International Trade Committee on May 30th, 2024

[Daniel Gobeil]

It's obvious that, for us, this is a very important element. Bill C‑282 is in committee in the Senate right now, and we want it passed by the next federal election. It's vital for the Canadian dairy industry.

As we said, and as Mr. Wiens also mentioned in his presentation, trade policies differ from country to country. Canada has had a supply management policy since the 1970s. Countries, including the United States, have policies to preserve sectors.

We are asking to preserve the dairy sector, which feeds Canadians. The latest pandemic has highlighted the importance of feeding our population. Indeed, when borders are closed and we are subject to imports, grocery store shelves empty very quickly.

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

As part of your presentation with Mr. Wiens, you gave an overview of what definitely shouldn't happen, i.e., more breaches of the complaint resolution system, and so on.

Is there anything else you would like us to consider, or would you have another recommendation for us? Is there something that needs to be corrected in the agreement? We anticipate reopening negotiations on the agreement within two years.

[Daniel Gobeil]

Indeed. We can talk about the export cap. While the goal of the supply management system is to feed Canadians, we can look at options to export value-added products at Canadian prices. All agricultural sectors export around the world. Right now, all global exports are subject to thresholds. For Dairy Farmers of Canada, such a measure in an agreement between three countries is unacceptable. It should be considered when the agreement is reopened or renegotiated.

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

What should we do, then? Should we abolish it?

[Daniel Gobeil]

Exactly.

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

Thank you, Mr. Gobeil.

I will now turn to you, Mr. Trew. You've shared a report from your organization with us; you've even shown it to us. In fact, I invite you to send it to the clerk of the committee so that it can be officially tabled.

You talked about increased labour measures. Earlier, you attended the first hour of the meeting when we heard from Unifor, who said there was a pretty interesting new mechanism. What could we improve in that regard?

You also told us about the environmental issue, which is important. You said there were a lot of commitments and nice principles, which is true. What should we do to make sure it's worth more than the paper it's printed on?

[Stuart Trew]

Thank you very much for your question.

With respect, I think the focus is on environmental enforcement. One thing our report recommends is that we take a look at the rapid response labour mechanism and the success of that process. As we've heard, there were 23 uses of that so far in total. Many of them resulted in worker rights being respected in Mexico: workers being reinstated, pay hikes and, basically, democratic votes in these factories.

Let's look at the success there and see how we could apply those ideas to the environment chapter, which is not very enforceable. It basically goes from consultation to consultation to consultation and then a possible recommendation that does not have to be followed by anybody.

Maybe we can find a way to make those elements go more quickly to a dispute panel and have the dispute panel be binding in the same way as we've seen in some of the labour disputes.

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

You also talked about the investor-state dispute settlement mechanism. According to you, the good news is that it has been abolished. In fact, personally, I also support this position.

We do know that Canada still officially supports this principle; it's on the Global Affairs Canada website. Negotiators are constantly fighting to have this mechanism reinstated in future trade negotiations. If Canada were to maintain its position, there would still be a chance that it would argue for the return of the mechanism, even if the Americans are no longer in favour of it.

You strongly urge the committee to take an official position against the return of this mechanism.

[Stuart Trew]

I would say absolutely, if the committee wants to do that, please do. Canada should make its policy in line with its position taken in the CUSMA, I believe.

[The Vice-Chair, Conservative, Kyle Seeback]

Great.

We'll go to Mr. Cannings for six minutes.

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

Thank you.

Thanks to all of you for being here today.

I'm going to continue with Mr. Trew from the Canadian Centre for Policy Alternatives.

I've been scanning through your report as quickly as I can, and there's so much there that I think would be of value for the committee. I'll perhaps ask you broad questions.

In the labour chapter, what do you think the top three recommendations are that you would have for Canada in its renegotiation efforts?

[Stuart Trew]

Thank you for the question.

We have eight recommendations. I won't read them all out. Picking the top three would probably be difficult.

One of them was mentioned already, which relates to making sure that the rapid response mechanism applies in Canada and the United States as well. It currently doesn't. In effect, it's only for Mexico. There were reasons for that, but I think seeing how successful it's been and knowing that there are violations of core labour rights in Canada and the United States, it should be applied here as well.

I think we need to expand the number of sectors that the rapid response mechanism applies to in Mexico, so that it covers more collective agreements in that country.

I think we need to do more in Canada to take a lead in enforcing it in Mexico. We've seen most of that happening in the United States right now. A lot of resources put together in terms of a consultative group within the government that can accept petitions to look into violations in Mexican plants. I think that if Canada were to take on more of that burden.... Because we have significant investments in Mexico in the mining sector, in manufacturing and in energy, we should take on a greater role in that as well.

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

In the environment chapter in your report, you talk about an environment peace agreement or something. If you could, expand on what that would entail.

[Stuart Trew]

Sure. I'm happy to.

Very briefly, this is an idea coming out of the United States again. It's a climate peace clause. I think it might have come up at committee before.

The idea would be to agree somehow, whether in the CUSMA review process or perhaps at the level of the free trade commission, to not bother each other about and to not dispute each other's measures that are intended to reduce emissions. Those could be procurement measures. They could be industrial policies or subsidies or anything that's designed to quickly reduce climate emissions and transition to a cleaner economy. Those things should be off limits. That's the idea of a climate peace clause.

I think it's possible they could agree to something like that in the review process. There's a lot of support in the United States, including in the Biden administration, for such an idea.

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

Okay.

I know we could go on about this for a long time: the investor-state dispute mechanism. A lot of us were very happy that wasn't included for Canada in CUSMA, but it still seems to apply for Mexico. Is that correct? How can we fix that?

[Stuart Trew]

That's correct. I suppose it's going to be largely up to Mexico whether it wants to get rid of it or not. I think Canada and the United States should try. It applies in limited sectors in Mexico, for government contracts in oil and gas, electricity and mining, for example. It applies in limited circumstances, but as it stands it creates a significant inequality in the agreement, where Mexico is still subject to these ISDS claims, and Canada and the United States are not.

I think we should try to work with Mexico, the next Mexican government, to try to diffuse it between Mexico and the United States as well.

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

I'll go on.

One of the labour recommendations—and I don't think you touched on it when I asked you for your top three—is that there's a part of the agreement in the labour chapter about the percentage of high-wage labour jobs. How can that be improved?

[Stuart Trew]

That's right.

I'll just note that the labour chapter in this was written by Angelo DiCaro, from Unifor, who was on the screen earlier.

I believe you're referring to the requirement that a certain percentage of auto jobs or auto trade comes from factories where they pay at least $16 U.S. an hour. The point we would like to make is that it's now out of date in terms of inflation. That should probably be up around $18.69—I think that's the exact amount per hour—and that should be tied to inflation going forward. It makes sure that we're not continuing to put downward pressure on wages in something that was intended to push wages up. The wage itself has to go up as we move along.

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

I'm going to turn to Mr. Kingston briefly, if I have a few seconds, to talk about your concerns over the EV sales mandate for Canada.

The jurisdiction that has really driven the automobile manufacturing sector in terms of environmental issues is not Canada but California, which sells more cars every year than Canada. They have a mandate for 80% by 2035. Why wouldn't Canada want to be on board with that?

[Brian Kingston]

It's simply because we need to align with the federal U.S. to be part of the much larger market. California is a big market, but it's not nearly as big as the rest of the United States.

I would also note that the mandate is a very outdated policy. It was designed to increase the supply of vehicles. There are now over 80 models in Canada, 40 more are coming this year, and EV inventories on lots are at record levels. The EVs are here. The question is whether we have the demand for them.

[The Vice-Chair, Conservative, Kyle Seeback]

We'll now go to our second round. We'll go to Monsieur Martel for five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I thank the witnesses for being with us.

My questions will be directed to Mr. Wiens or Mr. Gobeil.

The government has granted the Americans a say in our domestic dairy policy.

What would be the effect on our market of submitting all of our policy changes, such as changes to our milk classes, to the Americans? Where is our sovereignty in this context?

[David Wiens]

Yes, that is a major concern for us and our sovereignty. As a country, we have given up here to some extent by putting us under the microscope for any domestic dairy policies that we make in this country. That has made things much more difficult for us.

It could go beyond that too. They have restricted certain exports on the protein side of the milk from not only their market and the markets within the signatories but worldwide. That was very concerning to dairy farmers when those restrictions were placed on us.

Daniel, you may want to add to that.

[Daniel Gobeil]

Indeed, this is another worrying element. Earlier, we talked about export concessions and limits around the world. The U.S. has a say in every change in dairy policy made by the Canadian Dairy Commission.

This is really peculiar for a sector as sustainable as ours.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

The Prime Minister of Canada met with President Biden of the United States, after his election, to discuss the agreement. They jointly stated that the Canada-U.S.-Mexico Agreement, or CUSMA, should benefit our small and medium-sized enterprises, or SMEs. If we compare the Comprehensive Economic and Trade Agreement, or CETA, and the CUSMA in terms of quota allocation, we know that the CETA favours SMEs, unlike the CUSMA, which favours big business.

Can you tell me about your vision on this?