International Trade Committee on Nov. 17th, 2016

[Angella MacEwen]

That's a fantastic question. I think you know that Gus Van Harten, Michael Geist, and other experts have said that much of what we want to accomplish could be accomplished through federal courts or state-to-state dispute mechanisms like we have through the WTO, and if we get rid of NAFTA, we had that in the Canada-United States Free Trade Agreement.

The problem it presents is that the company then has to convince their country that it's a worthwhile case to bring forward, but we think that's a useful step so that you can't bring forward frivolous cases. Certainly, if you're talking about contracts and about being treated fairly, if we don't respect those contracts, that can fall under federal courts, federal jurisdiction. We don't see the necessity for investor-state, and we think it will fail in Europe because of the insistence on it.

[Tracey Ramsey, NDP, Essex, ON]

That is what we saw the Walloons hitting up against.

You represent 3.3 million Canadian workers. It has been estimated by Tufts University that we'll lose 30,000 jobs under CETA. I wonder if you could comment on that and its impact on communities across Canada.

[Angella MacEwen]

As others have noted, we're in a slow growth situation. We are in a situation where, over the past 30 years, wages have not kept up with productivity growth in Canada or the U.S. Obviously, it's better in Canada than it is in the U.S.

As for what these trade deals do, that Tufts study found that the returns to capital were higher than the returns to labour, and inequality increases because of that. If the government doesn't take any moderating action.... Chrystia Freeland was asked why CETA will lower inequality, and she said it was because there's a progressive government. We don't always have progressive governments, and there's no specific action that this government has put forward that would reduce the inequality that will result from CETA. You'll notice who is here presenting.

[The Chair, Liberal, Mark Eyking]

You still have time, Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

I still have time? Okay.

The other thing I want to ask you is about the ILO. CETA encourages, but doesn't require, participating countries to ratify and fully implement the International Labour Organization labour conventions. If participating governments really want CETA to be the gold standard for trade agreements, violations of its labour provisions must be subject to sanctions.

I wonder if you could speak about what sanctions you think CETA should impose on a country that doesn't ratify or implement all the ILO fundamental labour conventions.

[The Chair, Liberal, Mark Eyking]

It will have to be a very quick answer.

[Angella MacEwen]

Sure. I think we should be able to have trade sanctions. For example, if a shipping company doesn't pay fair wages or the minimum wage in Canada, then we should be able to revoke their privilege to move shipments within Canada.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to move back to the Liberals.

Ms. Ludwig, you have five minutes. Go ahead.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Good afternoon. Thank you very much for your presentations.

Earlier this week, we heard from the officials regarding CETA. Certainly, to Mr. Everson's points, the chief negotiator also discussed the significance of trade to Canada's GDP. We know that there are about a million small to medium-sized enterprises in Canada, but only about 41,000 are exporting.

In terms of preparation, to continue with Ms. Lapointe's questions, how are you working with the chamber members on reaching out to talk with the members about the opportunities that come forward in this trade agreement?

You also discussed the Trade Commissioner Service. In my experience, so many businesses are not aware of the work of the Trade Commissioner Service and therefore do not get the benefits of it. Could you speak to those benefits for your members and to any other government programs that would help support exporting and getting our companies and all Canadians the best from this deal?

[Warren Everson]

Yes, absolutely. Thank you very much for the question. I'll try to be quick. I also desperately want to get in on a point that was raised earlier, so I'll try to slide that in as well.

We're just getting spooled up now. Last summer, we spent some time at Global Affairs talking about a promotional program to get Canadian business properly supported, informed, and matched up to European partners and so forth. When the agreement lurched into the ditch for a while there, we dropped all of that in the interests of just trying to encourage the Europeans to support it.

Now we're getting back into the business. I think you make the point: information is the first and most important thing. People will find advantages for their own businesses, but for small business, all these international adventures are highly risky. They don't have a lot of people, and if the president spends a week in Europe, then the president had better come back with some scalps in his or her hand.

The Chamber of Commerce also has allies in all the European countries in chambers of commerce or the like, such as MEDEF in France, for example, and we deal with them. We are going to try to engage them on what will be a mutual push and pull. It will also have to assist the Europeans as they try to scope out the Canadian marketplace.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

That's more in terms of matchmaking...?

[Warren Everson]

I think so.

I've heard people testifying in front of committees like this say, “If anybody in a small business thinks they're coming into a foreign country and competing with me, I'm going to kill them.” Their only way to do it is if they can make deals with existing players, and that's becoming the way of the world anyway. I think matching and helping people find the best match, the best quality player, the most reliable—

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

But don't you find, Mr. Everson, that sometimes that's an education in itself? As a Canadian company, if you're perceiving your business to be a big player, it's not easy to enter into a partnership or to lose your name recognition, but then you know from your experience internationally how significant it is to the Canadian enterprise to have some form of strategic alliance.

[Warren Everson]

Absolutely, and there's a cultural aspect as well. We understand how to talk to the British and French and probably the Germans, but we don't have as much experience with the eastern Europeans and the way they do business.

On the Trade Commissioner Service, we're strong believers that it's an important part of Canada's trade strategy. There's more to a trade strategy than just agreements.

For the Trade Commissioner Service, the challenge is the bewildering complexity of all the new players that are starting to show up. It was one thing back in the old days to have MacMillan Bloedel say they had 10 million board-feet of pine and there it was, that it was from that sawmill over there. Now, somebody will show up and say that they don't make the cup and they don't paint the cup, but they make the chemical fixative that goes on the paint. That's their product, they'll say, so find them somebody in Romania who deals with painting cups so they can.... The trade commissioners are going to be saying, “Huh?” That's going to be a challenge for them.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

I have three questions for the beef industry as well.

In terms of a Canadian beef strategy, you mentioned that the significance of this deal could be a hundredfold. You're trying to reach that capacity. Where are you at this point within your industry for succession planning, for working with small industries or a small area? I represent the riding of New Brunswick Southwest. Our farmers are significant, of course, but they certainly don't have the large capacity that we see in other parts of the country. Could you speak to that as well? How could we offer supports regionally as well as nationally?

[Dan Darling]

First of all, before we threw our support behind CETA, we consulted with our producers and their representatives from their provincial organizations to make sure that they were supportive of new access. Of course, they all were, under conditions of meaningful access, in that we get proper tonnage and whatnot in order to make it meaningful for us.

As far as the timing goes and where we are in terms of meeting that, you have to remember that one of the things that controls how much product we can send in and when we can send it in is hormones and growth promotants. That's never been on the table. Europe never has agreed to that, so we go into it saying, all right, we will not send anything in there.

Because of that, once this deal is signed and ratified, we have probably a two-year window before our producers have enough production to send into Europe in any mass whatsoever. These are baby steps, but we're fine with that. We hope that by that time we can ramp up production, and we're confident we'll ramp up production in order to meet the needs of exports.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Do you think that will also change on the domestic side?

[The Chair, Liberal, Mark Eyking]

I'm sorry, but we are way over time. Nice try.

We're going to move to the second round.

Mr. Fonseca, you have the floor. Go ahead.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Mr. Chair.

Thank you to the witnesses.

One thing I always like to say is that people buy from people. When we think about the people who are in Europe and the people who are in Canada, something that we hold as a great value is our multiculturalism and our diaspora communities. Think about all the different diaspora communities we have from European descendants.

Have you looked at your organizations, Mr. Kingston and Mr. Everson, and thought about all the individuals in those various companies who hold executive roles and bringing them in...? There are those who are of Italian background, and German, Spanish, Portuguese, English, French, and all the different European countries. I can go through the whole list.

I think we've really underachieved when comes to our diaspora communities that we have here in being able to trade with the rest of the world, and in this case with Europe. Could you speak to that? Has that ever been a focus or a question that's been discussed?

[Warren Everson]

Brian, do you want to go first on this? I've been hogging the the mike.

[Brian Kingston]

Sure.

Thank you. It's a great question. It is something that we've looked at. We do have examples of large Canadian companies that have done business with and made major investments in Europe in part because they have links to certain countries.

There are examples of it happening, but I would agree with you that we don't do a good enough job of taking advantage of large diasporas in Canada, of ensuring that we link up and take advantage of that. I think there's a huge opportunity there. I think there's a role for the government to play, as well as business associations, in helping to facilitate that and making sure that companies are aware of the opportunities that are now in place because of CETA.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

I think of something like the auto sector. We have a gentleman, Sergio Marchionne, the CEO of Fiat Chrysler, who was born in Italy, came to Canada, is Canadian, studied here, and raised his family here, etc. He has risen in the ranks at Fiat Chrysler to head up that organization.

I know that for a long time we looked to land a Fiat Chrysler assembly plant here, and that's never come to fruition. Now, with CETA, would that open up a new opportunity in terms of having someone like a Sergio Marchionne being able to come here and to have that competitive edge to be able to open an assembly plant?

[Brian Kingston]

I can't speak on his behalf, but I would say—and I mentioned this in my comments—that Canada, with its suite of trade agreements now, is an increasingly attractive place for large multinationals to invest in and to use Canada as an export platform. Once CETA is in place, if we go ahead and we actually secure market access to some large Asian markets—Japan, in particular, and perhaps China—Canada will stand out in the world as a great place to do business and to manufacture and export from. I think it creates huge opportunities.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

In 2008, Canada and the EU did a joint study to look at the gains from a CETA agreement. What they found was that the major comparative advantage for the EU would be for services, and for Canada, the area would be in industrial goods. I want to ask now, post-Brexit, with the U.K. possibly out of CETA, do you know if much of that services advantage the European Union had was coming from the U.K.?

[Warren Everson]

We don't know that.