International Trade Committee on March 8th, 2021

[The Clerk]

I see her in the room, but her camera is not open.

Ms. Whattam, can you hear me?

[Jesse Whattam]

I can hear you, but my connection keeps cutting in and out, so I've been having difficulty. I'm keeping my camera off and I hope that boosts my connection.

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

That's not a problem. I'll direct my first question to you, given that you can still hear me.

You mentioned in your opening statement the Geneva principles for a global green new deal. The opening paragraph from that executive summary talks about how we “once had a version of multilateralism that permitted nations to regulate international markets and to pursue strategies for equitable prosperity and development.” It reflected, really, the experiences that we had from both World War II and the Great Depression. The leaders in the post-war period, in the 1950s and 1960s, were intimately acquainted with how fragile our international system was, having gone through a depression and a world war. With the current pandemic, we are learning that again. We've seen the stresses on our supply lines and so on.

Given that climate change is very much going to be the defining issue of the 21st century, and putting this in the context of WTO reform, can you give the committee a sense of what's really at stake?

The threats that climate change, if left unabated, poses to our trade networks, especially with countries that have a lot to lose if their climates change, with increasing desertification, scarce water supplies, migration of people and so on.... Why is it so important for us to put that into the context of WTO reform?

[Jesse Whattam]

Yes, absolutely, I'll definitely take that question. If I cut out, it's because my connection dropped.

You mentioned the pandemic, and I think of the ways in which the global community has come together. Especially when you're talking about civil society organizations and grassroots organizations that are on the front lines of both the pandemic and climate change, we can see how those crises are similar in a way because the stakes of both are so high.

The ways in which the World Trade Organization and the current trade regime rules have constrained.... Even if governments want to take actions to prioritize the livelihoods and lives of communities, they're actually unable to do so because of the way that trade is structured right now. We can see this in the ways free trade agreements can be used to constrain governments from prioritizing “buy local” or other environmentally friendly projects.

When I think [Technical difficulty—Editor].

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

I think you've put yourself on mute.

[The Chair, Liberal, Judy Sgro]

Ms. Whattam, are you with us, or have we lost the connection?

[The Clerk]

It seems like she is still there.

[The Chair, Liberal, Judy Sgro]

We're not getting any response from her, and this is taking up Mr. MacGregor's time here.

Mr. MacGregor, maybe you should go on to one of the other witnesses.

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

Yes, okay. I'll move on to Mr. Vaillancourt.

In a similar line of questioning, we don't want to lose sight of the lessons that have been learned from this pandemic, the strains that have been put on global supply lines and so on. Maybe along the same lines, where I was asking about the threat of climate change and so on, are there any lessons you would like to see us really firmly commit to when we are looking at WTO reform, based on the experiences of the last year but also the challenges we will face over the next decade?

[Claude Vaillancourt]

I think one of the big problems with the WTO is this willingness to systematically attack tariff barriers by claiming that they are in place to hide some level of protectionism. In my view, that's the wrong way to approach things.

It is clear that we need to make a major energy transition. That is very important. We need to think about the economy in a different way. We need to shorten the circuits and produce more locally. There must also be a series of regulations to organize society around the necessary energy transition.

An organization like the WTO aims at very broad, liberalized trade. One only has to look at the history of the WTO to see that what the General Agreement on Trade in Services, or GATS, proposed in terms of liberalization was extreme. So we have to think of the world differently. The WTO must fundamentally and structurally reform its way of looking at the economy. People are ready to do this, at all levels. I mentioned Klaus Schwab earlier, and I'll repeat his name. This proves that even in fairly elitist economic places, people are ready to make this change.

The WTO must also manage to question itself and rethink the economy in a different way, according to the challenges that await us, that is to say the energy transition and the fact that social inequalities are increasing every year. Let's not forget that they are getting worse. This creates a fundamental problem. If the WTO chooses to reform itself, it must address these fundamental concerns, not put obstacles in the way, and allow states to take the necessary measures to address these major issues.

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

Maybe as a final question—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. MacGregor. Your time is up.

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

No worries.

[The Chair, Liberal, Judy Sgro]

It's on to Mrs. Gray for five minutes, please.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair, and thank you to all the witnesses for being here today.

My first questions are for Ms. Yurkovich from the BC Council of Forest Industries. Our last softwood lumber agreement was from 2006 to about 2015. Now, with no agreement and with softwood not being negotiated into CUSMA, based on some of the testimony we've had here today it sounds like you're likely at the mercy of a functioning WTO to resolve disputes. How have your organization and those you represent been affected since we last had a softwood lumber agreement with the United States?

[Susan Yurkovich]

The last agreement was 2006 to 2015, with a one-year standstill period. We have, of course, been back into paying duties, which were put on us in 2017.

It adds costs, but mostly it creates volatility and uncertainty. I think that's not good. After this year, we know what it's like to live with uncertainty. For our sector, this ongoing battle on the trade front takes up a lot of time, energy and resources. Most frustratingly, it doesn't allow us to deploy those resources in a different way.

It has real impacts when we have.... We're in good markets now, but when we were in bad markets, a lot of people were out of work very quickly. Look at 2019. It was a devastating year. Each person who loses a job in a mill.... These are good, family-supporting jobs. They are jobs that build communities. When we have that kind of volatility and loss, it can have a huge impact on workers and communities.

We would like to get resolution on this, particularly given that we've always had a North American market for lumber. They need our lumber. It's a great building material for people who are looking to make good choices for the planet. We would just really like to have this resolved once and for all.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you very much. I appreciate those comments. I've certainly seen it first-hand in my community of Kelowna—Lake Country because we had a mill here, Tolko, which closed recently and hundreds of jobs were lost.

We know that the Ottawa Group has been working to find solutions relating to the WTO. Have you seen any noticeable changes or reforms that have benefited the forestry industry since this group has formed?

[Susan Yurkovich]

I couldn't say specifically.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Okay, that's fair enough. That's good information.

You mentioned the importance of binding dispute resolution settlements and that decisions that should take months were taking years. How has the forestry sector been affected by this? Have you seen decisions yourself that you felt could have been easily rectified, but which were extended over a long period of time?

[Susan Yurkovich]

If you look at the current situation we're facing, the decision out of the WTO in the summer was a stunning victory for the country. It proved, yet again, that our industry was not subsidized. We have that decision. It's been made, yet it's been appealed and it's basically in limbo.

It's important to have those decisions finalized, because that's what, in the end—in both Lumber III and Lumber IV—actually puts pressure on the U.S. to come to the table and do the right thing. It's very frustrating for us to see that put in limbo. It's frustrating that they can appeal it to a body that the party you're litigating against has the ability to thwart.

It just doesn't seem fair. It doesn't seem right. It's not due process. It's super frustrating.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you for that.

Have you seen non-tariff barriers affect your industry? How do you see the WTO modernizing in order to be able to positively address these issues?

[Susan Yurkovich]

There are the phytosanitary issues. Issues around non-tariff barriers for our sector are real. We see them all the time. We've seen them levelled not just at our sector...but we've seen other instances even over the last year or so. It's challenging.

We've put a lot of time and effort—as I am sure the Grain Growers and other producers in the country have—into making sure that our products meet very high standards through our quality assurance programs and our auditing processes. To see those non-tariff barriers kind of creep in is a super tricky way to basically harm competitors in a way that looks like they're trying to do the right thing. We guard against that. We spend a lot of time and effort on that. Like I said, Canada has very good systems for making sure that we make sure that our products are of the highest standard.

It's not going happen—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Yurkovich. Excuse me for interrupting, but we have to move on.

We move to Mr. Dhaliwal.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Madam Chair.

Madam Chair, on this International Women's Day, I want to congratulate you and all women around the globe. Have a very happy Women's Day. I want to thank them for all the contributions they have made to our society and around the globe.

My question is going to Susan Yurkovich, who has done great work and has shown great leadership in British Columbia when it comes to the lumber industry. I'll just call you Susan. You were here during the last Parliament as well.

I have seen an enormous impact over the past many years. I'm sure Randeep will agree. Over 100 years ago, when the Sikh community came in, where they ended up was in small towns in the lumber industry. That's where the jobs were. Today, with a declining number of jobs, those small towns are becoming ghost towns. That had an effect over the years.

To come back to the WTO, we have 100,000 jobs, $13 billion in GDP, and $4 billion in taxes and fees. You mentioned there were two decisions that were made in favour of Canada—Lumber III and Lumber IV. How do those decisions address the economic impact that happened over the past many years?

[Susan Yurkovich]

How did those decisions impact...?