International Trade Committee on Feb. 6th, 2018

[Brendan Marshall]

I can speak to that to a certain extent.

MAC has developed what's called the towards sustainable mining, TSM, program. It's a corporate social responsibility management system, originally designed for mandatory implementation in the Canadian context. The program has since gained reasonably significant and increasing attention internationally. TSM is a system whereby companies set management systems in place in a variety of areas, such as tailings management, environmental performance, energy and greenhouse gas management, local community engagement, and biodiversity management, and report against the targets they set for themselves, and then are audited by a third party, the results of which are made publicly available. It's an accountable and transparent self-management system, and an award-winning one at that.

In recent years, given the success of towards sustainable mining as a program in Canada, other countries around the world and mining industries in countries around the world have taken keen interest. This year we reached a milestone. It's currently in practice in five countries on five continents. It's in place in Argentina presently. There are a number of other countries that MAC continues to liaise with and continues to provide briefings and information sessions, for them to assess whether this is a standard or a program that they feel is appropriate for them.

[The Chair, Liberal, Mark Eyking]

Thank you, gentlemen.

Mr. Carrie, you have the floor for five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

I thank the witnesses for being here.

I want to start with Mr. Marshall about competitiveness. I noticed that Canadian mining companies spend an awful lot of money overseas. My father's family was from Kirkland Lake. There's big mining up there. I remember a few years ago, when there was all this talk about developing the Ring of Fire. It's kind of sad that there's a certain amount of wealth created through the value added, in other words, when you take the ore out and then you produce steel and put it into cars and that whole line across. It seems that we may be missing out because of maybe certain government policies that we put on our own Canadian companies versus what's out there in the rest of the world. I wonder if you could comment.

I think that Canadians think it's very important that you operate in a socially and environmentally responsible way and with respect for human rights, when you operate outside our country. However, as far as the competitiveness side of things, if Canadian government policy gives you too many unique Canadian regulations or priorities, whether it's gender or labour standards, how does that affect your ability to compete in other countries? When our competitors, like the Australians and maybe the Russians don't have the same mandates, while you have to operate in a certain box, by Canadian government standards, how does that affect your competitiveness?

[Brendan Marshall]

I think there are a couple of points that I would offer for the committee's consideration for that question. The first is that Canadian companies have been operating internationally for decades. They've been operating in different continents around the world. There's a heavy concentration of Canadian companies that operate in Latin America. Since companies began operating and investing internationally, there have been significant policy changes across the federal and provincial context within Canada. What I'm underscoring there is that policy is not the only driver for investment competitiveness.

To come back to your point, our members currently feel that there's reasonably significant policy uncertainty in the Canadian context that is having an adverse effect on Canada's competitiveness as a destination for mineral investment. That said, two years into the government's mandate, we also believe that this is a decision year for a number of these areas where consultations have been ongoing and decisions will be forthcoming in the relatively near term. Other companies and MAC, or parties generally speaking, will start to get a clearer sense on the direction the government intends to go, in areas like regulatory reform, climate change, taxation, etc.

We're keenly monitoring these developments and engaging actively in these spaces. We're hopeful that the input we've been providing in these consultations has been considered. We're hopeful for a coordinated, thoughtful rollout of the key policies that we anticipate coming forward. We feel that a great deal depends on it.

As I mentioned, mining is a truly pan-Canadian industry. Companies operate from coast to coast to coast and in remote northern regions. It's a significant employer. It's a core driver of indigenous economic reconciliation. It's the largest proportional industrial employer of indigenous Canadians across the country. Particularly in that space, we would offer that the industry is a platform that the government can leverage to better achieve the goals that it has set for itself with respect to indigenous reconciliation. However, we also understand that balancing investment attractiveness and the ability of mining companies to do mining is an important piece in order to achieve that objective.

[Colin Carrie, Conservative, Oshawa, ON]

I feel a little sad, since I know that there are so many resources in Canada that we could be developing. We put a lot of attention on these trade agreements, which are important because we want to see you be able to compete around the world.

How many new mines are actually planned in Canada right now, off the top of your head? Do you have any numbers?

[Brendan Marshall]

The year 2016 was the lowest year in memory for new project descriptions being added to the Canadian Environmental Assessment Act. I believe there were two projects added to the list. In the collective MAC memory we can't recall a year where there was such a dearth of projects added to the project description list. It slightly improved in 2017 with four projects added. That's still relatively low compared to an average year.

I would offer two perspectives here. One is that companies operating internationally that are headquartered in Canada provide a significant amount of found wealth in the Canadian context: the TSX, the banking sector, the white-collar supply side of the mining industry with environmental expertise, tax expertise, and engineering expertise. Canada has the third-largest mining supply sector in the world, so the opportunity for those companies to benefit from Canadian mining companies operating abroad is significant.

[The Chair, Liberal, Mark Eyking]

Thank you, sir. You can catch up on this later. We're over a minute.

It was a really good question, but Mr. Carrie, don't be asking that question in the last 15 seconds.

[Colin Carrie, Conservative, Oshawa, ON]

I didn't.

[The Chair, Liberal, Mark Eyking]

That's fine. It was a good question, and maybe we can catch up on more of that information.

We're going to go to the Liberals now.

Madam Ludwig, you have the floor.

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

Thank you so much for your testimony this morning.

My first question is to Scotiabank. Certainly you have a large footprint in Latin America as a Canadian banking system.

How many of your customers or clients who are working here in Canada and are looking to export, work with you, let's say, in Mexico, Chile, or Peru as a point of contact? What services might you offer to that company on the ground?

[Jean-François Perrault]

I don't have specific numbers on that because it changes through time. One of our strengths, certainly as we pitch to clients, is very much our network in the Pacific Alliance and our ability to tap into that for our clients' advantage. That works both ways. It works when we deal with Canadian clients looking down south, and it works with our Pacific Alliance clients when they are looking up north, and in fact not only up north, but across Asia and Europe as well. That is a fundamental benefit we offer to our clients, and it's something that we market very heavily.

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

Thank you.

Just going further along here, Ms. Hannah talked about gender in terms of the chapter with this agreement. I'm wondering if I could get a comment from all three of you. I'll start with Scotiabank.

Our previous witness from Oxfam Canada mentioned that the gender chapter is important in a trade agreement and it's progressive, but it's not everything—we need to have more partners involved in that.

What role does Scotiabank play in promoting gender involvement, whether it's debt financing for Canadian women looking to export or women on the ground living within the Pacific Alliance and the services there? I'll ask the same question of the mining company and Ms. Hannah.

[Jean-François Perrault]

It's critically important to us, and I'll give you a very concrete example of this. In our operations in Peru we have a very large microcredit operation. It's actually a very profitable segment for us. However, as you probably know, microcredit tends to be a credit provided to women, whether it's provided in Latin America, Africa, or Asia. It's something we've invested very heavily in, it's something we're very proud of, and it's a very active part of our business in Peru in particular and in other parts of Latin America as well.

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

Mr. Marshall.

[Brendan Marshall]

I'm not an expert in the gender equity component of trade agreements given Canada's leadership in this space and it being a relatively new endeavour in that context. I can say from the mining industry's standpoint that in MAC and the broader Canadian context, representative organizations are actively seeking out ways to better incorporate, accommodate, and equip women to engage in mining at all levels. I believe that would be the same intention attitudinally within and outside of Canada's borders.

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

Mr. Marshall, I had a group come to my office several times in my constituency, advocating for an ombudsman in the mining community and talking specifically about human rights in the mining community.

What role is the Canadian mining industry playing within the Pacific Alliance countries in terms of increasing the standards for working and increasing the wages? You had mentioned that your annual revenues are around combined $80 billion. What is happening on the ground in those four countries that you can contribute to?

[Brendan Marshall]

Just as a minor correction, the asset value exceeds $80 billion. That's a very different number from revenue.

As for specific examples in those countries, I think it was said best earlier: Canadians expect Canadian companies to operate to a particular standard internationally. They're not looking for actors who act in bad faith. I think MAC members are willing to be held accountable and own their responsibilities and actions on the ground.

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

Ms. Hannah.

[Erin Hannah]

There's a tendency, I think, in the Canadian media to talk about the gender in trade agenda as something that's the Trudeau government's invention. I'd like to underscore that actually this agenda is very broad-based. We can look to a lot of partners and countries, particularly European countries but also developing countries—we can look to Iceland, we can look to the Netherlands, we can look to Côte d'Ivoire—and a lot of different intergovernmental organizations that have gender in global trade as the crux of their work. The Commonwealth Secretariat, for example, has been on this agenda for at least 10 years, and now the ITC, the International Trade Centre, which is a co-agency between UNCTAD and the World Trade Organization. We can look to the OECD. We can look to the World Bank. All of these organizations have a gender in global trade agenda.

Part of our job is to think about how we can demonstrate leadership to bring some coherence to the agenda that each of these different camps is pursuing at this time. Maybe in other questions we can talk about the specific initiatives that I think we can put in place.

[The Chair, Liberal, Mark Eyking]

Thank you.

We'll move over to the NDP now.

Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you to our presenters.

Ms. Hannah, I want to pick up on something you've written about in recent publications about the current international trade regime having a “status quo” problem. The developed countries talk about being progressive but end up returning to the status quo of these profit-led trade agreements, and ultimately are not successful in linking trade with sustainable development or human rights.

I wonder if you can speak to the committee about your thoughts on that.

[Erin Hannah]

There are lots of different ways to talk about the status quo of the multilateral trade system in particular. I think we are stuck in the status quo with respect to the status of the negotiations. I said in my opening comments that multilateralism is dead. Really, in the trajectory of multilateral trade negotiations, multilateralism was a blip. We got a multilateral deal in the Uruguay Round, but that was really the exception, we're finding, as opposed to the rule.

When it comes to these broad-based agreements that have “one country, one vote” principles, where developing countries are able to link issues so that they get goodies in areas that are of their strategic interest, that's a rarity. That's part of our status quo problem in multilateral trade. More broadly, I think what you're talking about is ideologically, right? A lot of my research has looked at the role of different international organizations in helping disrupt the status quo, to think about ways in which we can put sustainable development, for example, on the agenda in a meaningful way.

Clearly gender is the new buzzword these days. I'm interested in where this idea of gender in global trade came from but also in its potential to bring about real, meaningful social change. I'm a pessimist, I have to say, with the initiatives that are currently under way. Partly that's because I'm thinking pragmatically about what's been done in other areas, with things like inclusive trade, and microfinance before that, and sustainable development to date. We're very good at changing up the discourse but very bad at following it up with substantive policy change. I hope this is an area where we can do better.

[Tracey Ramsey, NDP, Essex, ON]

Yes. I think we hear that pretty consistently here at the committee. We talked about human rights, and certainly in the Colombia agreement we heard that the provisions there have not been effective. We're talking, of course, about NAFTA, labour....

You brought up an important point, something that I try to raise as much as possible. It's about identifying and providing support to those who are negatively impacted by trade. Working people are an afterthought in trade agreements. When they are negatively impacted, there seems to be a distinct ignoring of that complete fact: like, let's pretend it's not happening. I think we need to address those who are left behind by trade.

I'm wondering if you could speak further to that.

[Erin Hannah]

Overwhelmingly we've put attention on women entrepreneurs in the gender in global trade agenda. That's important. It's very important. But the lion's share of women in the developing world work in the informal economy. They're wage earners or they're entrepreneurs in the informal economy.

We don't have very good tools for assessing the impact of all sorts of things in the lives of women working in the informal economy, but particularly trade. You've probably come across this, but the OECD has done a great report, one of the best reports, on the status of women in the Pacific Alliance. However, they are unable to come up with good methodological tools to study the impact of proposed trade deals on women who are not in the formal economy.

That raises much bigger questions, though, about whether the objective of these initiatives is to bring women into the formal economy, to transition women out of the informal economy into the formal economy. It raises a whole host of other issues. I think it's important to think about how that would change these women's lives. We have a data problem, but we also have an ideological problem.

[Tracey Ramsey, NDP, Essex, ON]

You mentioned the investor-state provisions and called them potentially socially regressive. We see countries like India removing these provisions from all of their trade agreements.

Can you speak more broadly about what's happening globally around the removal of these provisions?