International Trade Committee on Feb. 15th, 2024

[Doug Forsyth]

I think it's an important element of an economic model to consider the opportunity costs. I'm just not sure if ours does that. I'm not saying it does or it doesn't; I don't know.

I would have to check with our chief economist's office to answer your question more fully. I'm happy to do that.

[Chandra Arya, Liberal, Nepean, ON]

I'm sure we have very experienced trade negotiators who have successfully conducted very beneficial trade agreements for Canada with countries across the world. My only suggestion is let's be pragmatic when we have a free trade agreement. The environmental chapter is important, because that is one of our objectives too, but as we know, we are just one of the two partners at the table. There's only one of us, so let's also give due consideration to the interests of Canada, Canadian economic interests and Canadian trade interests. At the end of the day, our prosperity that we enjoy today is only due to international trade, which contributes about 67% of our GDP. Let's not forget the big picture when we have agreements and negotiations with small markets or big markets, etc.

With my limited time, I want to ask a question that was touched on by my colleague. Will the free trade agreement with Ecuador create a base for Canadian companies to explore further into the region where we don't have free trade agreements? Can Ecuador act as a base to open doors to channel our exports and trade to other countries in the region?

[Doug Forsyth]

I think it absolutely can. It's one of the areas that certainly we see through our experience and when we see what happens with an FTA after x number of years being in place. You establish your linkages with companies, whether it's enhanced supply chains or whether it's finished products. Then it depends on the country and how they're set up.

It strikes me that in this case, Ecuador is well placed within the context of South America to do just as you outlined, but we'll have to see, frankly. That also depends on their economy, how they're set up, what their companies are doing and the transportation network, etc. It strikes me that it's certainly quite possible.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Monsieur Savard-Tremblay, you have two and half minutes, please.

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

Thank you.

There have been scandals surrounding the behaviour of mining companies, which often end up involving militarized fighters clashing with indigenous populations. We spoke about that a little earlier.

How can we ensure that there are measures—

[The Chair, Liberal, Judy Sgro]

We have a translation problem again.

Can you try it again, Monsieur Savard-Tremblay?

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

Do we have access to the interpretation?

[The Chair, Liberal, Judy Sgro]

I don't know. I'm sorry. Could you try it?

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

Then I'll start over.

We know that there have been scandals—

[The Chair, Liberal, Judy Sgro]

Now it is working. Thank you very much.

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

Third time's the charm.

We know that mining companies have behaved atrociously in Ecuador, as in a number of countries in Latin American and elsewhere around the world. Many are arming their security personnel, which leads to clashes between the security personnel of these mining companies and the local, often indigenous, communities. We talked about this earlier.

How can we make sure that there will be effective due diligence measures in place to monitor the behaviour of Canadian mining companies?

We know—and the Ecuadorian ambassador said as much—that this agreement will develop the mining industry. However, with mining projects, there can be local push-back. The mining companies like to go in heavy-handed, so to speak.

What guarantee is there that Canadian companies will respect human rights under this agreement?

[Dean Foster]

To begin, that's an excellent question. From our perspective, we think the free trade agreement, with robust provisions on labour and the environment, etc., will be a net benefit.

We're also always looking to understand what complementary initiatives we can undertake, including with respect to our broader responsible business conduct regime in Canada and also initiatives in the bilateral relationship that would be supportive of the trade agreement. In that regard, we welcome feedback from this committee on the kinds of things that we should be looking at more holistically in the relationship to support the free trade agreement.

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

Can we expect something more stringent?

You talked about chapters. In recent agreements, there were basically chapters that referred to principles, but there were almost no effective mechanisms for implementing them.

Can we expect something better this time?

[Dean Foster]

Right now, we are doing the policy work on the various chapters that we are considering for proposal, including a built-up, dedicated responsible business conduct chapter. We would welcome feedback from you and the committee on the kinds of things that would be of interest in that regard.

I'll also say that we're looking at, again, complementary initiatives to support our broader objectives in the relationship.

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

We'll hold you to that.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, for two and a half minutes, please.

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

Thank you.

I'm going to follow up with what I guess is a similar kind of question.

We've heard that Canada is Ecuador's biggest trading partner. Most of that is in mining. We have I think admirable chapters on the rights of indigenous peoples, on the environment, etc., and apparently there are dispute mechanisms that would go along with those chapters, and Canada could complain if Ecuador was not abiding by them.

I'm just wondering about this, because we have a situation here where it seems that most of the human rights violations and most of the environmental problems the Ecuadoreans are concerned about are being caused by Canadian mining companies that are being protected by an ISDS provision. Who makes those complaints and how are they adjudicated? It seems that we are working at cross-purposes here.

Also, just so I can get this in before my time is up, would one of these things that might go along with it be a stronger ombudsperson for responsible enterprise in Canada who has the powers to get documents and get witnesses to testify? She said to this committee she needed to make the changes that are necessary.

[Dean Foster]

On that, I will just note that the question pertains to a much broader global responsible business conduct regime in Canada. At present, Canada has measures and frameworks in place to encourage responsible business conduct by Canadian companies active abroad.

The government has two non-judicial dispute settlement mechanisms: our national contact point for responsible business conduct and the Canadian ombudsperson for responsible enterprise.

Also notable is Canada's Corruption of Foreign Public Officials Act, which continues to help ensure that Canadian businesses are engaging responsibly in their engagement with foreign public officials.

As regards the particular FTA, we're working on a chapter and would welcome feedback on the kinds of things that would go in that chapter, but I'll also say that we have a number of other initiatives under way outside of the FTA that are of note.

Just next week, a project will begin where a Canadian international development company will be providing advice and assistance to the Ecuadorean government on the development of a free, prior and informed consent law. I think that's a very net-positive opportunity for Canada to make a positive contribution to these issues in Ecuador and one that I think complements the free trade agreement.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Martel, you have five minutes.

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

Thank you, Madam Chair.

My question is for Mr. Bouchard.

Mr. Bouchard, in 2022, wheat and refined oil together accounted for 76% of Canada's exports to Ecuador. That oil came from Alberta and Saskatchewan.

Would this potential agreement likely create more Canadian jobs in these sectors?

[Pierre Bouchard, Director, Bilateral and Regional Labour Affairs, Department of Employment and Social Development]

Thank you for your question, but I would like to clarify that my field is workers' rights, not the labour market.

That aspect is not covered in the chapter.

[Doug Forsyth]

Thank you for your question.

If I understood correctly, you'd like to understand how many jobs were created based on the number of exports.

Did I understand your question correctly?

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

As of 2022, wheat and refined oil accounted for 76.9% of Canada's exports. That oil came mostly from Alberta and Saskatchewan.

Is this potential agreement likely to create more Canadian jobs in those two sectors?

[Doug Forsyth]

Thank you for the clarification. I appreciate that.

Our economic model, to the best of my knowledge, does not necessarily equate jobs created with numbers of new exports.

Opportunities to access new markets certainly create more production and more exports. Our agriculture system on the prairies is certainly based around exports. If we have new markets for our wheat, lentils or oats, certainly there will be more jobs on the farm, in processing and in transportation.

Again, I'm not aware of the economic modelling around the number of jobs, but just intuitively, I think we have seen that from a policy perspective.

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

Three quarters of Canada's total exports to Ecuador come from Alberta and Saskatchewan.

Do you think the other provinces could export more, or have they already reached their maximum potential?