarks between Mr. King and you.

In certain fields of professionals, such as architects and engineers, it won't affect them because you need to have that professional designation to work in Canada. Those people in Malaysia, as Ms. Ramsey was saying, won't have those qualifications. Do you see—

[The Chair, Liberal, Mark Eyking]

Sorry, Mr. Dhaliwal, but you won't be able to get that question in because your time is up.

Ms. Ludwig, for five minutes.

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

Good morning and thank you all for your presentations.

Mr. King, I represent a riding in New Brunswick that is very coastal. We have a big lobster business in southwest New Brunswick. Are you working together? Think of a trade deal. Trade deals bring together countries into a regional pact. Looking at the lobster industry, particularly in Atlantic Canada, are you familiar with any programs or any collaboration between associations that are working together to promote and market the lobster industry and looking at value-added services?

[Dennis King]

Do you mean in terms of employment or in terms of marketing the product?

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

The marketing itself.

[Dennis King]

Five years ago there was a serious issue with pricing, and the lobster hit a crisis. The Lobster Council of Canada was formed with the desire to bring the three provinces of the Maritimes together to be part of a generic marketing program.

The industry had a little bit of an upswing, and there's been some lost traction on that, but the Lobster Council of Canada has still invested some money into a generic marketing program. This year P.E.I. was the first province to charge a 1¢ per pound levy, money that's going to go to marketing generic lobster. That's 1¢ per pound from the fishermen and 1¢ per pound from the processors, so it's actually 2¢. The processors' money is in a pot right now waiting for the other provinces to come on board. In the meantime, we've funded the Lobster Council of Canada $16,000 or $18,000 to keep it functioning so that we can meet the objectives.

We have a plan in place. We need the funding.

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

Thank you. That's great.

In terms of innovation and product adaptation, are you familiar with any work that's being done in the fisheries or in the lobster area on that?

[Dennis King]

I have four of these reports under the same situation, where in facing our labour challenges we had to look within.

The problem with lobster in particular is that there are no facilities that are the same, and there's no place where you can just go and say, “I need this”, and pick it off the shelf.

There's a need for automation. There's an understanding of the need. The gap right now is in R and D, and that whole process of the commercialization of it. Lots of people want to try things, and lots of people will use it, but in the middle is where we're missing something.

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

Sure. The time you need to try it and test it is typically during the high season, when everyone is busy.

[Dennis King]

Yes, and with record landings of lobster coming in, it's hard to designate part of it.