International Trade Committee on April 12th, 2016

[Richard Garneau]

My view on this, which I shared with Madam Freeland, is that I think the U.S. wants to have support from Canada on the TPP.

I think we should remind the U.S. that if they want to have the support of Canada, they should basically abide by the rules of NAFTA and make sure that NAFTA—the free trade agreement we have among Canada, the U.S., and Mexico—works, and then we're going to give Canada's support on the TPP.

But we know that they are in violation now. Why should we support? I think we have a tool. I think Canada really has a very good opportunity, and I think Madam Freeland has a lot of tools in her tool box.

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

Mr. Poitras.

[Gaston Poitras]

I'm just going to say that I've been involved with this file for over 25 years. From what you read, the American coalition and the U.S. commerce department are not going to go away.

The best thing Canada can do is to try to negotiate a deal, because if we don't negotiate a deal it simply means that we're going into litigation, and we all know how much that's going to cost. From my perspective, if that's what's going to happen, the only group that's going to be making money in the lumber business is the lawyers—no offence to any lawyers in the room, okay?

[Voices]

Oh, oh!

[Gaston Poitras]

Really, at the end of the day, our position in the maritimes is that we should negotiate. We should try to make a deal, and the best deal for Canada. Understand that.

[The Chair, Liberal, Mark Eyking]

Thank you.

We have only two minutes left and we're going to give them to Mr. Ritz.

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

Gentlemen, thank you so much for your insight today.

I totally agree with you on the dispute mechanisms. They always have to be done in a timely way and they have to be enforceable. We saw that with the U.S. on country-of-origin labelling. It's a David and Goliath situation, but we can't back away from it.

You're absolutely right, Mr. Poitras. Litigation is not the way to go, because no one makes money. You lose your trade advantage and you lose your ability to trade, simply because the U.S. turtles up and drags you through the courts.

Mr. Tremblay, you made the point earlier on that the provinces had option A or option B, and once they chose it they were locked in for the term. Is there something on flexibility that should be negotiated the next time, so that as you make adjustments in your stumpage fees and so on, you should be able to use either option A or option B?

[André Tremblay]

I think so, yes. A certain measure of flexibility should be built in to account for each province's distinct interests. That's what I was trying to point out earlier. It is entirely conceivable for Canada's western provinces to have an agreement that is based on principles that differ from those in the agreement with the eastern provinces.

We represent the Maritimes, Ontario, and Quebec. We put forward considerations that are absolutely critical to any agreement we are party to. But, yes, there is no reason why different considerations could not be included in agreements with British Columbia or Alberta.

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

Yes, times have changed. There's no doubt about it.

There's one other point, too, Mr. Garneau. You were talking about the loss of jobs, and of course we all want to see a strong, vibrant industry, but some of that rationalization was done by the industry itself with the housing collapse in 2008, and of course with the changes to the pulp and paper industry. It's not just the softwood lumber agreement that drove some of that rationalization, and it's always unfortunate when people lose their jobs.

How much of a factor is the variance in the Canadian-to-U.S. dollar in the push-back from the U.S. side?

[The Chair, Liberal, Mark Eyking]

Would you please be brief and wrap up?

[Richard Garneau]

On the costs, I'd like to make a comment. When you compare costs to litigation, I think the industry paid $2.3 billion in export taxes, plus the $1.4 billion Canadian, okay?

On the other point, when you look at the job losses, let's take the example of Ontario. Fifty per cent of the production has disappeared, and Ontario is right in the middle of the country and the only market it has is the U.S. If you don't have free trade and don't have access to that market, and you're hit by a tax and a quota, you don't invest.

So sure, in five, ten, or fifteen years the coalition will basically succeed in shutting down the industry in Canada. We know what happens when you don't invest. I think that's the reason we're insisting.... A deal is always good, but with NAFTA I think we have the tool that we need to have access to this market, as long as we have fair trade. I think we have fair trade in Canada and basically we need to have that recognized by our friends south of the border.

[The Chair, Liberal, Mark Eyking]

Thank you, and thank you, Mr. Ritz. Thank you, gentlemen, for coming and giving us the briefings, and I thank all committee members for all of the good questions today. We had a very productive day.

That ends our meeting.