No, it's not necessary.
Evidence of meeting #37 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 question.
A recording is available from Parliament.
Evidence of meeting #37 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 question.
A recording is available from Parliament.
11:05 a.m.
Liberal
The Chair Liberal Mark Eyking
Are all in favour of this amendment?
(Amendment agreed to [See Minutes of Proceedings])
Is there anything else we have to deal with? Of course we have to go to the title and so on.
We're back now to the clause. Does everybody agree with the new clause as amended?
(Clause 33 as amended agreed to)
Now we go to the title. Shall the title carry?
11:05 a.m.
Some hon. members
Agreed.
11:05 a.m.
Some hon. members
Agreed.
11:05 a.m.
Some hon. members
Agreed.
11:05 a.m.
Some hon. members
Agreed.
11:05 a.m.
Liberal
The Chair Liberal Mark Eyking
We're all done with the officials. Thank you.
Just to let everybody know, I'm going to present this in the House tomorrow on behalf of the committee.
Tomorrow is Friday.
11:05 a.m.
Conservative
11:05 a.m.
Liberal
The Chair Liberal Mark Eyking
I'm here, Gerry.
I knew you were going to come and do it, but I heard you had to go home and shovel your driveway.
11:05 a.m.
Some hon. members
Oh, oh!
11:05 a.m.
Liberal
The Chair Liberal Mark Eyking
We're just going to suspend and then we're going to come back to our business.
11:10 a.m.
Liberal
The Chair Liberal Mark Eyking
We're back to Global Affairs Canada and we're dealing with the TPP.
It's good to see Mr. May. Thank you for coming to our committee.
11:10 a.m.
Liberal
The Chair Liberal Mark Eyking
You will find it's the most vibrant, exciting, productive committee on the Hill.
11:10 a.m.
Liberal
The Chair Liberal Mark Eyking
We're glad that Global Affairs could be back. As many of you know, on global affairs we've been fairly active at our committee for various reasons. We have the softwood lumber issues and agriculture issues with the United States and with the European agreement. We've just finished up last week with our cross-country tour. We did every province and we did a video conference with the territories. It's one thing to hear it here in the room, but when you're going to each province right into communities you get quite the perspective.
We were very successful. We had a lot of briefings and quite different perspectives across the country. We're glad you are here. I think the timing is good, after our travels, that you're here to give us an update or answer any questions on this agreement.
Ms. Hillman, you have the floor.
October 6th, 2016 / 11:10 a.m.
Kirsten Hillman Assistant Deputy Minister, Trade Agreements and Negotiations, Department of Foreign Affairs, Trade and Development
Thank you very much, Mr. Chairman, and good morning to everybody in the committee.
I'm very pleased to be back again with you here today and to provide you with a bit of an update on the activities of the government's consultations with respect to the TPP, and give you a sense of what we're hearing, both concerns and support. Of course, I look forward to answering any questions that you have.
Deputy Minister Hogan was invited by the committee to join you here today and she was unable to join you so she sends her regrets and she sends me.
With me, from Global Affairs Canada, I have Dany Carriere, who is the deputy chief negotiator from the TPP and the director of the TPP division; Sarah Phillips, who is our lead negotiator for temporary entry within the negotiations; Loris Mirella, who was our lead negotiator for the intellectual property provisions within the agreement; Paul Huynh, who is the acting director of the tariff and goods market access division; and André Downs, who is the chief economist for Global Affairs Canada.
We have many other folks behind, but we thought this was probably a good cross-section based on what we've seen from the kinds of questions and feedback you've been getting.
Before I move to the TPP consultations to date, I'd like to just take a few minutes to say a few words about the TPP economic impact assessment, which was completed by the office of the chief economist at Global Affairs Canada, and shared with this committee, and Canadians, on September 9, 2016.
The chief economist's study considered two possible scenarios: first, a scenario where Canada is in the TPP; and second, a scenario where we are not in the TPP, but the TPP enters into force. In short, the study projects a GDP growth of 0.127% if Canada is part of the TPP, which would generate gains of $4.3 billion in the long term. If Canada were not to participate in the agreement, and the 11 other countries were to implement it, the study projects GDP losses of $5.3 billion by 2040.
Reaction to the report has been mixed. Some note the projected GDP impacts as evidence that the agreement is important to Canadian businesses and exporters, whereas others have asserted that the projected GDP gains do not outweigh the concerns raised by many on labour mobility, investor-state dispute settlement—known as ISDS—and intellectual property.
The chief economist's study is only one of a diverse set of perspectives asserting various economic outcomes from the TPP. There are economic impact studies by Tufts University, the World Bank and the C.D. Howe Institute, among others. The government remains committed to considering a variety of studies, using different methodologies to assess the value of Canada's participation in the TPP.
With respect to our TPP consultations, since taking office the government has heard from all provinces and territories, industry, civil society, think tanks, academics, indigenous groups, students, and the general public on all aspects of the agreement.
Minister Freeland and her cabinet colleagues, as well as Parliamentary Secretary Lametti, have met with hundreds of Canadians to hear their views in consultations across the country. Officials have also met and heard from hundreds of individuals, businesses, and national associations, many of whom have also testified before you in this committee.
Through our consultations, we have heard that the Canadian business community generally views the TPP as an important opportunity to diversify Canada's trade and expand access for Canadian exporters and investors in Asia-Pacific markets.
This reflects the views shared with us by farmers, fishers and business associations such as the Canadian Chamber of Commerce, the Council of Forest Industries and the Canadian Agri-Food Trade Alliance.
Civil society organizations and unions have raised concerns relating to the impact of TPP on Canadian jobs, the scope and application of the investor-state dispute settlement mechanism, and certain intellectual property provisions.
Some Canadians also oppose the agreement altogether and have requested that Canada walk away.
I would like to expand on some of the recurring themes that we have heard.
Let's start with labour mobility.
Some stakeholders have said they want to ensure that the movement of high-skilled workers is facilitated, whereas others are concerned that it will lead to an influx of foreign workers and low-skilled workers. For example, some have questioned whether the TPP could lead to foreign companies winning procurement contracts in Canada and then bringing in their own employees to Canada instead of hiring Canadians.
We've also heard from certain business stakeholders about the difficulty they encounter in finding qualified personnel to perform their work and who welcome the opportunity that trade agreements afford them in facilitating recourse to qualified short-term foreign workers for specific needs.
Under the TPP, facilitated access into Canada would be limited to high-skilled business persons who have either invested substantial capital, or who have pre-arranged contracts or employment offers in Canada. In the case of high-skilled professionals and technicians, such as architects, engineers, and IT workers from countries like Japan, Malaysia, and Australia, Canada has also included safeguards such as education and the prevailing Canadian wage requirements.
Temporary entry commitments do not affect Canada's immigration policy, such as with visa requirements, nor does it affect the ability to maintain licensing and qualification requirements at any level of government.
It is clear from the government's consultations that the temporary entry of businesspeople is a complex issue, and many Canadians are seeking clarity on the implications of the agreement. We have met with several concerned stakeholders, including the Canadian Labour Congress, Unifor, the Teamsters, Canada's Building Trades Unions and other central labour bodies, to listen to their concerns, and to provide added clarity on the scope and application of the agreement's temporary entry commitments.
Let me now turn to investments and the investor-state dispute settlement.
The TPP's investment provisions have also generated a lot of interest from Canadians. In particular, many Canadians have concerns regarding the scope and application of the TPP's ISDS mechanism, or investor-state dispute settlement. More specifically, some fear that ISDS provisions will allow corporations to sue the government if a regulation or law interferes with their business practices or leads to a potential loss of profit.
In other words, they're concerned that the TPP's ISDS mechanism could prevent the government from regulating in the public interest.
We have also heard from Canadians who value a sound investment framework overseas and who support the TPP investment provisions, including those concerning investor-state dispute settlement. They say that binding investment rules, predictable market access and dispute settlement mechanisms help enhance the international investment climate.
Let me now turn to intellectual property. The intellectual property chapter is another key area about which the government has heard diverse views. Some say that these rules will hamper innovation by forcing Canadian innovators to play by rules forged by the United States, and that copyright term extension will make it harder for Canadian creators and innovators to use material protected by copyright. Some commentators have voiced concern that the TPP intellectual property provisions on patent protection could lead to increased cost of medicines in Canada due to a delay in the availability of generic drugs by a few years. On the other hand, we have also heard about the benefits that could stem from the TPP, such as a more predictable rules-based system to protect the intellectual property of Canadians who trade in the region.
Turning now to market access, with respect to market access for goods and services, as the committee can appreciate, the feedback provided has been dynamic and for the most part positive. We've heard from Canada's export-oriented businesses that they are keen to take advantage of new market access opportunities. They have underlined to us the importance of a level playing field and the potential impact on their export markets should the TPP go ahead without Canada.
We have also heard from supply-managed sectors. Concerns have been raised regarding an erosion of Canada's system of supply management and the impacts on farmers. Attention has also been paid to conveying expectations to the government regarding transition support should a decision be made to ratify the TPP.
Diverse views have been expressed about the TPP and its potential impact on the auto sector. We have heard from auto manufacturers, auto parts suppliers, and unions. Some of Canada's auto manufacturers are expressing significant concern with the discrepancy in length of Canada's tariff phase-out as compared to the U.S. phase-out.
However, other stakeholders in the automotive sector have advocated for a shorter tariff phase-out on autos coming from Japan, and indeed, it should be noted that Japanese autos are at a competitive disadvantage compared to Korean vehicles which will enter Canada duty-free beginning in 2017 under the Canada-Korea Free Trade Agreement.
Others in Canada's auto sector view the TPP as granting Canada increased market access opportunities and are urging for ratification as soon as possible.
The TPP automotive and auto parts rules of origin have also garnered significant attention, and have been raised on many occasions during our consultations. The different views expressed reflect a diverse array of interests in Canada's auto sector. For example, we've heard from some auto stakeholders that rules of origin are a factor that is taken into account when they make sourcing, production, and investment decisions. We have also heard that other factors are significant considerations, such as the quality of inputs and the proximity of suppliers to production facilities.
With respect to the sourcing of parts in particular, it has been noted that the TPP rules of origin will create more options for Canadian automakers, and in so doing will increase the level of competition faced by our parts producers.
In conclusion, I think overall the government's consultations on the TPP have been very enlightening and informative. Canadians across the country and businesses across all sectors have expressed clear views, and have contributed greatly to a national dialogue on TPP so far.
The government remains committed to being open and transparent with Canadians and Parliament on the outcomes of the TPP. It is important to note that the other 11 TPP signatories are at varying stages of their domestic processes towards ratification, but no country has yet ratified the agreement. TPP signatories have until February 2018 to bring the agreement into force, which allows sufficient time for Canada to consider the wording of the agreement and the views of Canadians before making an informed decision on the next steps.
We welcome the opportunity to be here with the committee today and answer any questions you may have as you work to continue your own consultations on the TPP.
Thank you.
11:25 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, Ms. Hillman.
It's a very good brief. It's similar to what we have been hearing across the country. It's a good snapshot. I think it's the first time I've seen those initial numbers. Maybe we'll have some of our MPs ask about those numbers and about the impact if you're in or the impact if you're not in. We'll leave that to the members.
We're going to get started on some questions from the MPs, and we're going to start with the Conservatives.
We have Mr. Ritz. Go ahead, sir.
11:25 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, Mr. Chair, and thank you to the officials for a great compilation of exactly what we've been hearing. I'm sure you kept up to speed on that as well. You've highlighted some of the major concerns we've heard out there from the side that says, “Walk away, it's not a good deal”. I tend to take the other side of that. I think it's a tremendous opportunity for Canada to get into those growing middle-class marketplaces in the Pacific Rim.
I do have some questions, and the chair alluded to the first one on the chief economist's report that there's no GDP gain, and it's only $4.3 billion in the year 2040. That doesn't reflect the cumulative gain year by year. I know there's no specific modelling that can be doing that, but we're hearing from people out there that say it's not enough for all the risk that we're taking. How do you respond to that when we know that there's a gain year in and year out? I know you can't second-guess who's going to take advantage of it and move forward.
The other thing they say in that regard is that we're already 97% tariff free, which is probably true of the commodities we're shipping, but there are a lot of commodities we don't ship because the tariff wall is so high. From that economy side, I see this as a huge boon to Canada. How do you respond to that when it's only $4.3 billion, and we're giving that to dairy farmers?
11:30 a.m.
Assistant Deputy Minister, Trade Agreements and Negotiations, Department of Foreign Affairs, Trade and Development
I will answer in some general terms, and then pass the floor to André to answer your specific questions.
The study and the model we have undertaken within Global Affairs Canada and the office of the chief economist is run under specific parameters, with specific assumptions. It provides information and a snapshot on certain issues that André can reflect on further. What it doesn't do and can't do in a way that we, as officials, feel confident that we can stand behind—
11:30 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Take a guess, because by 2040 you won't be an official anymore.
11:30 a.m.
Assistant Deputy Minister, Trade Agreements and Negotiations, Department of Foreign Affairs, Trade and Development
That's right.
