Evidence of meeting #12 for International Trade in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cusma.
A video is available from Parliament.
4:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
You say that the agreement does not contain firm climate commitments, but does it set out some standards on related elements, for example air, water and land quality?
4:10 p.m.
International Policy Analyst, Climate Action Network Canada
Yes, it does. There is a desire to reduce air pollution. As I mentioned earlier, there are different provisions with respect to fishing subsidies, but no specific provision forces states to meet specific commitments for air pollution. With the exception of the proportionality provision, there are no provisions that tackle the issue of oil subsidies.
4:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
All right.
With respect to disputes or problems, you seem to be pleased that Chapter 11 on investor-state dispute resolution has been removed.
4:10 p.m.
International Policy Analyst, Climate Action Network Canada
Of course I am pleased, and for two reasons.
Chapter 11 fostered a serious lack of transparency. Since you studied it, you know that this chapter made it possible for companies to abuse in the extreme their rights vis-a-vis governments. Its elimination is a win that I am very happy about. We worked on this with unions and other groups.
However, it is not enough. I know that the NDP member has already asked for greater transparency when negotiating future agreements. I am pleased about that, but it shows that other issues need to be resolved in connection with how Canada engages in, signs and ratifies other trade agreements.
On the issue of the arbitration system, I would say that there is cognitive dissonance on the part of the Government of Canada, which chose to withdraw this mechanism when dealing with the United States, but continues to value and promote it when negotiating trade agreements with other partners.
4:10 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Peréz.
Your time is up.
We'll go on to Mr. Blaikie.
4:10 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you.
First of all, thanks to all of our witnesses for appearing here at committee today.
I want to continue with Mr. Peréz for a moment.
I think you alluded to some examples, so I'm wondering what some of the kinds of mechanisms are that Canada might look at advocating for in trade agreements that might be able to deliver a concrete impact on the environment. In particular, we know that the United States is not a signatory to the Paris Agreement, and that's something we would like to see in the agreement. What are the kinds of mechanisms that we ought to be pitching to our international partners to try to tie environmental goals to economic goals? I think that's crucial to success on the environmental front.
4:10 p.m.
International Policy Analyst, Climate Action Network Canada
Thank you, Monsieur Blaikie, for the question.
I think a lot of the context for the lack of climate provisions within CUSMA relates to the [Technical difficulty--Editor]. We need to be aware of that. That said, there are ways for Canada to address this question at the domestic level.
I know that members have been asking for information on the economic impacts of CUSMA and how CUSMA impacts specific industries, and the same applies to climate.
As I mentioned at the beginning of my comments, it might be important to specify how CUSMA ends up favouring or maybe not favouring climate friendly groups if CUSMA is able to encourage the exchange of goods that help to reduce carbon emissions over time. This is something that Canada could engage in at the domestic level. That is just for the context of CUSMA.
Internationally speaking, the inclusion of binding commitments in trade agreements is the first step for Canada and partners who sign trade agreements with Canada to respect their commitments under the Paris Agreement. Why is this necessary? Because all partners that signed the Paris Agreement do this at the domestic level. Nationally determined contributions are domestically decided and agreed on. There's no issue of sovereignty in the kinds of things that Canada could be wary of because other countries might be pushing these to us because Canada's climate commitments are domestically based. Including these binding commitments so that both Canada and the other partners respect their nationally determined contribution could be a first step.
4:15 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Being mindful of the cost of paperwork and all that, I couldn't help but listen to one of our other witnesses who was here at committee talking about products coming up from Texas being sold at prices that undercut ours—but, of course, the other cost to something like that is the environmental cost of shipping pipe from Texas instead of buying locally.
It seems to me that, when we talk about environmental provisions and having some kind of carbon budgeting or a way of trying to account for that environmental cost, there are real issues about not having reciprocity on the pricing side, but it seems to me that there is also the issue that we don't want to be incentivizing people to get products from farther away when there are good local alternatives. There are environmental costs, and trying to work with countries to have some way of assessing those—at least for certain kinds of products or above a certain threshold—might be the kind of mechanism that we're talking about when we're talking about trying to incorporate environmental measures into a trade agreement.
I don't know what you think about that, or if you have some other concrete proposals, but I'd be glad to hear them.
4:15 p.m.
International Policy Analyst, Climate Action Network Canada
What you mentioned is a first step. You might remember, for example, that when Ontario wanted to prioritize its own renewable energy products, Ontario got sued. I think one key element that we need to understand is that if we don't address this properly—the way you explained it is very clear—as we continue to commit to climate targets and to reduce our emissions, we're going to be forced to buy goods that allow us to reduce those emissions. If that is not properly addressed in trade agreements, we're already allowing for future disputes to take place, because we don't have the necessary mechanisms to let these products come to the country or, for example, as you said, encourage local renewable energy products.
The current CUSMA continues to give corporations handouts and the ability, for example, to modify laws and regulation, and that could have an important impact on the evolution of the renewable energy industry in Canada, the United States and Mexico.
4:15 p.m.
Liberal
4:15 p.m.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Thank you very much, Madam Chair.
Thank you to all the witnesses for joining us today to share your perspectives.
Mr. Tully, I'm particularly interested in your experiences in bidding on U.S. government contracts. Could you walk us through the process that your company goes through when you're bidding on a U.S. government contract as opposed to a Canadian one?
4:20 p.m.
Executive Vice-President, DECAST
Typically, we get approached by a constructor or a large engineering firm asking us if we would provide a quotation into a particular job. I would say, for 99% of the jobs we've been asked to quote in the U.S., at the end of the day our bid wasn't taken, simply because they couldn't verify whether they could accept the product because of the uncertainty put out there by these policies that exist in the U.S. It's a real, real struggle for us.
Where we have been successful is when we partnered with local U.S. producers and kind of subsidized what they were producing into a project. Other than that, we really have not been successful.
4:20 p.m.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Which policies of the U.S. in particular are the most problematic for you?
4:20 p.m.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Okay. Are you experiencing this at the state level too or just the federal government level?
4:20 p.m.
Executive Vice-President, DECAST
—because when you go to the municipal level, a lot of the time you end up dealing with people who believe that buy America has to mean built in America, sourced in America. They don't really understand the fine mechanics of it, that it's the raw materials that are used within the product that have to be sourced from the U.S.; for example, the steel that's used in the product.
We could theoretically meet the requirements, but by the time everyone figures that out and you file all the necessary paperwork, and you're sitting in a three- to four-week bid process, it's not going to happen.
4:20 p.m.
Conservative
Michael Kram Conservative Regina—Wascana, SK
All right. You've talked about your idea of reciprocity with domestic content preference. Were you planning that on both the federal and provincial levels in Canada? Could you explain what you had in mind for how that would work?
4:20 p.m.
Executive Vice-President, DECAST
A lot of what we've done in the past is that we've been focusing on the FCM and trying to deal at that level and saying push for reciprocity as you did a decade ago when you were able to get around these policies and Canadian products were accepted.
We're not a massive exporter. We make concrete. Concrete's big and heavy. It's a tough thing to export, so our focus would be in the northeastern U.S. when we would sell stuff. We've gone as far south as Myrtle Beach.
When we talk about reciprocity, we just want to have the ability to go if we can. Right now we don't. Our market's being taken away from us in Canada by predatory pricing because it's open. I'm a strong believer in free trade. I've worked in 50 different countries in the world in my career, and I'm a strong, strong believer in it, but if you want to put some caveats on what you're considering as free trade, as the U.S. often does, then we should reciprocate and say that as soon as they drop theirs, ours are dropped. To me, it's a simple and effective way of ensuring that free trade is free trade.
I sat in front of Peel Regional Council back a number of years ago, and Hazel McCallion got up and she said, you know, there is no such thing as free trade and there never has been. That happens a lot of times because of these little side agreements that pop up, and they affect different businesses in Canada.
If there's any way within the new Canada-U.S.-Mexico agreement that some kind of understanding could be put in that, if you start putting these side agreements in, then we're going to reciprocate....
4:20 p.m.
Liberal
4:20 p.m.
Liberal
Rachel Bendayan Liberal Outremont, QC
Thank you very much, Madam Chair.
Just quickly, and with the greatest respect I have for the witnesses who have come before the committee this afternoon, I would like to make sure that the record is clear on the point that an overwhelming majority of Democrats in the United States—193 Democrats—voted in favour of this deal, and only 38 did not.
My question is for Mr. Jacobi of CanadaBW Logistics. Thank you very much for joining us today. If I understand correctly the nature of your business, you help local Canadian businesses expand their export operations. Is that right?
4:25 p.m.
Executive Director, CanadaBW Logistics Inc.
One of the challenges we have, being a border community, is that we rely heavily on interaction between Canada and the U.S. That has been our ideal place to export, because it's fast and it's easy. We can literally see the other country across the river in the Niagara region.
In these past few years, there's been a lot of uncertainty for us being able to ship goods or get contracts in the U.S. Through the Canadian consulates around the world, we've been helped to find other opportunities in other countries to export our products—those longer supply chains. We've relied too heavily on a specific path. We have to start building these other chains so that if something goes wrong, we still have other opportunities. It's the diversification that is necessary.
Furthermore, if this is ratified, the resulting diversification will allows us to develop partnerships and build bridges between the other trade agreements for us to have better access into the U.S. market with trade partnerships from our other pacts, such as CETA and the like.