International Trade Committee on Feb. 19th, 2020

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lewis.

We'll go on to Ms. Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

Thank you, Mr. Geist. Thank you, Ms. Marsden and Mr. DiCaro.

My question is for Señor de la Cueva.

[Member spoke in Spanish]

[English]

You discussed a lot the importance of some of the labour provisions that are found in the new NAFTA, and I want to touch on that in greater detail. In particular, as you know, there is a requirement now that almost half of automobile parts be made by workers earning at least $16 U.S. per hour.

We heard from Mr. Angelo DiCaro just a few minutes ago on that point, but from your perspective in Mexico, does this level to some extent the playing field for auto workers in North America? Do you think this is a good thing for both Canadian workers and Mexican workers?

[Hector de la Cueva]

Thank you for your question. I'll try to answer in my very bad English. I apologize for that.

We think, in the auto workers' independent unions in Mexico, that this provision could not help us enough in Mexico. Why? Because less than 1% of the workers in Mexico work in the auto industry, and their salaries are very far from $16 per hour. It will be a long time before any factory in Mexico will pay $16 per hour. This provision will not promote a Mexican salary increase. Even the labour chapter is not enough to promote an increase in the Mexican salaries. To put the $16 per hour, really, that means nothing in Mexico, because we are really far from getting that salary. At least there are regional strategies for motivation to get to the top, the labour conditions and the salaries. It happens exactly to the contrary in NAFTA here, which motivates them to dump Mexican salaries and put pressure on the U.S. and Canada to lower wages.

To answer very concretely, I think this provision for $16 per hour could affect jobs in Mexico, but certainly would not promote Mexican salary increases. To attack the social dumping, we need other provisions to really guarantee that the Mexican salaries could increase, including in the auto industry. This provision could affect jobs in Mexico, but it will not put pressure to increase the salaries.

I don't know if I was clear.

[Rachel Bendayan, Liberal, Outremont, QC]

Yes, perfectly clear.

I'm not sure if you have any additional comments from the Canadian perspective.

[Angelo DiCaro]

I agree with Hector. We've been consistent in understanding what that $16 provision will be.

I also want to clarify, so folks aren't left with a misunderstanding. Despite the fact that it signifies in the text of the agreement that this is a minimum wage of $16 U.S. per hour, that is not what is being promoted in the new agreement. If you read the footnotes to that clause, somehow a minimum magically got turned into an average in the footnotes. We're talking about an average salary of $16 U.S. per hour, which is about $21 Canadian, and they're in the uniform regulations. We'll find out exactly who's going to be included in that calculation. There's a lot of strange wiggle room being created in this, and we're paying very close attention to how that's going to shake out.

The intent of that, to be honest, was about creating a fail-safe on more component-part work moving from higher-wage facilities in North America to the low-wage ones. It was never intended to be about Mexican transmission workers or powertrain workers making that amount of money. As we said, the real reforms that are going to have an effect on collective bargaining and freedom of association will provide more of a lift to Mexican workers and independent unions to fight for those stronger wages.

[The Chair, Liberal, Judy Sgro]

Thank you.

I'm sorry, Ms. Bendayan, your time is up.

We'll move on to Mr. Savard-Tremblay.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

As is customary, I'll begin by thanking you all for being here. Thank you for coming. We are very glad to have you. Despite your no doubt busy schedules, you've made yourselves available to answer our questions.

Your presentations dealt with very different sectors. They were certainly diverse.

In discussing this agreement, we haven't heard much about the sugar industry or the digital sector. My question, then, is for Mr. Geist. Our interpreters do a great job, but it's not always easy given the fast pace of the discussion in many cases. I'd just like you to clarify something for me.

We've heard about various data collection scandals involving different companies. We know that, despite everything, the trend is towards liberalized digital trade, which is what you talked about in your presentation.

If we take a closer look at digital giants such as Google, Amazon and Facebook, we realize that their workforces are actually quite small, much smaller, in fact, than that of the automobile sector at one point in time. Nevertheless, the digital issue goes way beyond those who work in the digital sector outright. All companies have now made the digital transition.

Given the trend towards data collection and liberalized digital trade, can you tell us whether the current agreement favours increased data collection by big companies?

[Dr. Michael Geist]

It's quite clear that the digital trade chapter, in particular, is designed to liberalize digital trade further. It won't come as much of a surprise that the template used in this agreement, which is similar to the template that we saw in the TPP and some other agreements, has its origins largely in the United States. It's the U.S. that has pushed for particular provisions.

What is perhaps most striking to me is that there are certain provisions that are optional, in the sense that all countries profess to say they are trying to move in a certain direction, have a certain amount of privacy protection or consumer protection and the like. However, where you see actual requirements, those are areas, I would argue, where there are some limitations in terms of our ability to establish full data sovereignty, for us to establish some of our own rules.

The best examples are the ones I provided in terms of data localization, requiring the information to be kept local, or restrictions on data transfers. Another interesting one, for example, that ties into your questions around the large companies, must be around algorithms. We've seen a lot of emphasis lately on seeking greater information about the algorithms that are used by Facebook, Google and other companies to determine how they are making some of their choices with respect to advertising and the like. There are restrictions in this agreement on our ability to compel disclosure of algorithms.

On many of these issues, there are good reasons for some of those provisions, but there is no question that Canada's ability to regulate in the digital space will be circumscribed by this agreement. We've effectively agreed to certain provisions in this agreement that will take certain policy options off the table down the road.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In other words, because the agreement limits the government's policy-making power, the digital giants and big companies could collect data for commercial use.

[Dr. Michael Geist]

Realistically, those organizations are already collecting, and we already have privacy rules. I think everybody recognizes that those privacy rules are out of date. That's where, in a sense, there is the potential for some friction. We have, on the one hand, Navdeep Bains, the ISED minister, who has made it clear that there is a desire to update Canada's privacy laws. I think there is a general sense that we are in desperate need of that. Part of the problem we may face under this agreement is that some of the policy options that we would have, in terms of trying to upgrade our privacy laws to make them more effective and relevant in the digital space, might be limited by some of the things we have agreed to within this agreement.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

You said that any new rules or laws would be limited, despite the government's pledge to make such changes.

In your research, have you explored ways to limit the damage in the event that the agreement is ratified?

[Dr. Michael Geist]

It's a great question. I think it depends a little bit on the issue. As I highlighted in my opening remarks, on the issue of facing significant retaliatory tariffs on anything from steel to dairy—or perhaps even sugar, who knows—in theory, the U.S. could target whatever they want to target as retaliation. To me, that sends a strong message about some of the cultural policy proposals we've seen, particularly coming out of the Yale report. Frankly, I think they ought to be avoided. I think they're highly problematic, and they make us very vulnerable in that respect.

On how to address some of the potential privacy concerns that may arise as part of this, I think there is some room to navigate. It's not that we've given up everything with respect to our ability to enact new privacy laws, but it will be unquestionably more challenging if we want to move towards some restrictions on data transfers for highly sensitive information or if we say that very sensitive health information has to remain within Canada. We'd have a very hard time doing those kinds of things under this agreement.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

I want to follow up on a couple of those questions. In particular, with respect to data localization, part of our concern when we're talking about the United States is that they have the Patriot Act. One of the incentives for data localization requirements for Canada would be to ensure that Canadians' data isn't covered by the Patriot Act.

I wonder if you want to speak to that a little on the level of individuals, but also on commercial information that we may not want to have stored.

[Dr. Michael Geist]

It raises an interesting point.

People may recall that this particular issue arose nearly 20 years ago, when the Province of British Columbia was seeking to outsource some of its health information. That health management information was going to go the United States, and there was concern about the applicability of the U.S.A. Patriot Act.

I would say that in the current environment, it speaks to a broader concern. If we think of a spectrum of privacy safeguards around data, with the Europeans and the GDPR having some of the strongest rules, the U.S. in many respects is often viewed as having the most lax rules. They have fairly weak rules. In fact, this agreement builds in the ability for the U.S. to continue to have fairly weak rules without widespread privacy rules. Effectively, as little as telling people what you're going to do with their information, as long as you abide by what you've told them, is good enough. It doesn't set a particularly high floor.

I think there are concerns about the transfer of data into a jurisdiction, notably the United States, where some of those safeguards may not be as strong with respect to privacy. There are questions about the ability of our own Privacy Commissioner to ensure that Canadian privacy rules will be applicable, as well as real doubts among many Canadians about whether their personal information will be appropriately safeguarded in that kind of environment.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

Mr. DiCaro and Mr. de la Cueva, we talked a little about how some of the new provisions may help certify authentic bargaining units in Mexico. I wonder if you can speak to how that might work and what work needs to be on the Canadian end in order to make sure that the potential of those provisions is realized.

There's been some discussion about having an advisory committee for the government here, composed of people such as you who have experience in labour but also from the business side who have had successful labour relations, in order to provide the best advice from our end and to share best practices. That's one example of what we might do in order to ensure that we're getting the most out of this agreement on that front. I'm curious to hear what else we might do or how we might do that better.

[Angelo DiCaro]

I can make a few comments, and then Hector can fill in. I feel odd giving you this answer with Hector listening in.

I don't know that anybody is holding their breath. In my remarks, I referred to the language of the text of the agreement as being somehow like the magic wand that's going to fix these problems. There's going to be a lot of work ahead, and it's going to be very complicated. There are two interesting features of the new agreement. One is the annex that sets out all these rules around freedom of association and freedom of collective bargaining. Essentially, the language of the annex says that, within a four-year time period, facilities that have a collective agreement will have to undertake some sort of review and a democratic vote for their agreement, and also for their union executive. As Hector referenced, in the case of these so-called protection contracts, those things just don't happen. Those things are not subject to democratic oversight. In a lot of cases, we've heard that there are workers in Mexico who are members of unions and who can't get access to a collective agreement. That's just the nature of the beast down there. Having that in place is one thing that has to be monitored.

The other interesting thing about it is the rapid response mechanism. Where there is a potential violation, there is a fast, expedited approach to making sure that those rights are being upheld, and they'll send in independent investigators to make sure that they're upheld. To move that along, from Canada's point of view, there is a process of determining what is a good-faith complaint. Anybody could say anything about problems happening in Mexico: “You need to investigate that” or “That's a dispute.” Not all of them will be. It is vital to have a clear, streamlined and inclusive approach to getting this information and generating evidence, to make a very specific use of the rapid response mechanism. Canada is obligated under the terms of the revised agreement to do something like that, and we're waiting for details on how it will work. I think that's a good step.

Maybe Hector will have more to add to this.

[Hector de la Cueva]

Thank you.

As I said, in Mexico these protection contracts mean that some kind of mafia will have these contracts. In Mexico, there is a lot of mafia. There is not only the mafia from drug cartels; there is also mafia in labour, and that means protection contracts. The mafia is doing business with the companies. Many Mexican workers work for Canadian and U.S. companies, so if the Canadian and U.S. companies refuse to do business with the mafia, it would help a lot. If the governments encourage, through the new treaty, different tools so that the companies don't do business with the mafia, which doesn't represent the workers but has secret contracts with the companies, it could help a lot to make the Mexican workers free.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. de la Cueva. I'm sorry to interrupt, but everybody's on a timeline. Perhaps you can finish that thought with one of the other members as we go forward.

Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madam Chair. I want to thank the witnesses for being here.

I want to start my questions with Dr. Geist. I remember that back in 2007 you did a lot of work with us on the industry committee for copyright and digital locks and all that stuff. When you look at the issues you're bringing forward, you see that a lot of them went under the radar with this agreement, and these issues are extremely important for Canada's future and our competitiveness.

I believe you've studied in the U.S., the U.K. and all these different parts of the world. Just out of curiosity, did the government use you as an expert when we were dealing with this chapter? Did they consult with you at all for this part of the agreement?

[Dr. Michael Geist]

The government opened up consultations for all Canadians. I participated by providing a submission, and in fairness, I participated especially around the CPTPP on a couple of occasions, including in a town hall with Minister Freeland, who was the international trade minister, but no, I wasn't working specifically with the government under an NDA or anything like that.

[Colin Carrie, Conservative, Oshawa, ON]

All right. As I said, on the things you brought up, I don't really know where to start in terms of the copyright side of it, and the privacy and data localization, but I do want to delve into the copyright regulations. You said that because of the lack of harmonization between the countries, if we're looking at our future competitiveness.... Are you able to give us an opinion as someone who is an expert in the area?

What kinds of effects do you see this having on us here in Canada when it comes to our competitiveness with other jurisdictions such as the U.S. in terms of their businesses and content creators? Is there anything in this agreement that is going to encourage people to invest in Canada, for example, versus having them say, “You know what? I don't want to deal with it, so I'm just going to go to the States”?

[Dr. Michael Geist]

That's a really interesting question. I think that especially in the digital environment this touches on a range of different issues, including on the digital trade chapter and on copyright.

On copyright, I would say that the work we did back in 2007 leading up to the Copyright Modernization Act in 2012, as well as the copyright review that was conducted extensively by the industry committee last year and into that period, gives us pretty good sense of where Canada stands. I actually think Canada has been pretty innovative when it comes to some of our copyright rules. They meet international standards, but at the same time many of them have been fairly forward-looking.

The issue around term extension is an interesting one, because it's bipartisan, in the sense that we had successive Conservative governments and, later, Liberal governments that all rejected the notion of extending the term of copyright. The Canadian position was that we needed to meet the minimum international standard that's established through something known as the Berne Convention. This is something that we do.

The U.S. has long pressured us to extend the term of copyright. That extension in the United States is often referred to as the Mickey Mouse term extension, because Disney actively pressured for that term extension to keep Mickey out of the public domain. We took a look at that issue in Canada and said that we wanted to ensure that our artists are well compensated, and we also wanted to ensure that consumers don't overpay. We wanted to ensure that there are appropriate levels of access in trying to strike that balance. Not extending the term of copyright was how we tried to do that.

I can't put myself into the negotiating room to know why it was that after decades of saying no to term extension we finally agreed to it in this agreement. What I do know is that the best way to try to at least salvage a difficult and I think bad situation with respect to term extension is to take advantage of this transition period that the government did negotiate.

At least with respect to some kind of registration requirement, I think it offers up the prospect that for a small number of works, for those works where there are rights holders who say they want to be competitive and want to ensure that they have as long a period of time as possible for protection, they'll make that registration. They'll get the extra 20 years, but for an enormous amount of Canadian heritage, for other works, those will enter into the public domain in accordance with the international standard.

As for what we ought to be doing, I think this committee ought to leave things alone in terms of where we are right now and recommend the registration process in keeping with what the industry committee said in the copyright review. We need to spend the next 30 months developing a registration process, which, much like some of the other issues we dealt with many years ago, other countries may look to and say that Canada provides a good example of how to strike that appropriate balance.

[Colin Carrie, Conservative, Oshawa, ON]

You also mentioned—

[The Chair, Liberal, Judy Sgro]

Your time is up for this round. Thank you very much.

Mr. Sarai, please.