Evidence of meeting #39 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 post.
A recording is available from Parliament.
12:05 p.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
It is.
My question is for you and Mr. Emerson, as well as Ms. Marsden and Mr. McLinton. If Canada did not ratify the TPP but the U.S. and Japan did, what impact would that have on your industries?
12:10 p.m.
Executive Director, Canadian Aquaculture Industry Alliance
I guess my first response is that it probably wouldn't have any dramatic effect immediately, but if we want to take a longer-term vision of where this industry is going to go, it would definitely be putting us at a disadvantage and not making us as competitive as we could be.
12:10 p.m.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Which countries are our major competitors coming into the market? Would it be Norway, Scotland, or Chile? Which one would it be?
12:10 p.m.
Executive Director, Canadian Aquaculture Industry Alliance
I would say all of them.
12:10 p.m.
Executive Director, Soy Canada
It would be a very significant issue in the soybean industry.
I was explaining earlier how in Japan we have tariff-free access on seed but not on oil. If the U.S. was able to have access to the Japanese market with those reduced oils, they have a big industry and would take over that market very quickly. Canada would never have an opportunity to develop that market. This would apply to other Asia-Pacific markets as well.
12:10 p.m.
President, Canadian Sugar Institute
Surely the advantage we have in food-processing investment would largely shift to the United States, because they would have access to those markets. Their plants are much bigger in the United States, and we'd lose the advantages we have in Canada, including our import costs.
12:10 p.m.
Conservative
The Vice-Chair Conservative Randy Hoback
Okay, we're well over time, Ms. Ludwig.
Mr. Van Kesteren, you get five more minutes. I know you're excited.
12:10 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
This is a great day.
Thank you, Chair.
Jason, I asked you before about cross-border shopping and competitiveness at the retail level. This was a big issue, especially when our dollar reached parity. Right now, we don't have that. We know it's going to fluctuate. How will that advantage our retailers?
12:10 p.m.
Senior Director, Retail Council of Canada
We don't anticipate that this agreement would have a big impact on cross-border shopping, given that there is already NAFTA as well as other agreements in place with the United States. Of course, the majority of cross-border shopping happens in the United States as opposed to other nations.
Where we did dodge a bullet, though, was on the issue of online sales and the pressure that was coming from some TPP negotiators, namely from the U.S., to increase that level dramatically and essentially favour online purchases made in the U.S. I don't anticipate that it will have a major impact and that's a very good thing. Canadian TPP negotiators recognize this, and therefore the $20 exemption level did not change.
12:10 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I'm going to get a chance to talk to Ms. Marsden. As you probably know, Chatham-Kent was the largest sugar producer in all of Canada at one time. They lost that sugar beet production probably in the 1980s, maybe earlier, maybe in the 1970s. We're still producing sugar beets out west and we're starting to produce them in the northern part of the county. As a matter of fact, we have quite a large number of farmers who are producing sugar beets. As it stands now, they're being processed in Michigan. What are the chances of this industry growing to the point where we would see a processing plant back in southwestern Ontario?
12:10 p.m.
President, Canadian Sugar Institute
First, let me explain that the reason operations were closed in southern Ontario was that Canadian companies were finding that operations have to compete globally, because our market is open. In the late fifties, those plants closed. Redpath Sugar built their plant and opened it in 1959 in Toronto. It's more economic to import the raw commodity, which is unfit for consumption, and process it close to customers.
Sugar beets in Alberta have the disadvantage of geographic location away from deepwater ports. In Ontario, yes, they sell their sugar beets to Michigan, into a high-priced market. In the absence of very substantial reductions in trade distortions in sugar in other markets such as the U.S., it would be difficult to envisage putting in a new sugar beet operation. We would certainly be very happy to see more processing in Canada, but the opportunity is unlikely.
12:10 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Can we compete with the world market in taking in the raw product? Do we take it in from Cuba at this point?
12:10 p.m.
President, Canadian Sugar Institute
No. Their industry is very small. It's mostly from Brazil and the Central American countries that we get the raw commodity. It's exported to Canada in 20,000- or 40,000-tonne vessels. It's very economic rather than importing refined sugar, which would be competitive with us. That's where we have that advantage, because we don't apply tariffs to that raw commodity.
12:15 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
You mentioned that in 2005 you had a surplus of $1.2 billion and it declined significantly. What was the cause? Was it the 2008 recession?
12:15 p.m.
President, Canadian Sugar Institute
It was mostly to do with the Canada-U.S. exchange rate, as well as some relocation to Mexico under the NAFTA, because the U.S. and Mexico have free trade, which exemplifies the problems when Canada—at least for one commodity but also more broadly—isn't part of a freer trade area. That's coming back a bit now with the exchange rate, but we need more markets to improve that again.
12:15 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Thank you.
Ms. Salmon, I think Gerry asked most of my questions. I'm looking for potential for growth. You say that it's our restrictions on your industry that are stopping.... If you were to give us a snapshot of the potential—I think about Arctic char for instance—how many areas of Canada would benefit from some changes in regulations?
12:15 p.m.
Executive Director, Canadian Aquaculture Industry Alliance
It would be across the country. Arctic char is now farmed in Yukon. They would benefit from a national aquaculture act that clearly spelled out the rules and provided a vision for growth, as would the salmon producers on both coasts and the trout producers in the prairie provinces. Everybody would benefit from having clarity in the regulatory field.
12:15 p.m.
Conservative
12:15 p.m.
Conservative
The Vice-Chair Conservative Randy Hoback
Mr. Van Kesteren, your time is up. I know you're so keen and you have more questions, but we're going to Ms. Trudel again.
You have three minutes.
12:15 p.m.
NDP
Karine Trudel NDP Jonquière, QC
Mr. Century, could you continue answering the question I just asked? You have three minutes.
12:15 p.m.
Associate Lawyer, Goldblatt Partners LLP, Canadian Union of Postal Workers
Thank you for the question.
Just to make things a little more specific, I spoke about the risk of a new renewed NAFTA-like challenge under the TPP. Of course, the TPP now continues investor state, so that's a possibility. The rules have changed. They have been enhanced in a number of areas.
If you happen to have the opportunity to look at the express delivery services annex of the TPP, I encourage you to do so. It's very short, just eight bullets and under a page, but I think you may be surprised to see an annex of that kind in a general trade agreement. It's quite clear that it serves industry's interests. The efforts of the express delivery and courier industry to influence trade rules are well documented and, frankly, they have been quite successful. Our view is that an annex like this has no place in a general trade agreement. It poses risks of another lawsuit, and even if we're successful, do we really want to go down that road again?
It is also highly relevant as Canada Post is considering all of these options entering into other areas, so it poses a risk to the current line of business. The way Canada Post currently gets by is by also delivering by courier. The view of companies like UPS is that this very involvement in those competitive markets is problematic. They call it cross-subsidization. Now, the jury is out on what exactly cross-subsidization means. It hasn't fully been litigated. The NAFTA case didn't go there, but it may well be litigated under the TPP, and the result could be highly problematic to the survival of Canada Post, which is not to mention lines of business besides courier.
You're a member of the Canada Post review, and obviously Canada Post is looking at a number of other ways to revitalize its services drawing on international models. There are untold consequences throughout the TPP and potential for renewed challenges threatening Canada Post's ability to really deliver on its mandate of universal service, which is particularly hard in a country like Canada.
We heard from some friends about the natural advantages that Canada has in a number of industries. In postal delivery, Canada is at a disadvantage. The geography is vast, there are underserved communities, and we're concerned about new threats that the TPP poses.
12:20 p.m.
Conservative
The Vice-Chair Conservative Randy Hoback
Your time is up.
Mr. Fonseca, you get the last set of questions for the day. You have five minutes.
12:20 p.m.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
First of all, let me thank all of the presenters for their fine presentations and the way you represent your sectors. You represent, really, millions of Canadians, be they employers, employees, the public sector, as well as all the consumers in Canada.
I find it so remarkable, Ms. Marsden, that Redpath Sugar is occupying probably the most expensive real estate in Canada, right at the foot of Yonge Street on the lake in Toronto, and they still have a viable business there and have not moved from that location.
You mentioned sugar and our trade with the United States, that it would improve under the TPP, but it will not open the border. What do you mean by improve? Why would it improve, but then not open the border?