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.
9:35 a.m.
Liberal
The Chair Liberal Mark Eyking
Just a little background, but try to keep it under five minutes, and then we'll have dialogue with the MPs.
Go ahead. You have the floor.
9:35 a.m.
Representative, Common Frontiers Canada
Well, I guess I've always considered myself an academic activist. I've done some teaching on globalization issues and community political power and on environment and sustainable society and those types of courses. I've also worked for the last 20 years in the global justice movement. I've worked with Sierra Club Canada for years, and I actually represent Sierra Club Canada on the Common Frontiers group, whose brief was submitted to this committee.
Common Frontiers, as the brief indicated, is a network of many groups across the country from environment, faith-based, union, and international development groups. I've been working in that group for probably 15 years now. This group works across the Americas. It's always had concerns about neo-liberalism. It does research and education work and it works in Latin America on the social, economic, and environmental impacts of neo-liberalism.
In our brief, we begin by commenting on our concerns with neo-liberalism and the existing free trade model because of its impact on democracy, sovereignty, environment and sustainability, equity, and a number of other issues.
We view the issues stemming from the TPP and the mega trade agreements within the broader context of neo-liberalism, as I said, under which free trade agreements are one of several tools that seek to shift power away from citizens in a democratic society. We actually have recommended in our brief against the signing of the TPP as it is. We're particularly very concerned about the investor state agreement, which I'm sure you've heard much about from other groups as well. As you would know, our government is concerned about it because they have done something to help ameliorate that condition in regard to the CETA agreement with Europe, but not so with the TPP. We feel it has many aspects that really need to be reconsidered.
We also believe that within the whole area of neo-liberalism, we see constantly from day to day, week to week, the analyses coming out that it is a failed system and that it has not worked well. Even yesterday there was a report from the IMF suggesting that neo-liberalism has failed.
The way we approached the subject was to consider some of the impacts on what you might call the different sectors, and I'm sure you've heard from all those sectors at this point. We were concerned about the impact on local governance because, if we're looking to a future where perhaps there is some kind of financial, economic, or environmental collapse, we're going to have to be working from the bottom up. We're going to need our local economies.
If you've looked at the analysis of Professor Jane Kelsey from Australia, who's one of the top-notch lawyers in this field, she points out all of the areas where this agreement has impacts on the ability of municipalities and municipal governments to legislate and also suggests that it will have a severe impact on local economic development strategies. That is a concern, particularly in some parts of Canada. We know that local agriculture, for example, is absolutely crucial, but we know that within this agreement, if you're over the $300,000 benchmark, it could inhibit local farmers, for example in this province, from being able to supply certain larger public institutions, and that's just one example that I'm aware of locally.
9:35 a.m.
Liberal
9:35 a.m.
Representative, Common Frontiers Canada
We go through some of the issues with free trade in general, some of the theoretical issues, and cite some of the literature, and then we look at some of the concerns around the global economy and whether it could be at this point in a sort of a downward nosedive. We really need to have some alternatives on the back burner.
Our brief really speaks to the recommendations as to how we could make free trade fairer, and it also hints at the fact that we would do that within the concept of a transformed economy, which will have to look at a number of different models, which might suggest such a thing as a think tank to make sure that we have some back-burner policies if the global economy gets worse than it is right now.
9:35 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you. That finishes the panellists' briefings. Now we'll go to dialogue with the MPs. Each one will get five minutes, and if they keep it tight, we can get this done in time.
We're going to start off with the Conservatives.
Mr. Van Kesteren, you're first. Go ahead, sir.
9:35 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Thank you, Chair.
Thank you all for being here.
Finn, we saw each other a few weeks ago.
Mr. Burke, I say congratulations on what you're doing.
Against my better judgment, I'm going to engage you this evening, because I'm intrigued by what you're saying. I really am. I'm a free-market thinker. I believe in the free-market system. I think we would agree that system has brought about more wealth and betterment, but there have been challenges. Everybody knows that, but the world is a better place because of free trade and the free exchange of ideas that follows that. I'm not an academic and I'm certainly not going to engage you in this way. I'm open to new ideas and I think we have to be careful.
What's interesting about your presentation is that you talk about some other things we haven't heard about yet—for instance, a global meltdown. It's not been talked about too much, but there are those—and I know Mr. Poschmann and I had a brief discussion about that—who think that the globe is in a very precarious state at this particular point and that there is always that possibility.
My question is this. As a free-market thinker, I completely believe in the unguided hand and how we see that marvellous spread of the economy as it moves. If you take that away, what are you suggesting? Are we going to have think tanks determine how we now proceed with a new economy and a new strategy? Can you elaborate on that a bit?
9:40 a.m.
Representative, Common Frontiers Canada
One of the things we talk about in the brief is that free trade as it was envisioned years ago, in terms of comparative advantage and whatnot, was defined by Ricardo within certain constraints, such as a national economy and a balance in trade and so on, and that is not able to happen in a globalized situation.
I agree that we need markets. That they should be as free as they have been in the last decade under neo-liberalism, I think is very questionable. I agree that many parts of the world have improved because of a market economy, but I think many of us, even 15 years ago, were warning that it was a little too free and open. It was accompanied by deregulation, by privatization, by a diminution of the public service sector, and so on.
As you say, it is possible to cite many advantages, but what you don't often hear as much about are the disadvantages. Particularly as a group that works across the Americas and through Latin America, we've seen the poverty that existed there under neo-liberalism, and it's quite stunning. Just because the Brazilian president has been evicted for what some people feel are unjust reasons.... The conservative government that's taken over is very crime-ridden and is pulling back on all of the progressive moves that have been made since Lula Da Silva got in some years ago. If you look at that closely, it's not a very pretty picture.
I'm just saying that we haven't really looked at the downside of this whole free-market neo-liberal model. What we do know is that it is leading to runaway climate change and to contamination of ecosystems. Many of our ecosystems are starting to actually collapse. If we look at the coral reefs in Australia and other places, we see climate-change issues. Some people actually feel the climate-change issue now has reached a point where it's almost beyond being able to—
9:40 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I have to cut you off, because I'm out of time.
Wouldn't you agree, because we've had this discussion with fishers—I'll use the correct term here—that in an advanced economy, many of those things you talk about don't take place anymore because we've corrected those things, such as, for instance, overfishing? We've learned our lesson and we now set the example, so as economies progress, we can set the standard rather than being the nation that leads the globe into the pit.
9:40 a.m.
Representative, Common Frontiers Canada
Well, we see poverty even in developed societies, and we see the democratic and sovereignty aspect being set aside, as we've experienced right here in Nova Scotia with the Digby Neck quarry investor state issue. We find that is really unacceptable at this point.
Just to say more about this investor state side of things—
9:45 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I was afraid we'd get into too long a time. Maybe we'll get a chance to talk about it later.
9:45 a.m.
Liberal
The Chair Liberal Mark Eyking
When I cut it off, I'm not really cutting off the witnesses; I'm cutting off the MP's time. I have to keep it around five minutes so everybody can get a shot.
We're going to move over to the Liberals.
Madame Lapointe, go ahead, for five minutes.
9:45 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you, Mr. Chair.
Good morning. I would like to welcome the witnesses who are with us this morning. It was a pleasure to listen to your comments, which were very interesting.
My question is for you, Mr. Porschmann. What do you think might be the consequences for Nova Scotia of the TPP being ratified without Canada's participation?
9:45 a.m.
President and Chief Executive Officer, Atlantic Provinces Economic Council
Thank you for the question.
The question is about the impact on Nova Scotia in the absence of TPP.
It's a really interesting question. In dollar terms, our Atlantic exports from the region, Nova Scotia exports, are overwhelmingly dominated by energy products, by petroleum products, flowing into the U.S., primarily through New Brunswick. That's where the giant numbers are with respect to the Atlantic region's trade, and Nova Scotia is part of that.
The losses if we're not in it—or otherwise put, the missed gains—are in the seafood sector primarily, both in product and in improved tariff access or lower tariffs in the Asian markets. The percentages in potential tariff reductions seem small, but they're going to matter.
The potential opening in Vietnam is fascinating. If you look through the schedule, you see that Vietnam looks to be among the really big winners in the system. Ratification has been held up by the government in Hanoi for reasons unknown to me, and I'll leave it to others to figure out Hanoi's internal politics.
However, the gains primarily for us are in seafood and other agricultural products.
9:45 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
From another angle, if the TPP were not signed and Canada went back to the bargaining table, what aspects would you like to see changed, apart from the length of patents, that you mentioned a little earlier?
9:45 a.m.
President and Chief Executive Officer, Atlantic Provinces Economic Council
I'm not sure I would look for a lot. If we had our druthers and our preferences....
It's sort of difficult to picture, because you'd have to bring a lot of people around the table to do it again and give up things or provide access that they didn't before.
The time period over which tariff rates are phased down, say in Japan, is very long. It's very incremental, and this applies in some relatively protected sectors in other countries. If we were going to do something, it would be to push for faster reductions. However, of course, the paces of tariff reduction in those countries were agreed to exactly because that was where they were drawing their bottom line.
Reopening doesn't look like a whole lot of fun, and whether we can picture such a scenario in the medium term really depends on what happens in the U.S. and the approach that a future U.S. president will take, because without the U.S. at the table, the agreement pretty much loses its steam.
9:45 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
My next question is for Mr. Burke.
You said earlier that your challenge is finding workers. How can the Canadian government help you find qualified workers? Is this in innovation research? Where do you see possibilities in this regard?
9:45 a.m.
General Manager, Victoria Co-operative Fisheries Ltd.
In finding workers, our only experience to date was the temporary foreign worker program. It's a very costly process. Typically, we need support for about 10% of our workforce in the rural areas. Reduce the amount of red tape and the requirements on the temporary foreign program. We look to it as a supplement to our existing workers.
For example, we're facing peak periods of product being landed, whether it be lobster as the stocks increase or snow crab, and we just don't have the workforce to deal with it, but we don't need it 12 months of the year necessarily. Where we can, we're employing local workers, but there are challenges in rural economies, and the population is not there.
Under the current program we pay $1,000 per applicant. To bring 10 workers from Thailand costs us almost $40,000 before they work one hour. That's a challenge for a small business.
Reduce the cost. Reduce the red tape. We have to pay the same wages. We have to pay housing. We have to pay medical and dental insurance. Contrary to what may be reported in the media, it's a costly process that we prefer not to use.
Longer term, some automation but also immigration to our rural communities may help. We need new blood, more people. We have schools that are closing. The opportunity is here with these free trade agreements to increase production, but we need more people in our rural communities.
9:50 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, Mr. Burke. We have to move on.
We are going to the NDP now, and Ms. Ramsey, you have the floor.
9:50 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Thank you very much for your presentations. I think you can see the challenges that we're up against.
There is this thought in the general public that we'll see big economic gains out of the TPP, but there are many studies, including our own economic impact study, that show that is not the case and that the growth will be negligible for Canada. There are studies by Tufts University, the C.D. Howe Institute, the Peterson Institute for International Economics, and again, our own economic impact assessment. When we look at those, of course we want to look at the provincial implications as well.
Mr. Burke, you have highlighted many issues—you talked about the Swedish issue with the non-tariff barrier that exists—and yet we keep going into these trade agreements without actually fixing those problems for folks who would benefit. Certainly, we hear from you that you would. I think that is what's driving this conversation on the global stage.
Ms. Eaton, you said that the International Monetary Fund has released a document entitled “Neoliberalism: Oversold?” It was quite surprising to a lot of folks, but it is part of the larger conversation that we're having.
I want to ask you about the ISDS provision specifically, because many countries around the world are rejecting this. Brazil and India will not sign an agreement with ISDS provisions. We're the most sued country in the world under these provisions in chapter 11 of NAFTA.
I wonder if you can speak to what's happening globally and whether you feel that we could push back here in Canada against the provisions that have worked against us.
9:50 a.m.
Representative, Common Frontiers Canada
Thank you.
Yes, globally you've mentioned that many countries in the world now are starting to look to renegotiate their investor state agreements, their BITs—their bilaterals—and their free trade agreements that have this chapter in them, and that's for obvious reasons. What we found is that many of them signed onto these with very little understanding. The developed world came in and it looked good. Once all of these cases started to emerge, they had second thoughts, and so that's going on.
What we're finding in Canada is that a high number of these cases are attacking our environment legislation or health, and people are concerned that our legislation, which has been democratically put in place, is being unfairly challenged by an offshore court before using our own domestic court. We find that this offshore investor state tribunal is not at all like a public court. It's made up of three people who are trade lawyers, and they're not paid a regular salary. In other words, they're not on a permanent court and have no tenure. They don't even have a permanent base of knowledge. They don't have a permanent location. They come into a hotel room, often, and stick a sign up as to which base they're with.
The other thing about it is that the protections that the corporate sector is offered—things like national treatment and expropriation—because of that lack of a permanent base of knowledge and because of what some people consider a bit of bias with the international trade lawyers, are often based on decisions that are made in a more arbitrary way.
I noticed that when I started to examine what happened with the Digby Neck quarry case, which I participated in for the early stages and which was not permitted by the joint panel. Then a case was brought back by Bilcon, the company, and that's still going on. The federal government is trying to have that whole thing set aside because it was so unfairly judged. It was determined that it should have been a domestic court that examined this particular issue that came up—
9:55 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Yes, we have such a progressive court system here in Canada. It's shocking to think that we're going to use this other court system that doesn't have jurisprudence.