Evidence of meeting #16 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ceta.
A video is available from Parliament.
12:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
We fight for them every day—every day—on market access, whether it's CETA or CPTPP or any of our negotiations. I fight for our exporters and our businesses every single day to be sure that they get access.
12:05 p.m.
Conservative
12:05 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
I try to be respectful here.
Explain this to me, then. You say that you are fighting for them, yet in the meantime they've been left out. They've said right from the start that in this new agreement they needed to have a comprehensive agreement to deal with the issues of the EU agreement. They've been left out, and they've been left out now since 2003. What are you going to do to compensate them or to help them get market access or find a path forward for those sectors that are left out?
In the same breath, have you identified what are the sensitive sectors that the U.K. has that they're trying to defend and that they don't want us to have access to?
12:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
We are here to make sure that our businesses get the continuity they need through this agreement. We of course hear that there are issues, but the purpose of Bill C-18 is to replicate CETA, and I would remind you that while the EU was still a part of the CETA, they were not able to undertake new international trade negotiations, so the discussion that has taken place with the U.K. is in terms of replicating CETA on a bilateral basis, which is what we've got here.
We're going to continue to work very hard for the agriculture sector, and indeed all sectors of the economy, so that in this new set of negotiations, we are considering what they are looking for and how we will pursue that in the next set of negotiations. I'm looking forward to ratifying Bill C-18 as quickly as we can so that we can begin those negotiations once Bill C-18 is ratified.
12:05 p.m.
Conservative
12:05 p.m.
Liberal
The Chair Liberal Judy Sgro
Yes. I'm sorry.
I know that Ms. Gray had a short question that she wanted to ask the minister.
Ms. Gray, please go ahead.
12:05 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Thank you, Madam Chair.
Minister, another concern that I've been hearing is related to British pensioners who reside in Canada and the unfair playing field that they currently have.
Did you meet or consult with the Canadian Alliance of British Pensioners, or any other group that might be representing them, either prior to or during your negotiations with regard to the Canada-United Kingdom trade continuity agreement?
12:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
We consulted widely with many stakeholders, business groups, Canadians and workers. We're going to continue to do that as we pursue a new round of discussions.
12:10 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Was that one group that you recall? Do you remember meeting with them?
12:10 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
We consulted with many Canadians, and we're going to continue to do so.
12:10 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you, Minister, very much, and thank you to your officials. We appreciate your being here.
We will suspend for a couple of minutes so that the current witnesses can leave and our other panel can have a voice check done.
I'm suspending the meeting for a couple of moments.
12:10 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
Thank you, Madam Chair.
Thank you, everybody.
Thank you, colleagues.
12:15 p.m.
Liberal
The Chair Liberal Judy Sgro
I call the meeting back to order.
I'd like now to welcome our witnesses for the second panel: from the International Association of Machinists and Aerospace Workers Canada, David Chartrand, Quebec coordinator; from the Canadian Chamber of Commerce, Mark Agnew, vice-president, policy and international; from Hensall District Co-operative Incorporated, Brad Chandler, chief executive officer and president; and from the Trade Justice Network, Angella MacEwen, co-chair.
Thank you, all, very much for joining us today.
Mr. Chartrand, please go ahead with your opening statement.
12:15 p.m.
David Chartrand Quebec Coordinator, International Association of Machinists and Aerospace Workers
Thank you for the invitation and the opportunity to share the position of the International Association of Machinists and Aerospace Workers on this important matter.
The IAM is the leading union in the aerospace sector and air transportation industry. We represent over 55,000 members across Canada of whom 22,000 work in the aviation, aerospace and air transportation sector. We also have members who work in a range of sectors and industries, from screening services across airports in Canada, automotive parts manufacturing, the hospitality sector, health care, custom paint additives, industrial pump manufacturing, plastics manufacturing to woodworking. We are as diverse as our membership and take every opportunity to advocate on issues that impact our members and workers across Canada.
The U.K.'s departure from the European Union has far-reaching ramifications, and securing a transitional agreement provides for continued trade and stability in trade relations between Canada and the U.K. This is irrefutable. The IAM unequivocally supports efforts to diversify and expand trade opportunities since healthy industries provide jobs Canadians can rely on. But with opportunities come challenges and today, on behalf of the IAM, I would like to highlight where we see both opportunities and shortcomings under the proposed agreement.
We strongly recommend that CETA not be continued in its original form and that the federal government address problem areas before proceeding with Bill C-18. In this interim period, we see an opportunity for the federal government to improve CETA through Bill C-18 and ensure the best possible trade deal for Canada and Canadians.
The contribution of Canada's aerospace industry should not be ignored. The aerospace industry has irrefutably proven to be the driver of innovation and technology across sectors. For decades, Canada's expertise, knowledge and skill base has been world renowned. In fact, the Canadian government relies more on this industry for revenue than Canada's competitors. Aerospace is a large contributor to the Canadian economy, some $28 billion annually, and as a large contributor to our GDP, it's an export-extensive industry. Ninety-three per cent of aerospace manufacturing firms were exporters, which is 44% higher than the manufacturing average. Aerospace manufacturing firms also have more diversified trade than the manufacturing average, underlining the importance of trade to this industry, which must be on favourable terms.
The industry is also a source of well-paid, stable, unionized jobs that support middle-class Canadians. In the Canadian labour market, the aerospace industry employs more workers than the auto industry by a large margin: 208,000 versus 123,000 workers or 60% more workers than auto. Yet, to date, the industry has seen little direct support as a whole. We advocated for support in this industry prior to the pandemic and we support all efforts to grow Canadian aerospace, making us more competitive. Certainly, trade opportunities open doors for growth and exposure.
There are opportunities in the U.K. aerospace market. According to a study done by the trade commissioner, there is a niche for Canadian aerospace in the U.K. market. Although we make up a small portion of the U.K.'s trade portfolio, approximately 1.6%, we believe the Canadian aerospace industry should take advantage of opportunities afforded by the transition agreement.
The trade commissioner has identified opportunities for Canadian aerospace companies, which would be supported by the continuation of agreement terms under CETA. Disruptions in global markets due to the pandemic are inevitably leading to mergers and acquisitions with the aerospace and defence industry having been flagged as the most susceptible. The trade commissioner advises Canadian companies with cash flow to consider acquisition targets and to invest in the U.K.
Other opportunities of interest are software solutions that support the digitization of supply chain management, as well as technology supporting the transformation of industry due to the coronavirus crisis, such as cyber solutions, monitoring solutions and CBRN-type capabilities that support disinfection.
We need to position the aerospace industry for success in the U.K market by the development of an industrial policy. Globally, economies have been shaken by the pandemic, paralyzing several industries. Government spending has increased in efforts to sustain both workers and businesses during this challenging time. It's clear a recovery will take years, and we recommend the development of a thorough industrial policy targeted at supporting and stimulating hard hit sectors, such as aerospace, aviation, tourism and related industries. Getting the economy back on track will not only require funding, but a comprehensive and well-thought-out plan to ensure a strong and full recovery in the form of an industrial policy.
We need the development of a national aerospace policy. A pan-Canadian aerospace policy would address several issues that Canadian aerospace faces. Canada's largest aerospace cluster is centralized in Quebec, however practically every province has an aerospace cluster. The industry is often caught between provincial and federal governments, which has made a cohesive funding framework and fostering of regional clusters difficult. The approach the government has taken is to fund individual aerospace companies and randomly transfer money to provinces with aerospace clusters.
This is neither an efficient use of money nor an effective means to ensure that Canada remains globally competitive, despite being unsurpassed in production of flight simulators, civil aircraft engines and MRO.
On support for regional clusters, practically every province has a regional cluster, yet there is no coordination amongst them. A healthy level of competition within an industry is beneficial. However, as an industry of national importance, there must be some level of coordination and cohesion at the national level. Simply put, strengthening the domestic industry supports its global competitiveness.
With regard to support in the procurement process, we recommend that Bill C-18 outline stipulations for Canadian content requirements in public contracts. Additionally, measures that allow the Canadian government to support and guarantee economic benefits must be part and parcel of the new agreement. The IM also recommends that a form of insurance framework be included, with the goal of protecting struggling economic sectors such as aerospace in the current climate, without facing penalties for breach of contact.
On CETA's gaps and erosion of labour rights, labour groups rang the alarm bells before CETA was adopted, highlighting the agreement's shortcomings in protecting labour rights. For instance, CETA's chapter 23 is excluded from general dispute settlement, meaning that labour disputes couldn't be resolved through a formal mechanism that involved penalties. While investors can rely on a binding investment court system, labour disputes are resolved through a non-binding process of co-operation and recommendation, which companies can ignore without penalties.
Furthermore, labour provisions did not provide for any binding or enforceable labour provisions for implementation of core international labour standards. International labour standards prevent the erosion of standards and a race to the bottom, which is likely, given that CETA allows parties to shift investments to areas where labour standards are lowest and through challenging new regulations that would negatively impact investments.
CETA also allows certain classes of workers to move between countries and bypass the Canadian immigration process. CETA limits government's ability to put limits on migrant workers in areas of high unemployment, even if local workers are available. This provision clearly undercuts government's efforts to train and hire local workers.
Last but not least, temporary entry provisions do not provide a path to permanent residency or immigration, as is the case in other European trade agreements. Moreover, this provision is expected to have a greater impact on Canada than the U.K.
CETA also imposed a condition on the Canadian government to treat foreign suppliers at least as well as domestic suppliers, which, in some cases, would disadvantage domestic businesses. Under the original agreement, our government's ability to regulate entry and activity of foreign firms was limited, even in instances when such regulations didn't discriminate between foreign service suppliers and domestic service suppliers. This places emerging domestic businesses in a precarious position, such as the majority of the SMEs in the Canadian aerospace market.
With regard to public procurement, CETA allowed procurement rules to apply to Canadian municipal and provincial governments, in addition to the federal government. Local bodies are prohibited from favouring local suppliers and even applying local content requirements to procurement contracts, as it would infringe on non-discrimination provisions.
What is more concerning is that CETA's provisions give unconditional access to Canadian procurement markets to European companies. Moreover, procuring entities are not able to obligate foreign suppliers to contribute positively to local economic development.
Under the new transition agreement, we recommend that Bill C-18 outlines stipulations for Canadian content requirements in public contracts, a measure that allows the Canadian government to support and guarantee that economic benefits be part and parcel of the new agreement.
12:20 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Chartrand.
I'm sorry; I don't want to cut you off, but we don't have enough time. Maybe you can get your last comment in during our questions.
12:20 p.m.
Quebec Coordinator, International Association of Machinists and Aerospace Workers
I will just put in the IM's recommendations: Develop an industrial policy that includes a national aerospace policy to support the industry nationally; support the industry in remaining globally competitive in accessing global markets; ensure under Bill C-18 that there are Canadian content requirements in public contracts; review and revise problematic CETA chapters, such as labour rights, public procurement, trade regulations and quotas.
Thank you.
12:25 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Chartrand.
You have submitted that to the committee, so they have those as well.
12:25 p.m.
Quebec Coordinator, International Association of Machinists and Aerospace Workers
Absolutely.