Evidence of meeting #68 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 nafta.
A video is available from Parliament.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
It's not a case of not making eye contact with the teacher because you didn't do your homework. In this case, we're going to have to face him down and make our case.
President, Canadian Steel Producers Association
Yes. We have a great story to tell about integration.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Exactly.
It's so important that we don't get behind the U.S. and Mexico when it comes to regulations, red tape, taxation, all these different things. How do we get that message out?
Geopolitically, you can't have a strong integrated NAFTA system going head to head with China, India, and the emerging economies until you come to terms with the streamlining of regulations, red tape, and taxation. Trump going with a border tax, and us having a carbon tax that nobody else has, will put everybody at a disadvantage.
How do we start to smooth out some of those bumps, using NAFTA as the vehicle to do it?
President and Chief Executive Officer, Chemistry Industry Association of Canada
There are some examples of things we've already done. The regulatory co-operation council, for one, has been very good. That's a great example.
It doesn't mean that Canada has to follow the U.S. lead. With the chemicals work that's been done under RCC, as that work sped up, the U.S. passed its only piece of major bipartisan legislation last year, which was the reform of the Toxic Substances Control Act. Voila, it looks very close to what Canada put in place more than 20 years ago.
We led the way. Through that regulatory co-operation, they followed suit. Now we're drilling down into details where we can discover and share deficiencies, share our science, and reach conclusions on toxicity substances, etc. There's a lot of good news about the co-operation. We can extend that. It doesn't mean that we have to water down what we do and follow the lead of the Americans. We have the capacity to lead.
On your second point, though, about competitiveness, it's something we worry about very much. I mentioned that the U.S. chemistry industry alone has seen over $250 billion of new investment. Canada historically has a 10% share of that. We should have seen 30 new projects valued at $25 billion. We've seen about three or four projects valued at $2 billion. We've seen 1%, so already we're not competitive when it comes to attracting investment.
Conservative
President and Chief Executive Officer, Chemistry Industry Association of Canada
I think the message we have is that we reserve the right, just like in health care, to pursue whatever policy choices we want.
President and Chief Executive Officer, Chemistry Industry Association of Canada
We want to address carbon. We will address carbon, but make no mistake, it will impact competitiveness. If that's the case, what are we doing to maintain the competitive position while we're focused on a carbon policy?
The notion that departments of environment nationally and provincially can somehow re-engineer our economy solo is hard to believe. If it is indeed a cross-cutting horizontal policy issue, then it will require a whole-of-government approach, and we're not seeing that.
Conservative
President and Chief Executive Officer, Chemistry Industry Association of Canada
Yes.
Conservative
The Vice-Chair Conservative Randy Hoback
We'll move on to Ms. Ramsey. You have the floor for five minutes.
Conservative
Conservative
The Vice-Chair Conservative Randy Hoback
I'm sure you can and would.
Sukh, you have the floor for five minutes.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you, Mr. Chair.
Welcome to all the witnesses.
Mr. Schultz, Canada ranks in the top 10 in the world of energy products. The global demand is increasing and so is the standard of living across the world, as economies are progressing. British Columbia is number two in the amount of natural gas produced in Canadian provinces.
Right now we rely mostly on the U.S. Were we to renegotiate NAFTA, how would that affect British Columbia and Canada?
Also, what priorities will change when it comes to reliance on the U.S.?
Vice-President, Pipeline Regulation and General Counsel, Canadian Association of Petroleum Producers
We wouldn't see a renegotiation of NAFTA as altering the basic market structure, assuming we come out of it with essentially a free market policy for energy, as we did in 1988. The decisions of where product will go will be driven by relative market opportunities, relative competitiveness.
Coming to the issue of British Columbia's natural gas, a huge resource there is looking for markets. We know that the markets in North America are not going to support the growth that people would like to see. We will be looking offshore. Essentially the resource will drive the search for the markets. In the case of North America, free market policies are supporting that.
The barriers to getting to market have a lot to do in Canada with the complexity of the regulatory process and the timeline it takes. Some market opportunities have been lost because of the length of time it's taken to move things along. When those windows close internationally, they don't open again for a while. The International Energy Agency doesn't expect the next wave of LNG projects to occur until the mid-2020s, so it's possible we're going to see a slow movement forward in Canada. We would certainly hope to see projects continuing to move, but some opportunities have probably already been lost.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
What are those barriers, and what can be done, in your opinion?
Vice-President, Pipeline Regulation and General Counsel, Canadian Association of Petroleum Producers
We need to find a way to address the issues that are causing the process to bog down, which relate to an approach to aboriginal engagement that will be more satisfactory for all concerned than perhaps we have now. Of course, we always need to address the environment as we go through that. Reports have recently been tabled from two reviews that will probably make the process more rather than less complex at the federal level.
We need to find a way to make the process move more efficiently, but also preserve the effectiveness of the process.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you.
Ms. MacEwen, you mentioned that you believe in open trade, and free trade helps us grow. All those factors that you mentioned that should be part of renegotiating NAFTA, do you see them negatively affecting economic prosperity and economic development?
Senior Economist, Canadian Labour Congress
No.
If you're talking to an economist, the reason free trade works and the idea with NAFTA is that it was supposed to raise wages in Mexico. Then it would increase internal demand in Mexico, and that would bring Mexico up to our standards. That hasn't happened because of a failure to enforce labour rights. Wages have stagnated in Mexico.
I believe this would be a path to shared prosperity. We would end up with better economic outcomes because you don't get the rising inequality, or the exploitation of the environment and workers.
Conservative
The Vice-Chair Conservative Randy Hoback
We'll move on to Ms. Ramsey.
You officially now have the floor for five minutes.
NDP
Tracey Ramsey NDP Essex, ON
I thank my colleague because his question was going the same way that I wanted. You talked about the impact of trade shocks on working people in North America. The labour community raised the alarm 25 years ago around serious issues of having the labour chapter and the environment chapter sit outside of the agreement. Some of those things have come to pass. I think that Mr. Fisher spoke about that, about how working people have felt left out of trade, and they certainly have lost a lot of jobs in North America to trade going to Mexico or to the southern U.S. from Canada.
What I want to ask about are those trade shocks, the CLC's perspective on the impact of NAFTA on working people in all of North America, and what you think could be done to strengthen or modify NAFTA for working people.