International Trade Committee on Feb. 1st, 2018

[Hassan Yussuff]

Angella, go ahead.

[Angella MacEwen, Senior Economist, Canadian Labour Congress]

There has never been a successful labour complaint under a free trade agreement that has resulted in the other country having to do anything. It has never been the case that the free trade agreement labour chapter has resulted in concrete change for workers in that other country. We have other venues to do similar things that we're doing in Colombia right now, for example through the ILO, that might result in the same outcomes as this FTA, but the FTA has allowed Canadian companies there to exploit workers right now. We have complaints against Canadian companies.

The ombudsperson who was announced is useful in that and far more useful than perhaps the current labour chapter we have in the Canada-Colombia Free Trade Agreement. Often small businesses don't have access to understanding the free trade agreement or to the enforcement mechanism in the free trade agreement, so usually large corporations benefit that have the lawyers who can fight the ISCS claims. Often we say it's not small businesses that benefit from free trade agreements.

[The Chair, Liberal, Mark Eyking]

Your time is up. We're going to move over to the second hour. We might have time for two more MPs.

Madame Lapointe.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much, Mr. Chair.

I would like to welcome the witnesses.

It is a great pleasure to see you here. You testimony is very interesting.

Mr. Dixon, as we said earlier, we already visited Port Saint John in September 2017. It was very interesting.

You said that potash comes primarily from Saskatchewan. Are there other products or merchandise that could be transported to increase the capacity of Port Saint John?

[Andrew Dixon]

Yes. In conjunction with the growth and the modernization of our WestSide terminals, we are taking a very targeted approach to specific commodity groups that we know are exported from central Canada or imported to central Canada from the Latin American countries.

We've always been very involved in forest products, but there are so many other things—consumer items, plywoods, veneers, hardwoods—that we're currently targeting. When I'm down in Brazil, Chile, and Mexico during the last two weeks in February, this is going to be some of the discussion with freight forwarders, and with the embassies, and also with the offices of the two major container lines, to uncover what those opportunities are and to develop a business development plan for the next couple of years to exploit the fact that we now have such great container connections down to that area.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

That's good.

[Andrew Dixon]

So yes, we see a lot of opportunity.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

You talked earlier about modernizing infrastructure, and you just mentioned it again. You also talked about rail and truck transport.

What percentage of merchandise that you export to Maine comes from Central Canada and Quebec? I would also like to know the percentage of merchandise shipped by truck and rail.

And I have another sub-question: is the rail capacity good?

[Andrew Dixon]

On the percentage of goods that are shipped, there are three regions I would note. One would be down into the U.S. It could be Maine and New England. Another would be regional: New Brunswick, Nova Scotia, Prince Edward Island. The third would be central Canada.

Because we have other sectors that involve different regions, a lot of our container business is very strongly based on regional cargoes in Atlantic Canada that are exported. We're just uncovering the opportunities with the new lines that are calling for import, but to have that business model and to have those container lines calling...it's very important to have connections to Quebec, Ontario, and beyond.

Every week we have shipments that are exported from and imported to central Canada as well. You mentioned Maine. That's a developing business. We used to do a very big business with forest products exporting from Maine through Saint John, but we saw a lot of closures in Maine forest product-producing mills, paper and pulp. A lot less is going offshore, but we have good opportunities in central Maine, and just over the border in Woodland, Maine, for exports through the port as well. We're working on those currently, enjoying some business, but we see that's going to certainly grow.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you very much.

[Andrew Dixon]

And what was the second part?

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Dixon.

I have a question now for the Canadian Labour Congress representatives.

You have not mentioned temporary foreign workers. A lot of produce is grown in my riding and surroundings. You talked a lot about workers' rights, but can you tell me how we could improve conditions for temporary foreign workers? What could be done? Many of them come from Chile and Peru.

[Hassan Yussuff]

We have said consistently since this program has been created that there's been consistent documentation about the abuse in the program. The government, of course, has taken some steps, but again we think we have to do more. The pathway to become a Canadian landed immigrant and to citizenship, I think, is one of the most positive developments. We think there are other aspects of the program that continue to be problematic.

As you know, the federal government authorized temporary foreign workers to enter the country, but of course when these workers get to Canada, they operate under the provincial jurisdiction. The provinces, then, are required to enforce their labour laws, employment standards laws, housing laws, and what have you. When there's no inspection of a workplace, we see consistent abuse. Most recently, it's been documented. When the story was exposed, workers who came to help build a temple were absolutely horrified with what was going on. Most recently, it was documented that some workers in a Burger King facility ended up living in the facility, not just working in the facility. There have been consistent patterns of abuse in the program.

I think the government has to be far more aggressive in what we have said. They should end the low-skill pilot program. There's never really been any demonstration as to why we need the low-skill pilot program. It was never originally part of the program. Where there are some challenges in terms of certain sectors.... We established a process as to how we can get workers to fill.... More importantly, if we're going to bring workers here to fill those jobs, we should also provide a pathway for them to remain and become Canadian landed immigrants and citizens going forward.

[The Chair, Liberal, Mark Eyking]

Sorry, we're way over time. I let it go for quite a while. It was an important question, but it should probably have been asked first.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

That was very interesting.

[The Chair, Liberal, Mark Eyking]

We have time for one more MP.

Mr. Dreeshen, you have the floor.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

Thank you to our witnesses today.

Mr. Hoback and I, a number of years ago, through ParlAmericas, had a chance to go to Colombia. We happened to be there when the talks were taking place in Havana between FARC and the government. We were talking to the various groups that were going over for meetings, such as the trade unionists, families of those people who had been kidnapped and murdered and so on. The discussions were very fulsome. With that, and of our Canada-Colombia Free Trade Agreement, where a human rights component was associated with it, I think our standing in Colombia is very strong. They recognize that we have been a great partner for them and with them. Of course, the imports and exports that we've had with Colombia over the years have helped them, and of course have helped us as well.

One of the main imports that Canada has from Colombia is coal—which has a certain irony—and petroleum products. Petroleum products are coming in at world price. We continue to sell ours because the majority of our petroleum products are landlocked at a discount, which hurts every Canadian when you look at the relationship that exists there.

I suppose one of the things that I would like to first of all ask Mr. Dixon is, how many oil cars can you take per day from Saskatchewan and Alberta in order to run through your facilities?

[Andrew Dixon]

On the capacity of oil cars, we had a tremendous number coming in—I'm going back maybe between one and two years ago—and they came into Irving Oil private facilities. I know they expanded that capacity during that time because there was a lot of activity that was coming by rail as opposed to vessel. I'd be hesitant to quote specific volumes. I know it's the Irving Group, and if they see that as being a good source of raw materials, then they have the geographic area to expand. They have shown that they'll put in the rail tracks and accommodate the rail.

CN has been primarily bringing that in, and they have a great system down through an interchange in Moncton. I would say that the capacity is not limited provided there's a bit of lead time and infrastructure can be put in place. I think today there's an overcapacity of infrastructure for railcars so there will be no difficulty with an increase in business coming over land as opposed to water right now.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

When you speak about that and that we're having supertankers coming in with oil from other parts of the world, what are the safety procedures? Are they different from the safety procedures that would have been used on the west coast for similar types of tankers?

[Andrew Dixon]

I can't speak to what the difference might be between safety on the east and west coast. I can't imagine that it would vary in any substantive way. Of course, we're part of the Association of Canadian Port Authorities and we operate with the same rules under the Canada Marine Act with 18 ports across Canada.

I would say that the safety rules are quite inconsistent. From a safety standpoint coming into Saint John, once again, I know that my colleague and the harbour master Captain Chris Hall would be able to speak to specifics, but we work very closely with Irving Oil and the crude oil tankers. We know what the activity is each day. The monobuoy, where a lot of the oil is discharged, is something that we monitor and the communication is very intense because of the potential for something to go wrong. Obviously, the impact could be very great.

If we get a small incidence of leakage in the system, it's detected right away. It's isolated, so everything is shut down and it's resolved. We have a very good safety regimen in the port and in the Bay of Fundy in total, with respect to oil cargoes. We've been doing it for a very long time.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

[The Chair, Liberal, Mark Eyking]

That wraps up our time and our first panel.

Again, I thank the witnesses for coming.

Sorry about the technical difficulties. When we got back on track, there was some good dialogue.

If you want a copy of our report in the upcoming months, it will be released and we're looking forward to that.

We're just going to suspend for a few minutes.

[The Chair, Liberal, Mark Eyking]

Good morning, folks.

This is the second portion of today's meeting. We're continuing our study of a potential agreement between Canada and the Pacific Alliance.

Welcome, witnesses. Thank you for coming.

If some of you are here for the first time, try to keep your briefs at least under five minutes so we can have lots of room for dialogue with the MPs. We have one hour altogether, so we're going to move along here.

We're going to start with the Canadian Chamber of Commerce and Madam Vega.

Thank you for coming, and you have the floor. Go ahead.

[Adriana Vega, Director, International Policy, Canadian Chamber of Commerce]

Good morning.

Thank you to the committee for conducting this study and for inviting the Canadian Chamber of Commerce to provide comments and our views on a potential agreement between Canada and the Pacific Alliance.

The Canadian Chamber of Commerce is supportive of preferential trade agreements as a means to expand Canadian exports and to reduce barriers to trade. As a trading nation, we know these are important tools to remain globally competitive and also to help our economy grow.

Specifically on the Pacific Alliance—and I'll try to keep my remarks fairly brief—the chamber is supportive of the government's interest in seeking associate membership for four main reasons, and I'll outline those for you.

The first one is that an FTA with the Pacific Alliance would upgrade, or modernize in a sense, the individual agreements that we have with each of the four Pacific Alliance members. While this might seem perhaps an unnecessary thing to do, it's quite relevant given the level of integration and coordination that the Pacific Alliance members are pursuing, particularly in areas like regulatory standards, for example, or trade facilitation. We know for a fact that the terms of the agreement under Pacific Alliance would be far superior for Canada than the current scenario. We see the existing bilaterals as a good foundational start for an eventual FTA.

The second reason is first-mover advantage. Canada has been an observer member of the Pacific Alliance for a number of years, since 2012, and that gives us an early start. But that window of opportunity is narrow. It's closing fairly quickly in the sense that last year Australia, New Zealand, and Singapore all joined Canada on the short list of countries seeking associate membership to the Pacific Alliance. We know that roughly 50 countries are currently observers in the Pacific Alliance. If we look at it another way, we see that Canada is at this moment in time the only G7 nation in that short list of countries seeking accession to the Pacific Alliance, and the only one in the hemisphere. That gives us a very early advantage and an opportunity, really, to play a significant role and even a leading role in the trade relationships in the Americas.

The third reason is strategic. Canada is right now in a privileged position, in that we have a CETA and we are still in the mix for CPTPP. What we're observing in trade rules globally is, in a way, a race to the highest gold standard for modern rules of trade. What's interesting is that the Pacific Alliance is in a way already there. It's very forward looking, and they have a high level of ambition when it comes to things like digital trade, for example, or new industries like fintech. It would be very valuable for Canada to be a part of that. We're seeing the competition or that race as accelerating. We see Japan moving very quickly on its deal with the EU, and the EU itself modernizing and closing a number of agreements, so it's important to keep those things in mind. Of course improved access and rules of trade are good for businesses already operating in that region. Beyond that, being a member of the Pacific Alliance or an associate member would give Canada a voice also in the accession of future members, which is, once again, a significant advantage.

The fourth reason—and perhaps this should be the most obvious one—is that the Pacific Alliance is an attractive region on its own. Put together, the four economies of the Pacific Alliance make up the equivalent of the ninth-largest economy in the world. It's growing fast, it has a large and young population, and it has taken significant steps toward economic reform. In fact, two of those countries are OECD members.

Really, if we look at it, we see there is no real reason we shouldn't pursue this agreement. It's just perhaps that there has been a lot on our plate, our attention has been perhaps elsewhere, and we've been preoccupied with other agreements, but it's quite an attractive region in its own right.

Arguably, with the exception of Mexico, some might say, “Well, they don't really represent a big chunk of our export markets; they don't really feature in the top five countries.” That doesn't mean they're not buying from elsewhere, and that's where an improved access would help. It would be an added tool in the bag, so that Canadian exporters could access or improve our share in that market.

Of course, trade negotiations are complex, so we have a lot on our plate. This one is still at a relatively early stage, and yet a lot of the work has already been done. We'll continue to observe how negotiations proceed. We often recommend to the government that we look for easy wins or aim for the low-hanging fruit, and this is exactly it. The Pacific Alliance is a modern agreement. It has solid foundations. It opens new markets with relatively low costs in an attractive region, and it supports our ambition to diversify our trade.

Overall, just to close, the chamber is supportive of this initiative.

[The Chair, Liberal, Mark Eyking]

Thank you for all the work you're doing, not only in our country but internationally. Thank you for helping us on our previous study we did on NAFTA. You were a big part of organizing our meeting in Washington with the chamber of commerce, so thank you very much. It went really well, and we had good dialogue there. Thank you, again, for your presentation.

We're going to move on to the Canadian Pork Council. We have Mr. Roy and Mr. Stordy.

Thank you for coming. You have the floor.