International Trade Committee on May 2nd, 2024

[Wilson Miao, Liberal, Richmond Centre, BC]

Okay.

Let's talk about the Indo-Pacific. You mentioned it in your remarks and during some of your comments as well.

Minister Ng recently also announced a date for the next team Canada trade mission to the Philippines and Indonesia, and it will take place around December 1 to December 6 of this year. It will build on the success of the previous team Canada trade mission.

Would you agree that trade missions like this improve relationships between trading partners and help bolster supply chain resilience? As you mentioned, it's all about relationship building.

[Michael Harvey]

As you said, relationship building, especially in cultures in the Indo-Pacific, which are relationship-based rather than transaction-based.... When these team Canada missions take place, we always have several CAFTA members joining, which shows that they see the value in them.

[Wilson Miao, Liberal, Richmond Centre, BC]

Would you recommend that the government continue these kinds of engagement efforts to support our Canadian businesses and industry across the country?

[Michael Harvey]

We're always in favour of opportunities to build up relationships. We also think it's important to take advantage of the infrastructure we have on the ground.

We're very supportive of the agri-food trade office that was opened up in Manila, after calling for it for years, because in an environment like the Indo-Pacific, you really want to have people who are able to build up long-term relationships with local authorities. Being able to come from Canada for a few days is great, but really, what you're doing is opening doors, and then you need to follow up with people who are on the ground, so something like the office in Manila is very important.

[Wilson Miao, Liberal, Richmond Centre, BC]

That's great.

How's my time, Madam Chair?

[The Chair, Liberal, Judy Sgro]

[Inaudible—Editor] seconds remaining.

[Wilson Miao, Liberal, Richmond Centre, BC]

Okay. I'll just let that go.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Monsieur Savard-Tremblay, you have the floor for six minutes, please.

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

Thank you, Madam Chair.

I would also like to thank all the witnesses for being with us.

My question is for the representatives of the Canadian International Freight Forwarders Association.

You talked a little bit about the contribution management system. As you know, we did a study on this, which is not yet complete. We're waiting for a lot of information and a lot of documents that we requested that were supposed to be provided in two weeks and still haven't been.

Your organization is part of the Trade Chain Partner Working Group, which worked with the Canada Border Services Agency, or CBSA, to test and implement the CBSA assessment and revenue management system, or CARM. The CBSA is also one of the 22 signatories to a brief containing strong, if not murderous, criticism of the system, particularly with regard to the lack of preparation and consultation.

We received other documents after that. Even people from the CBSA union say they weren't consulted. Also, in your brief you point out a lot of inaccuracies in the testimony that was given here by CBSA officials.

Feel free to expand on that. That said, since it was recently announced that implementation of the CARM for partners would be postponed until the fall, I'd like to know if you're satisfied with that decision.

[Bruce Rodgers]

That's a very loaded question. Thank you for bringing it up.

The standing committees have dealt with these matters. I know you've met with the particular industry stakeholders, as well as the CBSA directly, on the challenges with the program. After those standing committee meetings...we were having biweekly meetings with the CBSA, but those have been cancelled. There has not been another meeting since the standing committee discussions. As trade chain partners, we're now even further out of the loop than we were previously.

The deferral until October will be a good thing initially, but there's a lot of work that has to go on between now and then. Again, when they were going to implement on May 13, there were some contingencies put in place. They had a 180-day contingency for how importers with a business number were going to import products, and then there was another 12-month extension.

In October, I don't know if those same extensions will be granted. Again, we don't know at this point in time. All we've heard about is the deferral. There have been no meetings, no correspondence and no communications other than that at this point in time.

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

In other words, collaboration and communication with the agency, even in the context of this major about‑face, have not been forthcoming.

Is that correct?

[Bruce Rodgers]

That is correct.

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

Okay, thank you.

You say that it should be ready in October, but what still needs to be done?

[Bruce Rodgers]

It was identified at the last meeting that out of the trade chain partners and the people who were doing the system testing, there were only three who were certified. That's out of all of the service providers, so that testing has to continue.

There were a number of issues that were brought forward and discussed with this committee, such as the incorrect calculation of duties and taxes. Other issues, such as trying to get responses from the CBSA, were very delayed as well.

Again, we don't have any further information other than the announcement that came out from a trade chain partner. They basically indicated that the system is ready and they're moving forward internally, but the trade chain partners have been deferred until October. Until we have better information on what that actually means, I'm at a disadvantage to be able to comment any further on that.

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

I know that you weren't given any privileged information, but are you aware of the situation all the same? Normally, on April 26, the current system was to be completely suspended. Importers were to take notes on their own for entries to be made on May 13.

As far as you know, is the current system still in place?

[Bruce Rodgers]

Yes, it is. Everything is in place, as it was prior to that date.

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

My next question is for the representatives of the Canadian Agri‑Food Trade Alliance.

Recently, the Senate in France refused to ratify the proposed Canada‑European Union Comprehensive Economic and Trade Agreement, or CETA.

Mr. Harvey, at the time, you said, “Our food goes through a verification system that is among the best in the world and scientifically there is no risk. So we should not use lies and unconfirmed information to infringe on trade”.

Could you give us more details on the frictions that led to this non‑ratification, if you have any, of course?

[Michael Harvey]

I believe that the Senate in France did not ratify the agreement because of elements of French domestic policy, which I really cannot explain for lack of knowledge. Following that non‑ratification, we received a briefing from the Canadian government, which explained how the embassy there understood the situation.

There are, in fact, elements of domestic policy that aren't very clear. What is clear, however, is that our food inspection systems aren't always received as they should be in France. We think it's because there are things that aren't very well understood, as our systems are at a higher level.

Sometimes it's also because people pretend not to understand our systems. They want to impose non‑tariff barriers in place of other barriers to make our products uncompetitive. However, in cases where we can work together, we believe in communicating with the French authorities to ensure that they fully understand our systems.

[The Chair, Liberal, Judy Sgro]

Next we have Mr. Cannings for six minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for being here.

I was going to start with PECO Pallet. However, after comments by the Conservatives about strikes and workers, I feel I should start there instead.

We had a port strike in Vancouver, which this committee studied last year. It was a 13-day strike, and it was the first strike since 1969. It's not like we've been beset by strikes in the Port of Vancouver. In the last couple of years, there have been several disruptions on the west coast of the United States, so they're not immune to strikes. Right now, there's great worry about the east coast of the United States, so much so that a lot of shippers are moving plans to the west coast, the opposite of what they did last year.

Perhaps I could ask the freight forwarders this, though I'm not even sure what the question would be.

What proportion of your concern about how to fix Canadian supply chains is related to infrastructure? We've heard a lot about railways, bridges and port structure. How much can or should we change our labour relations models?

I think the infrastructure situation is something the government could really get hold of and it could make a big difference in it.

[Julia Kuzeljevich]

Thank you for the question.

Certainly, we could make some major fixes in our infrastructure, and some major investments, if there was a dedicated strategy to do so. I think we still await a dedicated national trade strategy. I know it's been promised many times. The commentators from the agri-food sector mentioned that environmental approvals are impediments in our supply chain.

Regarding U.S. labour, yes, certainly, the west coast ports in the U.S. took a long time to resolve their issue. That was something that was a concern as well. However, they had national federal recognition of the issue. I think, here in Canada, we are lacking that recognition that the supply chain is a prominent contributor to a country's GDP.

The U.S. also has an agency called the Federal Maritime Commission, which oversees issues such as demurrage and detention. In Canada, it's a fight we do on our own when we deal with demurrage charges and detention charges throughout the value chain. There is no competition oversight, aside from the Competition Bureau and throwing things at Transport Canada. We certainly think those are deficiencies in our system.

In terms of labour, we recognize the need for collective bargaining and that the best deals are made at the table. However, the circumstance in many of our disputes is that parties don't want to come to the table. You can't negotiate if you're not there.

Those are observations we've made in our system.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

There are two sides to labour disputes, but we tend to hear more negative things about workers when they're often up against intransigent management.

I turn to Ms. Vegso for the last thing. I remember meeting with PECO Pallets in my office, and the whole story about this system of renting out pallets is so amazing. I'm wondering if you could again dive into more detail on what we could do to make that whole recycling system better in Canada. How do we make sure people send those pallets back to you? I will give you more time to dive into that.

[Lisa Vegso]

One of our strongest recommendations is really just taking a collaborative approach that considers the the supply chain end to end, and all stakeholders.

Pallets are the foundation of the movement of critical goods that are moving across the country, so our strongest recommendation is really just identifying pallets—which the supply chain task force did—as a vital part of the Canadian supply chain and making sure that key stakeholders from that industry are given a chance to weigh in on any changes that might be upcoming or considerations that are being made in government.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Is there anything that needs to be done about the people who...? These are rented by the manufacturers and sent to the consumer outlets. Are those consumer outlets always good about sending them back to you?

[Lisa Vegso]

One dynamic of the way that the pallets move, particularly within the food industry, is they are shipped to retailers. I mentioned in my opening remarks that we have a dependence on those retailers. We have a dependence on their being good stewards of our assets, and that means returning the pallets to us. We're constantly striving to mitigate lost pallet assets in our network, making sure those pallets get back and keeping costs low. When retailers are good stewards of our assets, it allows us to control cost, which ultimately impacts the consumer. If the cost of pallets and behaviours in the network are poor, it drives up cost of goods sold to the retailers, which ultimately affects the consumer.