International Trade Committee on Sept. 28th, 2016

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

Are you sure?

[The Chair, Liberal, Mark Eyking]

Yes. I don't think you could punt a question now, because your time is up, but there will be another time and maybe you can pass it up front to your colleagues.

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

Thank you.

[The Chair, Liberal, Mark Eyking]

We have to move on if we're going to get all the MPs in.

We're going to go the Liberals.

Mr. Dhaliwal, go ahead, sir.

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

Thank you, Chair.

Thank you for your presentations.

Ms. Shortall, a study done in 2014 by Ciuriak and Xiao projected an approximate 0.8% increase in labour, which is very significant.

What is your opinion on this? Does it give any credibility to ratifying TPP?

[Mary Shortall]

What did you say the percentage increase was?

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

It was a 0.8% increase in labour.

[Mary Shortall]

Well, all the research that we've been using to study TPP points to exactly the opposite. Even Joseph Stiglitz talked about wage inequality. Tufts and the research done by unions like Unifor, by Jim Stanford on the auto manufacturing, have shown the exact opposite, to the point of 58,000 jobs. When you look at the Japanese auto parts coming in, we are facing a possible loss of jobs in auto manufacturing and auto production.

The same is true in farming. Jobs are threatened every year. What's happening with dairy farmers, what's possibly going to happen with public services and procurement, the investor-state disputes around labour-market policies, the influx of more foreign workers, and the broadening of what defines a skill in a trade—to us, all these point to layoffs and job losses right across the spectrum.

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

Mr. Haire, over the past two weeks, quite a few manufacturers have come and said that opening markets to globalization...and particularly in British Columbia, they can't compete. They are shutting down. For the Europeans it is the other way around.

How would you be able to convince those manufacturers, who are coming to me and telling me that it's very difficult to compete in the open globalization?

[David Haire]

My advice to those manufacturers would be to adopt lean, to Six Sigma problem-solve, and to aggressively chase new technologies. Be very innovative and be agile. I think that would be my recommendation to anyone in the country.

We have problems in skills and labour. We're competing with other countries. Japan, for instance, is very advanced in their management sciences. They're very advanced in adopting problem-solving techniques. They're very advanced in new technology. I think we must constantly be running to keep up with those types of countries.

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

What are some of the value-added industries in Newfoundland and Labrador that would be able to take the advantage of TPP participation?

[David Haire]

For the most part, our economy is based on natural resources. The bulk of our exports are oil and gas. There is oil and gas, minerals, seafood, and then you get into forestry products, lumber products. I'd say seafood is probably the industry that will chase this most aggressively. I don't believe we're going to send rocks from the IOC to Japan or Australia. I think seafood is the area of most interest.

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

Ms. Reid, we all know that globalization is a reality now. We can't avoid it. We have to deal with it. You talked about heightened inequality.

A key promise that the Prime Minister made, and that we are trying to deliver, was to help the middle class—

[The Chair, Liberal, Mark Eyking]

It will have to be a very short question and a very short answer.

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

Do you see globalization as a reality? Are there any alternatives, or are there any suggestions that you can make to the panel?

[Marilyn Reid]

I think it's interesting that in the media response to the OECD reports, the headlines were about the end of globalization, and whether globalization was going to fall.

One of the biggest reasons is the rampant inequality it has caused. It has been great for certain sectors—rather, elites—but it has been really terrible for workers. It's not just in Canada; it's everywhere.

I would say that globalization is being questioned, big time, everywhere in the world. If we rush into globalization—I'm horrified by CETA, which is worse than the TPP—while the rest of the world is getting away from it, we're going to be constricted by these ISDS lawsuits and trapped. We're going to be trapped by globalization.

[The Chair, Liberal, Mark Eyking]

Thank you. You might be able to get some more comments in later on with another question.

Now we are going to move over to the NDP.

Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you so much for your presentations this morning. I have so many questions, I think it's going to be tough to narrow it down. You all gave a great snapshot.

Mr. Haire, you said we have a poor history in trade agreements, and that's the truth. Under the previous government, we signed the most trade agreements we ever have, yet we have not seen the benefit of that. Our trade has actually gone down after every FTA we have signed with a country. By Global Affairs' own admission, in the economic impact assessment that was released two weeks ago, trade will go down, under the TPP, with all of our current FTA members. That means the U.S., Mexico, Chile—everyone we currently have a deal with, we will lose trade with.

From what we've heard on this panel, the largest trading partner we have is well known; it's the U.S. To enter into an agreement that would put that in jeopardy, or see that trade go down, wouldn't make sense from a business perspective either, because that is the market where most people are trading. I am certain that would be reflected by you as well.

I want to talk about jobs. I want to talk about the potential 58,000 jobs lost. I would like to ask my colleague Mr. Dhaliwal to please submit the brief he was referring to, because I haven't heard of it either. I'd ask him to please submit that brief to the committee so that we can study it, because the only study that has labour included—our own impact assessment does not include labour—shows 58,000 jobs lost.

I want to ask you, as a representative of 65,000 members, what would the impact be? Can you also give us a snapshot of your current situation around jobs, the unemployment, and inequality that you are experiencing?

[Mary Shortall]

In our recent budget, the government predicted, just based on its own budgetary decisions, that the unemployment rate in this province is going to rise to almost 20% within the next five years, that the labour market is going to be reduced to the same numbers that it was in the year 2000, and that economic growth will slow down, obviously, because of that. We are already seeing signs of that. We are already seeing the closure of some manufacturing places. Scotsburn dairy just closed down last week, throwing 300 people out of work.

That's happening anyway. Obviously, in a resource-based economy, the price of oil and the decisions the government makes are having an impact on that. When you throw in what can happen....

We already, as a nation, export a lot of raw materials. When we talk about diversification, we are talking about how to change that. How do we export things that are already finished, value-added? That will be restricted under the ISDS. Anything that has local procurement or, from our point of view, anything that will make it a little easier to employ Newfoundlanders and Labradorians will be challenged and has been challenged already under previous trade agreements.

Besides the actual loss of employment that we see predicted from this, the other thing is the downward pressure on wages from things like an influx of temporary workers or skilled workers from the countries that signed the TPP. Although they talk about labour standards, there is nothing written in the TPP that's going to ensure that those labour standards ensure a good quality of life: there are no minimums there, and there is no enforcement, or the enforcements that are mentioned are very weak. Those things in the trade agreement are real signals for us that it is not going to benefit workers in this province.

[Tracey Ramsey, NDP, Essex, ON]

I think workers across Canada have struggled to compete with the low wages in Mexico, and now we'll be forced to compete with low wages, like 11¢ per hour, in Malaysia, a market that we won't be able to have any type of labour competition with, unfortunately.

Ms. Reid, I wanted to give you the opportunity to finish your thoughts. I know you were cut off a bit there. I think it's been well documented that there are real conversations around whether to continue to pursue these trade agreements that end up hurting our country.

[Marilyn Reid]

Just to respond to some of the arguments that were posed here, the whole idea of comparative advantage has really been quite nonsensical. When it was first put forth 200 years ago, or 150 years ago, it was comparing the British exporting wool and importing grapes. It was that simple.

We don't have comparative advantage. A computer manufacturer will use the value-added chain to have the computer parts made in six different parts of the world. One of those, or two of them, are always tax havens so they can avoid paying taxes. There is no comparative advantage to international trade. I think we have to start looking at that.

The other thing you want to be aware of—

[The Chair, Liberal, Mark Eyking]

Sorry, you're going to have to finish.

[Marilyn Reid]

—yes, I will—is that the UNCTAD study reported that Canada would suffer a 26% loss in value-added exports if we went into the TPP: wow. I'm passionate about democracy, but economically I think it's horrible. I think we need to start looking at that.

[The Chair, Liberal, Mark Eyking]

Thank you.

I would remind the MPs to try not to punt a question when you're getting close to the end of your five minutes, because I am given the hard task of cutting off the witnesses; it's my job. If you can get your questions in early, and if you only have a half a minute or so left, ask your witness to give a short answer. I don't like cutting off witnesses, especially when they have something good to say and we're not getting their whole thought.

We're going to move over to the Liberals now and Madame Lapointe.

Go ahead, please, for five minutes.

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

Thank you, Mr. Chair.

Good morning and welcome to the witnesses.

Mr. Haire, my question is for you and it follows up on your comments.

You said that Canada was not doing much to help businesses before and after free trade agreements were signed. It seems to me that this is what I understood. What suggestions could we make for the trans-Pacific partnership to help small and medium-sized businesses? What would you like to see in the free trade agreements?