International Trade Committee on Feb. 20th, 2020

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

My thanks to all the witnesses today. It was particularly interesting to hear about the reality of producers and workers in the softwood lumber sector. It confirms a number of our fears.

As a member of the Bloc Québécois, I will first address my questions to the representatives from Quebec. It is a pleasure to welcome groups from Quebec. Furthermore, I have previously worked in your network in Quebec. It is a pleasure to have you here today.

You said that chapter 28 on good regulatory practices somewhat mitigates the beneficial effects of eliminating the previous chapter 11 of NAFTA. In your opinion, it now remains to be seen whether we are trading four quarters for a dollar, as they say, or whether there is still some progress despite everything. I guess time will tell.

As you mentioned, the Minister didn't actually talk about it when she appeared before the committee. However, I had asked Mr. Verheul, Canada's negotiator. According to him, there was no encroachment on sovereignty and, ultimately, it was simply in a spirit of reciprocity and to avoid any funny business by the U.S.

Can you see any merit in that interpretation?

[Normand Pépin]

That is basically it. Governments are there to make political decisions and we will not question that.

The motivation behind this chapter is that state action is suspicious at its core. It is as if, one morning, a minister decided to impose regulations that make no sense. That is not how things happen in life.

Furthermore, all the criteria that must be met in order to implement new regulations or even improve existing ones will discourage governments, whether the United States, Canada or Mexico, from taking action. If you ask me, all three governments are in the same boat.

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

Mr. Vaillancourt, do you have anything to add?

[Claude Vaillancourt]

Yes. You asked if we were trading four quarters for a dollar. In our opinion, it may be even worse than chapter 11, because everything will be done behind closed doors. We don't really know how things will unfold. Regulations may well be blocked even before they are put in place. That's the issue. A government's duty is to adopt regulations in the public interest.

That is our main concern about this chapter, which has not been sufficiently discussed, even though it is one of the chapters of this new agreement with the most consequences.

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

In the end, you don't see this as a way to mitigate any potential unfair competition, ensuring that everything is clear from the beginning and that none of the parties will try to use the rules to their advantage. Is that it?

[Claude Vaillancourt]

No. In our opinion, this chapter will contribute to deregulation. However, in light of climate change and social inequalities, we need regulations that are more robust, but that are still in the public interest, of course.

There is a lot of talk about harmonization, and we agree that it is necessary, but it must be upward, not downward.

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

That brings me to the issue of the environment, which you have raised. You said that it was clearly inadequate and that the Paris agreement was not mentioned. As you know, the U.S. is not a signatory to the Paris agreement either. It would have been surprising to see that there.

Is there any sort of mechanism to enforce the regulations? Do you think this chapter will have enough teeth when it comes to the environment?

[Claude Vaillancourt]

No, we don't think so. The answer is clear. This chapter has no teeth. The fact that climate change, the current environmental problem, is not mentioned in the agreement is problematic, in our opinion.

As we have said, that is where chapter 28 can come in. Under the old chapter 11, the majority of lawsuits were to challenge environmental regulations, and we are afraid that will continue under the new chapter.

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

Madam Chair, do I still have time?

[The Chair, Liberal, Judy Sgro]

You have one minute left.

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

My next question is for the representatives of the softwood lumber industry.

As you know, Quebec has a separate system for softwood lumber disputes. An auction mechanism is used to set the price of softwood lumber.

In your opinion, should this separate system be recognized in the agreements, since it would avoid the punitive tariffs that have been applied over time?

[Al Balisky]

I have just a brief comment. Jurisdiction on Crown forest lands across Canada differs by province. There's everything from fee simple, through to where in western Canada the province owns the Crown forest lands. There's a full range of outcomes, and each jurisdiction has been very effective at trying to negotiate its own outcome provincially. Unfortunately, the U.S. doesn't take that approach. It sees Canada as a whole, and injustice prevails as these crippling duties continue to be a part of our landscape.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir. I'm sorry to have to cut you off.

We go now to Mr. Blaikie.

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

Thank you very much.

I'd like to take up some questions with our visitors from Saskatchewan. First, I want to thank you for proposing some concrete solutions in terms of what governments might seek to put into trade agreements to help indigenous businesses prosper, but I want to take a step back. One of the things the NDP has said about this agreement is that it ought to have recognized the United Nations Declaration on the Rights of Indigenous Peoples. We feel it's important that a trade agreement not be able to trump Canada's relationship with indigenous peoples. Whether or not it's in the Constitution, treaty documents are fundamental to Canada. We already have existing international commitments and international agreements like UNDRIP. My point is that you can't just go off and sign a trade agreement that is then going to take precedence over all of those important factors.

I wonder if you have any thoughts on that, or if you've done some thinking about how to ensure that those fundamental aspects of Canada and its relationship to its indigenous people are protected in trade agreements.

[Al Balisky]

Certainly, we would completely endorse that point of view. There is the special relationship and anything that acts as a deterrent or keeps constraints on any kind of affirmative action within Canada is a negative outcome. We certainly endorse that and would encourage anything that would allow for this free, unfettered approach to Canada's approach with indigenous peoples.

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

Thank you very much.

I would first like to thank the representatives of the Réseau québécois sur l'intégration continentale for their comments on chapter 28.

Given the philosophical bias associated with this type of international trade agreement, how could we integrate the precautionary principle into an international trade agreement to ensure that this principle is included in public policies when they are developed?

[Claude Vaillancourt]

I think chapter 28, as it is worded, literally prevents that precautionary principle. This is a major issue in the negotiations between Canada and the European Union. The Europeans want to keep the precautionary principle. They believe that it is fundamental to protect the health of their people and the environment. They believe it is under threat, and the regulatory cooperation chapter bolsters their sense of vulnerability.

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

Europeans are demonstrating that it is possible to establish an international trade agreement that includes the precautionary principle.

[Claude Vaillancourt]

Yes, it's entirely possible.

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

It isn't something that will make it impossible to trade or create wealth, right?

[Claude Vaillancourt]

No, it's not a barrier to trade at all.

On the contrary, it puts in place a trade that is much more at the service of the population and that takes into account factors other than immediate profit. Both are important. It provides the public with health and safety. These are fundamental things.

If the precautionary principle is not applied, the damage is often irreversible, and it is too late to back off. The whole spirit of the precautionary principle is indeed a fundamental principle that Canada should support in the fight against it. We know from the CETA Regulatory Cooperation Forum in Europe that it is fighting this precautionary principle.

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

Chapter 28 contains philosophical biases that have nothing to do with trade. Rather, they have to do with the special interests of certain businesses or governments.

[Claude Vaillancourt]

Yes, we completely agree with you on that analysis.

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

Thank you very much.

Mr. Robertson, I wanted to touch a bit more on the buy America provisions and the importance of procurement. You mentioned some of the ways in which Canada might consider trying to make up for what's not in this agreement in terms of access to procurement.

I have New Flyer Industries in my riding, which produces a lot of buses and sells most of them into the United States. Buy America has affected jobs in Winnipeg because of the content requirements.

I was surprised recently when there was a meeting of governors and Canadian premiers, and Premier Pallister from Manitoba didn't go and didn't send anybody on his behalf. It seems to me that the province-to-state relationship is going to be important for businesses that export to the U.S. in terms of keeping jobs here in Canada. Could you speak to that a bit more?

[Colin Robertson]

I think you're correct. Premiers and governors, because they're the level where the spending usually takes place, particularly when it comes to major infrastructure, want best value, and best value often comes from having a variety of vendors, not just those in your state or province. Having outside competition that has equal access will often prevent cartels in your own province or state, and, therefore, you get far better value for public money.

This was really the philosophy that was behind.... When I was at the embassy, we were trying to get a procurement agreement at the national level. It wasn't working. We since have one through the World Trade Organization, but when the United States under the Obama administration was doing their big build as part of the post-recession effort to recover, we wanted access, as you put it, for New Flyer and others so we could sell buses and things into the United States.

We found that the best way to do it was by having premiers go down and meet with governors. Both saw an advantage. Both of them were charged with spending monies that came from federal governments, so they worked out a—