International Trade Committee on Nov. 15th, 2016

[Steve Verheul]

They will be done in advance of us, as it currently looks—

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

Are we looking at late winter or early spring if we get everything...?

[Steve Verheul]

I think we're probably looking at early spring, because we do have a different type of system. They don't have a process whereby they have legislation and then regulations that have to go through that long process.

We're trying to see whether there are any time-saving approaches that we can take for that process so we're not too far behind where the EU is. I think we have a joint interest in getting this CETA to enter into force as soon as possible, so that's what we're working for, but the EU, I think, will be ready before we are.

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

Okay.

We've also committed to compensation packages, to transition monies or whatever it was, to the dairy sector. That has been announced. There's also one for the fish processing sector in Atlantic Canada. Do you know what the status of that is? That's not necessarily your shop, but it's part of it.

Then there's also the distribution of the imports of cheese and how that will be handled. I know that we had originally written in that 30% of new entrants had to have access to some of that.

Can you give us an idea of where those negotiations are at?

[Steve Verheul]

First of all, on the fish issue, there was a negotiation, as you will recall, between Newfoundland and Labrador and the federal government. There was a tentative agreement reached, which subsequently couldn't be put together in its entirety. There are still outstanding promises that have been made to Newfoundland and Labrador and, in fact, to the other Atlantic provinces as well. We have had a number of discussions on that, and the Department of Fisheries and Oceans is now pursuing discussions with those provinces, I think starting first with Newfoundland and Labrador, so we are moving ahead on that. We're anticipating that it should not take too long.

On the issue of the allocation of the cheese quotas, we've done a very extensive consultation process. We have solicited input from all of those who might be interested in having a share of those import allocations. You mentioned that one of the requirements in CETA is that, for the CETA TRQs—tariff rate quotas—we have agreed with the EU that a minimum of 30% would be allocated to new entrants. They're aware of the existing WTO cheese tariff quota, and they don't want just the same players across the board. We've finished the consultations. We're now working on preparing some recommendations for the minister as to how the cheese tariff rate quota should be allocated, so that shouldn't be too far off in terms of coming out with a policy.

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

That will likely play into the legislation moving forward.

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you. We're going to move over to the Liberals now.

Mr. Dhaliwal, you have five minutes.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

Thank you to the team. I would like to echo the comments made by Mr. Ritz on the work that you and your team have done, Mr. Verheul. Congratulations, and thank you.

You mentioned in your statement that CETA provides increased freedom of movement for services and professionals. In particular, being a professional engineer, I would like to ask you if you can elaborate on how it would help fellow professional engineers and architects moving forward.

[Steve Verheul]

There are two elements to the labour mobility package within CETA. One has to do with the temporary entry of independent professionals, contract service suppliers, and intercorporate transferees, who will have increased freedom to move between Canada and the EU in most cases. If, say, a Canadian company made an investment in the EU, they might want to move some of their people back and forth so as to manage that investment and have that own expertise. It's the same with architects or engineers. As independent professionals, they would be able to go both ways. That's the first element.

The second element is that we also have provisions relating to qualifications, so that if an architect, for example, is working and is licensed as an architect in Canada, we're setting up a process whereby they could become licensed to work as an architect in the EU as well. That's obviously going to be a long-term effort. The architects are actually in front on that and are making some good progress already. The engineers are not far behind.

Those are the two main areas of labour mobility in the agreement.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

It would not necessarily help the bigger companies. When it comes to small and medium-sized firms, do you think it will make a difference?

[Steve Verheul]

Yes, we think it would make a large difference, particularly in those smaller companies. A lot of the larger companies can easily manage different operations in different places. Small and medium-sized enterprises have less flexibility in what they're able to do, but they will want to be able to move back and forth to be able to take advantage of the opportunities in the EU market. Particularly if you're operating as an individual architect, for example, you can get some contracts in the EU, and you want to be in a position whereby you can fulfill those contracts without any other hoops or requirements that you have to go through.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

I come from British Columbia. When it comes to CETA, how will it particularly help British Columbians?

[Steve Verheul]

British Columbia was very actively engaged throughout the negotiations. They had a lot of interests. Obviously, fish and seafood was one of the interests. They had some agricultural interests. They had a lot of interest in some of the services that are of particular importance in British Columbia. They saw some significant opportunities in research and development and in some of the government procurement elements as well. Really, I think they saw some opportunities across a fairly broad spectrum.

Now, as you will well know, British Columbia is often looking not necessarily towards Europe but more towards the Asian market, because of geography, but they started to see an increasing number of interesting opportunities in the EU.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

[The Chair, Liberal, Mark Eyking]

You have one minute left.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

When it comes to British Columbia, would there be regional pressure on the ports and the infrastructure? If so, what kind of improvements would you like to see happening in the near future?

[Steve Verheul]

I'm sorry. Increasing pressure on the...?

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

On the infrastructure and the ports.

[Steve Verheul]

On the infrastructure side, I think it's working both ways. We certainly have advantages that we can provide to Canadian infrastructure providers, but at certain levels, the EU will be able to compete on a number of the tenders that might be issued. We've found that the EU often has technology or expertise that we may not necessarily have in Canada, so we can expect that they will play a particularly useful part for us when it comes to infrastructure as well.

What was the other issue you mentioned?

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

It was the ports.

[Steve Verheul]

We've been speaking quite a bit to all of the ports. Given that the most likely route of travel and the first access to Canada would come more from the east than from the west, I think the Port of Halifax and the Port of Montreal are quite interested in the kind of elevated traffic that they're going to get as a result of CETA. We've seen less of that, to be honest, in the ports in British Columbia.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Dhaliwal.

We're going to move to the NDP now.

Madam Ramsey, you have five minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

Thank you so much for being here today and for being available to us in other ways as well. Obviously, it's a huge agreement and we have a lot of questions.

The last time CETA came to the committee, the NDP and the Liberals called for a study to assess the financial impact of the increased intellectual property protection of patented drugs in Canada and on the provincial and territorial health care systems and prescription drug costs. Has the department done any such analysis?

[Steve Verheul]

At this point, we haven't, and the main reason we haven't is that we're finding it very difficult to conduct that kind of analysis, mainly because the types of changes we will see with the changes to the Patent Act, particularly for the additional two years of protection, are not likely to kick in until the agreement has been in place for probably eight years or so—at least for the majority of the changes.

That means it's really impossible to predict whether there will be blockbuster drugs coming through at that point, whether there will be more biologics, and whether there will be more niche drugs that are going to have smaller but more targeted markets. We don't know what pricing policies may be on the drug side by that point, particularly in relation to comparisons between brand-name drugs and generic drugs. We have found that, at least at this point, it is very difficult to come up with any kind of clear prediction.

The other element I will add is that there are also, as I'm sure you're aware, some ongoing efforts to modify or reform the domestic system as well. The work that Health Canada is doing with the provinces on health care programs is likely to reduce some of the costs overall.

[Tracey Ramsey, NDP, Essex, ON]

Second, there was also a call at committee for the government to inform Canadians about the possible increases in prescription drug costs. Is there a plan in place to do that?