Evidence of meeting #35 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lobster.
Representative, Common Frontiers Canada
Exactly. There's conflict of interest as well. That's been highly identified in reports in Europe.
NDP
Tracey Ramsey NDP Essex, ON
We've had open mike periods in every city that we've gone to, and nearly every person has spoken about ISDS and their concerns. Average Canadians, I think, have concerns—
NDP
Tracey Ramsey NDP Essex, ON
—about this provision in deals, and they are calling for it to be rejected as well.
Representative, Common Frontiers Canada
Right.
If you have a look at our recommendations, many of them do go to not moving forward as long as there is an ISDS segment. We cite the UN expert, Alfred de Zayas, who has done a 40-some-page report for the UN General Assembly. He's an expert on international order and democracy. He says that this agreement should be subservient to international law. That international law says that business agreements should be subservient, and that's not happening.
NDP
Tracey Ramsey NDP Essex, ON
We heard from the Grand Manan Fishermen's Association that they're concerned about ISDS, too.
Liberal
The Chair Liberal Mark Eyking
Ms. Ramsey, your time's up. Sorry. You have to move on and try and keep to the five minutes.
Madam Ludwig, go ahead.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Thank you for all your presentations.
I'm glad, Ms. Eaton, that you made it here this morning. Even without your notes, you've done exceptionally well.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Mr. Burke, I represent a riding that is heavily engaged in the fishery section. I represent islands. We have lobster. We have scallops. We also have agriculture. We also have science services. It's a diversified economy in New Brunswick Southwest. Much of your position has been discussed, and it's definitely reinforced across the country.
I have a couple of questions for you.
When it comes to market diversification, is your organization, the Victoria Co-op Fisheries Limited, working together with other organizations across the region to promote not only Nova Scotia products but Atlantic Canadian products?
General Manager, Victoria Co-operative Fisheries Ltd.
Yes, especially in the trade shows. As an example, we're off to Qingdao, with Seoul, South Korea, coming up, and then Shanghai. At most of these shows, we are sending off product—lobster and snow crab. That will be shared in the Atlantic Canadian booth. There is a chef shared by the four Atlantic provinces. There are partnerships with Agri-Food Canada and the four provinces.
As an example, we are providing lobster and snow crab. Not everybody is going to bring that, but all the provinces generally have that product, so there is a sharing of product. If somebody comes to the booth and speaks to me, we may not have a particular product, but one of our counterparts does. It's a very team-oriented approach, as we are not threatened.
We work every day with Cape Bald Packers from New Brunswick. They buy side by side with us. We ship. Some days they are stuck and need someone to pick up their lobsters. There is a lot of that coordination and co-operation, big time, happening in the Atlantic Canada provinces.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
I really compliment you on that model. I've had years of teaching international trade and product development, and often your competition can be your greatest ally, sometimes even the competition abroad.
There are partnerships available. Although we think of ourselves as literally a big fish in the pond for lobster, on an international scale we are a small market.
General Manager, Victoria Co-operative Fisheries Ltd.
I'm quite familiar with Grand Manan and with Melanie, Bonnie, and all the group, and with Klaus when he was there.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Ms. Eaton, I need some help in balancing out the spectrum of comments that we've had. Certainly in a number of comments people have spoken indirectly—yours were directly—about neo-liberalism, but they were also talking of binaries and polarization of issues, to somehow find a common ground that we can share with Canadians to move forward with or without this agreement. There are costs to ratifying it, and there are also costs to not ratifying it.
This morning, just after the presentations, I spoke with Mr. Colwell, the agriculture and aquaculture minister here, and I asked him what the implications would be on the provincial side for Nova Scotia if the other countries went ahead, particularly the U.S. and Japan, and ratified the agreement and Canada did not. Would it rectify some of the issues that we see on the polarized end regarding the concerns about health care, pharmacare programs, and the cost of drugs?
Yes, the cost of drugs, as we've heard from a number of different witnesses, will rise significantly, but Mr. Colwell's point was that for every $1 in export, it's the equivalent of $7 in return. As a province, the argument may be from a provincial level that looking for those who are the most in need and the most vulnerable is often taken care of, to some extent, by a provincial or federal government.
If we had less revenue drawn from the international trade market and we had a lower price or a consistent price in medicare costs, how could we balance that out? We now have a social service network that may not have the same support that it would have if we had higher exports in international trade.
Liberal
The Chair Liberal Mark Eyking
I'm sorry, but just before you go there, your time is up. My understanding is that in the next round Mr. Dhaliwal is going to give you his time. If you want to continue with that conversation, go ahead, because the Liberals have five more minutes.
Representative, Common Frontiers Canada
Yes, it is a big question, and I think there's one aspect here that hasn't been considered and which I was alluding to earlier, which is that there are two different dominant paradigms that we're looking at here.
If we are talking about limits to growth and any possibility of collapse, then we need to be viewing things from a systemic paradigm. Right now, some people would suggest that the dominant one is more of a mechanistic paradigm that is not looking so much at the interconnections, the relationships, and the systems thinking, although that's starting.
Just to get back to what would happen, I want to say that some of the things I'm talking about are an end-of-growth model. There is a lot of literature on the end of growth. That's why we're talking about the limitations of a dominant neo-liberal model that's based on free trade in order to create more growth.
There are suggestions coming from the financial sector and from the general economic sector that this is not going to be able to go on. I alluded to some of the economists who are talking about the fact that there will be no more growth. Even Larry Summers, who advises the Liberal Party, is saying that we're into “secular stagnation” for 10 years. Another famous economist, Gordon, is saying it could be 25 years.
Paul Mason, an economic journalist in the U.K., is analyzing the Kondratev curves, the 50-year curves illustrating how we go down into depression and we come out. He's saying that we aren't going to come out of this, partly because of technology and robots, but partly because of the limits to growth too. There is a lot of literature on that as well.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Dr. Eaton, excuse me.
If you were at the end of a wharf and having a conversation with one of Mr. Burke's fishers, who at the very basic level is out there harvesting fish for sale, and the argument potentially is that we're going to limit the market because we see some of the other issues.... That's my juxtaposition. That's my challenge right now: trying to explain to someone—let's say, a fisher at the end of a wharf—why we need to change that market, because of such.... It's a very hard argument to have.
September 29th, 2016 / 10 a.m.
Representative, Common Frontiers Canada
It is a hard argument, and you can't do it unless you look at the literature and the analysis and the modelling. It is coming from economists and others who are working under the assumption that we have reached the end of growth and who are looking at alternate models such as planned degrowth and co-operative localization, which are inhibited to some extent by trade agreements and by grassroots movements around the world. This has to be understood.
The other thing is that Peter Victor, an economist in Canada, I think at York, has done modelling showing that we can exist in this country totally within a domestic economy without really altering our services or our general well-being—not that we necessarily want that, but we may need to slow down growth. It may be that we don't need these mega-agreements, because they're putting us in a vulnerable position. For example, the U.S. has crafted these agreements. They decide who gets in on them, and then we get engulfed in their foreign policy. Part of the TPP is the Asia “pivot”, which is the foreign policy that the U.S. has adopted to isolate China.
So there's a lot more to this. A lot of people say it's not as much about trade as it is about the other aspects, and they say it's an initiative for more global control beyond our borders.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Thank you so much.
Mr. Poschmann, in April the C.D. Howe Institute suggested that if Canada does not ratify the TPP, welfare costs in Canada would increase to $1.7 billion by 2035. They also suggested that for a number of sectors, such as automobiles, the losses predicted under TPP cannot be avoided by Canada's staying out.
How would you respond to that?
President and Chief Executive Officer, Atlantic Provinces Economic Council
There's a contradistinction there. If we're not in TPP, the losses have a dollar value but not a huge dollar value, which is the flip side of saying that within TPP there are gains but they're not huge dollar gains.
As to the auto sector, I agree fully. If the TPP goes forward and Canada's not in it, then the market structure changes between the Asian producers and what they make and build and deliver to the U.S. market, so if TPP goes ahead and we're not in it, then our auto sector comes out a loser.
Liberal
The Chair Liberal Mark Eyking
I'm going to have to cut you off there, but you might have a chance to add some comments, because Mr. Ritz is our last MP on this panel.
Go ahead, Mr. Ritz.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, Mr. Chair. It's a very interesting discussion.
Dr. Eaton, I'm glad you made it. You brought some new points to the table. I have to disagree with most of them, but I think it's government's role to set the stage and then it's up to industry and the people to decide whether or not they're going to take a position on that stage.
Trade agreements are are all about stability and predictability, setting the rules. We see Sweden starting to make some noise about lobster that is outside of anything scientific. With an agreement, you would actually have a venue to go back to them and say they couldn't do that under what had been agreed.
That's the value of these agreements. There's a lot of talk about how we quantify the value of various things, and Ms. Ramsey comes forward with some numbers that really don't show the whole picture. It's up to industry to decide, and we're talking about a phase-in period within that, when we don't really have access yet. At the end of the day, there's a lot more than $4 billion to be gained, and there's an immediate $5 billion to be lost if we don't get into this.
On the ISDS side, we have a mature court system here. We have the rule of law, unlike a lot of countries that Mr. Burke is dealing with. ISDS would actually protect you as you move into Malaysia, Vietnam, and other countries, so it's not a one-sided thing.
I also have some concerns when you talk about the end of growth, when I see growing middle classes in China and India, which are each at least 15 to 20 times the population of Canada. If we don't have access to those markets, certainly it is the end of growth.
China and India are not in the TPP, but it keeps them honest when we have other parties that move into those markets. We can't begin to live in the domestic model. One in five jobs in this country depends on trade, so right away, you'd have 20% of our work force out of work if we didn't continue with trade.
Mr. Poschmann, I know this is your area of expertise as an economist, so I'd like your viewpoint. If we don't do this, if we continue down the road that Dr. Eaton has laid out, how quickly would we see Armageddon here in Canada?
President and Chief Executive Officer, Atlantic Provinces Economic Council
If I may, I will address ISDS first.
If you were Mr. Stanfield's family and you had bought a plant, invested, and expanded in facilities in the southeast U.S., and the state made a massive change in laws and regulations that seemed clearly to undermine your investment, you would want a place to go and you would want a place to fight. That's the purpose of ISDS, because your own government may not always be there to back you. It may not be worth it for them.
Likewise, you need an end for the process or you never get there, and that's why we came up with a tribunal system, as deeply imperfect as it may be. After the tribunals, state sovereignty has not, in fact, come to an end.
I have a quick word on the Bilcon case. If you read the tribunal, I found the dissent quite compelling. In my opinion, having read it very carefully, it was a wrong decision through its reading of the law. This is where the ball is back in cabinet's court, if they wish to pursue it.
On the size of gains, we've seen a range of numbers. I may have commissioned one of these studies myself. What they do, in fancy talk, is marry a computable general equilibrium model to a global trade model. It's the best you can do and it's state of the art. When you look at the dollar numbers for Canada, because we already trade with so many of the TPP countries, you get a small number in the long run when using those models.
What those models are not good at capturing, because they're just not built in, is the dynamic impacts, firm entry and exit, the impacts of productivity, new products, new technologies, reorganization of trade along new lines. The economic models just extend the existing framework that we see. They're not good at, and they don't capture, the dynamic impacts that trade flows have in the broader world.
If we have time or a question, I'll carry on to supply management.
Liberal