International Trade Committee on Sept. 29th, 2016

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

I want to clarify a couple of things in the presentation.

Dr. Eaton, on page 3, under agriculture, you talk about corporate concentration taking over. Actually, 98% of farms in Canada are still family-owned, family-run. You also make a comment about UPOV 91, which came into play two years ago. We've seen a huge influx of investment in new seed varieties of which farmers are very supportive. I just wanted to clarify that.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Ritz.

That ends this panel. Thank you, folks, for coming in, and thank you for the lively discussion amongst the MPs. It's good to see that, and good luck with your professions.

We're going to suspend for five minutes because we're running a little late.

[The Chair, Liberal, Mark Eyking]

Welcome, panellists.

This is our last panel in our last province. We've embarked on this consultation process over the last few months.

We have with us the Canadian Labour Congress, Oxford Frozen Foods, Unifor, and the Wild Blueberry Producers Association of Nova Scotia. Welcome to all.

My name is Mark Eyking, and I'm the chair of the trade committee.

We have with us Tracey Ramsey and Dave Van Kesteren from southern Ontario, Gerry Ritz from Saskatchewan, Karen Ludwig from New Brunswick, Linda Lapointe from Quebec, and Sukh Dhaliwal from British Columbia. We had to leave a few of our members back in Ottawa.

We've been a very busy committee. We have to deal with a lot of issues. Canada is, of course, a trading country, so we had to deal with the European agreement. This is coming to some sort of an end, and we're dealing with that. We're dealing with issues with the United States. Examples are softwood lumber and agriculture.

However, TPP has been our main focus for the last few months. It's a big deal. It's a deal that's going to affect all Canadians one way or another. It involves 12 countries and 40% of the GDP and I think 800 million consumers.

We've been going pretty hard at this. We've been to every province and we've had video conferences with the territories. We have received almost 200 briefs, 300 witnesses, and over 20,000 emails. We've opened it up quite a bit to the public in accepting their emails. We've had an open mike at the end of each session, and we have had quite a bit of uptake on that.

We're finishing up our consultation process by the end of October. We'll be putting a report together and presenting it to the House of Commons at the end of the year or at the beginning of the following year.

Without further ado, we'll begin with the Canadian Labour Congress.

If the witnesses can keep it to five minutes or less, we'd appreciate it, because that way all the MPs can have a dialogue with you, and we won't fall behind in time.

Mr. Alex Furlong, you have the floor.

[Alex Furlong, Regional Director, Atlantic Region, Canadian Labour Congress]

Thank you, Mr. Chair.

I'll keep it under five minutes. I'm originally from Newfoundland, so I'll try not to speed up too much.

On behalf of 3.3 million members of the Canadian Labour Congress, we want to thank you for giving us the opportunity to present our views on the impacts to Canada of a possible trans-Pacific partnership agreement.

I want to begin by expressing our sincere appreciation of your willingness and that of Minister Freeland and your government to sustain an open and frank dialogue regarding this agreement negotiated under the previous administration.

It is a deeply flawed agreement, and our view is that the costs of this agreement outweigh the benefits that might arise from the deal. Proponents of the deal only expect it to boost Canada's GDP by 0.5%, and that is certainly 10 years down the road. That's about as much as the previous administration promised to pay the dairy industry in compensation for TPP losses.

This leaves nothing to cover losses to the auto sector and other areas. A key study from Tufts University predicts that workers in all 12 TPP countries would lose out, because the TPP would increase income inequality. This flawed agreement is about protecting multinational corporations' rights; it does nothing to help workers or the environment. The two sectors with the most to lose certainly are the auto sector and the dairy sector, but I also want to touch on our concerns with the provision of public services, rising drug costs, and investor challenges to environmental regulations.

The automotive sector is centrally important to Canada's research and development, high value-added production, and to manufacturing exports. In 2014 approximately 40,000 Canadians worked in motor vehicle manufacturing and another 70,000 in parts manufacturing. The five-year phase-out of tariffs on Canadian imports of Japanese vehicles will quickly eliminate the incentive to manufacture in Canada and will encourage Japanese assemblers to import vehicles. Unifor, who will speak shortly, has estimated the TPP could lead to the loss of 20,000 jobs in the auto sector alone.

The dairy sector provides high-quality, locally produced food while supporting small family farms and rural communities. Under this agreement, foreign dairy producers would be able to access an additional 3.25% of Canada's 2015 dairy milk production. This comes at a time when the dairy industry is already under considerable stress, and 250 million litres of milk and subsequent production jobs are at risk annually.

Concerning the investor state dispute settlement, we have many concerns. By now the problems with this model of dispute settlement are well known: the unaccountable and ad hoc nature of the arbitration panels, their expansive definition of what constitutes an investment, the fact they do not operate in subsidiary to national court systems but above them, and the apparent lack of deference to the prerogatives of governments or even to national jurisprudence on any given issue.

On our public services, the TPP chapter on public services locks in the current level of privatization with so-called ratchet and stand-still clauses. This makes it more difficult for governments to introduce new public services such as pharmacare or child care without subjecting themselves to an ISDS claim. Canada already has the second-highest per capita drug cost in the entire world. The TPP will further constrain efforts to reform prescription drug purchasing and provision in Canada.

On the environment, the TPP also contains broad prohibitions on economic or environmental performance requirements, such as requiring technology transfer or local sourcing to foster green industry. Such restrictions will serve as a chill on governments contemplating steps required to make the transition toward a low-carbon and climate-resilient economy.

It's time to come back to more reasonable forms of investor protection, protections that should be subsidiary to national judicial processes, should privilege state-to-state settlements, and should emphasize investor responsibilities just as much as the protection of their assets.

In conclusion, given the high economic and political stakes, Canadians deserve no less than a full and substantive discussion on the potential consequences of this draft agreement.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, sir, and thank you for doing it within the time with precise comments.

We're going to move over to Oxford Frozen Foods, a big producer of blueberries, carrots, and many other products.

It's great to see you here, sir. Mr. Hoffman, you have the floor for five minutes.

[David Hoffman, Co-Chief Executive Officer, Oxford Frozen Foods Ltd.]

Thank you, Mr. Chair, for the opportunity to talk to the committee. I've distributed a couple of pages of notes.

As you've already mentioned, there are 800 million people involved in the TPP, and I think $29 trillion of GDP and $31 billion of Canadian agricultural exports, so those are very important numbers.

I believe the objectives of the TPP in promoting and enabling free trade are commendable. If the intention is to reduce tariffs, as an exporting nation, an exporting province, and an exporting company, we need to do that. Reducing tariffs and reducing non-tariff barriers are important. It should promote economic growth in Canada, and I think economists will say many things, but it seems the general consensus is that it does improve economic growth. It supports the creation and retention of jobs, and it certainly enhances innovation. It forces innovation and forces us to become better. It forces productivity and competitiveness, which are things we need to keep on doing. It should improve our living standards overall. It reduces poverty in the signatory countries. These are all important things to achieve.

It promotes good business governance; it enhances labour and work conditions, as well as safety standards in the signatory countries; and it improves environmental protection. These are all good things if they can be achieved, and they are some of the objectives of the TPP.

I believe the TPP will increase the size of the pie and not just re-divide it, so that's good for everybody and should accelerate growth in the developing countries.

Clearly in Canada we need sustained economic growth to support some of the social programs that we aspire to.

That's the kind of policy macro outlook that I would see for TPP.

For the wild blueberry industry itself, we're very limited geographically where wild blueberries are grown, and I would just refer you to the map that shows that. Wild blueberries are grown in a very, very small part of the Maritimes, Quebec, and Maine.

I'm sure everyone—certainly Mr. Dhaliwal, in British Columbia—is familiar with the cultivated blueberries. All the way through the Lower Mainland there are cultivated blueberries. Those are grown everywhere in the world. Wild blueberries only grow where they grow. It's a natural plant that grows and it doesn't transplant, so we have a unique resource here.

It's also very important from the rural community perspective. This supports some of the less economically well-off areas of Canada, in all the provinces where it is in the rural areas.

It's a very modern industry, a very 21st century industry. It sounds like a cottage industry, but in fact it's not. It's high tech. It's capital intensive. It has all the attributes of being a 21st century industry, with continuous improvements and top quality. It's safe food, and well known as being a healthy product. It is differentiated from other fruits.

It has great health benefits. It has been touted as being probably the second most healthy food you could eat, after wild Atlantic salmon, which is very hard to come by, so it puts it really at the top of the heap.

Canada grows two-thirds to three-quarters of the commercially viable wild blueberries in the world. The domestic market is very small, so 90% of the wild blueberries are exported. I think that emphasizes the importance of export markets to this industry, so access to markets is critical. Access to new markets is critical, because we have to keep growing access to new customers.

All efforts to reduce tariffs and non-tariff barriers for this industry are positive. What we see with the TPP is an additional effort to do that in some new and emerging markets that will be positive in the long run.

The specific opportunities we see—

[The Chair, Liberal, Mark Eyking]

Mr. Hoffman, you'll have to wrap it up. You have only 30 seconds.

[David Hoffman]

Thank you. I need two seconds.

The specific opportunities we see are reduction of tariffs in Japan. We are already in Japan, but reducing tariffs will enable us to be more competitive.

Vietnam will be the other one in the longer term. We see it as a market that with a 30% duty is going to be very hard to access, but if we can have that duty reduced or eliminated, that will help.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you very much, sir.

You buy a lot of blueberries. A lot of small farmers ship to you guys, or you buy from them. You see it when you travel in the countryside, especially in northern Nova Scotia and New Brunswick. Thank you for coming.

We're going to go to Unifor now. Ms. Payne, it's good to see you again. We saw you in Newfoundland yesterday. You're a busy person.

[Lana Payne, Atlantic Regional Director, Unifor]

I know. I never rest, and Unifor never rests.

[The Chair, Liberal, Mark Eyking]

Thank you for coming. You have five minutes. Go ahead.

[Lana Payne]

Since we're the last panel, we should be given at least 10 minutes each, don't you think?

[The Chair, Liberal, Mark Eyking]

Well, then you'd be robbing from the audience, because they have a few things to say too.

[Lana Payne]

First let me thank the committee for the opportunity to appear today. You've already heard, obviously, our national president talking about the TPP. I think he appeared before your committee earlier this year on our opposition to this deal—not to trade, I want to be very specific about that, but to this deal specifically.

As you're aware, Unifor represents 310,000 workers in over 20 sectors of the economy from coast to coast to coast and about 40,000 in Atlantic Canada. Our members in the region work in forestry, fishery, the telecommunications area, manufacturing, offshore oil and gas, and health care, just to name a few. Obviously, today I reiterate our union's very serious concerns with this deeply flawed trade agreement and call on the committee to recommend its rejection.

We believe our members' jobs are important, and they are affected negatively by this deal, but just as important, so will the jobs and lives of many Canadians. Today I want to focus my remarks on what is needed for a fair and progressive trade agenda for Canada. Given this is your last hearing, I think it's critical that we turn our attention to why the TPP does not meet this definition.

Minister Freeland in her remarks to you in May and in speeches since her appearance before this committee has referenced the need for Canada to develop a progressive trade agenda. Indeed, in recent weeks in Europe she reiterated this new approach to trade. It is actually refreshing to hear a trade minister be so frank about how trade agreements have not been delivering the shared economic goods as promised.

In June, to the Conference of Montreal, the minister explained why globalization and corporate trade deals are in so much trouble now around the world. The middle class, she said, in western industrialized societies and probably more broadly in middle-income countries, has begun to fear very profoundly that the two great economic transformations of our time, globalization and the technology revolution, haven't been good for the middle class and people who are working hard to join it. She said the people who feel that it's not working for them are not wrong.

Minister Freeland has been clear that trade agreements must start addressing the very legitimate concerns that people, that labour, have about the investor state provisions and about the fact that these deals have not raised living standards or resulted in shared prosperity. She suggested that a progressive trade agenda also include real, effective labour protections and environmental standards. Currently they do not, and certainly the TPP does not.

She's also noted that there is a need to strengthen a nation's right to regulate and develop policy and laws in the best interests of citizens and that the investor state provisions must be brought back to why they were introduced in the first place: to ensure non-discrimination against foreign investors and nothing else. We would argue that there be no special investor rights provisions, but the fact remains that Canada's own trade minister had criticized these provisions.

If Canada is to turn to a new trade chapter, if we're to build and develop a truly progressive trade agenda as spoken about by our own minister, then there really is no choice here. Canada must not ratify the TPP because it does not do any of these things in any way, shape, or form.

Attached to your kit that I've given to the clerk is a fact sheet that talks about a framework for a progressive trade agenda. I hope you will read it and that it will be useful to you in your deliberations.

In Atlantic Canada, as some of you know, we are very practical, sensible people. We would ask why we would sign a deal that can and will have a negative impact on good jobs in the forestry, we believe, and dairy sectors in this region, in the auto sector in the rest of the country, and on the prices of drugs for all citizens, including our members. Why sign a deal that will hand over even more power to corporations under the investor state provisions?

Across all the studies released to date, the overall consensus is that the benefits of the TPP for Canada are at best negligible, but the risks and the losses are great. Let's be very clear—

[The Chair, Liberal, Mark Eyking]

Excuse me—

[Lana Payne]

I'm almost done.

[The Chair, Liberal, Mark Eyking]

Okay. You only have 15 seconds.

[Lana Payne]

Go ahead.

Let's be very clear: we're saying no to the TPP; we're not saying no to trade. Saying no can bring us back to the drawing board so that we can develop a trade agreement that actually works for everybody.

Thank you very much.

[Voices]

Oh, oh!

[Lana Payne]

I brought some friends.

[The Chair, Liberal, Mark Eyking]

Well, gee, you brought a fan club. Are they clapping for us?

[Lana Payne]

I have a few friends in the room.

[The Chair, Liberal, Mark Eyking]

I don't think they're clapping for the politicians.

I have a couple of reminders before we go to our last panel. We have translators, if you need translation, because we're doing both official languages. As well, while we're in session here, you cannot take photographs or videos.

The other thing is that we don't mind you clapping throughout the next hour or so, but it eats into the time for presenters. We want to get as much done here as we can in the next couple of hours. We're also going to a list of speakers later on, so just keep 'er down and we can keep moving on.

Mr. Rideout, it's good to see you. You're the last panellist we have from this whole country.

You and I go way back. It's good to see you still working with farmers. Thanks for coming.

You have the floor, sir.

[Peter Rideout, Executive Director, Wild Blueberry Producers Association of Nova Scotia]

Thank you very much, Mr. Chairman. I've been last before. People say I've been last more often than not.

Mr. Hoffman has just given a good introduction to our industry. I'll say a few words about our wild blueberry industry here in Nova Scotia and in this region.

It's not a cottage industry. We have 1,100 producer members in our organization, managing some 44,000 acres of wild blueberry land in Nova Scotia and producing consistently over 300 million pounds of wild blueberries annually in our regional industry. In Nova Scotia it's our largest agricultural export, exceeding $100 million in export sales last year.

Those export markets are, as you know, Mr. Chairman, the U.S. domestic market, Europe as a bloc, and east Asia as a bloc, principally Japan. We feel that most of our market opportunities going forward, as our industry now consistently is producing such a volume of fruit, are in the Asian markets. Some of the countries represented in the TPP proposal are on the short list of prospective markets going forward. We think most of our increased future market opportunities would be in the Asian market. Market access is extremely important for us in those developing areas.

Japan is our principal Asian market. We've been there for many years, since the 1970s. Our business is mostly ingredient-focused. In all of our export markets, we deal with companies as customers who are producing consumer food products using wild blueberries as an ingredient, as well as other fruit. We have to be competitive with things that can be substituted for our product in those markets. Continued market access in Japan is very important to us. More unfettered market access to some of those developing markets that Mr. Hoffman mentioned would also be a high priority for us in developing those future markets.

Finally, 90% of our Canadian wild blueberry crop is exported to foreign countries. It's a big driver of the rural economy, as you know. There are a lot of jobs at stake in rural Nova Scotia and throughout this region.

That concludes my remarks. Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Rideout. Thanks for keeping on time.

We'll open it up now for a dialogue with the MPs. Each MP has about five minutes. If we can keep it to that, it would be appreciated.

We'll start off with the Conservatives.

Mr. Ritz, you have the floor.