International Trade Committee on Feb. 20th, 2020

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

Okay. We heard yesterday from the teamsters. They're of the view that given the targeted impact of this deal on the dairy sector, not only the producers and processors will be affected but also a lot of workers who work in those plants. Whether it's with regard to pension bridging or assistance for retraining and job search, they should be considered in that compensation package as well. Would you be supportive of that?

[Philip Vanderpol]

Yes, definitely. The workers, the ancillary workers, the transporters and so on, are all affected by this. There will be wide effects. Just directly in our industry we employ over 220,000 people, so they'll all be affected by this.

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

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you to all of the witnesses. I apologize for having to cut people off occasionally, but the members are all on a timeline. My job is to make sure that everybody gets their fair share of time.

Thank you all very much. It was a very interesting panel.

We'll suspend for five minutes.

[The Chair, Liberal, Judy Sgro]

We are resuming debate and discussion. We are following up, pursuant to the order of reference of Thursday, February 6, on Bill C-4, an act to implement the agreement between Canada, the United States of America and the United Mexican States.

With us in this segment, on our panel, as individuals, we have Leo Blydorp and Lawrence Herman. From the Assembly of First Nations, we have Judy Whiteduck, director, economic sector, and Risa Schwartz, legal counsel. From the Canadian Manufacturers & Exporters, we have Matthew Poirier, director of policy, and Alan Arcand, chief economist, and from the Federation of Canadian Municipalities, we have the mayor of Windsor, Drew Dilkens.

We will open up our panel for discussion beginning with the Federation of Canadian Municipalities.

Mr. Dilkens, you may go first.

[Drew Dilkens, Mayor, City of Windsor, and Member, Big City Mayors' Caucus, Federation of Canadian Municipalities]

Thank you very much.

Good afternoon, Madam Chair, Parliamentary Secretary Bendayan and members of the Standing Committee on International Trade. As I sit in my office right now at Windsor City Hall, what you can't quite see—you'll have to trust me, and you can pull up your Google Maps—is that about one and a half kilometres out the window behind me is the city of Detroit and the United States.

I want to thank you, because I think it's appropriate to have this opportunity to provide some comments on Bill C-4, the Canada, U.S., Mexico agreement implementation act.

Now I don't need to tell anyone in the room that Canada is a trading nation, that our prosperity, growth and success are largely reliant on our ability to trade with other countries. I'm the mayor of the City of Windsor and also a member of the FCM Big City Mayors' Caucus. My community is home to 240,000 people, and we are set in a region of nearly 400,000 people. Our city is the largest border city in Canada. The local economy is intricately tied to that of Detroit, Michigan, and the United States.

We are home to the busiest commercial border crossing between the United States and Canada. In fact, the Windsor-Detroit border crossings handle more than one-third of all Canada-U.S. land trade over four points of entry: the Ambassador Bridge, the Detroit-Windsor Tunnel, the CP Rail tunnel and the Windsor-Detroit Truck Ferry.

The importance of trade with the United States to this area is further punctuated by the fact that one of our nation's largest infrastructure projects is under way, that being the construction of the Gordie Howe bridge linking Windsor and Detroit, Canada and the United States. This project has survived the test of time through four Canadian prime ministers and four U.S. presidents, representing Democratic, Republican, Liberal and Conservative parties. It has made it this far because smart people on both sides of the border understand the value of smooth and efficient border crossings and the value of trade for our economies and what it means for jobs. Nowhere is the value of secure, efficient and safe movement of goods and people so important than to the Windsor-Essex area, likely more so than anywhere else in Canada.

Windsor is proud to be the automotive capital of Canada and home to the largest cluster of tool, die and mould-makers in North America. Our two largest private employers are the Fiat Chrysler assembly plant, home to the Dodge Grand Caravan and Chrysler Pacifica, and the Ford Motor Company, which operates two engine plants locally.

Windsor-Essex is also home to the largest auto cluster in North America, with more than 300 local companies engaging in engineering, designing and manufacturing of cutting-edge industrial systems and products for clients across the globe. This is an industry that supports thousands of well-paying, highly skilled jobs, and one that comprises 30% of our regional GDP.

The auto sector is vital to the economy of Windsor-Essex, but it's also vital to the overall economy of Canada as well as various regional economies throughout the United States. Our local supply chains are still tightly integrated. Based on geography, businesses are able to take advantage of the best elements that all three countries have to offer. There is no better example that I can think of than this: Parts put into a car produced in Canada cross the border an average of seven times before that car rolls off the end of the production line. That, I think, is a great example of how tightly integrated our economies are.

The amendments to the new Canada-United States-Mexico agreement will help strengthen and protect well-paying jobs and will help our companies stay highly competitive in a global economy. That's truly how our employers compete, on a global basis. The agreement's updated rules of origin, increasing the regional value content threshold for cars up to 75% from 62.5% ensures that a higher majority of car parts, such as engines and transmissions, for example, originate in North America, in cities like mine.

The new agreement also introduces new requirements to help ensure that at least 70% of a producer's steel and aluminum products originate in North America. This agreement has the potential to generate increased automotive production in North America, of course, including cities and areas like Windsor-Essex, as well as additional sourcing opportunities for Canadian parts producers, many of which have local footprints in Canada.

I'm not going to sit here and tell you that this new agreement is perfect. It's not. Future revisions to trilateral trade agreements with Mexico and the United States should strongly consider better labour mobility for highly skilled workers, so that positions like robotic technicians, machine learning specialists and other new economy workers can seamlessly travel within the trade zone to meet the changing demands of employers as they and our economies evolve. The 8,000 people from my city who cross the border every day into the United States to work understand how important mobility is for their livelihoods and for that of their employers.

There's an old axiom taught in many law schools that says the best agreement is usually the one that leaves each party thinking they could have done a little bit better. There's no doubt that is the case in this negotiation and revision to our trade agreement. However, the incremental improvements achieved through the process far outweigh any negative aspects.

Political and economic environments juxtaposed with the benefits of this bill lead me to offer my full support to the federal government. On behalf of the people in Windsor—Essex, I encourage Parliament to move quickly to ratify this deal. I personally thank Minister Freeland for her efforts on behalf of all Canadians.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mayor Dilkens.

We'll go to Mr. Herman.

[Lawrence Herman, Counsel, Herman and Associates, As an Individual]

Thank you, Madam Chair.

I prepared a memorandum. I don't know whether it's been circulated to the committee.

I'm going to just summarize what I've said in the memorandum, and I hope that we can have an exchange during the question-and-answer period.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Herman. It has been distributed to the committee members.

[Lawrence Herman]

Thank you. I won't go through the paper in any detail. I'll just summarize some points.

Bill C-4 is an implementation measure. It adjusts Canadian laws to bring those laws into conformity with the agreement, with CUSMA, and it needs parliamentary approval, obviously, to make those changes to Canadian statutes. Those changes set out in the bill will allow Canada to ratify the treaty.

It's important to understand that the conclusion of treaties and their ratification is an executive act. It doesn't legally require parliamentary approval for the Government of Canada to ratify an agreement, but the policy for many years has been to submit major agreements, trade agreements in particular, to Parliament for parliamentary approval. Of course, before Canada can ratify any agreement, whether it's a trade agreement or otherwise, Canadian laws have to be brought into line with the provisions of the agreement. If Canada were to ratify an agreement and Canadian laws had not been made consistent with the agreement, Canada would be, as a country, as a state, in breach of its obligations under the agreement.

Let's come to Bill C-4. I want to give you a bit more context about Bill C-4. There is nothing that I could see in Bill C-4 that is in any way inconsistent with the provisions of CUSMA. I have to say—and I think this is important in terms of context—that CUSMA is a done deal. The negotiations are over. This committee is not being charged with renegotiating or proposing renegotiating the CUSMA. It is done. The U.S. has ratified it. Mexico has ratified it. It is now Canada's turn to ratify the agreement. That requires that Canadian laws be changed and adjusted in some respects. In some cases, it's a matter of tinkering, but in some respects, Canadian laws and statutes have to be changed. That's what Bill C-4 does.

This committee, it seems to me, has three options.

It can approve Bill C-4, possibly with some minor tinkering here and there. I don't think there's much that needs to be done in that regard, if anything. It can approve the bill as presented.

The second option would be to propose amendments to Bill C-4 with or without a recommendation that the treaty be approved. It could radically amend Bill C-4 to change its contents, making them inconsistent with what Canada has agreed to in CUSMA.

Third, it could refuse to approve Bill C-4 and refuse to recommend Canadian approval of CUSMA.

The latter two options or scenarios would mean that Canada could not ratify the agreement. This would be, in my view, an enormous setback for the country, and in fact would be without precedent. There has never been an instance in Canadian history where Parliament has refused to approve a trade agreement and to pass the necessary legislation. We know that in 1987-88 the original Canada-U.S. Free Trade Agreement was held up in the Senate after it had passed the House. An election was held and we know the consequences. A Conservative government was returned with a majority and the House subsequently passed the necessary implementing legislation.

In the case of the NAFTA, before it was presented to the trade committee or indeed tabled in the House, there were changes made to the NAFTA as renegotiated, because Canada, the U.S. and Mexico agreed that it would be necessary to add side letters to the negotiated text of the agreement. The NAFTA implementing bill was tabled in the House and was approved.

Canadian implementing legislation in other areas has been approved by the House. The European Trade Agreement—the CETA—and the trans-Pacific trade agreement have both been approved by the House. If any one of the negative scenarios that I outlined were to be proposed and approved by the House as a whole, I think the consequences would be disastrous. It would mean that the U.S. and Mexico would have ratified CUSMA, Canada would not have and, I assume, that Mexico and the U.S. would go ahead with the implementation and all of the other matters under the agreement. Canada would not be a party to that agreement. It would complicate things enormously in terms of supply lines and other matters. More than that, it would set back Canada-U.S. relations in a major way.

If this agreement, as I said—negotiated, signed, approved and ratified by the U.S. and Mexico—were turned down by Canada, legally, at least initially, the NAFTA would then remain in force as is between Canada and the United States. There would be serious doubts about whether the NAFTA would be continued by this particular administration under that scenario. The future of the NAFTA itself would be extremely uncertain.

The question then before this committee is what the consequences for Canada would be if Parliament, by following through with any such recommendation by this committee, were to refuse to approve the CUSMA and pass the necessary implementing legislation. That is the issue that you're faced with.

I know that in previous deliberations of this committee, suggestions have been made to reopen the NAFTA because one or another interest group is not happy with certain of its provisions. That is frankly a non-starter. The United States and Mexico, but particularly the United States, will not agree to reopen this agreement. It has passed the U.S. Congress. It's been ratified by the President, and the suggestion that Canada could go back to the U.S. government and say that it wanted to reopen this agreement is frankly a fantasy. It will not happen. Even if it did in the remotest of possibilities, even if the United States and Mexico were prepared to reopen the CUSMA because of Canada's insistence, we would have to look at starting negotiations again, going through all of the process of negotiating and putting on the table our starting position, and being prepared to make compromises, because, as Mr. Verheul said in his testimony, trade negotiations are questions of balancing concessions. Canada would have to put its starting bid on the table and be prepared to make concessions. This is, to me, the most unrealistic of scenarios.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Herman. You have my apologies for cutting you off.

[Lawrence Herman]

That's fine.

[The Chair, Liberal, Judy Sgro]

The committee has many questions for you.

We go now to Mr. Blydorp.

[Leo Blydorp, As an Individual]

It's still morning, so good morning.

It's Leo Blydorp here. I'm a farmer in Dufferin County, Ontario, which is around Orangeville. I started farming there in about 1995 and had a prior career in agriculture chemicals. I started off at about 250 acres and worked myself up to about 1,300 acres. I farm with my son and we have a number of part-time employees. I grow a number of crops that are covered by the agreement: canola, corn, oats, soybeans, winter wheat, hay and straw, and I have grown barley, white beans and quinoa in the past.

As far as the trade deal is concerned, there is really no change from NAFTA. Nothing has really changed for me. I'm a proponent of free trade, so we could go home from here, but it's been my experience that trade is never quite that simple, and it's never free, or fair or equal in my point of view. I want to spend some time going into that, if I might.

Just recently we've had this trade tiff with China—or the U.S. has—and we've gotten caught up in the crossfire, so I want to spend a little bit of time on that.

The U.S. has offered trade-distorting domestic support to their farmers, which our government hasn't seen fit to match. After the U.S. launched the trade war with China, retaliatory Chinese tariffs were introduced in June 2018, which saw the price of soybeans drop about 10% on the Chicago Board of Trade.

The Chicago Board of Trade also determines all of our prices in Canada, so most of the commodities, other than canola and barley, are traded on that exchange. Canola, which is a bit linked to soybeans because it's an interchangeable commodity for vegetable oil and for meal, dropped about 5%, but then it dropped about another 5% when we detained the Huawei executive Meng Wanzhou. Essentially, China stopped buying all of our canola. China was the biggest customer of canola. Most of the canola is grown in western Canada, but we do grow some canola in the area where I farm in Ontario.

The U.S. responded to the Chinese tariffs on agriculture products—primarily soybeans—in 2018 by introducing the USDA market facilitation program, or MFP. That gave U.S. farmers $12 billion in 2018 and $16 billion in 2019. I'm just quoting here from the fact sheet:

The [2018 MFP] provides direct payments to help...producers who have been directly impacted by illegal retaliatory tariffs, resulting in the loss of traditional exports....

The initial MFP rates are as follows:

...Corn $0.01 per bushel

...Soybeans $1.65 per bushel

Therefore, about 95% of that money went to soybean growers, and there was also a little that went to wheat. These are all crops that trade freely across the border and compete with what I'm trying to produce here in Ontario.

We have been impacted equally by this damage that was a result of the trade war between the U.S. and China, and we have not gotten any government support.

Then, for 2019, they changed the program a little bit, because I think they had some concerns about how different trade partners might react to it. They made it more or less directly linked to the specific crop. They changed it a fair bit to make it county-specific, but in the end, the average farmer in Illinois got another $21 an acre than he did in the previous year. That was cited in a weekly farm economics Gardner policy series, a paper that was authored by the University of Illinois and the Ohio State University.

What does that mean for me in Ontario? We grew 284.5 acres of soybeans in 2018 and had a production of 16,040 bushels. If you convert $1.65 U.S., that comes out to $2.20 Canadian. If you multiply that by 16,040 bushels, that was just over $35,000 that I didn't get that my American competitors did get. For corn, I would have gotten a little, $294, and for soft red winter wheat I would have gotten just over $3,000, for a total of $38,700 that I'm behind my U.S. competitor. In 2019, if I apply the same ratios, I would have had $51,580 out of that program if I'd had an address in Michigan.

During this time, there are considerable U.S. soybeans that come right into Ontario and are processed and exported through Hamilton, displacing Ontario soybeans. To date, our federal government has done nothing that I'm aware of to address this disparity in crop farmer support between Canada and the U.S., while it has paid compensation to other agriculture sectors.

Dairy farmers, for example, have been allocated $1.75 billion for trade injury that has not yet occurred and may not occur, or if it does occur, may be impossible to measure. That's from Agriweek, Canada's agribusiness authority since 1967. I don't have anything against dairy farmers, but I think farmers need to be treated equitably when there are trade issues.

I sat on a government committee for three years. I had the opportunity to travel to Ottawa about three times a year in 2015, 2016 and 2017. I was a federally appointed producer representative to the national program advisory committee. We met to discuss Canadian agriculture partnership programs. Much of the time was spent discussing business risk management programs, AgriStability in particular. This was largely an exercise in frustration for many of us producer representatives, as our input was never considered or implemented. AgriStability was changed in 2013. It became a much less useful program for stabilizing farm income, as the reference margin that triggered payment was reduced from 85% to 70%. Changes were also made on the eligible expenses used in the calculation, with a cap on certain expenses. Hence, many growers dropped out of AgriStability, as did I at the recommendation of my accountant.

The response from Agriculture and Agri-Food Canada staff was that our proposals would not pass the scrutiny of countervail and were likely to be classified as amber domestic support programs. I haven't seen any discussion at all from the federal government, or even from the provincial government, about whether the support offered in 2018 and 2019 by the American government in the USDA facilitation program would in fact be countervailable—I certainly think that 2018, because it was very specific and very regional, would be countervailable—or whether it would fall in any of the boxes that are amber, blue or green.

If we're going to have free trade, we need a government that will take a proactive approach in monitoring the domestic support programs of other CUSMA countries and determine both their impact on market price in Canada and their ability to distort trade. As an individual farmer I do not have the resources to do this or the expertise. I spent about a day trying to get ready for this. I don't know much about trade. I've just told you everything I know.

In terms of competitiveness, many of these things continue to creep on us. I'll harp on one more, now that I have the floor. I probably have a few minutes left.

[The Chair, Liberal, Judy Sgro]

You have one and a half minutes left.

[Leo Blydorp]

I think we can do it.

A myriad of other factors are affecting the competitiveness of Canadian farmers. These include the cost of production inputs, farm equipment, interest rates and labour. The recently introduced carbon tax raises costs to Canadian farmers and not our competitors. It adds to our cost of drying grain. For example, 2019 was a terrible year because we couldn't get any grain off dry. It adds to the cost of nitrogen fertilizer manufacturing, custom trucking and rail transportation. It is unlikely that the tax will alter consumption of these uses, but it does decrease the competitiveness of Canadian farmers, who can't pass on this added cost to their customers.

If we're so interested in carbon, why isn't there an offset that would pay farmers to sequester carbon if their farming practices indeed do that?

With that, I will end. Hopefully, I'm within my time.

[The Chair, Liberal, Judy Sgro]

You are, sir. Thank you very much.

We'll move on to the Assembly of First Nations. Ms. Whiteduck is director of the economic sector and Risa Schwartz is legal counsel.

Welcome. We're glad to have you here today.

[Judy Whiteduck, Director, Safe, Secure and Sustainable Communities, Assembly of First Nations]

[Witness spoke in Algonquin]

[English]

I wanted to acknowledge all of you, myself and the territory before we begin. We have a brief set of remarks that we'll share, which I will start with.

Thank you, first of all, for the invitation to the national chief of the Assembly of First Nations to appear before your committee to inform the study of Bill C-4. The national chief has sent his regrets due to other commitments, and we are pleased to be here on his behalf.

My name is Judy Whiteduck, and I am the director of the economic sector. I am joined by Risa Schwartz, our legal counsel on international trade matters.

The AFN is a national organization advocating for first nations citizens in Canada, which includes more than 900,000 first nations people, both living on reserves and in towns and urban centres.

First nations leaders direct the work of the Assembly of First Nations through resolutions passed at chiefs' assemblies. In 2019, the AFN passed resolution 37/2019, which was continued advocacy on Canada's international trade agreements to achieve economic reconciliation. It urged greater participation of first nations in international trade negotiations, and called upon Canada to include a trade and indigenous peoples chapter in future international trade agreements. The AFN has a specific chiefs committee on economic development, which includes first nations trade relations.

In 2017, the national chief was welcomed by Deputy Prime Minister Chrystia Freeland to be a member of the NAFTA council. At an official level, Risa Schwartz and I also participate on the indigenous working group on international trade for the Canada-United States- Mexico agreement. While there is more to do, this work has resulted in the most inclusive international agreement for indigenous peoples to date.

I will now ask Risa to provide additional comments on CUSMA and to make a recommendation for an amendment to Bill C-4 as well.

Thank you.

[Risa Schwartz, Legal Counsel, Assembly of First Nations]

Thank you, Judy.

With the ratification of CUSMA, Canada, working together with first nations, will be taking steps to make international trade more inclusive and more equitable for indigenous peoples, especially for indigenous women.

CUSMA didn't ultimately include a trade and indigenous peoples chapter, but the text of the final agreement mainstreamed many important provisions for first nations. CUSMA maintains Canada's traditional reservations, exceptions and exclusions in the areas of services, investment, environment and state-owned enterprises. It continues the WTO agreement on procurement carve-outs for indigenous businesses. It contains provisions that recognize the important role that indigenous peoples play in conserving the environment.

There is a new emphasis in CUSMA on co-operation activities to promote and enhance opportunities for indigenous businesses in the chapter on small and medium-sized enterprises. Indigenous peoples are the youngest and fastest-growing demographic in Canada, and opportunities for indigenous business means opportunities for women and for youth. There is a new provision in CUSMA for handcrafted indigenous textiles and apparel goods, which are now eligible for duty-free treatment.

Also, importantly, for the first time in a Canadian trade agreement, CUSMA includes protections for inherent and treaty rights through a new general exception in article 32.5, “Indigenous Peoples Rights”. The general exception clause is much stronger than we have seen in other agreements. This new exception clause covers the entire agreement and applies to indigenous peoples in all three CUSMA countries. It will allow all three states to take action to fulfill their legal obligations to indigenous peoples.

As well, we'd like to note that the investor-state dispute settlement will be phased out as between the United States and Canada. ISDS is a threat to indigenous peoples' rights. All these matters are groundwork for positive change.

Once CUSMA is ratified, we must work together to realize economic gains and to ensure these provisions are implemented in a manner that provides for greater economic equity for first nations. We note that the mandate letter for the Minister of Public Services and Procurement includes that “at least 5% of federal contracts awarded” must be “to businesses managed and led by indigenous peoples”.

This commitment needs to be monitored by each federal department and reported upon to cabinet on an annual basis to ensure the target is being met. Progress in meeting the 5% target should also be published by the Government of Canada for transparency.

While CUSMA is an example of the difference it makes to engage with indigenous peoples at an early stage, there must be increased opportunities for first nations to participate directly in international trade negotiations, consistent with the United Nations Declaration on the Rights of Indigenous Peoples.

The Assembly of First Nations will continue to advocate that Canada move beyond engagement and invite first nations to the negotiation table; include trade and indigenous peoples chapters in all new or modernized international trade agreements; explicitly acknowledge the United Nations Declaration on the Rights of Indigenous Peoples in international trade and investment agreements; and ensure that a general exception to protect indigenous people's rights, such as the one in CUSMA, is a red-line item for negotiation agreements. Like New Zealand, Canada must commit to protecting indigenous rights in international trade agreements. This is not a matter that should be up for negotiation.

As well, we ask that Canada halt the negotiation of new ISDS provisions in new international trade and investment agreements and remove ISDS provisions when older agreements are being modernized.

Finally, we ask Canada to invest in programs and services needed for first nations trade networks and inter-nation trade so that additional capacity can be established in first nations trade policy and programs and services. We are also here today to recommend an amendment to Bill C-4. The bill is missing a non-derogation clause. The non-derogation clause amendment was proposed previously by the national chief when he appeared before this committee during the study for Bill C-100.

All implementing legislation for international agreements that have the potential to impact inherent and treaty rights must include a non-derogation clause. It is not just the international trade and investment agreements that can impact inherent and treaty rights, but also how the agreement is implemented through domestic regulatory and policy matters. A non-derogation clause will clarify that the act and CUSMA shall be construed so as to uphold existing aboriginal and treaty rights recognized and affirmed in our Constitution.

Chi-meegwetch for the opportunity today to present to the Standing Committee on International Trade.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We move on to the Canadian Manufacturers & Exporters, to Matthew Poirier, director of policy, and Alan Arcand, chief economist.

[Matthew Poirier, Director of Policy, Canadian Manufacturers & Exporters]

Thank you, Madam Chair. Good afternoon to everyone.

It is my pleasure to be here on behalf of Canada's 90,000 manufacturers and exporters and our association's 2,500 direct members to support Bill C-4, an act to implement the agreement between Canada, the United States of America and the United Mexican States, also known as CUSMA.

Before I begin, I would like to thank the efforts of the Prime Minister, Deputy Prime Minister Freeland, chief negotiator Steve Verheul and all of their staff for negotiating CUSMA. Being part of the process, we at Canadian Manufacturers & Exporters, or CME, understand how difficult these negotiations were. It was crucial to achieve a positive outcome for business and all its employees, and we did just that. As such, CME fully supports this bill and we urge the government and all parliamentarians to ratify CUSMA as soon as possible.

My goal today is simple. I want to explain why free trade is important to manufacturing and how CUSMA will improve on NAFTA. Why is free trade so important? Simply put, North American trade is the basis upon which Canada's manufacturing industry is built. Our sector alone employs 1.7 million workers in every community across the country.

In 2019, we shipped $455 billion of merchandise exports to the U.S. and Mexico. This represented 77% of our total exports to all countries that year. Two-thirds of these exports, worth about $305 billion, were manufactured goods. The numbers simply speak for themselves. You see, Canadian, American and Mexican manufacturers don't really compete with one another. Rather, we build stuff together: a continental manufacturing ecosystem bound together by integrated supply chains.

North American free trade is therefore a pillar of our national economy. It is why the manufacturing sector produces the bulk of Canada's exports. It is how the sector can compete against the rest of the world. This is why CUSMA, and NAFTA before it, are so important. Without these agreements and without integrated production with the U.S. and Mexico, we simply would not have the scale necessary to be a global player. Canada's ability to take advantage of any other trade deal is only possible if North America continues to manufacture together.

How does CUSMA improve on NAFTA? CUSMA preserves the integrated manufacturing operations that allow the relative free flow of goods and services among our three markets. Going into the negotiations, our members made it clear to us that the primary objective of Canada must be to do no harm to this integrated manufacturing economy. CUSMA accomplished this.

In fact, CUSMA preserves many of the key elements of the original NAFTA that were targets of the U.S. for elimination. This includes dispute settlement mechanisms and the business traveller visa exemptions. This was by no means assured at the outset, but there they are alive and well.

Importantly, CUSMA updates critical areas of NAFTA, dragging it into the 21st century. This alone will significantly enhance North American trade. For example, the new digital trade chapter recognizes now that the Internet is a thing and establishes a framework for e-commerce in North America. The customs administration and free trade facilitation chapter will also go a long way in modernizing borders throughout North America, enabling the free flow of goods.

Lastly, chapter 26, the new competitiveness chapter, has not garnered a lot of attention, but it is, in our estimation, one of the biggest accomplishments of CUSMA. Why? It sets up a framework for three sovereign countries to become a unified trade bloc. It will do this by promoting better coordination and integration of our manufacturing industries so that we can tackle global trade challenges together. This is a significant accomplishment.

We have consistently urged the government to start work on implementing parts of the agreement now, like chapter 26, that do not require legal changes. We should be looking to make early progress by establishing committees for North American competitiveness and good regulatory practices, as outlined in the agreement. This would show Canadian leadership, signal to our other partners that we take CUSMA seriously and let us hit the ground running.

Once CUSMA is the law of the land, we need to pivot toward helping manufacturers and exporters take advantage of the new deal. The U.S. is, and will always remain, our largest export market. We must leverage the excellent government resources like the trade commissioner service and Export Development Canada to help companies transition from NAFTA to CUSMA.

Limited access to the U.S. government procurement market is also a big challenge. We encourage the government to work with the Americans, on a bilateral basis, to open up this lucrative area for Canadian farms. This is how government can play a positive role in helping companies capitalize on CUSMA once it's enforced.

In the final analysis, CUSMA is a good deal for Canada, and given the very challenging negotiations, an impressive achievement. We urge all parties to pass this bill as quickly as possible. If you do that, I can assure you that Canadian manufacturers will return the favour by creating prosperity for all Canadians for years to come.

Thank you, and I look forward to the discussion.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

We will go on to Mr. Lewis.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much.

Thank you to all the witnesses this morning. It's been very interesting to see the various dynamics, and I thank you for that.

Good morning, Mr. Mayor. Of course, I'm coming straight to you from Ottawa. By the way, folks, he is literally sitting in the Florida of Canada, and I will vouch that indeed behind him is Detroit.

You're welcome for that one, Mr. Mayor. I have a couple of questions for you this morning, sir.

First and foremost, thank you for representing FCM and the big city mayors. That's really exciting for this committee and me to see. I've noted that the FCM and big city caucuses are enthusiastic about the new NAFTA.

If I could be so bold to suggest it, Windsor—Essex is truly a microcosm of Canada, in that whatever Canada has to offer, quite frankly, we pretty much have the same thing to offer, be it the auto sector, agriculture, commercial fishing so to speak, mining, and the list goes on and on. We are very much in a unique situation here. We kind of have the pulse of what's going on from coast to coast to coast.

That being said, it certainly does appear—I'm speaking specifically to CUSMA right now—to be good news for the auto sector, of course, and it's good news for our region, both Windsor and Essex, given the importance of the automotive sector to our region.

Let me also say that we are the party of free trade, and we certainly do not intend to hold up this agreement. However, let me also be very clear that it's important that we do our due diligence. I don't know if you know this, but I would hope that you do. You'd be interested that despite repeated requests, we have still not received an economic impact statement. Why is that vital? We're getting down to crunch time. We need to make some very serious decisions, and quite frankly, it makes it very difficult to do our due diligence without that.

One example, to illustrate the kind of data that is needed, is an issue of significance for our region. Labour has supported the clause that requires 40% of cars produced in Mexico be completed by workers making at least $16 an hour, $20 Canadian. There's an assumption that automotive manufacturing jobs will migrate north, and that would be good news for us, of course, if that assumption proves correct. However, because of the lack of analysis, we don't know how many jobs are expected to be created in Canada. An economic impact study would provide a frame of reference for us to track those numbers.

Obviously, if the City of Windsor, as an example, were to do a P3-type of an agreement with someone, certainly staff and council would ensure that they knew the economic impact on the City of Windsor.

On behalf of the FCM, has the FCM done an economic impact statement of the new NAFTA, and does it intend to monitor the impacts going forward?

[Drew Dilkens]

Mr. Lewis, it's nice to see you as well. I haven't seen you since you were sworn in, so congratulations to you and to all the members who were elected and re-elected.

To the best of my knowledge, the FCM has not conducted that particular type of analysis. From a high level, if we looked at the value provided to all cities by having an excellent trade deal and an ability to make sure that goods can continue to flow.... As you pointed out, there's no better place to look than the Windsor-Essex area, definitely a microcosm of Canada, but certainly a leader when it comes to the nature of trade and the reliance on trade between the United States and Canada.

I acknowledged in my remarks that, at the end of the day, there was no plan, no way to make this perfect. With the economic and political environment out there, certainly I think we understood very acutely in my conversations expressed to Deputy Prime Minister Freeland during the negotiations that there are people in the community who are very scared about what might happen.

Certainly the consideration we have as a community—and I'm sure FCM would echo this in many ways—is that, looking at General Motors' decision to close the plant in Oshawa and to reallocate work, if I consider the prospect of that happening in my community because there's more trade friction put into the system, the economic impact and what would happen to our local community would be very devastating.

FCM certainly is briefed on the high-level matters here. I think we all agree on many points, especially on the automotive front when it comes to the regional content value being increased, with the requirement for more North American production of steel and aluminum as well. Overall it presents a good value proposition for Canadians, Canadian businesses and jobs in Canada as well.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much.

Mr. Mayor, very quickly, this is specific to the Gordie Howe bridge. I know it's very exciting and has been a long time in the works.

As you also mentioned in your opening statement, an auto part typically passes across the border seven times.

With regard to the administration of CUSMA, do you or the FCM foresee any issues specific to Windsor-Detroit? Being the busiest border crossing in North America, do you have any concerns about the implementation and the potential for blockages?