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 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Thank you, Chair.
Mr. Stanfield, you said 1993. I assume you mean that once NAFTA was enacted, it stabilized the industry?
9 a.m.
President, North America, Stanfield's Limited
No. That would have decimated the industry.
9 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Decimated.
But you were able to rebound. How did you do that? I applaud you as a family.
9 a.m.
President, North America, Stanfield's Limited
I don't know. It's probably that history and blood and all of those types of things keep us in Truro and keep us in the province of Nova Scotia.
Really, my father sat on the tribunal for NAFTA and he left that tribunal for two reasons. One was that he had to go and rebuild the company with the decision that we were making. Our decision at that point in time was to acquire in the U.S., which would allow us to expand quite quickly, so we bought a company in 1993 and 1997. We did that very rapidly, and it took our revenues to 50% in Canada and 50% in the U.S., so that really levelled our playing field and allowed us to continue to grow through the rebalancing of what NAFTA did to the apparel trade.
In the same time frame, a lot of manufacturers in Canada at the time—the majority of the other players, other than men's suits, which is a specialty out of the Quebec market—quickly went to Bangladesh and these other nations to gain probably profitability and margin, while we felt a commitment to Canada and a commitment to the province was the better route for us to take. A more strategic play for us was to remain here and produce as much as we could in Canada and also use our monies and margins that we gained through selling our products to acquire various brands across various channels and in different countries.
9 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
As I said, I applaud you for that and I congratulate you for what we all know as an important and iconic industry here in Canada.
I want to go to the farmers for a minute. I've had some discussions with our chair, Mr. Eyking. Mr. Eyking and I of course share a background. His parents came from the Netherlands, as do mine. I asked him how in the world a Dutchman wound up in Cape Breton. His dad saw that there was a population there that needed to be fed, and that's what economics is all about: supply and demand, willing buyers and willing sellers. He told me the history and how they produced products that were needed by the local population.
I haven't much time left and so I'd better clam up myself, but I wonder if you could give us a snapshot of agriculture in Nova Scotia, primarily in Cape Breton, and what other opportunities you have. As Mr. Eyking pointed out, there were produce crops, and I think they did quite well.
9:05 a.m.
President, Nova Scotia Federation of Agriculture
Thank you very much.
I'd like to reiterate what some of the other speakers have said here today. We're certainly not opposed to the TPP and CETA agreements. We commend the government for the opportunity. There is room for growth, especially on the export side, around blueberries and things like that, and some of the products that we excel at growing here in Nova Scotia. We have the right climate, the right ground, the right work ethic, and the right attitude around—
9:05 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I wonder if I could just lead you a little. We know about that and I'm really happy about that, but we saw in Prince Edward Island, for instance, they're going soybeans and corn. Maybe you could just expand on that.
9:05 a.m.
President, Nova Scotia Federation of Agriculture
There's tremendous opportunity there. There has been a decline in agricultural operations in Nova Scotia. There's huge potential in the amount of fallow land that's there for things such as soybeans.
Clean, green technology is huge, giving farmers the ability to produce clean renewable energy through anaerobic digesters and wind technologies and things like that. There are tremendous opportunities there for farmers.
9:05 a.m.
Liberal
The Chair Liberal Mark Eyking
Your time is pretty well up.
That ends this first panel here today. I thank you, gentlemen, for coming and presenting very different perspectives from the very different industries that you represent. Thank you for coming, and thank you for the good dialogue with the MPs.
We're going to suspend for just five minutes, because we're running a little short on time to get the next crew on deck.
Thank you.
9:05 a.m.
Liberal
The Chair Liberal Mark Eyking
Welcome, gentlemen, and welcome to anybody who has joined our proceedings for the House of Commons trade committee.
Our main focus and the study we're right in the middle of right now is the TPP, which is a big agreement amongst 12 countries. Forty per cent of the GDP is there, and there are 800 million consumers. I think it's a deal that affects all Canadians in various ways. There's a lot of interest, and that's why our committee is doing consultations right across the country.
We've been in every province and in communication with the territories. We've had over 200 briefs, witnesses and, of course, many individual Canadians want their input. We've had over 20,000 emails.
We're going to continue to do this up until the end of October, and after that we're going to put our study together. Then we'll present it later on in the year, or maybe at the start of the following year, to the House of Commons.
Trade is big for Canada, as you know, and especially with all the concerns down in the United States with their election, trade is a big topic.
Our committee also deals with other issues. We have a trade agreement with Europe that's being completed, and we also have issues ongoing with our big trade partner with softwood lumber, as well as some agriculture issues.
Our committee comprises members from right across the country, so we have good representation on the committee side.
We're going to start with Mr. Burke, a friend and a neighbour of mine from Cape Breton, who handles a lot of fish products.
It's good to see you here, sir. You have the floor.
9:05 a.m.
Osborne Burke General Manager, Victoria Co-operative Fisheries Ltd.
Thank you, Mr. Chair, and members of the committee. I'm pleased to have the opportunity to come here today and speak to your committee.
I'm a general manager at a local fishermen's co-op in northern Cape Breton, so we're in a rural area. We're a major employer in our county, and this year marks 60 years of operation. We were incorporated back in 1956, and started out as more or less a fresh-fish operation and progressed into a ground fishery. We all know the history of the ground fishery. In the early 1990s that closed out, but the co-op members and the board had the wisdom to switch gears very quickly and get into shellfish, both processing of lobster—we're the only company in Cape Breton that processes lobster—and into snow crab, as the two primary ones. We also handle other species such as halibut. We're into Jonah crab, rock crab, and mackerel, so there's a variety of species.
In 2015, we basically purchased about $20 million's worth of product from our local fishermen. That spans about 100 miles of coast and seven small harbours, from 10 vessels to 35 vessels, and our sales were in excess of $26 million.
In the past few years we've started to look into other markets, because primarily our market is the U.S. We spent a number of years travelling on trade missions, notably Brussels for four years now. China would be year two, times two, because I had just come back when Minister Colwell and Premier McNeil were there. We were in Hong Kong as well, and China. We also obviously travel to the big show in Boston.
We decided to make a decision to start to move some of our sales and some of our product into the Asian market, which I think is a heck of an opportunity for us, and to look at diversifying a bit so we don't have all our eggs in one basket, so to speak.
With regard to free trade agreements in general, whether NAFTA or CETA, which we've heard about for a number of years, or TPP, in the seafood industry and in terms of our export industry, it's certainly positive anytime we can reduce tariffs and reduce restrictions. There's always a caution, as a Canadian citizen, that there could be other impacts. As we heard earlier from agriculture, there are positives and negatives. Hopefully with wisdom, governments can provide protection for the industries, because there are going to be winners and losers, as there are in any kind of an agreement.
For us, in terms of tariffs, we're doing business now or have shipped to five of the 12 countries involved, namely Vietnam, Singapore, Japan, the U.S., and Canada. When I look at Vietnam, there is potential to reduce the tariff by 34% on processed lobster. It's significant. Even in the case of Japan, we're talking 4% on snow crab products—and they are a big consumer of snow crab—or 5% on lobster, and there is 3.5% or so referenced on halibut there and in some of the other countries. There is potential for reducing those tariffs and to increase our opportunities to export.
Some of the challenge we have as we go forward and increase our production levels occurs because we're in a rural community. The vast majority of processing facilities in Nova Scotia are in rural communities. I can only think of maybe two that are near Halifax, so it's near and dear to the coastal communities. The labour force is a continual challenge, seasonal portions of it, at least for us. There are peaks and valleys and landings. That will be an ongoing challenge.
We have used foreign workers in the past from the temporary foreign worker program. It is extremely costly and entails a lot of red tape. Our local workers were supportive of that because without the foreign workers in a couple of those years, I don't know how we would have pulled it off. Certainly going forward, we see that as a challenge as we increase the trade.
We have people of the age of 70 to the age of 16 working at times in our processing facility, and we're competing with the local fishing industry, which is growing in leaps and bounds. We're competing with the tourism industry, so especially in our April to October season we're extremely challenged by the workforce situation.
If we look at CETA, which hopefully we will finalize somewhere along the way, as the minister mentioned earlier, we see that this whole proposed Swedish-EU ban on lobster needs to be taken very seriously as an example of what could happen in another trade agreement. Lobster is part of a list of species. The rest are all non-commercial under this proposed ban, but lobster is tagged on with the rest. There's real argument from industry to separate lobster on this EU ban. If it isn't separated and the committee decides to go ahead on flawed science, it all goes as one package. There's no passing part of it and not the other. I throw that caution out to every member here to really raise that issue with anyone and everyone that we can. There's intergovernmental involvement, both provincially and federally, and everybody working on it. Hopefully, we won't see something similar under the trans-Pacific partnership agreement.
9:25 a.m.
General Manager, Victoria Co-operative Fisheries Ltd.
Yes.
One of the MPs asked earlier about Atlantic Canada working together on the trade mission. Whether it's in Brussels, Boston, Hong Kong, or Qingdao, the four Atlantic provinces are sharing costs and working together. Even though we may be competitors at times, we work as partners because we'll never be able to supply the volume that's in the Asian market. If 10% of the Chinese population all bought one lobster, there wouldn't be any left. There are opportunities for value-added and opportunities to build relationships, which take time in the Asian market, but also opportunities to sell a high-quality, high-value product there.
9:25 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, and thank you for your work. To milestone your association, it's been 60 years. It's made a big difference for the fishers. It's also made a big difference by working on the Atlantic Canada strategy.
Talking about Atlantic Canada strategies, we have Mr. Poschmann, who is with the Atlantic Provinces Economic Council.
Go ahead, sir. You have the floor for five minutes.
9:25 a.m.
Finn Poschmann President and Chief Executive Officer, Atlantic Provinces Economic Council
Thank you, Mr. Chairman.
Good morning. I'm delighted to be here in front of the members.
I'm Finn Poschmann, president of the Atlantic Provinces Economic Council, a charitable think tank with the wonderfully simple mandate of promoting the economic well-being of the Atlantic region. We've been around since 1954, and my favourite underwear is Stanfield's.
Trade, international trade, and investor protection deals are not always big deals, not always big political footballs. We have a trade deal with Chile, for example, signed 20 years ago, and nobody has ever noticed it much. Meanwhile, our world is criss-crossed by a web of bilateral investment treaties, about 3,000 of them. Canada is signatory to dozens of them, not all enforced. They're not always big political or economic issues. They facilitate doing business and moving people, goods, and services across borders.
We have two very big current deals awaiting ratification, and they are big political footballs; they're important to Canada. Canada should be cheering these deals enthusiastically. I'm referring to the Comprehensive Economic and Trade Agreement with the EU and the trans-Pacific partnership, the topic of our discussion today.
Many of us have mentioned CETA in passing, and I'll do the same. CETA is important to us because it improves market access for our goods and services in Europe, and it also improves prices and product choices here. It'll bring more competition into public procurement, and, even better in my view, it will put a little bit of a dent in the supply management system, and I think that's good.
Most of CETA can be provisionally applied, but it's not legally binding until it's been ratified by individual EU member states. That process has been horrendously complicated by Britain's decision to leave the EU, and the deal is under attack in many countries from the left and the right. Opponents in the EU are concerned about Canada weakening their environmental and labour standards, so I think we need a charm offensive on behalf of Canadian trade in Europe.
It's hard to say whether prospects are worse for TPP. As we've heard, TPP would boost markets nicely for our sea products and other agricultural goods and it would provide a bit of a boost to our ports and transport sectors.
Canada came late to the TPP negotiations. We were under some encouragement from Australia and New Zealand, which saw that the deal would be easier to sell in the U.S. if Canada was in. Those countries also wanted dairy market access in Canada, and they will get a little bit of it. Over the course of 20 years, the deal will slightly increase our supply of milk for industrial processing, with only a small impact on the retail market. That's a good start, too.
The barriers to TPP ratification are not here in Canada. For the moment, they're in the United States. President Barack Obama's administration had enthusiastically backed TPP, and they negotiated it. President Obama secured trade promotion authority, or fast track, in Congress with bipartisan support, with the full expectation that the deal would eventually pass. When Hillary Clinton was Secretary of State, she said the TPP was the gold standard of trade deals; not everything Donald Trump says is wrong.
While her comment about the gold standard was probably hyperbolic, no trade deal is perfect. They always represent a muddied middle ground of negotiations between economic and political parties. It's a good deal nonetheless, because it opens markets under broader and better terms for Canadians already selling into many of the Asian markets.
The TPP, as I've hinted, certainly is not perfect. With respect to intellectual property, I agree that there are patent extensions as well as copyright term extensions that I don't think do anybody much good. Mostly with respect to patents, it's not a very big shift for Canada, but I can't say that we needed it either.
9:30 a.m.
President and Chief Executive Officer, Atlantic Provinces Economic Council
I will. I think it's a good place to do so.
The current game is in the U.S. political system. We have among the current presidential candidates no sincere champions of the deal post-January 2017. There is a narrow window between the election and January when the President of the United States could push for ratification in the Senate. That would be politically very ugly, but it is plausible.
It's another case for a charm offensive, because if the U.S. president is willing to take that risk before mid-January, then Canada should be there enthusiastically backing and cheering on.
9:30 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
We have Janet Eaton.
It's great to see you here, Janet. I heard you had some vehicle trouble and you made it here a little late.
9:30 a.m.
Liberal
The Chair Liberal Mark Eyking
Your timing is still perfect, because we had an opening here. If you have put yourself together after your car troubles, could you give us a few minutes to tell us about yourself and your ideas on the TPP?
9:30 a.m.
Representative, Common Frontiers Canada
In all the confusion, I did leave my briefcase and my notes in the tow truck, but I'll just—
9:35 a.m.
Liberal
The Chair Liberal Mark Eyking
Just speak from your heart, and when you get close to five minutes, I'll tell you, but take whatever time you need.
9:35 a.m.
Representative, Common Frontiers Canada
Did you want some background on me?