International Trade Committee on Nov. 29th, 2016

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

I thank you for that. I'm thinking about my neck of the woods in the greenhouse industry. You mentioned packaging, and that's a great example. The packager doesn't necessarily sell the product to the United States, but it provides it for the producer who does. We've seen some incredible innovation there.

Are there other areas that stick out in your mind, in which you've seen that growth and in which you've seen that really take on a life of its own?

[Claire Citeau]

One example is the life sciences sector, which provides a lot of services to the grains and oilseed sector in Canada. This is one strong component of our membership, and one that is looking to take advantage of opportunities in Europe in particular if European decisions to allow our products can be made based on science. That's why I was referring earlier to some of the technical discussions that need to be addressed in that area.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Alain, do you want to jump in on this? Have you seen that in your industry as well, that innovation has taken place because of trade agreements?

[Alain Lavoie]

No progress is attributable to this trade agreement. The companies sell directly in other markets. An interesting thing that we're seeing more and more often is SMEs teaming up with major players to enter global markets. Companies such as CGI, in Quebec, help SMEs enter these markets.

As I said this morning, we're currently considering the market in England. I called people from CGI to see whether they could help us enter the market. We also sometimes ask the Quebec government how it can help SMEs that want to enter foreign markets receive support from large corporations.

Does this answer your question?

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Van Kesteren.

We're going to move to the Liberals.

Ms. Ludwig, you have four minutes.

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

Thank you, Mr. Chair.

Thanks, witnesses, for your testimony today.

I have questions in two different areas. I'm going to begin with Mr. Lavoie.

Looking at your industry, what opportunities do you see for strategic partnerships on the import side?

Are there opportunities to work in a strategic partnership with some of the companies from the European Union that will be doing business or that plan to do business here in Canada? You certainly have the expertise here in Canada, and those firms will not.

[Alain Lavoie]

We often meet with representatives of European or American companies that want to set themselves up in Quebec and form a partnership with a local company. In Quebec, Investissement Québec takes care of bringing companies to work with us. In Montreal, Montréal International helps us connect with foreign companies that want to set themselves up here and work with Quebec IT companies. As an SME or business, we're drawn to the opportunity to help a company enter our market, and in exchange receive the company's assistance to enter its market. It goes both ways.

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

I represent the riding of New Brunswick Southwest. In our province, we're trying to specialize in the area of cybersecurity.

What opportunities do you see that CETA might offer in the area of cybersecurity?

[Alain Lavoie]

That's a broad question. New Brunswick is also a client of my company when it comes to the drafting of legislation and regulations.

Cybersecurity will be a crucial matter. Privacy will be an important issue. With this agreement, we might see how the Europeans handle cybersecurity.

At a recent seminar, people who work in security told me that some insurances now specifically cover security attacks against companies. Steps are being taken in this area. We may learn more about the subject, since Canada is not quite at the same level as the European community in this respect, or at least not in the same spheres. Nonetheless, Canada is fairly well positioned.

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

Thank you. Merci.

Madame Citeau, my next questions are to you.

Looking at the agricultural sector, certainly in my riding we have dairy, blueberries, maple syrup, and fish and seafood products, and we also have processing.

In the area of blueberries, for example, there is not a lot of value-added processing there. I would like to know opportunities you think there might be for value added in the Atlantic region with regard to Europe?

As well, might there be a drop in price to the Canadian consumer, based on the economies of scale and the fact that the businesses are paying one mortgage and paying their operating costs in a standard way? Might an increased capacity help scale the price and lower costs to the Canadian consumer?

[The Chair, Liberal, Mark Eyking]

It has to be a very short answer.

[Claire Citeau]

On the prices, in some cases having more products coming in may increase competition, particularly when products are similar, and at times it may force prices down. That provides a benefit to the consumer as well as providing more choices to the consumer. However, that really depends on the commodities and the products.

On your question on the processing side, what's interesting with the European market is that it's a mature market but it's a sophisticated market, in which opportunities continue to exist. There are even more opportunities for differentiated value-added products if the companies here have the capacity to do processing.

[The Chair, Liberal, Mark Eyking]

You're way over. We have to move on, and we're going to go to the Conservatives.

Mr. Nuttall, you have the floor for four minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair.

Ms. Citeau, in the last point of your statement today, you noted that you would exert every effort to resolve as many as possible of the outstanding technical barriers during the interim period.

I have two questions. First, it sounds as though you'd like a tightening up there, so what exactly does that look like? Second, can you give me a few examples of the technical barriers that you think can be worked through in advance of the closing of CETA?

[Claire Citeau]

We know that when free trade agreements are implemented, typically tariffs come down or are reduced. Non-tariff barriers come up right after, as a result, for example, of countries not adopting international standards, lack of compliance, or at times blatant and creative ways of introducing regulations that will have a protectionist impact, and certainly a commercial impact, for our exporters. Countries have the right to introduce their own regulations for a number of domestic safety reasons.

The particular issue we're facing today with the CETA agreement is that non-tariff barriers are happening even before the agreement is implemented. Those currently are in two very specific areas.

There's the timely approval of biotechnology traits and the timely approval and re-evaluation of crop-input products. In that regard, the European Union, as part of CETA, has committed to timely approval of those traits and has not yet done so, and that creates anxiety for our farmers.

The second very specific issue is in the area of the approval of meat-processing plants, in particular the area of carcass washes. Again, it's another area in which the EU has committed to working together to advance these issues before the agreement is implemented, but currently our farmers, our beef and pork producers, don't have the approval they need. If the agreement were implemented today, they would not be able to export, regardless of tariffs coming down.

What we're asking for very specifically is a commitment to having a plan for the CETA agreement for our agricultural and agrifood exporters, to ensure that the negotiated outcomes provide for real commercially viable access by the time the agreement is implemented.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you.

[The Chair, Liberal, Mark Eyking]

We're going to move on to the NDP now.

Ms. Ramsey, you have three minutes.

[Tracey Ramsey, NDP, Essex, ON]

Okay. I'm going to make it really quick.

Jim and Jody, it's been brought before this committee that under CETA the increase to the cost of drugs would be $850 million to $1.645 billion per year. The overall GDP impact improvement under CETA would be $600 billion, so you can see that there is a clear distinction in how much we'll gain versus how much we will lose, and all Canadians will lose under the cost of drugs.

My question is what will happen to access to affordable generics for Canadians if the amendments that you're proposing are not brought forward?

[Jim Keon]

As I said, the most important aspect is that this be applied prospectively so that the impact will be down the road eight or ten years. The clear impact is that the low-cost generics are going to be delayed two years—that's what the legislation calls for—beyond what they are now, and that is going to have an impact on costs.

[Tracey Ramsey, NDP, Essex, ON]

Can you speak to the retroactivity and the combination product in the first two amendments you brought forward?

[Jim Keon]

With respect to retroactivity, the provisions of Bill C-30 should apply, in terms of this patent extension or certificates of supplementary protection, only to products approved after the coming into force of CETA. The amendment we have makes that absolutely clear, and I'm hoping it will be done.

On combination products, we're concerned more about evergreening, a term that's sometimes used, whereby protection goes to an underlying molecule. It gets an extension, and it's combined with a further molecule to produce a combination product, which can have a separate approval. If there have already been extensions for the underlying products, we don't think the extension product should also get extra protection. This has happened in Europe. Our colleagues in the European Generic and Biosimilar Medicines Association have told us this, and they have encouraged us to be very careful with it. We're proposing this amendment to try to make sure this doesn't occur in Canada.

[Tracey Ramsey, NDP, Essex, ON]

We've discussed evergreening in particular around mechanical pieces like EpiPen, for which there's been repatenting based on the mechanism versus the drug.

In terms of jobs, you said 11,000 Canadians work in generics. What would the impact be if we had this patent extension on potential growth in your sector?

[Jim Keon]

As I said, we're going to be delayed coming to market. The good thing about this is that there was an export clause negotiated as part of CETA. It is in the bill. That mitigates some of the impact. If that is done properly, we're going to continue to push very hard to get investment.

I would say, going forward, that when Canada negotiates future trade agreements, there should be less emphasis given to extending intellectual property protection, which seems to be the sole focus of pharmaceutical trade agreements. If we could have more attention paid to regulatory harmonization and convergence, that would allow us, like the agricultural people, to ensure that our product meets standards abroad and this would facilitate exports. That would be a real benefit to our sector.

We would recommend going forward that more attention be given to other aspects of the pharmaceutical industry, rather than just patent protection.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

Our last MP on the list is Mr. Fonseca.