International Trade Committee on Feb. 25th, 2020

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Sarai, your time is up.

I was just waiting for a moment to interrupt our witness.

I have to go on to Mr. Savard-Tremblay now.

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

My first question goes to Mr. Trew, from the Canadian Centre for Policy Alternatives.

You are delighted with the disappearance of chapter 11, on the settlement of disputes between investors and states, which was fundamentally designed to ensure stability for investors at a time when different places had less stable governments. Basically, it was seen to threaten the ability to adopt social measures dealing with the environment and public health. It was realized that there were quite strong adverse effects, and Canada was the champion in terms of the number of claims against it. In those cases, the multinational is always the complainant and the state is always the defendant. These treaties have no recourse the other way around to protect citizens harmed by a multinational. This chapter in NAFTA was a first, but the measure has been imitated in basically all subsequent agreements.

Do you believe that the disappearance of the chapter foreshadows anything good as things proceed? As of now, we cannot consider that it is a given when future agreements are signed.

[Stuart Trew]

Thank you very much for your question. I will answer it in English.

Yes, I really do agree with the minister that this should be precedent setting. Say what you will about whether the rule of law is as strong in other countries as it is in Canada, the fact is that Canadian companies have abused this system—like they did in Canada—to challenge completely legitimate environmental and resource management decisions.

I would say that in the kind of world we're operating in, where it's becoming obvious that certain types of economic activity are harming the environment, contributing to the climate crisis and, in some cases, contributing to inequality in other countries—or at least not giving the benefits that are meant to come from investment from northern countries—we really need to think about scaling back or rebalancing the kinds of rights we have in trade agreements.

Corporate rights are obviously very strong in these processes. We need to rebalance so that environmental rights, indigenous rights and human rights are much more prominent.

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

Thank you.

My questions now go to the gentlemen from the Dairy Processors Association of Canada.

You said that there has been compensation for many producers. That is often said, although, with the current agreement, no compensation has yet been paid. With preceding agreements, it took time, but payments were eventually made. But the processors were not compensated.

First, what form would you like the compensation to take and in what timeframe?

Then, how is your community reacting to the elimination of class 7? We know that milk protein has been an issue for a long time. I think you are from Agropur. Before it was politically fashionable to criticize the issue, you were one of the first to ban diafiltered milk, if I am not mistaken. The fact remains that a lot of processors have been using the practice for some time.

[Mathieu Frigon]

Yes, indeed, last summer, money was announced for dairy farmers only. Nothing was announced for dairy processors, and that was certainly a great disappointment for us, as we said in our brief.

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

Are you talking about the previous agreement?

[Mathieu Frigon]

Yes, I am not talking about CUSMA.

We were disappointed. We hope that it will be in the next budget. As we said in our brief, we were part of the working group that looked at the financial impacts and the ways to mitigate them. We need an investment program and tariff quotas, import licences, as we call them, to be given to our members, the dairy processors.

We would like compensation measures in two areas.

[The Chair, Liberal, Judy Sgro]

I'm sorry, your time is up.

Mr. Blaikie.

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

Thank you very much.

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

We will talk about that later.

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

Mr. Trew, I just wanted to follow up on something that Mr. Sarai said at the end of his remarks. He said that what you were suggesting was something that would remain to be negotiated among the three parties.

In terms of what you were saying, my understanding was that this was actually something Canada could do domestically without having to consult the other two parties. I just want to be clear, for the record, which version is true.

[Stuart Trew]

That's right, and I apologize if I implied we would negotiate. No, this would be something Canada could establish on its own. It could be made available, for example, to citizens from any country, possibly from Mexico and the United States, to bring cases. That's in the event that, for example, a similar process isn't established in the United States and Mexico. It shouldn't preclude people being able to enforce the labour rights that are in this agreement. Canada could be a leader there.

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

It might be a process that involves interested persons from the other parties, but it's something that Canada could do on its own to help mitigate some of the impact of this agreement.

[Stuart Trew]

Yes.

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

With respect to chapter 28, the NDP salutes the removal of investor-state dispute settlement clauses from NAFTA, but there's some concern that chapter 28 is quite prejudicial against public interest regulation.

I'm wondering if there might be some remedial work that Canada could do on its own, including a more wide-ranging definition of who an interested party, or an interested person would be, so that it's not narrowly defined as someone with a business interest in the regulation, but also recognize the interests that citizens might have. It is with respect to the environment or indigenous people worrying about any infringement of their rights, or workers who are concerned about the effect that a regulation, or lack of regulation, of a particular sector might have for them.

Could you offer some remarks to that effect in terms of how we might try to mitigate some of the potential negative impacts of chapter 28?

[Stuart Trew]

In one sense, yes, there's a lot of room in CUSMA for Canada to change how it regulates. The good regulatory practices chapter is meant to enshrine a very specific kind of pro-commerce way of regulating that does push the precautionary principle quite far down the list in terms of priorities.

There are parts of the CUSMA that require Canada, in perpetuity, to regulate in the area of cosmetics, for example, in what they call a risk-based way, so it would be in contrast to a precautionary way in, say Europe, or other jurisdictions, or in a hazard-based way, which can be more protective of public health in other ways.

For the most part, Canada could simply issue a cabinet directive, as it has done every few years now on regulation, changing the way it regulates, so that these other interest groups are brought more into the picture, and so that regulations do a better balance between the commercial interests of companies that will be affected by these rules and the interests of the environment, the animals, the people who are affected by some of the products that get put on the market.

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

As we look past this particular CUSMA process to future agreements, whether it's a Canada-China agreement, or Canada-U.K.—there's certainly talk about other kinds of agreements—how important do you think it is that we learn some lessons from this process?

We were talking earlier with a witness from the United States who described that interplay between the executive and legislative branch in the United States. We've negotiated with the government to get it to be more transparent about the negotiating objectives up front, and to provide an economic analysis, as a matter of course, with future agreements when it tables ratifying legislation.

What can we learn from what hasn't gone right with this process, and how important do you think early civic engagement is in order to get better deals for Canada in the future?

[Stuart Trew]

One thing that the CCPA and others have advocated for in the alternative federal budget for the past few years is that we need to rethink our trade policy, in general, for this era of climate emergency and growing inequality. We need to rebalance how these agreements work.

Parliament has a role to play in that, and Parliament should have a stronger role in determining our objectives when we pursue a trade deal with Mercosur, or with China, or elsewhere. As it is now, it seems, like you said, you get a moment at the very end of the process to say yes or no, but you don't get any input into the mandate or the objectives of the Canadian government.

Two things need to happen. We need to have hearings or consultations in Canada where we determine our trade agenda for the 21st century, taking into account things like the climate crisis and—

[The Chair, Liberal, Judy Sgro]

Mr. Trew, I have to interrupt.

Mr. Kram.

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

Thank you to all the witnesses for joining us today.

My question is to Mr. Frigon and Ms. Benoit from the Dairy Processors Association. You said that $60 million will be the cost of the new export tariff to your industry. That's the cost of the export tariff that applies not just to the United States and Mexico but to the rest of the world.

Can you give us an idea of what that means to the typical dairy processor? Is that a big hit to each dairy processor, or is it a minor inconvenience?

[Dominique Benoit]

Obviously that impact varies between processors, depending on their activities. I will talk to you about Agropur's perspective.

We're a large player in Canada. We process quite a bit of solid-not-fat into skim milk powder and other products.

I'll give you an example. In the last year, our organization exported close to 35,000 tonnes of skim milk powder. Therefore, it has a huge impact on our organization. It has a huge impact on those processors who process quite a bit of milk into these ingredients.

The issue is how to adapt to it, what we're going to do with the solid-not-fat that is surplus to our Canadian requirements. That is why we're saying we need support to invest in the development of new technologies to manage that solid-not-fat.

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

When did your group find out about this new dairy export tariff?

[Dominique Benoit]

We found out at the same time as everybody, because we were not consulted on this notion of putting a cap on exports to all the countries around the world.

There was no consultation with us about the fact that Canada could consider limiting its exports to all the countries. That is something we'd never heard about and we were caught off-guard.

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

Okay, but you must have found out sooner or later. Was it late last year, or in 2018?

Do you remember when you were first made aware?

[Dominique Benoit]

We found out when the agreement was announced.