Thank you very much.
I apologize to the translators because this isn't in my speech, but at the top I want to say that I'm very concerned that some people are drawing the wrong lessons from Brexit and from Trump.
Economists like Dani Rodrik at Harvard University and Thomas Piketty in the EU point out the flaws in a purely pro-free trade agenda. There are market failures, distributional impacts, and very real concerns that workers have, because trade deals can increase inequality if you don't take proper action to make sure they don't. The answer isn't in rushing more trade deals through. The answer is in taking a minute to examine those very real concerns that people have and those very real negative impacts to see how you can mitigate them. I'll leave that there.
The labour movement is keenly aware that trade is and has always been an important feature of the Canadian economy. We understand that all governments have an interest in fostering open trade. Distributional impacts from trade and investment agreements have long been ignored. We are told that trade deals have winners and losers, but “don't worry, we can compensate the losers”. Historically, Canada has done an inadequate job on this front, especially for workers.
The gains of these trade deals are never as big as they are projected to be, and the gains for CETA are small. They are among the error bars for what our economic growth is projected to be anyway.
The main gains from open trade come from reducing tariffs, as the beef producers commented, but much of this, outside of agriculture, was already accomplished by the 1990s. So-called modern trade deals are often more about advancing investor rights. As such, they do not necessarily increase trade, improve economies, or benefit Canadians.
CETA also goes farther than existing trade deals by putting restrictions on local governments. This is despite the fact that more than 50 communities, including Toronto, Victoria, Baie-Comeau, Sackville, Hamilton, and Red Deer—even communities in Alberta—are saying that they sent a clear message to federal and provincial governments that buying local and other public spending policies, as well as municipally delivered public services, should be excluded from CETA.
While we're sold free trade deals on the opportunities for Canadian business and the savings for Canadian consumers, as you've already heard today and we hear ad nauseam, the majority of this 140-page bill features changes to Canada's intellectual property rules, requiring changes that largely serve European interests. I note that you have had no witnesses who are intellectual property experts yet.
One of the biggest concerns regarding CETA is the impact on Canada's health care system. On a per capita basis, Canadian drug costs are already among the highest in the world, exceeded only by the United States, and they are among the fastest-rising among comparable nations. Bill C-30 devotes 30 pages of amendments to the Patent Act. These amendments will further exacerbate the rise in costs by committing Canada to creating a new system of patent term restoration, thereby delaying the entry of generic medicines by up to two years, locking in Canada's current term of data protection by creating barriers for future governments wanting to reverse it, and implementing a new right of appeal under the patent linkage system that will create further delays for the entry of generics.
Analysis conducted by Professor Marc-André Gagnon and Dr. Joel Lexchin estimates that CETA's provisions will increase Canadian drug costs by between 6.2% and 12.9%, starting in 2023. This is in line with internal government estimates that expect the patent changes to cost between $1 billion and $2 billion per year, and the generic industry's own research that put the price at $3 billion.
The previous federal government committed to compensating provinces for this increase in cost, but that simply means that the federal government will ask Canadians to pay pharmaceutical companies through higher taxes or cuts to services elsewhere. It also doesn't take into account that some of this increased cost will fall directly on low-income workers who don't have drug plans. As Lexchin and Gagnon point out in their paper: “cost-related nonadherence is 35% among people with low income and no insurance”. What this means in real life is that people won't go to the doctor because they know they can't afford the cost of the prescription.
The new legislation on pharmaceuticals is a very good example of the outdated approach being pursued through CETA. In 1987, we made a bargain with pharmaceutical companies. We strengthened patent protection and asked them to increase their R and D to 10% of sales. Since 2003, they have failed to meet this target.