International Trade Committee on Feb. 26th, 2021

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

This is meeting number 17, on Friday, February 26. Pursuant to the order of reference of Monday, February 1, 2021, we are studying Bill C-18, an act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. Today's meeting is webcast and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

Welcome to all of the committee members, the staff and our witnesses. From 1 p.m. until 2:30 p.m., we have the following witnesses who will be presenting to the committee.

We have, from the Business Council of Canada, Trevor Kennedy, director, trade and international policy. From the Canadian Alliance of British Pensioners, we have Ian Andexser, chairman. From the Canadian Cattlemen's Association, we have Fawn Jackson, director, international and government relations; and Doug Sawyer, co-chair, international trade committee.

From the Canadian Federation of Independent Business, we have Corinne Pohlmann, senior vice-president, national affairs and partnerships; and from Canadian Manufacturers & Exporters, we have Matthew Poirier, director, trade policy.

Welcome to you all.

Mr. Kennedy, if you'd like, please lead off.

[Trevor Kennedy, Director, Trade and International Policy, Business Council of Canada]

Thank you very much.

Madam Chair, committee members, thank you for the invitation to take part in your meeting on Bill C-18, an act to implement the agreement on trade continuity between Canada and the United Kingdom.

The Business Council of Canada is composed of 150 chief executives and entrepreneurs of Canada's leading enterprises. Our members directly and indirectly support more than six million jobs across the country and hundreds of thousands of small businesses. Representing different industries and regions, these men and women are united in their commitment to make Canada the best country in which to live, work, invest and grow.

It's been said many times before, but it bears repeating, that Canada is a trading nation, and many Canadian companies rely on the rules-based trading system, as well as our networks of bilateral free trade agreements, to provide certainty and access to global markets.

Given its prominent role in the economy, we expect international trade to be an important part of Canada's economic recovery. The facts speak for themselves. Merchandise exports to the world fell by 12.3% in 2020 because of the pandemic, a decline of $70 billion. Canada needs to work hard in the years ahead to restore and grow our exports from precrisis levels.

The potential loss of preferential market access to the U.K., secured under CETA, presented a serious risk to the recovery for Canadian exporters. The U.K. is Canada's third-largest merchandise export market. It was also one of the few markets in the world in which we were able to sustain our exports from last year despite the crisis.

The U.K., as part of the EU, has been a critical component of Canada's fast-growing transatlantic trade relationship. Before the pandemic, it accounted for 40% of Canada's merchandise exports and 36% of service exports to the EU. Merchandise exports to the U.K. grew by nearly 12% since provisional application. Canadian exporters had momentum in the U.K. before the pandemic, and it's important that we continue to grow our trade.

When I spoke to the committee during negotiations, I mentioned how time-sensitive a Canada-U.K. trade deal is. Not only did we risk losing preferential market access by reverting to the WTO most-favoured nation tariff rates, but many of our peers were negotiating bilateral deals that would have undermined our competitiveness in the market.

Given our existing trade relationship with the U.K. under CETA, and the uncertainty surrounding the future of U.K.-EU relations during the negotiations, the transitional trade deal approach taken by our negotiators was the best approach for Canada. The transitional approach provided Canada with an opportunity to take this new relationship into account when we negotiate a long-term trade deal.

As with Canada's existing free trade agreements, we want to ensure that we reach a conclusive deal in the future with appropriate consultation and assessment of the market opportunities for Canadian firms. The transitional approach will also allow us to do that while we maintain our position in the market.

We were pleased to see that a Canada-U.K. trade continuity agreement manages to preserve our gains under CETA. Like CETA, the TCA's benefits include the elimination of 98% of tariffs on Canadian merchandise exports to the U.K. and will eliminate 99% within a few years. This is in addition to important market access opportunities in government procurement and services, among others.

At the same time, because Canada and the U.K. agreed to negotiate a new deal in the future, the TCA does not require that our future trade relationship be based exclusively on our existing EU agreement.

Our priority today is to quickly ratify the TCA. The existing memorandum of understanding between Canada and the U.K. is a helpful stopgap measure but it is time-sensitive. The U.K. is retooling its international relationships and there is a clear opportunity to reimage our bilateral trade and investment ties with a comprehensive and ambitious trade agreement. We hope both parties can start working on this with stakeholders as soon as the TCA is in force.

The Business Council of Canada reiterates the importance of swiftly ratifying the TCA. This agreement provides certainty for businesses at a time of great uncertainty. It will help our economy to recover by driving trade and attracting the capital needed to innovate, grow and improve Canadians' quality of life through the creation of well-paying jobs.

Thank you for the opportunity to address your committee. I look forward to answering questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Kennedy.

We move on to Mr. Andexser, for the Canadian Alliance of British Pensioners.

[Ian Andexser, Chairman, Canadian Alliance of British Pensioners]

Thank you, Madam Chair, and thank you to all committee members for the opportunity to address you today.

I am sure many of you are wondering why I have been given the opportunity to speak to a committee formed to discuss future trade agreements between the U.K. and Canada. I hope in the next few minutes to clearly explain why we feel there is an important connection.

I may be one voice, but I say “we” because I speak on behalf of approximately 136,000 British pensioners who have chosen Canada as their home in retirement. The vast majority of these people, like me, emigrated many years ago in response to Canada's request for certain skilled labour, such as nurses, teachers, firefighters and tradespeople, for the booming oil industry in the 1970s. Others came to Canada, after working all their lives in the U.K., to be with family members who had already emigrated.

Before leaving the U.K., we worked and we paid mandatory contributions into the British state pension scheme, which is the equivalent of CPP, assuming that upon retirement we would be treated equally to all British pensioners residing around the world.

However, we are not treated equally because we have chosen to live in Canada, and indeed neither are pensioners in most Commonwealth countries. This results in almost half a million pensioners never receiving the annual uprating in their British pensions. We are known as frozen pensioners.

You may ask why.

One answer is that the U.K. has continuously refused requests from Canada's officials to sign a reciprocal agreement to stop this discrimination. They argue that pension increases are to take into account inflation in the U.K., but they ignore the fact that they already index pensions for half a million expats overseas in many countries, including, just to the south of us, the United States.

A recent U.K. House of Commons briefing paper covering frozen overseas pensions states that the unfreezing of British pensions in Canada did not arise during the negotiation of a social security agreement with Canada in 1959. This is not surprising. The pension payable overseas was only introduced in 1946. Movement around the world was in its infancy. There were very few people affected in 1959, but here we are 61 years later, and the U.K. still clings to this piece of history.

As more people started to be affected during the high inflation days of the 1960s, more and more United Kingdom MPs began to receive correspondence from pensioners abroad protesting the unfairness of the freezing policy. This protest has magnified over the years as travel around the globe has exploded.

Let me give you a couple of examples of the impact of this policy here in Canada.

Peter Duffey, a 95-year-old from Vancouver, lives only 300 yards from the U.S.A. border. He worked for 40 years in the U.K. He flew bombers in the Second World War and he still receives 52 pounds per week, as he has done for 30 years. A similar individual in the U.S.A, however, is paid 134 pounds. Anne Puckridge, 95, of Calgary—also a war veteran—receives only 72 pounds a week instead of 134 pounds.

Both of these seniors have been cheated out of thousands of pounds of their rightful pension, and the same is true of countless others of the 136,000 frozen pensioners in Canada.

The standard boilerplate response that we receive from the U.K. is that this is a policy that has been continued by successive governments for many years. However, having a history doesn't mean something is right. What was applicable 70 years ago isn't in today's world. If something is morally wrong, it is wrong, plain and simple.

Some years ago, our association joined forces with a similar group in Australia to begin a consolidated approach to seeking justice, and the International Consortium of British Pensioners now advocates on behalf of frozen pensioners everywhere in the world.

Only two months ago, Sir Roger Gale, a Conservative MP in the United Kingdom for 38 years and chairman of the All-Party Parliamentary Group on Frozen British Pensions, released a report that was extremely critical of his own government for perpetuating this practice.

For decades, the U.K. has maintained that they are not entering into any new agreements covering frozen pensions, yet with Brexit, the U.K. recently signed new pension agreements with 23 countries to ensure uprated pensions continue for all expats in EU countries, as indeed they should. The U.K. can no longer claim it's not entering into new agreements, and Canada should most certainly be given the opportunity to enter into an updated agreement under the current trade negotiation discussions.

Earlier this week, Sir Roger Gale invited more than 30 MPs from the U.K. and Canada to discuss ways to advance talks on the frozen pension issue, and a number of Canadian MPs, including pensions minister Deb Schulte, suggested that your upcoming trade negotiations would certainly be a good starting point.

On behalf of the 136,000 frozen pensioners residing in Canada, we would be extremely grateful if you could raise this issue with your counterparts across the pond. As Canada enters into trade negotiations with the U.K., worth an estimated $27 billion annually, there is no better time to have this critical discussion.

This policy is estimated to cost the Canadian economy close to half a billion dollars every year, and the onus to support those struggling on very low incomes should not fall on the backs of the Canadian taxpayers, as it currently does through subsidies such as GIS and welfare.

One recent high commissioner to the U.K. told us that the only thorn in an excellent bilateral relationship was that of frozen pensions in Canada. Surely one would have thought that as a major Commonwealth partner, Canada would have been the last place where this immoral, unjust and discriminatory practice could have been allowed to perpetuate for so long.

I hope that I have demonstrated that the current policy is a cost to Canada and deeply impacts the well-being of many of the most vulnerable in our society.

In conclusion, I realize that this issue might not appear to fall within the parameters of normal trade discussions, but now more than ever, your committee is in an excellent bargaining position to demand that the U.K. quickly respond to the recent official request from Canada to sign a social security agreement.

One definition of the word “trade” is to willingly give things or services and get other things or services in return.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Chair, I apologize for interrupting Mr. Andexser, but the interpretation is not working.

[The Chair, Liberal, Judy Sgro]

Mr. Andexser, could you just hold for a moment?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

The interpretation is back.

Thank you very much.

[Ian Andexser]

We feel that momentum to end this policy is now on our side. Please use your voices to help us.

Thank you. I would be pleased to answer any questions.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Andexser. I appreciate that.

We'll go on to the Canadian Cattlemen's Association.

Ms. Jackson or Mr. Sawyer, whichever one of you would like to go forward, please begin.

[Doug Sawyer, Co-Chair, International Trade Committee, Canadian Cattlemen's Association]

Thank you, Madam Chair, to you and your fellow committee members.

I am Doug Sawyer. I'm a rancher out here in the west, in snowy Alberta. I am also a board member of the Canadian Cattlemen's Association, the national voice of Canada's beef farmers and ranchers. With me today is Fawn Jackson, director of government and international relations with the CCA.

Thank you for the opportunity to reappear before the committee regarding the act to implement the agreement on trade continuity between Canada and the United Kingdom of Great Britain and Northern Ireland. We will refer to this agreement as the “continuity agreement”.

Today we advocate for two things. Firstly, we strongly encourage a swift return to the negotiating table to establish a permanent, progressive and ambitious free trade agreement, with a culmination in the U.K. joining the CPTPP. Secondly, we cannot replicate the trade agreement that we have under CETA in a Canada-U.K. FTA or CPTPP.

I will now expand on these points.

The beef industry is one of Canada's largest agricultural sectors, supporting a total of 228,000 jobs and a contribution of $17.9 billion to GDP. Canadian beef and livestock genetics are sold to 58 markets around the world and about 50% of what we produce is actually exported.

Although COVID has been extremely difficult for all Canadians, agriculture stands out as a vital and resilient part of our whole economy. I am pleased to report that while COVID was very difficult for the first part of the spring of 2020, we were able to recover and the value of trade was up 1.4% in 2020 over 2019. Having a record year, despite the difficult conditions, demonstrates the value of having robust and ambitious trade agreements in place.

Export Development Canada reports that Canada's agricultural exports are growing three times faster than the overall Canadian average, confirming that agricultural products are a net cash generator for Canada's economy and an area for future growth. This is important context indeed for the conversation we are having today about trade, both for recovery and for the long-term economic health of our great country.

Since it became clear that the U.K. would be exiting from the EU, CCA consistently communicated concerns with trade obstacles being carried over from CETA to the Canada-U.K. transitional agreement and any permanent trade agreement with them.

Last time we presented before this committee, the details of the continuity agreement were not available, but today we are able to share some thoughts on what the deal means for Canadian beef producers.

First of all, on access, Canadian beef will have 3,279 tonnes of access in 2021, and 3,869 tonnes in 2022. All beef must be hormone free.

In 2020, Canada exported 1,415 tonnes, which is within the total access we have gained, with some room for growth.

In the same time frame, the U.K. exported 5,393 tonnes to Canada, almost four times more than we exported to them, and significantly over the access we have in their market in this continuity agreement. Under the continuity agreement the U.K. has maintained duty-free access to the Canadian market, so even if we were able to resolve some of the trade limiting factors on our exports, beef will not be a net even trading partner with the U.K.

In 2020, Canada had a negative net beef trade of almost $14 million with the U.K., and a negative net trade of $83 million with the EU. This net trade deficit has grown since the implementation of CETA. The overall Canada-EU beef trade deficit, which includes the U.K., was a half a million dollars in 2018, $17.3 million in 2019 and an astounding $96.8 million for 2020. Needless to say, CCA is significantly concerned with how beef trade with the EU and the U.K. has actually progressed.

Unfortunately, because of the growing trade imbalance between Canada and the EU, we have had to ask the Government of Canada for some compensation. In future agreements, we must obtain reciprocal access. Anything less is unacceptable to our beef producers. It is disappointing to see that this reciprocity has not been obtained in the continuity agreement.

As you all know, CCA as an organization is a proud advocate of free trade, but we cannot have free trade in one direction without free trade in the other direction.

The continuity agreement does have some improvements. We are pleased with the tariff rate quota, TRQ, administration that will be handled on a first-come, first-served basis, which will make shipping to the U.K. less burdensome. Previously, the quota access was managed through a licensing system. We also recognize that this is a continuity agreement largely replicating CETA, and that without a trade agreement in place, the Canada-U.K. trading relationship could have fallen back to the MFN tariffs, which could halt trade between Canada and the United Kingdom.

For the reasons we have discussed today, CCA's highest priority is achieving a long-term FTA with the U.K. that resolves trade barriers and enables reciprocal trade. CCA is pleased to see both governments committed to negotiating a full FTA starting this year, and encourages both parties to do so, especially given the U.K.'s formal application for access into CPTPP.

Aside from reciprocal access, which we stress is imperative, there are a number of other factors that need to be addressed under a future trade agreement with the United Kingdom. We also advocate for a full systems approval. Canada has a world-renowned food safety and meat inspection system that is recognized throughout—

[The Chair, Liberal, Judy Sgro]

Please deliver your closing remarks, Mr. Sawyer.

[Doug Sawyer]

I'll skip right down to them.

CCA recognizes the importance of avoiding trade interruptions and the need for a transitional agreement. We are strongly advocating for a swift return to the negotiating table to establish an ambitious agreement. We are confident that Canada has the right team of negotiators, and look forward to achieving the same level of ambition that was achieved in the CPTPP agreement, with our U.K. partners.

I thank you and look forward to taking your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sawyer. You have my apologies for having to interrupt you.

From the Canadian Federation of Independent Business, Corinne Pohlmann is next.

[Corinne Pohlmann, Senior Vice-President, National Affairs and Partnerships, Canadian Federation of Independent Business]

Good afternoon, everybody.

Thank you for the opportunity to be here today to share the CFIB's perspective on Bill C-18.

You should have a slide presentation that was sent to you by the clerk. I'm hoping to walk you through it, so I hope you'll have that in front of you as I present my speaking notes over the next few minutes.

First, I just want to say that the CFIB is a non-profit, non-partisan organization that represents about 110,000 small and medium-sized businesses across Canada. They come from every sector of the economy and are found in every region of the country.

It's important to remember that, normally, Canada's small and medium-sized enterprises employ about 90% of Canadians, and they're responsible for the bulk of new job creation. However, the last year has been particularly challenging for many small businesses right across the country, as they had to deal with shutdowns and limited capacity to help Canada deal with the pandemic.

As of early February, you should know that only 51% of businesses in Canada were fully open, that only 39% were fully staffed and that only 25% were back to normal revenues. The CFIB also released some new data just yesterday that found that seven in 10 businesses have taken on new debt during the pandemic, with the average debt being almost $170,000 per business.

I share these staggering numbers to highlight why it is so important to continue to find ways to bring stability and continuity to businesses trying to operate in these challenging times. I think that is what Bill C-18 aims to do.

I also believe that trade, both domestic and international, will be key to Canada's economic recovery. Agreements such as this one are essential in making sure that small and—to be fair—large businesses, as well, have some certainty when dealing with some of our largest trading partners.

To better understand why this is so important to small businesses, I'm going to be referring to a survey that we did back in 2017 that got almost 4,400 responses. As you can see, 31% of survey respondents had some experience with exporting, and 71% had some experience with importing.

These may be slightly higher than what is actually out there, as the survey likely attracted those, but they're not going to be too far off from what's actually the experience of many small businesses. For some, though, it's only an occasional thing. They maybe do it a couple of times a year. Others, though, do engage in trade daily. What's important, though, is that, regardless of the frequency of their trade experience, it needs to be as seamless and as easy as possible if we are to encourage more small businesses to continue to trade internationally.

Which countries do they trade with? Not surprisingly, the United States, of course, dominates the trading experiences of small businesses in Canada. However, as you'll see, more than 5% of small business owners import goods and services from the United Kingdom, and slightly more—closer to 6%—export to the U.K. In fact, amongst small firms, the U.K. is the third most likely region that Canadian small businesses will be exporting to—behind only the U.S. and the EU—and it's the fourth most likely country that Canadian small firms import from. Clearly, it's an important trading partner for small businesses.

We know also that governments around the world are interested in getting more small businesses involved in international trade. Therefore, understanding what motivates them to get involved in trade is still an important question. As you can see, most do it because they see a growing market demand for their product or service, want to expand their business or see good potential market opportunities. However, more than a third—36%—are also citing favourable trade agreements as having an influence on their intention to export. Having trade agreements address small and medium-sized business trade priorities would encourage even more to engage in trade.

That's why we've always welcomed the small business—or SME—chapters that were included in the CPTPP and the Canada-United States-Mexico Agreement, as they're a starting point in recognizing some of the challenges that may be unique to smaller firms.

While CETA did not expressly have an SME chapter, there was some work done through a joint committee to recognize the unique needs of small firms. We would strongly encourage a continued focus on SMEs in this trade continuity agreement. We would also highly recommend that the new Canada-U.K. negotiated trade agreement include a small business chapter that has within it the development of such tools and activities aimed at assisting smaller firms with their trading challenges. It's these types of initiatives that will ultimately encourage more smaller firms to engage in trade.

At the very least, of course, trade agreements have to help small businesses overcome some of the barriers they face. Those challenges can include everything from currency fluctuations to the cost of shipping, but they also include dealing with various duties and taxes and understanding rules and regulations—basically those non-tariff barriers.

We are pleased to see that Bill C-18 will honour the tariff elimination agreements made under CETA, which includes the elimination of 98% of tariffs on products exported to the U.K. right away. That, of course, will go up over the next couple of years.

We're also pleased to see that chapters remain on improving technical barriers to trade, as well as an emphasis on working together on regulatory co-operation. Also, it's important, though, to improve customs and trade facilitation, as this is often where small businesses can get discouraged. Efforts to help them better understand all the various rules, all the various customs processes, will be an important component of making this trade agreement and others really work for small businesses.

While much of the information I'm sharing today comes from a survey done prior to the pandemic, I did want to share some more recent data that illustrates that these issues remain important for small businesses, even during troubling times.

A survey was conducted just last August. In it we asked what the federal government priorities should be or what it should focus on. As you can see, over one-third wanted the government to focus on ensuring favourable trade conditions for small businesses. This actually jumps to more than one-half among manufacturing firms. This is despite all the challenges that were in place at the time.

We want to ask that you ratify Bill C-18 and then move quickly to negotiate a comprehensive trade agreement with the U.K. The trade agreement to be negotiated should include a small business chapter that addresses their unique needs and provides them with tools like a centralized website that has relevant information in plain language. It also should ensure that Canada and the U.K. provide tailored information for small and medium-sized enterprises on what changes to the agreement may impact their existing trade relationships, and how small businesses can benefit from the agreement. It should also focus on making customs processes easier, as this is often where the greatest stumbling blocks are for smaller companies.

Incorporating some of these ideas and moving quickly on this agreement will help make sure that businesses already trading into the U.K. can continue to do so with limited interruption, and could potentially attract even more smaller firms that are looking to expand into new markets to engage in trade.

I want to thank you for your attention. I look forward to answering any questions.

[The Chair, Liberal, Judy Sgro]

Thank you, Ms. Pohlmann.

We move on to Canadian Manufacturers & Exporters, and Mr. Poirier.

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

Good afternoon, and thank you for inviting me to participate in today's discussion.

It's my pleasure to be here on behalf of Canada’s 90,000 manufacturers and exporters, and our association's 2,500 direct members to discuss Bill C-18, the implications for Canada’s manufacturing and exporting sector, and the future of this vital industry.

Our association’s members cover all sizes of companies, from all regions of the country and all industrial sectors. We represent the majority of Canada’s manufacturing output, as well as Canada’s value-added exports.

With over $20 billion in exports, the U.K. is one of Canada’s largest export markets. Canada-U.K. trade was one of our very first trade relationships and traditionally has been our doorway to the European market. According to our management issues survey, which is a large biennial survey of Canadian manufacturers, the European Union, and the U.K. in particular, is one of the top three markets that exporters see as having the most potential in the next five years.

As the committee knows, this is a unique situation. We've had a free trade agreement with the U.K. for many years under CETA, so the discussion today is all about maintaining that access and then, we hope, a discussion on how Canada can take advantage of a new bilateral trade agreement between Canada and the U.K. We, therefore, fully support the Canada-United Kingdom trade continuity agreement, and we urge swift passage of Bill C-18. This interim measure is required, obviously, while our negotiators hammer out a more permanent Canada-U.K. agreement, and like my fellow panellists, I urge that it happen as soon as possible as well.

However, beyond these mechanical trade agreement issues lies an even bigger problem that I must raise. That is the problem of our declining value-added export performance, a decline that has been accelerating despite signing more and more free trade agreements across the globe.

Let me explain what I mean. Two-thirds of Canada’s value-added exports, the types of exports that Canada makes the most money from, are manufactured goods. In other words, Canadian manufacturers take the raw ingredients, transform them into something of higher value and then sell these goods abroad. This “bigger bang for your buck” type of trade has been declining for years. In fact, with the U.K., manufacturing exports have been declining steadily for five years, even after we signed CETA. Canada can no longer afford to ignore the lost economic potential that the decline in value-added exports represents. It's simply not sustainable.

How do we fix that? We have ideas.

Simply put, Canada’s manufacturer-exporters are too small, and at full capacity. Generally speaking, Canada has a higher proportion of its businesses being smaller SMEs than most of our global competitors. From a fundamental structural perspective, we need to get our companies to invest in their businesses and help them grow and scale up. Larger companies are simply better positioned to take advantage of global trade. CME’s manufacturing survey results back this up. When asked what is holding them back from exporting to new markets, they told us that the risks are too high because they lack a competitive edge with foreign companies. They simply feel that they can’t compete and don’t bother.

It's important that we agree that this structural domestic business problem is driving our export underperformance. Landing new global customers through FTAs is rather pointless if we cannot produce the goods to sell to them at competitive prices.

Now, you might ask yourselves, isn’t this the point of EDC, BDC, CCC and the trade commissioner service? Aren’t they supposed to help derisk exporting and help SMEs get out there? The answer is yes, and we would argue that they are all quite good at doing that. The problem is the disconnect between these great programs and exporters knowing that they exist. When we polled manufacturers, we found that those who used these agencies and programs loved them, but a majority of respondents couldn’t even identify the agencies, let alone the programs they offer. This is a big problem.

Therefore, we have the dual challenge of our exporting companies being small, underinvested in and uncompetitive, and a big gap between government assistance and companies using that assistance.

Here are some concrete actions that we would like to put forward to address some of those problems.

Number one, create a manufacturing and export strategy for Canada that focuses on modernizing and growing our industrial sectors. It needs to help companies invest in the technology that will help them scale up and truly become global players. We happen to have such a plan, which we discussed with many of you in the past, and I would be happy to leave a copy with the clerk.

Number two, launch a made-in-Canada branding exercise at home and in international markets to celebrate our manufactured goods. This will boost awareness of Canadian capabilities and technologies as well as sales and exports. The maple leaf is a global brand with a sterling reputation that we don't take advantage of enough.

Number three, bridge government export agencies and exporters by leveraging the vast networks of business trade associations. This can be done by investing in Canada's trade associations' capacity to link the two sides and act as a concierge service for exporters. The government used to support these types of initiatives to great effect. We think they should again.

Number four, expand our efforts on SME exporter mentorship. Organizing and managing private peer-mentoring networks is another way Canada's trade associations can be used to maximize company-to-company learning.

All these actions are table stakes if we want to play a bigger role in global trade. They will also go a long way to helping current manufacturers maximize their export potential for years to come. However, while we at CME believe these solutions are something we need to work on now, the priority, of course, is ensuring we maintain current global market access.

Let me reiterate that CME fully supports Bill C-18. We need a transitional agreement in place between Canada and the U.K. as soon as possible and, in time, a permanent trade agreement between our two nations.

Thank you for inviting me. I look forward to the discussion.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Poirier. Thank you to all the witnesses.

We'll go on to Mr. Hoback for six minutes, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and thank you, witnesses, for coming out on a nice Friday afternoon to talk about trade. It's one of my favourite topics.

I'm going to start off with you, Mr. Sawyer. You raised quite a few concerns about the agreement that we have with the EU, yet this is a copycat agreement that's gone on to the U.K. As we look forward, we're not going to stand in front of this agreement. We're not going to hold it up. I think everybody understands that, but in the same breath, we have to make sure that when we go into our bilateral negotiations, all the sectors are properly represented.

As we go forward, what are the things that you'd key in on that would help the beef sector in Canada be part of that agreement?

[Doug Sawyer]

I think there are a few. We run into the non-tariff trade barriers that always give us grief. We need to equalize that. We also very much need to equalize our ability to trade in the same amount of tonnage. That's imperative. As you've seen, that huge trade imbalance, which has caused.... As you see, we still have some room to move upward on our quota there.

Those trade imbalances are caused by the non-tariff trade barriers that we're up against. We've been working through those for years, as you well know. We're not making the progress on those that we had certainly hoped for. If we had the non-tariff trade barriers removed, we would soon hit that quota limit. Free trade has to be free trade, so remove the quota limits.

I don't know if Fawn has anything to add to that or not.

[Fawn Jackson, Director, International and Government Relations, Canadian Cattlemen's Association]

It's in a future FTA with the U.K. and also as we move into CPTPP. It has to be imperative in both of them.

[Randy Hoback, Conservative, Prince Albert, SK]

The odds are that we'll do the British agreement first. I agree with you, Fawn, that we then have to address the science-based approach on all our trade and how other countries are using non-tariff trade barriers and avoiding science to restrict Canadian access for beef or other goods.

As we look at this agreement, one of the things they've said is that they've made no concessions and they've given up no access to supply management. Supply management has been compensated in the past when they had to give up access. When you're talking about compensation, where is your justification for compensation? Where do you feel you need compensation and why?

[Doug Sawyer]

Fawn, I think you're close to that file, closer than I am.

[Fawn Jackson]

I can tell you that it was a robust discussion for our board to go down that path, but it has been extremely frustrating that we have not been able to access the European market, including the U.K. market, as we had anticipated. Some of the problems are within Canada. We haven't been able to develop the supply chains, for which we need support from CFIA and AAFC to be able to do, to have the same sort of system, for example, that's readily available in the United States.

We're extremely frustrated, and the net trade balance has grown to a point where it is truly unbearable.

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, it's amazing when I think we're importing more from the U.K. than we're sending there. When I look at our cost production, we should be beating them hands down. We're more competitive and we produce a better product in a more environmentally friendly atmosphere. I just can't believe that.

Mr. Poirier, I'm going to move over to you and the manufacturers and exporters. One of the things that we've always been talking about, and I'm hoping is getting addressed in this agreement, is the fact that we need to become more competitive. We need to take advantage of our trading partners and partnerships with our trading partners to become more competitive globally.

Do you see those opportunities coming forward with this interim agreement? What other things would be changed in a final agreement that you would like to see happen?

[Matthew Poirier]

All of our agreements to a large extent give us access. That's the key point. The issue that I sort of touched on in my remarks was that, before we get out the gate, we're limiting ourselves here domestically in terms of our capacities. If we're speaking about manufacturing specifically, we're at our limit in terms of what we can produce. It's great that we get all this extra market access, but if we can't produce more goods, we're not going to be able to take advantage of the gains from exports.

In terms of the agreement itself, I know Ms. Pohlmann mentioned the SME chapter. We're big fans of these sorts of bilateral or whatever chapters. In the USMCA, for example, we have the competitiveness chapter, the SME chapter and others that are key mechanisms to have the two countries work out problems before they become trade issues. We would like to see that as well.