International Trade Committee on Feb. 20th, 2020

[Drew Dilkens]

That's a very good question, and I love the city of Surrey as well, sir, so no disrespect to your community. It's a great community in Canada.

From an FCM perspective, we're all about community building and building cities and making sure that cities have the capacity to compete, not just with other cities in Canada but really on a global stage. I can't underscore enough, when it comes to large manufacturers like our largest employers Fiat Chrysler Automobiles and Ford Motor Company, we feel very privileged that they operate here and that they have operated in our city for a long time, but they are competing on a global scale. At the end of the day, they're looking at a whole variety of different factors: Some of which are under municipal control, some of which are under provincial control and some of course are under federal authority that could either help or hurt them. They're looking for certainty in business. They're looking for the path of least friction to be able to build their product—

[Randeep Sarai, Liberal, Surrey Centre, BC]

I get that part. What I'm particularly asking is, once a company has certainty and it knows it can grow and it has 16-plus years of security on a trade agreement, how does it affect your city planning? How do you commit to your housing strategies? How do you commit to development in your region? Does it help knowing that the businesses have a relatively solid pathway for the next decade to two decades to three decades? Does it help you plan the growth of your city as well?

[Drew Dilkens]

For many businesses, including the tool, die and mould sector here in my region, I would say absolutely it does. Most of them are small and medium-sized enterprises, so they need that certainty in order to be able to figure out what their expansion plans are and what kind of capacity they'll need, and of course that translates into what kinds of folks should be coming out of our local community college or the University of Windsor to be able to fill the skills mismatch that we see here. I talk to mayors across Canada, and this is seen in every community across Canada.

There is absolutely an interplay with the certainty provided in an agreement like this that allows us to then take away and work with other partners in order to make sure that all the skills exist, that the employers are here and that we can retain them, and that we can help them grow based on the forecasting and planning that they need to make sure that the right people are in place to satisfy their business needs.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you.

My next question is for Ms. Whiteduck of the AFN.

I want to thank you. It's good for us to know that our government engaged with the Assembly of First Nations and indigenous peoples on this trade agreement. I hope our government and every government thereafter does this for any future agreements.

You said that this particular CUSMA will help and is better for indigenous women. Can you elaborate on how it is better for indigenous women? I'd like to know. I have a riding that has one of the highest urban indigenous populations, and obviously 50% of them are women, so it would be helpful for me to know.

[Risa Schwartz]

Thank you very much for this question. We're both going to answer it for you.

Canada has now put more emphasis on gender-based analysis, so there is in CUSMA an emphasis also on women and making CUSMA more accessible for women. That, and the provisions for indigenous peoples, we feel, will specifically focus on more indigenous women. As well, there is as an emphasis on digital trade. The truth about businesses over the Internet is that you can't see who you are dealing with. Where women are really succeeding is online, where they're able to create businesses and not have to deal with some of the problems that have been inherent for females in business in the past. Many indigenous women are selling goods and services online. That's a way.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Kram.

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

Thank you to all of the witnesses for joining us here today.

Mr. Blydorp, I'm from Saskatchewan, so when I think of canola farmers and soybean farmers, I tend to think of my home province. It's nice to meet someone in that line of work from a different part of the country.

I wonder if you could comment a bit on the importance of the growing Chinese market for canola producers and soybean producers such as yourself.

[Leo Blydorp]

It's been a very big market and purchases of soybeans and canola have been increasing yearly up until the last year or two. They've had a major epidemic with African swine fever, which decimated their hog herds, so their requirement for protein and the other grains was diminished because of that. However, as a result, there was more pork being exported back to China. Hopefully they'll be able to get ahead of that swine fever and resume their own pork production, as much as I'd like to see it produced here, because these farmers buy grains and oilseeds from us, too. We see that hopefully growing, if we can resolve some of these other trade issues.

But, yes, the biggest market of our Canadian canola is China—or has been China.

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

There's a clause in the new NAFTA agreement that requires Canada to notify the United States if we are to enter into free trade talks with a non-market economy country. The United States can remove themselves from the new agreement if we were to enter into a free trade agreement with a non-market economy country such as China. I was wondering if you could comment a bit about what effects that may have on Canadian exports of canola to China if that were to happen or take place.

[Leo Blydorp]

It would be a big red flag, especially for farmers from the west. We only grow 50,000 acres of canola, and I think there's about 20 million acres of canola out west, so it would have much greater impact there. As I said, China has been the biggest buyer of canola and now that market's dried up a bit. European rapeseed production is down a little, so some more of our canola was going there. Some of our canola is actually being processed here and they're buying more of the processed product, which is probably good for Canada. Hopefully we get these issues resolved and we'll be on the same trajectory of increased growth going forward.

Canola is a small crop in parts of the northwest United States. Why would it even concern them that we sign some kind of an agreement with a commodity that's not of great interest to them, or has marginal impact on what they're doing? I understand that, yes, they could do something if they chose to do something; and hopefully they won't.

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

Thank you.

My next question is for Mr. Poirier and Mr. Arcand from the Canadian Manufacturers & Exporters.

You've both talked a bit about the struggles that your industry is facing for a number of reasons and that you have a number of challenges that need to be addressed. Could you expand a little on what challenges your industry is facing and what the Government of Canada can do to help?

[Matthew Poirier]

Certainly. What we're here about today is trade certainty, so for manufacturers who are also the bulk of exporters, it's about securing the most important trade deal in our arsenal, and CUSMA is priority number one. Getting that done as soon as possible is the best thing. What we hope to see from that is an improvement in the investment flows.

Like I mentioned earlier, what concerns us is that when there's such trade uncertainty, especially with our key market like the U.S., those trade flows gravitate toward the safest harbour, which is the United States. It's very concerning for us as the industry association, because once that money and that investment goes out of Canada, it doesn't come back. When you're talking about the economic impact of the industry and the number of jobs tied to it, it's very concerning.

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

Once these trade uncertainties are resolved, hopefully in the near future, what would be the next major hurdles to provide certainty in your industry to keep us competitive with the United States, such as electricity costs, infrastructure, taxes or anything?

[Matthew Poirier]

Its all of the above.

Generally speaking, competitiveness is our issue. It's the basic cost of doing business—tax structures, investment supports, all these types of things. How do we incent the majority of our small companies to become big companies and global champions?

These are issues we're seized with and we're focused on, and that ranges from a whole suite of government assistance but also from the federal and provincial levels as well. It's working in concert to create an environment in Canada where it can be competitive, and there's lots of ground to cover there, to catch up t our global—

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Ms. Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much.

I'd be happy to continue the discussion with Mr. Poirier. I read that 10 out of the 11 CME recommendations were adopted. Is that accurate?

[Matthew Poirier]

In the current deal...?

[Rachel Bendayan, Liberal, Outremont, QC]

Yes.

[Matthew Poirier]

Yes.

[Rachel Bendayan, Liberal, Outremont, QC]

That's very impressive.

[Matthew Poirier]

We were very pleased.

[Rachel Bendayan, Liberal, Outremont, QC]

I can imagine.

As to the consultations and the process by which you provided those recommendations, I imagine that you were also pleased with that process. Do you feel as if you were consulted and heard?

[Matthew Poirier]

Certainly, it helped that I and my co-panelists had a seat at the table for those discussions. Because we're so dependent on NAFTA, it was important for us to be part of those discussions.

As for how the process went, it was terrifying going through it, simply because we weren't necessarily bargaining with people who wanted the same outcomes we did—that is, achieving a solid free-market, free trade agreement. Given that we were on the defensive from the get-go and trying to retain the basic access we had under NAFTA, I think where we ended up was very positive.

[Rachel Bendayan, Liberal, Outremont, QC]

That's wonderful. Thank you very much.

Mr. Herman, I would be happy to ask you a question as part of today's committee. I know you, by reputation. Prior to being elected, I too was a lawyer in private practice in trade and arbitration law. It's a pleasure to speak with you today.

I listened to your testimony with a lot of interest. As you mentioned, there are some possibilities of negative scenarios, as I believe you called them. Under those scenarios, if I understand correctly, it is your opinion that the United States and Mexico would go ahead with the implementation of CUSMA without Canada.

Is that correct?