International Trade Committee on Feb. 26th, 2020

[Bob Fay]

I think that there is one thing we do know: More data and more varieties of data are what is necessary. Canadian firms are competing with some multinational giants that already have these enormous data stores, and with the open data flows, we're reinforcing their market position. The question is this: What can we do about that? At CIGI, we're thinking about this.

I agree with everything Mr. Leblond said. There are ways to think about this and create our own data stores. There's a very important role for government here, too. Government can play an extremely valuable role in helping to nurture businesses and make data available to businesses. There's a patent collective that's about to be started in one particular sector. So, there are things that can be done. I think that we want to really push hard in these areas right now. As I mentioned, we want to use that six-year review period to help advance things that will be in Canada's interests as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir.

Now we will go on to Mr. Kram.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you, Madam Chair.

The committee is joined by the member of Parliament from Cypress Hills—Grasslands, Jeremy Patzer.

I'm going to be splitting my time with Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Michael.

My question is for Mr. Beck and Mr. Waugh over there.

Given where we are at with the softwood lumber dispute, can you elaborate further on the negative impacts it will have on the first nations that you represent, as well as for any who are looking to establish new logging rights and start up a new logging company? What is the outlook with regard to that?

[Mike Beck]

I'll let you take that.

[William Waugh]

The direct impact is on log prices. They factor in these costs that the lumber producers are having to pay—the tariffs—and they drive down the prices for domestic logs that are consumed in these mills and first nations are selling to them. A lot of these operations aren't viable because of this—a lot of the wood doesn't get logged; a lot of the wood sits; a lot of the volume still remains standing. As far as new logging operations go, on the coast of British Columbia there is more and more volume and tenure being awarded to the first nations as we speak. Currently, with the way things are economically, it's very difficult to start up a new business in the logging operation. If they reduce the tariffs and duties, hopefully that will increase log prices, and we can get some of these operations going.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Yes, that's what I had.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay, thanks.

How much time do I have left, Madam Chair?

[The Chair, Liberal, Judy Sgro]

You have three minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay, thank you.

My question is for Mr. Fay and Mr. Leblond.

Could you describe a little bit what some of the high-level public policy options are that we have in front of us to regulate digital platforms such as Facebook and Google? How would the new NAFTA agreement limit policy-makers' options?

[Bob Fay]

Do you want to start?

[Patrick Leblond]

I can start.

This is ongoing thinking, but I've already mentioned this idea that—as was mentioned in the panel review for heritage—if we were to treat social platforms as broadcasters and wanted to regulate their content, for instance, and make them liable for what they publish online, whether it's from news operations or others, then the question is whether that would be challenged by those companies through CUSMA and article 19.17. We would have to see. Of course it would have to be a dispute that would be launched by the U.S. government. There is no investor state in this case; it would not be the companies themselves. In that case, if there was a dispute, then a panel would be set up and would have to decide on these things. It's very difficult at this point to know where that panel would decide.

If it were to rule in favour of Facebook or those kinds of social platforms, it would immediately undermine what Canada would be doing. To me, that's problematic in a way. Are we potentially constraining ourselves when it comes to that?

We talked about privacy of individuals. Down the line, if we wanted to impose more data localizations, for instance, both at the federal level or even at the provincial.... The Quebec government is talking about moving in that direction. What happens if, for example, Quebec says that it wants to do more data localization—not for government purposes, but for private business? Then U.S.-based companies come and say that they think this goes against the agreement that allows free data flow between our two countries. If we were to challenge this and if a panel was set up and they found, for instance, that those regulations or laws can't apply to U.S. companies, then what happens? It creates an even bigger problem. Quebec could continue doing so, but the federal government would have to pay some form of compensation.

[The Chair, Liberal, Judy Sgro]

Mr. Leblond, I'm sorry I have to stop you there.

Mr. Dhaliwal.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Madam Chair. Thank you to all the presenters, particularly those from beautiful British Columbia.

I know that the softwood lumber dispute is a key issue to you fellows. As a committee here in the previous Parliament, we did study this particular issue, when witnesses were able to come in. At every opportunity that I personally found, I talked to the minister about this as well, so we could keep it on the forefront. The minister has always said that she has always been in contact on the other side—the U.S. side—when it comes to this dispute and dispute resolution.

Mr. Rielly, you just touched upon the previous chapter 19—now the new chapter 10—and making sure that in every agreement we sign in that regard has to have robust and fair dispute resolution in it.

Do you have any comments?

Is this chapter 10 going to help companies like yours?

[Andy Rielly]

Yes. I think it's not just going to help our company. It's essential even for bigger companies like Mr. Kalesnikoff's and the independent companies that are processing things across the country to have something that they can rely on to resolve this. We sometimes just can't count on the big companies to get behind the idea to resolve the issue, or the provincial governments to get the direction, from time to time, from the big companies to do that.

In a perfect world, I would suggest that it would be great to have softwood lumber included as one of the items that is going to be in the USMCA. In my experience over the years, having been through this since 1984, that is just not a practical thing to hope for because on the other side of the border you have a large group of people that doesn't want to have this resolved and have a free trade environment. That's always been difficult. That's essentially why I think the dispute resolution system they have in chapter 19 going forward seems to be pretty much intact. That's why I would say that the small and medium-sized independent companies would say the USMCA needs to be ratified, so we can continue that.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

My next question goes to Linamar Corporation. Linda, you mentioned that 70% of your business is in auto parts, and 30% in others, which also includes equipment manufacturing. Does this new agreement, CUSMA, help when it comes to equipment manufacturing, in particular, to the companies you represent?

[Linda Hasenfratz]

You mean outside of the auto business? Are you wondering about the impact on our industrial businesses?

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Yes.

[Linda Hasenfratz]

We don't see any negative impact from the agreement for either our agricultural harvesting equipment business, headquartered out of Winnipeg, or our access equipment business Skyjack, headquartered here in Guelph. We don't see any downside risks for either one of those businesses.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Basically, it's a win-win situation for you in both.

[Linda Hasenfratz]

Yes.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Do I have time?

[The Chair, Liberal, Judy Sgro]

Yes. You have 50 seconds.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

I'm going to go to British Columbia, or to both of you if you want to make a comment on chapter 10, which used to be chapter 19.

[Ken Kalesnikoff]

Sure. I agree with what Andy said. If we don't have that, what do we have? That's the problem. The WTO, for us, seems to have weakened. We need a mechanism. We must have something when these unfair threats are made, some way of challenging them.

We're dealing with a massive engine in the U.S., with the softwood lumber coalition there. They have a lot of power. They're not letting up and they're not going to let up, as we all know.