International Trade Committee on March 8th, 2021

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay. Well, when she gets back, maybe I'll ask her about digital or tariff-free broadband.

Next, with the BC Lumber Trade Council, it's the same deal. It's an ongoing issue, in perpetuity, dealing with other countries and tariffs, etc. What is the best outcome? If we're talking about WTO reform, how can we speed up the process so that organizations like yours and the businesses you represent can get before the WTO, get a result and get some financial compensation?

What is it, besides having Joe Biden appoint some appellate body panellists?

[Susan Yurkovich]

Well, that's part of it. We all have hope for a new administration in the U.S., but we have had this ongoing dispute on lumber with both Democratic and Republican administrations for many, many years. We are hopeful about the future.

For us, I think we just need to have a trade organization that can hear these matters in a timely fashion and you can get through the process. To your point, it just takes a very, very long time. The process should be rigorous and it shouldn't be a cakewalk, but these processes that drag out for years and years have very significant impact on workers, families, companies, communities, because you're tying up a whole lot of resources.

We rely on these independent, neutral bodies. This issue with respect to lumber is with the U.S., but we rely on these neutral bodies that take an evidence-based approach to come to decisions that then apply pressure on the U.S. Department of Commerce. If those processes are taking forever, we never get resolution.

For lumber, it's very much a Groundhog Day situation. As soon as we resolve something, we seem to be into it again.

Timeliness of processes.... They should be rigorous. They should be evidence-based and multi-faceted, but they should be timely so that we can actually move forward and not tie up resources—duties or legal or time and energy—that could be better spent invested in the Canadian economy and Canadian communities.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lobb.

We will move on to Mr. Sarai, please, for six minutes.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Madam Chair.

My first question will also be for Ms. Yurkovich, who has been leading this fight on behalf of lumber producers in British Columbia. She has become a very good expert on this. As we all know, we have thousands of jobs in the softwood lumber industry. In my riding in particular, I think we have some of the most softwood lumber jobs per capita in the province, and maybe even in the country. It's of deep concern to me when these tariffs are on year after year and different mechanisms are used to stall them.

What I want to know from you, Ms. Yurkovich, is how it has impacted the industry. Even though prices have been high and producers have been able to withstand it, we've also seen, when that was not the case, what it has done to the industry. It has devastated it in the past. You alluded to a very good point today, which is that there are $5 billion in duties that are collected and could be invested back into the industry. The sad thing is that this $5 billion is on the backs of Americans who are building or buying homes. They're paying it. It's used for political interests.

It's also not helping those in British Columbia who are producing this great lumber and who could be using this to, as you said, improve the industry, get the latest technology and also improve trades and technology in the industry.

Can you take a minute to tell us how it's impacting your industry?

[Susan Yurkovich]

I mean, it's weird. One of the things coming out of COVID has been that a lot of people are residing at home, and the home has been a very big focus, so out of this.... Very few good things have come out of COVID, but there has been a reinvestment in homes. For us, that has actually buoyed our industry, coming off the end of 2018 and through 2019 and early 2020, when we had a huge number of curtailments and closures of mills, and those affect families and workers in communities right across our country.

I've talked about this. There are 100,000 forest-dependent jobs in the province of British Columbia. Everybody always thinks about them as jobs that are largely rural. You were talking about where you reside, Mr. Sarai. It's a huge contributor to the local economy, even in the Lower Mainland, and in Calgary, Montreal and Toronto. We might not see the forest-dependent jobs, but about 40% of the forestry jobs in British Columbia are actually located in Vancouver, in the southwest part of the province. They're in logistics, marketing, banking, financial transactions, shipping and all kinds of things. Each one of those jobs has a family and a story attached to it, so when you have....

We are buoyed by high prices right now, but that just masks the underlying problem. Fundamentally, for us, every dollar that's sitting on deposit with the U.S. could be spent on plants, equipment, investing in communities and developing new products. When we think about the products that people are looking for, they are looking for products made from fibre, and when they come from sustainably managed forests, they're recyclable and renewable. People are looking for products made from fibre because they're a better choice, particularly in a climate-constrained world. If you build something out of wood, it's storing carbon for the life of the product.

During the early part of the pandemic, we had phone calls asking us how much more pulp we could make that could go into PPE and how they could source some of that product locally. Firms would love to be able to make those investments, but $5 billion.... About $2.5 billion of that is coming from the province of British Columbia. That's a lot of money sitting on the sidelines that could be invested in workers, communities and new products.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Ms. Yurkovich, besides prompt appointments and not blocking appointments to the appellate body, what other reforms specifically would help? The softwood lumber industry has become almost an expert with five rounds of this, five incarnations. What other reforms would help this dispute mechanism?

[Susan Yurkovich]

Like all processes, it's not perfect, and there is certainly room for improvement.

We would like to see.... Some of the other witnesses here talked about non-tariff barriers, which, of course, we are subject to as well, and even having a level playing field, including around how products are produced and environmental and regulatory considerations. We don't want to have a lax system. It's not good for the world to have very strong environmental requirements in one place and lax requirements in another place, because then money just flows there.

We actually do a good job here in Canada, because of our energy system, which is 96% or 97% clean. We have an abundance of low-carbon products that we produce, largely in British Columbia. We have an opportunity and we want to be able to make that available to the globe. We don't want to see there being opportunities for people to invest in places that don't have as stringent environmental considerations.

Therefore, it's about making sure that it's fair and applied evenly across the piece, making sure that the process works in a timely fashion, making sure we have a roster of people we can draw from who are experienced, who can look at the facts and who are able to opine in a way that's not influenced by externalities, who are going to look at the evidence and give countries a fair hearing.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Ms. Yurkovich.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you, Mr. Sarai.

We'll go on to Monsieur Savard-Tremblay, for six minutes.

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

Good morning. Greetings to all the participants. I thank them for their presence.

My question will be for Mr. Vaillancourt, from the Réseau québécois sur l'intégration continentale.

Mr. Vaillancourt, I will ask you a rhetorical question.

On paper, the idea of a dispute settlement body does not seem bad, particularly to ensure a kind of legal equality among states to avoid the fact that, in the balance of power, it is always the richest and most powerful countries that win in trade and other disputes. The small ones must be given a chance. On paper, that sounds like a good idea.

What is wrong with that?

[Claude Vaillancourt]

In my opinion, it is not the idea of having a dispute resolution body that is the problem. I think it's necessary and important. Trying to strengthen it is also a good thing. However, the questions we are asking about the current role of the WTO in the world are much more fundamental.

That the WTO is correcting some of its mistakes is interesting and should be done, but our concern is that it is not making the change in direction that is needed now. The record of the WTO is not very good, and that needs to be emphasized. It is not great for the workers of the world, nor for the environment. But all of this stems from the WTO's initial and fundamental vocation, which is to liberalize trade as much as possible. I think we are no longer there.

Even Klaus Schwab, the great organizer of the World Economic Forum in Davos, says we have to end neoliberalism. We are not there anymore. We need more regulation and a way to distribute wealth.

If the only question the WTO asks itself is how to perpetuate itself and improve its internal mechanisms, and it doesn't ask questions about its vocation, in my opinion, there is a problem. If it doesn't listen to the criticism that is levelled at it and doesn't take into account the problems that are created by the system that it has installed, there is a problem.

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

Basically, it is more a problem of perspective and not a problem with the structures themselves. You don't dispute the idea, per se, of having a body that adjudicates trade disputes.

[Claude Vaillancourt]

No, we don't dispute the idea per se at all, but if we're talking about reform, we would like to see the WTO go several steps further. It doesn't go far enough and doesn't seem to be listening to what the social movement has been calling for for many years.

So, yes, the WTO needs to be reformed, but it needs to be a much deeper reform that goes to the heart of the very objectives of this organization, which is problematic. We absolutely have to recognize that, and it's very important to say that.

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

It is also very different from what it was supposed to be in the beginning, after the Second World War. We were talking about an international trade organization based on the guidelines of the Havana Charter, which are quite different from the WTO of 1995.

What elements do you suggest should be reformed or eliminated? Would it be the most favoured nation principle? If you had to target two or three elements of the WTO agenda, what would they be?

[Claude Vaillancourt]

The priority would be the environmental issue. We must allow environmental protection to take precedence over free trade. It's a matter of survival for the planet.

Then, what is absolutely not talked about at the WTO, but which is fundamental, is the issue of taxation. We talk about it in our report. Tax competition distorts international trade and prevents countries from putting in place measures to redistribute wealth. Obviously, this is absolutely not within the scope of the WTO, but why not? That is the question we are asking. It could be part of it.

Among the most pressing issues, we include the issue of intellectual property. We're going way too far, because we're favouring large international companies way too much, when we have very important needs in terms of accessibility to medicines.

In my opinion, these three things are important, but we will also have several things to propose. As we mentioned in our statement, fundamentally, the idea of making international trade as free as possible is anachronistic. Humanity is not there anymore, right now, and we need to do what we need to do to really defend the people around the world.

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

At the end of the day, trade should be seen as a means, but never as an end in itself. You're talking about trade being based on human development goals, ultimately.

[Claude Vaillancourt]

That's exactly right.

We need to adopt measures to redistribute wealth, fight climate change, and ensure equality between north and south. The WTO has greatly favoured the kind of gap that has been created between the countries of the north and the south. Moreover, as early as the WTO Ministerial Conference in Seattle in 1999, this was denounced by the countries of the south, and the negotiation process was extremely difficult for them. So this is another problem.

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

If I am not mistaken, the WTO is one of the few international organizations that are not bound by the United Nations Universal Declaration of Human Rights.

Should the WTO be subject to international environmental agreements, for example?

I wonder how these policy changes that you put forward and that I support can be implemented in a concrete way.

[Claude Vaillancourt]

Yes, absolutely.

The goals of the Paris Agreement should be a priority—

[The Chair, Liberal, Judy Sgro]

It has to be a very brief answer, Mr. Vaillancourt.

[Claude Vaillancourt]

All right. So I'm going to stop here. I've said what I had to say.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will go now to Mr. MacGregor.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Madam Chair.

Before I begin, I thought I'd check to see if the Trade Justice Network is still with us. Is Ms. Whattam still there?

[The Chair, Liberal, Judy Sgro]

Madam Clerk, is Ms. Whattam with us?