FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Friday, April 30, 1999

• 0900

[English]

[Editor's Note: Technical difficulty]

The Chairman (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): —thanks, Gary. I'll ask witnesses if they can keep it to about 10 minutes, then we'll have more time for questions.

Mr. Peter Pellerito (Chairperson, Political Education Committee, Windsor and District Labour Council): Okay, I'm going to try.

Again, I appreciate the opportunity to be here, because it's a very important issue. If you look through the documentation that we've put together from the labour council, you can see it was very labour intensive, because I think this issue is very important.

I'm not going to go through the whole document the labour council put together, but I hope you'll read through it. I want to start off on the first page of this, where there's a quote from Mahatma Gandhi: “The world can produce enough for everybody's need, but not enough for everybody's greed.” I think that's really the focus of what's going on in the WTO as far as the corporate agenda is concerned.

I'm going to limit my remarks to pages 9 through 11, and end with recommendations that we think are appropriate.

The Canadian Labour Congress made a presentation a couple of days ago, and I can tell you that I read that document and I totally agree with what's in it.

Basically, I'll start with conclusions and recommendations.

Canada represents a rich market for transnational corporations and has given us some leverage in attracting investment. Through trade agreements and unilateral action with all the strings attached, we've surrendered virtually all of this leverage. Before we give it all up by allowing made-outside-of-Canada policies, someone would have to make a pretty good case on how we'd allow outside forces to dictate what are good trade policies and what's best for Canadians.

In the wake of the Asian—now broader—financial crisis, even leading promoters of global trade and investment liberalization are openly questioning the benefits of continuing this chosen course. Yet many Canadians fear that government is determined to increase, not decrease, the country's involvement in trade and investment liberalization—the same disastrous course plotted by the multilateral agreement on investment.

Our communities have suffered the consequences of the model imposed by the Canada-U.S. Free Trade Agreement, FTA, and the Northern American Free Trade Agreement, NAFTA.

NAFTA was the first international trade deal to grant foreign corporations the right to sue governments if legislation gets in the way of their profits. Agriculture, industry, social programs, and other aspects of our national life have been hit hard by these agreements. The FTA and NAFTA have changed the face of Canada.

Rulings of the World Trade Organization have challenged our sovereign ability to promote our own culture; set standards to protect the environment; and support sustainable communities, investment, and job creation—all in the name of commercial imperatives, globalization, privatization, and laissez-faire economics. While trade liberalization has undoubtedly benefited the rich and powerful, it has damaged the quality of life and democratic rights of most Canadians.

For many more in the world, economic globalization has far more dramatic consequences. Under the WTO, trade liberalization continues to have an appalling record. It is a model that strives relentlessly to reduce social and environmental standards to the lowest common denominator, and then seeks to reduce these standards even further. As a result, poverty is booming in most of the world.

The unemployment rate in Canada hasn't improved as we were told it would under FTA and NAFTA, and now WTO. The flora and fauna of the earth, our air, and our water are all at risk for the sake of profit.

The Canadian public should be aware of the big push by private enterprise to move in on health care, education, and social programs, and to have taxpayers' money going into the coffers of private hands. How will our programs work for Canadians when they are tied to profits?

Against this backdrop, it's difficult to understand why our government is pursuing dozens of new trade investment deals, including the free trade area of the Americas. Worse yet, the Canadian government appears to support an extension of the mandate of the WTO to include MAI-like provisions on investment, government procurement, and competition policy.

In all the documents on the subject of the FTAA, there is no mention of the most basic issues that are affected by any and all trade deals—working people and human rights. Since the early 1990s the international labour movement has promoted the inclusion in international trade agreements of a workers' rights clause that would force employers and governments to deal with the frequent and repeated violations of fundamental workers' rights.

• 0905

Basic labour standards and social programs must be part of any agreement. It would contribute to the betterment of working and living conditions for working people and more equalized distribution of income within countries. This dominant free market approach, embodied in NAFTA and the large multinational corporations' negotiating agenda for the FTAA and temporarily stalled MAI, argues that the global market on its own will allocate and develop the best possibilities for each country. Free trade does not simply involve opening ourselves to global trade; it also entails renouncing our role as active subjects in determining our future, instead allowing the market to decide the future for us.

According to this view, it is unnecessary for us to envision the kind of society we want to be or could be. We only need to eliminate all obstacles to global trade, and the market itself will take on the task of offering us the best of all possible worlds.

I want to refer just for one moment to something that I mention in the brief. I've indicated to you that there was a conference as well during the Santiago deliberations, a summit attended by over 1,000 people. I mentioned the book, and I got a copy of it just to show you, because it did cost me $12. I figured you guys could probably afford it more than I could. But it's a very good book. It's called Alternatives for the Americas: Building a People's Hemispheric Agreement. I would recommend the committee get copies of it and take a look at it. It mentions—

The Chairman: I'm informed we do have a copy of it.

Mr. Peter Pellerito: Okay, good.

The Chairman: So we won't need your $12—

Mr. Peter Pellerito: Thank you.

The Chairman: —we've already spent our own.

Mr. Peter Pellerito: Actually, a lot of people have been asking me for this book, and I'm going to find a way for the labour council to maybe pay for a couple of copies.

Anyway, in one part of it, during the meeting, President Clinton made the remark that Chile is a model. The next day, Luis Anderson, who is the general secretary of ORIT, indicated that if children begging on the street is the model, then obviously it's not a very good model. That's what he says is happening in Chile.

Again, I'll go through some of my remarks. In my presentation I talk about what happened with neo-liberalism in Chile back in 1973, with the U.S.-backed military coup of the Allende government. Anyway, I made some remarks to that, and again, I think the book really talks about some of the issues.

One of the other documents that I put in there is the status and the history of what's going on with the free trade area of the Americas negotiations. I found it kind of interesting that the nine negotiating groups include market access, agriculture, investment, services, government procurement, intellectual property rights, subsidies—which would include anti-dumping and countervailing duties—competition policies, and dispute settlements. They don't talk about human rights, they don't talk about labour rights, and they don't talk about the environment. So it's somewhat of a concern.

We are therefore taking this opportunity at the outset of the parliamentary hearings into the WTO and the FTAA to state our position clearly.

The Government of Canada should stop talks at furthering trade and investment liberalization, including the FTAA, and engage in a genuine dialogue with Canadians on the consequences of this model of economic globalization. Use the forthcoming millennium round at the WTO as an opportunity to push for serious examination of the real global record of trade and investment liberalization. Insist on a wide-ranging assessment of economic, social, and environmental impacts of economic globalization. Address the continuing lack of democracy and transparency that has placed more and more power in the hands of transnational corporations at the expense of civil society. Support the establishment of a joint WTO-ILO working party on a workers' rights clause and support the insertion of a clause in the WTO. Urge the WTO to give observer status to the ILO at all levels, and have workers' rights issues be made an integral part of the WTO trade policy reviews of member countries.

Thank you.

• 0910

Mr. Gary Parent (President, Windsor and District Labour Council): On what Peter has alluded to, when you read through the documentation you have before you... I want to bring it down for a moment to, hopefully, a more local issue or the local area. What we've seen through NAFTA and through the free trade agreement is the gradual escape of jobs from the Windsor—Essex County area. I can go back to when the free trade agreement was signed, and Susan and Jerry would remember Sheller-Globe, which went directly right to Mexico as a result of the free trade agreement allowing that to happen.

When we examine the imports from Mexico, they are up some 50% in 1988 to $7.6 billion. That's since the signing of the NAFTA agreement. Then when we look at the exports—because, remember, when the whole debate was transpiring on the question of whether we should or should not engage in the NAFTA agreement, we were looking at jobs being created and the amount of our products that are going to be now exported to the Mexican area—they've increased 17%, or $187 million, since the signing of NAFTA. In our opinion, our fears, as we predicted during that debate, have come to full fruition.

I don't mean for a moment that the government is deliberately trying to erode Canadian jobs offshore or to other areas. Obviously they want to do what in their minds is best for all Canadians. But I think we have to examine what's really happening on the ground floor. I can give you example after example here of where jobs have left this community, and I want to point out very clearly to the committee that the jobs that are leaving are labour-intensive jobs.

As to the labour-intensive jobs that I'm talking about, I'll cite the example of the trim operations that we have here in this city. A tremendous amount of labour-intensive action has to go into that particular operation. There are also some safety concerns that are alluded to around the work that's involved in that particular type of operation. So in the corporate mind, why not get rid of that type of operation and send it down to where there are few or no health and safety regulations—in Mexico? That is the actual fact of what is happening.

I happen to work at Chrysler Canada. I happen to deal with them across the bargaining table. We also have a trim operation in Ajax, and it's only through collective bargaining that we have been able to maintain that particular plant. They would like nothing better than to ship that operation down south. We used to have at least legislation that protected those jobs. Through the agreements that have been negotiated worldwide, or through the free trade agreement and through NAFTA, we no longer have that. So we have to be very careful on what we do here.

Thinking globally and trying to express our national way of trying to get more jobs into Canada, trying to get our product out into the other marketplaces, sounds great, but if those workers in those particular places we're sending our work to can't buy the product we're producing... I cite Mexico as the example, because what has also happened through NAFTA is the whole question of automobiles or vehicles being produced much more in Mexico, yet we don't export the same amount of vehicles into that country, for the obvious reason that they don't make enough money to purchase that particular vehicle.

When we talked on the whole question of the Auto Pact—and Jerry and Susan's colleague, Herb Gray, was around at the time—we had to put protection in at that time, because the Auto Pact protected jobs for Canadians. The same type of thing has to be looked at when you're looking at the whole question of world trade and the way in which the Japanese automakers, in our opinion and in the material you have...

I compliment the government of the day for their stance at that time, to not bow to the pressures from the Japanese relating to the whole question of lowering tariffs. But I can tell you—and we're looking very clearly and closely at these types of discussions that are going on—we feel that this is another venue where the Japanese and other offshore producers can try to put their teeth into that type of forum to try to get what they particularly want, which is to flood our market at the expense of good Canadian, Windsor—Essex County paying jobs.

• 0915

We can only say to the committee, please look at the material we have put before you. We are talking basically about jobs. We're talking about the future of our country and of this community.

I can cite other examples where we've been to city council. On outside contracting, they want to go outside the city—not only outside the city in Canada, but they also want to bring in some outside firms from the United States, which under the free trade agreement they have to allow to happen or they could be found guilty. So now, are we going to accept that we can have someone picking up our garbage who actually works in the United States, a firm that works in the United States, taking away good Canadian jobs? I don't think that's the intent of this committee. I don't think it's the intent of any government to allow that to happen.

But when we're looking at the whole question of globalization, I think Bob White said it best the other night on TV: We have to look at who is actually gaining the benefits of these trade agreements. It's the CEOs, the bond markets, the stock markets, not the average Canadian or the average worker in Windsor County, that are enjoying the benefits of the North American Free Trade Agreement or the free trade agreement. God help us if we get to a world trade agreement that's going to open up our borders, because Canadian people are going to be the ones who lose in this community, the people that Jerry and Susan represent. I don't think it's in their interests to want that to happen.

Thank you very much for your time. We hope you will take heed of some of the information we've provided you.

The Chairman: Thank you very much, Mr. Parent.

Before I go to Mr. Sands, Mr. Pillitteri, in terms of the FTAA, you mentioned that it doesn't have anything in there on labour or the environment. You may know that there's a whole section on civil society, for which Canada has been one of the countries that is pushing harder than any others. By the way, there's a lot of resistance from some of the Latin American countries on this. In that civil society envelope, certainly labour, the environment and human rights are big. That's why we're getting a lot of resistance from some of those countries.

Mr. Gary Parent: We have no problem with that. The problem we have is with the enforcement.

The Chairman: Yes, but I don't want you to have the impression that those issues are not on the table. They're on the table of the FTAA. The ability to get them front and centre is another discussion, and we'll be pushing that, of course, when we do our report.

Mr. Sands.

Mr. Christopher Sands (Director and Fellow, Canada Project Coordinator, American Auto Project Americas Program, Centre for Strategic and International Studies): Thank you, Mr. Chairman.

I appreciate the opportunity to come up here. I grew up in Detroit, so this is a hometown visit for me.

I was telling the clerk of the committee that the extra benefit for me of coming this week is that I'm going to do some research around the area and get to spend Mother's Day with my mom. So you've made my mother happy, notwithstanding other accomplishments of this committee in coming to Windsor. So thank you very much.

The Chairman: We're here to serve all sorts of interests. We didn't know that your mother was one of them, but we'll do our best.

Mr. Christopher Sands: Unfortunately she's not a Canadian voter, but otherwise she's still very grateful to you.

I'm grateful for the invitation. I work at an institution with which some of you are familiar, the Centre for Strategic and International Studies, a think-tank in Washington. We have been conducting over the last two years a study on how the North American auto industry is adjusting both under NAFTA and where it's headed now. We've tried to gather data and, as we've done so, look at what we can measure about the prosperity of the industry, its strengths, its weaknesses, adjustments that may be related to the trade agreement and that may be simply the evolution of the industry worldwide, and try to separate that out.

Before giving you a summation of that, I brought with me a copy of the study, which you are all very welcome to have, including my co-testifiers, if any of you would like. I'd be happy to provide them to the clerk of the committee, if you're curious. The book includes a chapter on Canada specifically, and also a chapter on the environment, the evidence that we were able to find on incomes, productivity, and so forth. It's probably better to read the book than listen to me, but I'm afraid I'm all I've got, so I'll provide you with both in different ways.

• 0920

The auto industry, as you know, in terms of its production, profitability and sales of vehicles across North America, has had some very good years since NAFTA took effect. It's important to separate NAFTA from other agreements. As my colleagues here have already stated, the auto industry has been integrating for a long time, going back to 1965. It can be difficult to separate the effective individual agreements. In a lot of ways, NAFTA came in and ratified the direction the industry was already moving in.

One of the questions a lot of people had was about new plants that might emerge in Mexico. But if you look at the assembly sector, we have not seen the major assemblers opening new plants because the plants they established in Mexico were established prior to NAFTA. So one of the things we tried to do in the book was separate causation and talk about what prompted what.

The auto industry—and I'm glad you're spending some time on it—is also worth paying attention to, particularly in North America. It's not only the largest part of our Canada-U.S. trade, it also represents 40% of our trade within North America. So if the auto industry is doing well, it's an indication that the North American economy is fairly healthy, at least in terms of its trade. If the auto trade is not doing well, it's a big concern; it's the biggest piece of the pie we have.

I had the opportunity to review what Minister Marchi presented to you in February as a kind of mandate, looking at the assessment of trade agreements. I want to share with you something we produced, looking at how you can really tell whether a trade agreement is benefiting you. The normal tendency is to look at very specific anecdotal evidence that connects to experiences of people at a grassroots level. The problem is that it becomes difficult to measure the overall impact on the basis of those specific and very real anecdotal cases. I would suggest to you it is more successful and useful to take a larger macro perspective and look at what's happening in the economy overall, and then tie that to the specific industry.

One common measure of the trade agreement is to look at specific trade balances to see whether you have as many exports as imports and your accounts balance. But rather than doing that, it is more constructive to look at total trade—what's happening in terms of overall Canadian exports and overall Canadian imports. The reason for that is that there is a natural tendency in a trade agreement to have countries specialize. So whereas you may find that labour-intensive work that doesn't carry the skills and value-added suffers, you may be gaining in other areas.

So you need to take the biggest possible picture to get a fair assessment of an agreement when you look at these sorts of agreements. You have to look at what's happening in terms of your economy's productivity and incomes for people here, not tied specifically to one plant or another.

I won't read my testimony to you, but I will at least give you a sense of the way I try to offer the evidence we have on how Canada is doing in the North American auto industry. I look at five categories. The first is what's happening with total trade. The second is what's happening with productivity and income.

Third, we look at evidence of intra-industry trade and specialization. The reason for that is because intra-industry trade is a particularly stable kind of trade; it doesn't spike up and down in the same way trade will if it's between your regular customer and a vendor. Specialization suggests that in certain areas you may have new skills being picked up, new expertise, and that can be of benefit to your economy.

Fourth is the effect on the competitive position of an industry. In this case we look at how Canada's industry competes with the rest of the industry globally, and how competitive your position is at the end of all of these trade agreements. Finally, we look a little at the consequences for the environment.

On total trade, the evidence is strong that Canada is doing very well. From the testimony of my co-testifiers, you get an indication of that in one of their graphics. I don't know if you have the page here, but Canada has 12% of North American auto jobs but under 8% of the total North American market. This has been true since 1965. So Canada has had a greater amount of production than sales. That's not true for the United States, but it is also true for Mexico.

• 0925

Certainly looking at this from our side of the border, Canada's not doing badly. They have a fair share; in fact, maybe more than that. This is not a complaint from me; it's just a recognition that Canada has prospered very well from its participation in an integrated industry, and as the industry has done well, Canada has done well also.

Trade overall, as you know, is rising and Canada's doing particularly well in services. Some of those services are directly connected to the auto industry, and Canadian expertise is also particularly helpful there.

Let me say something briefly about Mexico. We looked carefully at the numbers on Mexico, and there's some discussion of that in the book. Mexico is not importing at the level anyone would like to see, in part because in the data we have today—there is a lag in data, particularly from Mexico as they collect it and process it—we're still seeing, to some extent, the effects of the 1995 economic collapse of their peso. The best thing you can say about it is that the recovery for them has not been bad, and it certainly hasn't been as bad as it was in previous devaluations. But they are still coming back from a tough devaluation and a tough economic crisis. We haven't seen income growth at the level we would like.

On the other hand, as a positive indication of where we may be headed—the book documents this and gives you some numbers that are useful—we are seeing, in the auto sector, incomes in Mexico rising more or less in tandem with productivity. You see a bit of a step effect because of contracts—you have to write a new contract and move up in steps, whereas productivity moves in more of a smooth curve—but we are moving in the right direction. There is a gap, but it is closing, so that's an important positive sign, at least for the auto sector in Mexico.

There are other sectors that don't do as well and aren't as competitive, but the auto sector is doing very well in terms of leading Mexican incomes in a positive direction. We're not there yet, but Mexico is doing better.

• 0930

Canadian productivity in incomes is one of Canada's real strengths. I know there has been some discussion of late in Canada about productivity numbers, but in the auto sector Canada's productivity is world-class, truly outstanding. There are a number of factors there. It's partly the investment in technology, but it's also, let me stress, the investment in skills. The Canadian workforce is extremely skilled and talented and is a high-value workforce.

One of the things the auto companies have definitely found in Mexico is that you can't find skilled labour at the bus station. You can go to Mexico and find hard-working people who are willing to do the best job they can, but they don't have the skills and the training. Building cars is not an easy business, as anyone can tell you. It requires skills, experience and expertise. The Canadian workforce is a big factor in Canada's continued competitiveness.

Some people were worried that Canada might suffer from both the Canada-U.S. Free Trade Agreement and NAFTA in terms of losing out as the industry consolidated geographically in the United States, but that hasn't happened. One reason it hasn't happened en masse is that Canada has had very strong productivity and very strong skills in terms of our workforce.

I will read a little section of my testimony from some research done by Queen's University professors Pradeep Kumar and John Holmes, who looked at the Canadian industry for us. They said:

The process of modernization of plant equipment, application of new technologies and implementation of lean production techniques have led to significant cost efficiencies and improvements in productivity and product quality. Productivity gains have been impressive in both vehicle assembly operations and, since 1991, parts and accessories manufacturing. Almost all segments of the parts industry have recorded a significant increase in productivity. The gains have been particularly large over the past five years, 1991-1995, partly because of the cyclical increase in production

—which has benefited all of us; we've had a good couple of years—

and partly as a result of efficiencies and higher capacity utilization. Productivity improvements due to efficiencies have been particularly high in vehicle assembly, wiring assemblies, manufacturing and stampings.

I stress that because it is a very positive picture. As you look at trade policy and the effect it has on the Canadian economy, I think the auto industry provides a very positive example—not without areas of concern—of an area in which Canada and the United States in particular have been able, through trade policy, to do a tremendous amount of good for the industries that have employed literally thousands of our workers on both sides of the border.

• 0935

So in sum, productivity in the auto sector is up. As for wages—there's a little discussion of wages here—wages are a mixed bag. We've seen wages rise in the assembly sector, and that is again a tribute to collective bargaining. We've also, however, seen a mixed impact on wages in the supplier sector, depending very much on conditions and the specific competitive conditions for that individual component and so forth.

On balance, wages are at least holding steady. You can say that much. There hasn't been a precipitous decline overall, and again I think it's important to look overall rather than to become too focused on anecdotal cases that may tell an important story but not the whole story.

Third, regarding intra-industry trade and specialization, it hardly needs to be said that this has been a characteristic of the auto industry in North America, but particularly between Canada and the United States, for some time. The competitive position of the Canadian industry globally is very strong. We see that because you see Japanese companies investing here and expanding their assembly operations. You've seen a continuation of investment by the big three—or the big two plus DaimlerChrysler, if they no longer count among the three; it's hard to tell any more. But you do see investment here.

So Canada hasn't been abandoned, it hasn't been left behind. Canada remains a competitive place. Again, I tie that to productivity. I think that is an important attraction that draws this investment in. Also, as you look at this, I really want to commend your attention to the role of the suppliers.

There was a day when suppliers were a relatively ancillary part of the industry. They were small guys doing relatively secondary manufacturing within the industry, but the suppliers are becoming increasingly important in not only the production of content but also in the high-tech side, in the design, employing engineers and working with manufacturers to try to shape the cars we drive. And Canada has been host to some outstanding suppliers. Lear is doing very well here in Canada. They have a big investment. For those of you who are not familiar with it, Lear does seating and interior work. You also see tremendous investment from Magna, a Canadian-owned supplier that is world-class.

So the supplier sector, which often gets overshadowed by the major assemblers, is an important sector. And when you include Delphi, the General Motors in-house supply, which is increasingly independent and now going to be sold off, and Visteon, which is the Ford Motor Company former in-house supply, which they're repackaging as an independent company, you see a really important contribution to the industry where Canada is also very competitive. So Canada is doing very well there.

Fifth and finally, in looking at the consequences of trade liberalization on the auto industry with regard to the environment, we were tremendously fortunate to have working with us on the research John Kirton, from the University of Toronto, who I know has testified before the committee in the past. John is also working with the Commission for Environmental Cooperation, which has its headquarters in Montreal, looking at what happened with the environmental regulation and enforcement across the North American region, including Mexico. He looked at the entire region and his general conclusions, which are in the book, are positive. Mind you, that's for this industry, and there are areas of concern on the environment, but what he found was that governments in North American, Canada, U.S., and Mexico, and at the state and provincial level, including Mexican states, are looking at each other's standards as models and relying on one another increasingly for technical expertise in terms of measurement, regulation and enforcement.

What we're seeing in the auto sector, encouraged very much by the companies, is a tendency to harmonize upward. Countries are adopting the toughest standards in the region and looking to each other for assistance in enforcement. You might ask why are the companies encouraging this when there may be an opportunity to take advantage of lower standards? Within the North American region, I think, you find a concern over liability. It doesn't make sense to take a lower standard when before long you may find yourself paying costs. And the experience of major companies from the U.S. and Canada operating in Mexico is that they're perceived as having the deepest pockets, and so if there is a litigation over environmental damage they tend to pay the heaviest price.

• 0940

There are still concerns, particularly with regard to Mexico, with Mexican national suppliers that have not had access to the technology or the capital to invest in the latest technology. One of the things you're probably aware of is that the best environmental performance in terms of machinery and equipment in auto manufacturing comes from usually the most recent equipment, which incorporates the latest developments of the newest technology. Mexico has been at a disadvantage there but has made substantial progress, partly through acquisition by North American—Canada and U.S.—firms, partly by access to North American capital markets that NAFTA has provided.

It is early, based on the data we have, to make a final judgment, but I think we have a very positive story here and I want to close by commending you for taking a look at the auto industry. I think it's a positive story and it's nice to have some relatively good news, notwithstanding the fact that there's always work to be done.

The Chairman: Thank you very much, Mr. Sands. We appreciate that.

Mr. Gary Parent: Mr. Chair, if I may, I want to reassure my friend Chris here that DaimlerChrysler still is big three and will be for many years to come.

Mr. Christopher Sands: So noted.

The Chairman: I wasn't too sure who he said was taking over from you, but we'll ask him that later. I don't think it's Jaguar, but anyway.

Mr. Bondy, thank you for coming. We'll hear from you and then we'll turn to questions. We're trying to keep things to around ten minutes or so, and then we'll move on to questions.

Mr. Ken Bondy (President, Windsor Regional Environment Council, Canadian Auto Workers): Thank you very much.

My comments will be very brief. We come to you this morning representing the Canadian Auto Workers' Windsor Regional Environment Council, and our purpose is to represent the some 35,000 Canadian auto workers in this region on environmental issues.

Obviously we know we have something to say about what happens in the environment as it pertains to the automotive industry, and as I'm sure you've heard this morning ,we are very concerned about what happens around the globe and what happens in trade issues from the perspective of our day-to-day work within the automotive industry and how trade affects our jobs.

We do want to say, though, our concern today is how that trade and those trade policies affect our environment, particularly the protection of our environment. It is unfortunate, I believe, as we take a look back at some of the trade policies that have been put in place, the free trade agreement, the NAFTA agreement, and the proposed multilateral agreement on investment, that in our view there have been some environmental policies put in place but simply to appease some of the concerns.

The message here is that, although it may seem like a lot of people do not understand the environmental aspects of trade or may not be concerned, it is not so. We know that particularly the young people of today, who find a lot of trade policy discussions rather boring, are very much focused on the environmental aspects, understanding full well that they are the ones who are going to inherit any of the decisions made today and they are the ones who are going to have to live in the world we leave behind. So we find a lot of concern and we get asked a lot of questions by those young people as to what is happening and what can they expect to look at in the future.

Again, we are concerned that the environmental aspect of things that have been put in place for trade policies come up short as far as protecting what we need to be protected. And that is very much evident, as we have seen, right here in the province of Ontario, where there was what we believe was a very reckless decision made on behalf of the Ontario government to sell bulk water out of our Great Lakes. And that was done without any consultation with any people who live within these communities.

It is our position that any of our natural resources, anywhere in our country or anywhere else, belong to the people of that country or that province and not to a select few politicians who feel they have the right to make those decisions on our behalf. We were very concerned that this decision was made, and quickly the U.S. governments got involved and moved to help change that decision the Ontario government had made, and rightfully so.

But again, it is a clear example of what can happen when environmental aspects of trade are not taken into full consideration, and where we could have ended up one only knows. We know that as we move into the new millennium the environment and our environmental resources, particularly in Canada where we are very rich in environmental resources, are going to be a strong bartering tool and a very valuable resource for us as we see what's happening across the world. Resources are being degraded, water quality, air quality, deforestation. There are an awful lot of problems happening out there, and again, we partly blame that on the fact that there has been a big push on the globalization of trade.

• 0945

So we see industrialization taking over and sometimes taking over without any thought of what kind of damage is happening to the environment. We are eliminating species of animals and plants throughout this planet in our drive to industrialize and monopolize in business. At the end of the day, we're never going to be able to correct some of the damage that has been done, and we're very concerned that there are no policies being put in place to ensure that the environment is being protected to the utmost. That's the message we want to bring here today.

We've seen in Ontario how the government of this province has really cut back on regulations, and cut back on policies, in their driving attempt to keep up with globalization. And that can be no more apparent than in the report that was released just the other day by the environmental commissioner of Ontario, who is very critical about what has happened in this province, a province that is very rich in natural resources, as far as deregulation of those protective measures simply to make it easier for corporations to profit. At the end of the day, we know that the future generations are going to pay a dear price for that.

So we are concerned. We are here quite matter of factly to lobby the fact that when any trade decisions or policies are put in place the environment has to be the utmost priority. We are definitely here to say that we're willing to fight to protect those environmental issues we have today, and in fact we want to increase the protection measures and not take another step backwards, as I think we've done in the last five or six years.

We also want to say that this whole idea we have to develop, develop, develop, is not necessarily true and it is only going to create much more of a problem in the future. We have to take an approach of sustainable development. If we're going to develop anything, there has to be a solid sustainable development policy put in place to make sure that where we are impacting on this planet, where we are impacting on our natural resources, somehow, some way, there is going to be a development procedure put in place so that at the end of the day there is not some barren deforested land left there.

That does not mean, for instance in the forestry sector, that by clear-cutting 150 acres of land we are going to plant some saplings to make up for that. That is not the answer as far as trying to make up for some 200- or 300-year-old old-growth forests. That's just an example, because we know that in Canada this is rather a big concern for us out on our coastal areas as far as what's happening and the way our old-growth forests are being ripped out, again, simply for industrialization or for the profiting of these corporations.

So I want to leave that with you and, on behalf of our membership, encourage you people at these hearings today to take a serious look at the environmental impacts the trade policies are having on us today. Again, if you don't look at the importance of that for yourselves, then think about your future, the future of your children and your children's children, and ensure that environmental regulations, environmental policy, are in place and used properly as we move forward into this global economy that we've been moving into.

Thank you.

• 0950

The Chairman: Thank you, Mr. Bondy. Thanks a lot.

So we've got time for questions. Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Ref.): Thank you, Mr. Chairman, and thank you, gentlemen, for coming and giving your point of view. From my part, we take seriously the submissions you make. You make us think. So we will think, and thank you for coming.

My question is not an accusation or anything. I'm just curious and interested.

You're from the Canadian Auto Workers, and you have talked about environment and all those things, rightly so. I just want your opinion, your thoughts. Christopher talked about... Actually, what he was saying in reference to NAFTA's positive contribution to the auto industry is quite on the other side of the fence to what you were saying. He has made us think, too, as you have. In fact, one point that really stuck out to me was what Christopher said.

As you all know, Mexico is facing tremendous grief and crisis. The auto industry is one of the biggest polluters in the world as well, as you all know. But that would impact on your own industry very seriously. It's interesting to note Christopher's saying that environmental standards in Mexico are rising because of the desire to access the markets in Canada and the U.S.A., which have higher standards coming in. So we have higher standards that are created nationally. Then we have this global thing where Mexico's standards are going up, which is an interesting point. What are your thoughts on that?

Mr. Gary Parent: Well, to respond to that very quickly, they have not risen to the standard that Christopher would like to expound. In fact, it's only, I guess, through pressure from the Canadian and U.S. governments that they are attempting to make these things happen. But to bring it back down again to a lower level as regards health and safety and other standards that are not being enforced as stringently... I mean, the reason they're still looking at the environment is that when you go to Mexico City, as an example, you can't see who you're talking or walking next to. It's that type of thing.

But I want to make a comment, if I can, because you left the door open a little bit on Christopher's comment, when he's saying that the hourly earnings in assembly rose by 19% from 1985 to 1995. That's ironic. That's the same time period during which we split from the UAW in the United States. We took a completely different agenda as far as our membership in Canada is concerned. We wanted to negotiate real wages, not lump-sum payments, not tied to profits. That's the direction the U.S. made in their union, which is fine; they have the right to do that. But that's the reason for that 19% rise. It had nothing to do, in our opinion, with NAFTA or free trade. It had to do with exact bargaining strategies.

I also want to point out that he does point out the whole question of decline in real hourly wages as far as parts are concerned. Let me just state very categorically that they have been under tremendous pressure as parts suppliers to try to maintain ties to the big three. It's the big three that are driving down those wages.

I might also say that in this community—Jerry and Susan, you should be very cognizant of this; we had a member come to our membership meeting last night—there are 35 or 37 employment agencies. I thought that was atrocious. I didn't realize there were that many in our community, but there are. Guess what they're doing? They're going from one parts supplier to the other parts supplier, and they're rotating their workforces. They're being paid $7, $9, $10, maybe as high as $12, but never have a full-time job and are constantly on contract.

• 0955

So when Mike Harris and other governments of the day want to take credit for creating jobs, they're not creating full-time, well-paying jobs because of NAFTA or free trade. They're creating part-time jobs and contract workers. That's where we stand up as the labour movement and say that's absolutely wrong. The only thing that's happening is that the profits of the CEOs and the different corporations are going higher. But no one talks about the buying power of the workers.

When they talk about real hourly wages, are they saying, in our community where there are 35 or 37 employment agencies.... The employment agency is getting $14 an hour, but the worker is not being paid, by the way, by that client supplier; he or she is being paid by that employment agency at the $7 or $9 an hour rate. So I challenge even those figures. Really, even though they're declining, I think it's a much worse declining factor, and we can only cite the examples here in Windsor and Essex counties, as we know them.

I'll tell you, it really hit me hard last night when I found out there were 35 or 37 employment agencies. And this is all after the fact of the federal government changing the UI to a point where they're not counselling our unemployed people and finding employment for them. Why can't they do that? That's their responsibility, in our opinion. It's the government's responsibility, not that of employment agencies, which are really, in our opinion, extracting moneys from workers who are just trying to have the right of a job. I think that's wrong, and I think we're wrongly directed down at the local level when we're looking at that type of environment. The future of our kids and our grandkids doesn't look too bright if all they're going to be is contract workers going from one job to another instead of to concrete full-paying jobs, which we all want for our children.

Mr. Ken Bondy: Through the chair, I'd like to address Gary's comments on the environmental aspects.

I also find it rather ludicrous to say that Mexico is raising their environmental standards so they can have freer trade with Canada and the United States. The fact of the matter is that Mexico now has some of the most stringent environmental laws on the books of anywhere in North America, but are those laws being regulated? Are they being followed? No. What does that do? That leaves us in Canada and the United States with the threat that if we are to ask for more stringent environmental laws, where we have unions in place to police those laws and make sure ministries or government agencies are coming in to enforce those laws... It leaves the workers with a fear that if we push too strongly for those environmental protections, which ultimately is the protection of our health, those companies are going to pack up and move to Mexico. We hear it all the time. The fact of the matter is that on paper, yes, Mexico has some great environmental laws, but are those laws being utilized? Are those laws being policed? No, they are not.

Mr. Deepak Obhrai: I'm going to draw on what you said, and it's a good point. The laws are there, but are they really being implemented? The question is implementation. You can put all the laws you want on the books, but who's going to implement them? I agree with you about their implementation in Mexico.

The point I want to dwell on, going back to what Christopher said, is that... and it's your opinion, not my opinion. I'm just getting your thoughts from you. Would you not then say the laws are there, though not the implementation, but the pressure of free trade and everything will force an implementation to take place? Mexico itself will not implement the environmental standards, but the outside pressure coming out of possibly a free trade agreement and the desire to go in will force that enforcement we're looking for.

Mr. Peter Pellerito: I'd like to make a comment on that. It has not happened, and that's the whole point.

Mr. Deepak Obhrai: Yes.

Mr. Peter Pellerito: I think it's going to happen. They tried through the OECD when they tried to pass the MAI, for example. A small group, 29 countries, were trying to basically dictate to the rest of the world what they wanted to put in trade agreements.

Now you have the WTO, which is a bigger organization and has a lot more muscle. Obviously now the transnational corporations have a bigger stage to say this is what they want. But the opposite is happening. Those environmental laws we're talking about, those labour laws... Mexico is one of the best countries in the world for labour law, but it's not implemented; there's no muscle behind it. So we're not getting to those protections. You say maybe free trade will do that. Well, it hasn't.

• 1000

Going back to some of the comments that were made by Mr. Sands, the dollar has a lot to do with what's happened and why the auto industry is so strong in Canada, and the fact that the design of automobiles right now... I mean, Chrysler has a pretty good product right now, and we're selling everything we're building. That has a lot of impact. Marketing is the other thing.

If you really start to dissect it, NAFTA has absolutely nothing to do with it. In fact, we've had companies from Ontario move into Michigan because of lower wages. It's got nothing to do with NAFTA. NAFTA, for one thing, is creating those lower wages. As Kenny said, it's holding a gun to our heads, saying “If you don't comply we're going to move the jobs”. I think we've already had a couple of examples of that. The Volvo plant in Nova Scotia is a prime example. Here is a corporation that was making money in Nova Scotia, with 200 jobs. It may not sound like a lot, but it sure as hell was making an impact in that community. And what did the company do? They moved to Mexico because they've got lower labour costs down there, and they're going to make more profit.

I think free trade agreements are only as good as the governments that are going to push to implement and take care of the people in the country. Free trade and NAFTA are not doing that. And that's one of the things that were promised to us.

Mr. Gary Parent: A thought just occurred to me, if I can make a suggestion, on the whole question. I would like to see possibly that until Mexico or whoever we trade with meet the standards that we think are fair and equitable, we not allow corporations to just carte blanche move; that we say as a government, “I'm sorry, Chrysler, you can't put that plant there; I'm sorry, General Motors, you can't put that plant there”—or IBM or Nortel or whoever.

I'm sick of hearing all these corporations in the media saying that they're leaving Canada because of the taxes, because of the regulations, because of... But look at their bottom line: they're making millions and billions of dollars of profit. And the only reason they want to go further south is to make more profit. Going back to Peter's initial comment about greed, that's what's driving this agenda. It's not for fairness; it's not for equity. It's for greed, corporate greed. And the governments of the day have to protect us as Canadians against this greed.

We all have to wonder, with this shift around the world, at what expense are we shifting the sand below us? We say that up to this point it has not been in the favour of the Canadian people. And for that matter, for my colleague who comes from the United States, the same argument we're putting forward today is being put across by the U.S. labour movement on the whole question of free trade and NAFTA as well.

The Chairman: I'm going to hold you to about thirty seconds, Mr. Sands, because we're well over the time.

Mr. Christopher Sands: Okay. I don't want to belabour it.

I just want to point out, in response to your question, that the auto industry is doing better than a lot of other sectors. What I tried to present today is just the auto industry. Partly because it's large, I think it's a good example of one piece that's doing well. The other thing is to separate out what you want... Certainly we're not living in a perfect world, and there are a lot of things we need to work on. Otherwise, we could abolish government and live happily. But trade policy is not intended to be a substitute for social policy; it does not solve all of our problems. The question is whether it is having a good impact or a bad impact, and how do you deal with the causes?

As Mr. Pellerito was saying, NAFTA has nothing to do with why the Canadian industry is doing well. Yes, but it has certain impacts, and other impacts that are unfair to attach to it. So it's apples and oranges a little bit, but I think it's important to recognize.

The Chairman: Thank you very much.

[Translation]

Ms. Debien.

Ms. Maud Debien (Laval East, BQ): Thank you, Mr. Chairman.

• 1005

Good morning, gentlemen. My first question is addressed to Mr. Parent. The first recommendation you make in your brief is that the Government of Canada stop discussions on the upcoming World Trade Organization negotiations. Do you think it is either possible or feasible to stop the course of events of recent years?

This week, we met with Mr. White of the Canadian Labour Congress. He didn't go so far as that in the brief he submitted to us. The Labour Congress did, however, ask us in its recommendations to include all the clauses respecting human rights and working conditions, social clauses and all the environmental issues. He also requested that the ILO be allowed to work very closely with the WTO and that workers be present at the negotiating tables. What sort of mechanism do you think this would require?

My second question is for Mr. Sands. I'd like to share your enthusiasm when you say that Canada is doing fine. Of course, you demonstrated this in the context of the auto industry.

Since we've been holding these hearings, however, we've heard a lot of people, organizations and members of society tell us just the opposite. Of course, you spoke specifically about your industry, while Mr. Parent and Mr. Pellerito had a somewhat different point of view to express to us.

I'm going to give you a very concrete example to show you that the auto industry is not doing so well in Quebec. I'm thinking of the GM plant, in Sainte-Thérèse, which should soon close its doors. I think this involves 400 jobs in a very small community. So I wonder when you tell me that the auto industry is doing very well. Perhaps the industry and the industry owners are doing fine, but are the workers doing well?

My last question is for Mr. Bondy. I'd like to ask him for some information. We've been told that the Ontario government wanted to sell water in bulk from the Great Lakes. Is there some agency examining that? In Quebec, for instance, for the last few months, BAPE, the Bureau d'audiences publiques sur l'environnement, has been looking at all these questions related to exporting water, public management of water and conservation of this natural resource. We're about to do the same thing for the forest because the film L'erreur boréale showed that the forests in Quebec also had some problems. Is the Ontario government holding public consultations, as we are in Quebec, with business, society and organizations, about resource management, or are these decisions taken unilaterally by the Ontario government? This is simply for information.

The Chairman: Mr. Parent.

[English]

Mr. Gary Parent: Thank you very much for the question.

I believe that when you look at what we've put here... Even listening to Mr. Sands' presentation, he talked about the whole question that there's been a lot of study but there hasn't really been a finalization of the total impact. When we say stop the talks, what we're saying, and obviously in concert with Brother White, is that this is what we want included in the talks when they take place. But until there's a full examination of the effect of the current free trade agreement between the U.S. and Canada and of the NAFTA agreement among the United States, Canada, and Mexico and full consultation with all Canadians across this country...

• 1010

Our having this discussion here today is fine, but we're looking for a much broader consultation than what the WTO hearings are providing us here today. We're looking at having grassroots input from every community across this country on how NAFTA and the free trade agreement have affected that particular community.

You mentioned the situation of Sainte-Thérèse. That is part and parcel of the free trade agreement that's allowing that to happen. If we had had that particular scenario 10 years ago prior to the installation of free trade, that would not have been able to happen because of the whole question of sales versus product, and we could have accommodated, I'm sure, that plant staying open. But it's only the free trade agreement and the NAFTA agreement that are going to allow that plant to close, and we think it's criminal, particularly for the province of Quebec. When we look at Quebec, you're right, it comes from a very small community that is heavily dependent upon that plant.

If I can make a plea, I know that the federal government has worked with the Quebec government to try to keep that plant, but I'm sure General Motors could find another product to put in that plant if enough pressure was put on by both the Quebec government and the federal government to make that happen. But General Motors, being the company it is, will not do that because the free trade agreement allows them to close that plant with no regard for the economic consequences to that particular community.

That's the type of thing where we feel full consultation should be provided so that every Canadian would be aware of the effects free trade really has on those communities. Sainte-Thérèse is a perfect example of what can happen when free trade is evident.

I hope I've answered your question.

The Chairman: Thank you.

Mr. Sands.

Mr. Christopher Sands: I also appreciate your question. I've talked about the level of analysis and the challenge of trying to take the biggest picture so that you get a fair assessment of what's going on and not get caught in anecdotal evidence. When you look at whether the workers are doing as well as the company and the industry overall, I think it's important to measure what's happening against a realistic alternative of what would be happening.

I disagree with my colleague that a trade agreement put pressure on Sainte-Thérèse. I think Sainte-Thérèse happens to be geographically not close to the centre of the industry. It's facing distance problems, just as the Volvo plant in Halifax did.

The auto industry is a very competitive industry, and we saw in the late 1970s and early 1980s what happened when the industry in North America was not particularly competitive. What happened was the companies were forced to downsize and people lost jobs. The companies did a better job of profiting, and that helped to secure the jobs we have.

The alternative of having the Government of Canada or others decide how people who own property can use that property and how people who own capital can use that capital ultimately spells doom for the industry. It will drive the industry out of Canada, into the United States, and out of the United States if we take the same tack and into some place where the people who own the industry feel most comfortable operating. I think the Government of Canada struck a very good balance between influencing the industry to the best of their ability, using the leverage they have but also recognizing that there's a market reality that is a challenge for people in this business. Geography is to some extent something you can't change.

During the old NAFTA debate we looked at how NAFTA would affect the North American economy based on a model of what we thought 20 years from 1993 would look like. It's an economic model based on certain assumptions, but not a perfect look ahead to the future because you can't know the future.

• 1015

When we look back, would we have the same obligation? We know a little bit of the period between 1993 and 1999, we have some data, so we can look at what's actually happening. When we're looking at whether there would have been a better alternative, we have to look at what was realistic.

I think we're doing well under NAFTA, as well as we could have ever expected and in some cases better than we could have hoped, particularly in the auto sector. You can imagine alternatives, but I think realistically the industry has its competitive pressures on suppliers and others, and those things can't be wiped away with a trade agreement.

Mr. Gary Parent: I have to respond because—

The Chairman: Just let me explain something to you. Other people are waiting to ask questions. Madam Debien asked three questions for ten minutes, and we're well over her ten minutes. If you guys get into a debate, she'll go fifteen minutes, and then my other colleagues will—

Mr. Gary Parent: But this is important because it talks about the consequences of free trade. To my learned friend here, I'm saying that plant in Sainte-Thérèse is of very high quality and productivity is up. At the same time as General Motors is talking about closing their plant, it's talking about building three new plants, two in Michigan and one in Mexico. They're doing that, I'd say, at the expense of those workers in Sainte-Thérèse. There is product out there that they can move to that plant if they have the political will to do it.

All I'm saying is that free trade is allowing that to happen, and it's wrong. This committee has to adhere and listen to that type of argument.

The Chairman: We absolutely heard that the first time. All I'm saying is that if we get into a debate between everybody, we'll never get to anybody else. That's all.

So, Mr. Bondy, I'm going to have to ask you to be very, very quick because we're well over the time.

Mr. Ken Bondy: Thank you for your question. I think it is important that we do make a comparison between the province of Quebec and the province of Ontario. We do share many of the same natural resources and the same situations.

What we have seen in the province of Ontario under this pro-business government is a complete erosion of a consultation process with the citizens of this province. I think the reason for that is that we are seen as inhibitive to their business agenda. The citizens and their comments are a bit of an irritant to those people, because quite often we do have concerns and we do oppose some of their ideals. Rather than take a couple of moments to listen to some of our issues, their agenda has seemed to be to just put us in a corner and not listen to us at all.

We have seen those erosions. They've eliminated intervener funding, where we used to be able to actually participate and challenge some of the decisions that were made on behalf of corporations. That is gone. They've just done a unique thing in Ontario, quite frankly, in naming a string of parklands, but what many people do not know is that in that string of parklands, which are still governed by the Government of Ontario, deforestation and mining developments are going on. So although from the outside it looks all very fine and nice that there have been some parks named, there is still industry inside those parklands building, developing, and profiting from our natural resources.

The Chairman: Thank you very much.

Next is Mr. Pickard, followed by Ms. Whelan.

Mr. Jerry Pickard (Chatham—Kent Essex, Lib.): Thank you very much, Mr. Chairman.

I think many of the points that have been brought up today are ones that witnesses have brought up on a very regular basis everywhere we've been, so they're certainly not just localized concerns but concerns across this country. Number one, people issues and, number two, environmental issues must be tied into any trade agreements and movements in the future. That has been very obvious.

It's going to be a difficult challenge, I have no doubt about that, to bring that agenda up. But this committee is here to try to glean as much information as we can and to open the transparency of the process so that we can make sure that concerns of the average Canadian and of each of the industries are heard and presented in a reasonable way.

Maybe we're not perfect. We have a committee going through the west at this very time. We've gone through Quebec and Atlantic Canada. This committee did Winnipeg and Ontario. We are trying to get as much information out in the field as we can, as well as having many hearings in Ottawa. It's a very major issue.

• 1020

As far as the Windsor auto industry and auto support industry goes, it is, as Mr. Parent has suggested, as Mr. Bondy has suggested, the engine that not only runs this economy but does most of the trade in Ontario. There's no question that it is extremely important to this nation, and I commend you for coming forward.

The fact is that certain issues have come up that I think are critical, and we must look carefully at them. Gary, I'm glad you brought forward the contract question, because I think the issue of employment agencies and contracting is something that has to be looked at. It may start a new dimension in what is happening with our labour force. We are being told, and have been told by many, that lower wages have resulted from agreements, and progress is not necessarily progress when it diminishes the lifestyle of Canadians, when agreements do affect it. I think we have to have a very careful examination of how the income and the security of Canadians, Americans, Mexicans, and any others are affected by this agreement, and how future agreements are handled. I do think it is important. It's one aspect that we've all seen happen. We've seen it happen in many different companies.

The water issue that Ken brought up—certainly no one on this committee has supported the views of the provincial government in that case and we've all been very concerned that those types of things happen, but again we do not have control over every element. It's not a perfect system, but obviously there's backlash and a concern toward selling bulk water or resources as such. It is not acceptable in any dimension from people we've heard as witnesses or people on the committee; they've all responded very negatively toward that.

One of the issues I do want to touch upon, though, goes directly back to Mr. Sands' point. It has to do with proximity of plants to the industry itself and the markets themselves. You used Sainte-Thérèse as an example of being away from market, and you also used Halifax. But at the same time, while one plant is closing, another plant is opening in Mexico, which I would think is further removed from the industry and further removed from the markets. So in some cases we are putting plants at extreme distances away, while at other times we're removing—and I don't think Sainte-Thérèse is that far away, depending on certain aspects...

Maybe you could give me a better understanding of how distance affects that type of decision when we're also building a plant in Mexico that may be competitive.

Mr. Christopher Sands: It's not a question of strict miles. But what you find is that there are little pockets of assemblers, suppliers, in a little area of expertise. The operation of just-in-time inventory control depends on the infrastructure that's available and the proximity of facilities and their ability to keep supplying without having a large backlog warehousing operation.

Some of Mexico's more distant facilities are in the area around Mexico City. That's where you see Volkswagen and Nissan, which have traditionally located there. Early in Mexico's approach to the auto industry the government actually encouraged the auto sector to locate around Mexico City, so there's also a residual pocket of Mexican-owned suppliers that are there. The North American companies, the big three, to include DaimlerChrysler again, have tended to operate in the northern part of Mexico where there is proximity to some of the facilities in Texas, Missouri, Kansas, Oklahoma. There's a belt there that they're able to link up with.

• 1025

It's true that in terms of strict miles Sainte-Thérèse is not the ends of the earth, and I didn't mean to suggest that, but it's tough because it's on the periphery of the core. I think that's one of the factors working against it, which doesn't relate to NAFTA necessarily; it would have been a challenge for Sainte-Thérèse in any event. That was really my point.

Mr. Jerry Pickard: Can I ask you a second question as well? It relates to what we've heard here regarding labour and labour costs. Many of the jobs in the big three and many other auto industry plants have paid very high wages, and we have seen changes to the structure where supply plants, other plants, have taken jobs at somewhat less labour pay. Quite frankly, there has been some criticism of labour, that they'll move jobs away from good-paying jobs in plants and farm them out to suppliers just for an economic gain. Over the short term, I guess, they have succeeded in that.

What is your comment with regard to that, Mr. Sands?

Mr. Christopher Sands: To some extent what is happening in the industry is that each of the suppliers is competing for business on the basis of a price, which feeds into the cost of the vehicle when it's sold, and the assembler looks to contract out in order to keep costs lower. So there is a pressure for suppliers to be able to deliver whatever their component is at the lowest possible cost. Labour being one of the input costs, they look to keep those costs low. The supplier that may offer a higher wage than other suppliers may lose business to another supplier that is able to negotiate lower wages with their workers. So it's a tough competitive environment, independent of particular trade policy arrangements.

One of the things, in relation again to the honourable member's question on benefits, is that in the United States there's been more openness on the part of labour to accept profit-sharing arrangements, to tie... This is a very big area of controversy, but it's also true that when you look at incomes, wages are part of the picture, but there are some arrangements that have allowed the profitability of the industry to trickle down to the workers more directly than in the Canadian arrangement, which has resisted that.

Mr. Jerry Pickard: In the long haul, are these kinds of movements going to diminish the ability of workers to have good wages and share in the prosperity of trade? I think that's at the crux of what labour is saying. I do think that has to be answered and dealt with in our negotiations. Maybe you could just make a brief comment on that.

Mr. Christopher Sands: If we're not concerned about the outcomes of trade agreements for people, then we're making a mistake. Obviously that's important. I would just separate out, to some extent, the pressure on the industry and the pressures of the industry that would exist independent of trade agreements, and then look at how the decisions you all make with regard to trade agreements can improve the situation.

But to some extent it has to be recognized that the industry itself is moving in a direction, and it's going to be very tough for Canada, working alone, to turn around some of the trends in a global industry that's moving very fast, that's all. I wouldn't take too much responsibility on your own shoulders—you can't change the world—but on the other hand, I wouldn't shirk the responsibility you have to your own workers to do the best you can for them.

So it's a matter of striking a balance and assigning responsibility where it really lies, not only in terms of government but also in terms of what factors may be indigenous to the industry itself.

Mr. Gary Parent: If I can, Mr. Pickard, I think Mr. Sands put the strongest argument, the one that we've been putting forward for a long, long time on the whole question of content. He just said here that one of the reasons Sainte-Thérèse is looked at unfavourably is because all the parts suppliers are down south. What's wrong with the parts suppliers being in the province of Quebec or near Ontario or New Brunswick; what's wrong with the suppliers being there? The reason is that the profitability of those suppliers at a much lower wage rate is much more looked at by the General Motors corporation. It's a bottom-line thing.

That's why we fought so diligently on the whole question of content. There has to be a certain amount of content.

I might also point out that the Volvo plant really had very few parts made in Canada or the United States or Mexico, because they came in in kits from offshore. Basically, all those 200 workers were doing in the Volvo plant was kit-making and just assembling. So there was no Canadian content other than the actual assembly of that particular vehicle. The only thing that drove those 200 jobs out of Canada is that they could get more profit with the Mexican workers building that particular vehicle.

• 1030

[Translation]

Ms. Maud Debien: There's an explanation, which I'll give later on, but the reason for the closing is not the one that's just been mentioned. It's not a matter of distance and suppliers. It's quite a different reason, which I can give Mr. Pickard later.

The Chairman: It doesn't have anything to do with the policy of the Quebec government?

Ms. Maud Debien: Not at all.

The Chairman: All right. We'll exclude that too.

[English]

Ms. Whelan.

Ms. Susan Whelan (Essex, Lib.): Thank you very much, Mr. Graham.

I want to welcome our witnesses here today. I'm not a regular member of this committee, so I don't have the expertise that some of my colleagues at this table may have. I haven't had the opportunity to hear from all the witnesses, but I do have a couple of questions.

My first question is to Mr. Sands. I took a look through your brief and listened to your comments. I note that you talk about the growth over the past five years since NAFTA took effect. I look at this and I wonder, when you did this type of study and prepared this type of paper, was there any analysis done on what has happened in the past 30 years and looking at the different cycles?

Mr. Christopher Sands: In this one in particular, we were looking at the effects of NAFTA, so we went prior 1993, and in some cases, depending on the data that was available, we went back into the 1980s. We didn't go all the way back, except in a few areas, to 1965, but we didn't necessarily go back to 1900. It was to some extent the limitations of the data, but it was also because we were trying to focus on NAFTA's impact. So we did a little bit of a time series, but not too much.

Ms. Susan Whelan: To actually focus on NAFTA's impact and take a really clear and what I call responsible a look at it, I really think you have to go back and look at all the data. That's because the auto industry is cyclical. We were coming out of a mini-recession in the 1990s, and of course there's going to be a boom that goes with that.

I know from my experience on the industry committee and conversations I've had with the banks that they look at this area, Windsor—Essex County, to see how it's doing... or they used to. Now we've slightly diversified with the casino, but prior to that we were and still are highly dependent on the automotive industry, and a large contributor to that industry.

But it's a cycle, and when there's a downturn, they look at what's happening in Windsor first, because we're the first ones to go into a recession and we're the first ones to come out, normally. That's because of how the economy in Canada is driven and how much Ontario is driven by the automotive industry.

So when I look at statistics that talk about the effect of NAFTA, I don't know if you can really say this is the effect of NAFTA based on what has happened at this time, without doing a total analysis of the industry, because it is so cyclical. You're coming out of a bad time and going into a very strong, good time. We can go back and look at periods of bad in the 1970s and 1980s as well. So to do a really fair analysis...

As well, there's a lot of talk about the free trade agreement. The reality is that we traded up to 75% to 80% free trade with the United States prior to this thing called the free trade agreement. I don't even know why they titled it that, because we already had free trade in a large number of sectors.

I know some sectors have fared better than others and there have been some repercussions to some of the trade agreements, but when the automotive industry is one of the drivers of the economy in Ontario, and for that matter Canada, I really and truly believe that to take a good look and to do analysis, you can't just pick a segment and say that's where it is. When you look at it, you have to do a fair analysis and go back and look at the trend as it evolved. It's constantly evolving, as well.

As we've gone to a just-in-time delivery system, there has been a lot of movement, but as much as it evolves, it stays the same. I'm hoping that as the cycle comes into its next downturn it's nothing like it was before. I'm hoping we've gained and learned and had efficiencies that will never take us to some of the lows of before.

That being said, there's movement, there's knowledge, and there's experience that goes with that. I know the CAW representatives have also learned and moved, and we all gain knowledge from that experience. So when you do that type of analysis, I would hope the committee would recognize that you can't just pick and choose timeframes and say these are the benefits of trade.

• 1035

You also said we should be concerned about the outcome of people in trade agreements. I think it's exactly the opposite. Trade agreements should be about people. That's where the focus and all the benefits should be. What are the benefits for the people of the different countries?

The WTO is an agreement with over 120 countries. How many of those countries can really trade? How many of those countries really have a lot of things to trade—more than a few items? Yet we're signing an agreement, or talking about an agreement that will have dramatic effects on a number of industries. It's really a few players around the table that stand to gain the most. Others will say yes and have nothing to trade. It has to be about people and what the benefits are to people.

So I hope when you do an analysis, you take a look at it from all sectors in the future. I hope, for the WTO and the results of this committee, that will be one of the focuses.

I know Mr. Graham mentioned earlier that one of the sectors is about environment and labour, but I think it has to be a very strong focus. We have to look at where we've come from and where we're going.

To pick up on Mr. Bondy's point, the environment is key in looking at where we're at with our trade agreements and where we have to go. Can we move any further until we have some harmonization of environmental laws? I chair the Ottawa caucus for the Liberals in Ottawa, and even in Canada we don't have environmental laws that are in harmony with those of the United States. We don't have the same fuel legislation as that of the United States. We expect the automotive companies in Canada to be there and be strong, yet we're not in a balance. So I'm not sure if we should move much further on trade rules until we deal with some of these basics, one of which is the environment.

I don't know if you have any comments on that.

Mr. Christopher Sands: Just briefly, because I know we're under pressure for time, nobody ever feels sorry for economists, but it is tough to set the period of analysis. We relied a little on available data, but the further back you go, just as you get more data, you discover there are all sorts of other factors that may also impinge. It becomes difficult to say what the condition was over a longer series. So we tried to look at the immediate prior and after periods, because we thought that would be the most useful. But I just acknowledge the point that a longer data series provides other insights, and that's true.

I added something in my testimony here but did not say it on the record, so I would just draw your attention to it. One of the things any government could do, but it would be really tremendous for Canada to do, is help with data. It's very hard, surprisingly, to get good data on this industry that are comparably collected—the same kinds of numbers in Canada, the United States and Mexico.

Canada does an outstanding job in Statistics Canada. The U.S. is more scattershot in its approach to collecting data. In Mexico, you're lucky if you can get data at all. Whatever your purpose, pro or con, good data is key to evaluating what the effects of anything are. Just having comparable data would be a tremendous accomplishment that you, as Canadians, could lead the way on. We really need better data.

That's an economist's complaint, and no one feels sorry for economists, but there it is.

Ms. Susan Whelan: But that causes me great concern. We're making decisions and moving forward when we have data that is comparable but doesn't have the same parameters. As one of those people I think trade agreements should be about, I would echo the sentiments of Mr. Parent.

Mr. Parent and I don't necessarily agree on everything, but we agree that people are important and have to be the focus of trade agreements. I do believe trade is necessary. If anyone has benefited from trade it has been the automotive sector, and maybe even Gary would agree with me on that—

Mr. Gary Parent: I'll agree with you on that.

Ms. Susan Whelan: —and DaimlerChrysler has been one of the key benefactors.

There were fears about NAFTA, and one of the biggest fears was from the sector I'm familiar with, the wine sector in Canada, because it was a new and starting industry. They fought back and they fought hard. They've been successful with the VQA in their own marketing, but that was a tremendous fight.

Others maybe didn't have the wherewithal to fight as hard to withstand some of the changes. We have to move forward as a nation, and we have to recognize that global trade isn't new. Global trade started when Canada was discovered, or North America was discovered. That's what it was all about. If we think we've created this, we haven't; it's been around. But we have to move forward and ask what parameters we can move forward with, and yet protect the interests of the environment, labour, and all Canadian consumers, and not allow a few corporate giants to control what everyone does.

• 1040

Those are concerns I have. I don't know if Mr. Parent and Mr. Bondy want to add anything.

Mr. Gary Parent: I agree. I don't know what else to say.

Mr. Ken Bondy: I also agree. I also want to say that Susan played a very important role as our counsel here. She lobbied the federal government and was successful in decriminalizing the use of industrialized hemp. As far as trade goes, this is an issue that will be very positive for all of North America. Hopefully we can take a look at some of those positive aspects of things and bring that type of product into, let's say, the United States. Right now they do not have a complete understanding of what industrialized hemp can be used for, therefore they have zero tolerance for it.

So a positive note would be to be able to bring a good environmental message on trade into those other countries.

The Chairman: That's a good point, Mr. Bondy. Make sure you don't have a little piece of industrialized hemp in your pocket when you go across the border. You might find you'll never go across it again.

Mr. Ken Bondy: Right.

The Chairman: You're quite right that they're getting a little aggressive out there about what we would call perfectly normal products—but you can take a gun if you want, a machine gun or anything else. Don't worry about those. Don't have any hemp, but go ahead and bring in a machine gun.

We have about one minute, so I'd like to ask Mr. Parent a question. Some of your statements about the union's point of view troubled me a bit. You said all this was being done for profits of corporations—just profits, CEOs and stuff like that.

Two things stick in my mind. First, I live in Toronto, and consumers in Toronto will buy the best cars they can get at the best prices for the competitive products. If the company you work for doesn't make it and his price is higher, as in the Sainte-Thérèse plant discussion, if it's not competitive and they can't sell it, the company will go down, the workers will go down and your jobs will go too. So is there no sense in trying to deal with that? You must worry about that dimension too. Are you suggesting we just jack up tariffs, not let any Japanese cars or anybody else's cars in, and go back to the old way where we have a huge tariff wall around us? I don't think that's likely to happen. I don't think consumers would put up with it. So that's one thing.

The other thing is you say it's all profit driven and stuff like that. Do you know what the biggest investor in Ontario that makes money is? It's the Ontario Teachers' Pension Fund—$60 billion. They want your companies to be profitable because their teachers depend on those profits for their retirement. The biggest investors in Quebec are the caisses populaire and everything else. They don't want to see their companies lose profits. So when you're saying it's all just profit driven, it's not as if all this money just ends up in the hands of three pockets. Every citizen of the country needs this. So I'm just a little worried about an unbalanced discussion here from that point of view.

Mr. Gary Parent: Obviously my terminology was misinterpreted, which isn't that unusual. Obviously we're not against profits; it's the extent of profits and at what expense those profits are gained. That's where our concern comes in. We have in this world and this country the highest amount of wealth we've ever had in our history, but when you examine who has control of that wealth you see it's a very few.

I guess we're saying we have to be very careful at how much profit-driven... You look at the DaimlerChrysler merger and the Chrysler executives and the amounts of money they have taken out of this corporation, because they've exited now. They've taken out hundreds of millions of dollars in bonuses, salaries, severance packages and everything else. The worker on the line building that product does not share in that particular aspect.

My colleague here indicated that profit-sharing was something we should all possibly look at. If you talk to the Chrysler workers who made $7,000 on their profit-sharing cheques just a couple of weeks ago, they're happy as heck. But talk to the General Motors worker who only got $200 or $300, or the Ford worker who only made $4,000 and gave up the same wages and benefits that the Chrysler worker did, and tell me where the justification is on profit-sharing versus real wages. We can show you from our figures that Canadian wages—in fact you indicated it yourself—are 19% higher than the wages of the United States auto workers. Our dollar and health care play a big part in that as well. That's why the Canadian auto industry is doing so well, I might add.

• 1045

The Chairman: Productivity too—

Mr. Gary Parent: Productivity is the highest it's ever been in all our plants, including the Sainte-Thérèse plant.

The Chairman: I just want to assure you that as far as the committee is concerned everyone on the committee, particularly environment people, recognizes the fact that, as Sue put it very well, trade agreements have to be constructed more for general public benefit and not for exclusive capital things. As Mr. White said to us the other day, we will either have to work at the international level to get better standards in there or focus on how the nation-state can retain its sovereignty over these, or it won't work.

So we're very conscious of that. That message, as Gary said, will go back to Ottawa.

Mr. Peter Pellerito: I have just one last comment. I have some extra documentation here that basically shows the difference between Mexico and Canada—the trade going back and forth. So I would be more than happy to share that with the committee.

The Chairman: Thank you. We appreciate that.

We have to report in early June, so we probably only have a couple of weeks more, but if anybody has anything they'd like to send us, we would be more than happy to receive any further information.

Thanks very much for coming.

Mr. Peter Pellerito: Thank you very much.

The Chairman: We'll ask the next witness to come up. I think it's Mr. Paul Bondy from the Windsor—Essex County Development Commission.

Don't leave your sign there, Mr. Ken Bondy, or we'll be calling the wrong name all the time.

Okay, Mr. Bondy, you know what we're doing, so I don't have to explain all that. We appreciate your coming. Maybe you can keep your introductory remarks to about 10 or 12 minutes; that way we'll have more time for questions.

Mr. Paul Bondy (Development Commissioner, Windsor—Essex County Development Commission): That's fine.

The Chairman: Welcome.

Mr. Paul Bondy: Thank you, Mr. Chairman and members of the committee.

[Translation]

Welcome to the Southwest.

The Chairman: It's too bad Ms. Debien isn't here; she'll be back.

[English]

Mr. Paul Bondy: I was asked to speak on regional trade matters, and in that context, the mandate of our corporation is to cover Windsor—Essex County and the Tilbury business improvement area. I understand that our views—your findings—are then incorporated into the wider national mosaic, if I could use that terminology.

I would just like to say that there has been no opportunity to discuss this with our board members, and therefore I'm speaking as an officer of the corporation and hopefully we'll be able to discuss these issues with our people at a later date.

Without being too long-winded, I should explain what the commission is all about. We cover the region I just mentioned, and we're responsible basically for attracting new investment, working with those that are already here, and trying to make sure there's a climate conducive to business growth.

• 1050

I thought perhaps to better understand the business and trade patterns we are engaged in today, a retro look would be a good place to begin.

Well, 150 years ago Hiram Walker came to Windsor and emerged with the first of the manufacturing processing systems of this region, and 95 years ago Henry Ford started auto production here to overcome high tariffs and began to manufacture and then export to the Commonwealth, as well as supply the Canadian requirements. Some 50 years ago, Windsor manufacturing was front and centre in support of the Allied war effort. In the post-war, we returned to consumer production. The Canadian market was small and fragmented. All types of production and sectors were non-efficient—and that could call in anything from baby foods to passenger cars.

In the late 1950s our commission was involved in the preparation of briefs, which led to the royal commission on the auto industry. That led to the Drury pact on tariff remissions. In fact, there was a pilot project in this city with one of the big three. Of course, we went on from there to the Auto Pact and the duty-free movement of transportation equipment at the manufacturers' level. With this came efficient integrated manufacturing. Gone were the six or seven car models coming down the same line, or 20 different engine models in one plant, which was very inefficient.

We moved from there to a very efficient, highly automated production system, where a product with a global mandate—and I think we're all familiar with that buzzword—simply means, for example, certain types of Ford engines in Windsor go into seven or eight of their lines, shipping to six or seven assembly points in a very rationalized system. Other producers specialize in flexible products, where they're shipped around North America, Europe, and Japan. One recent example of that is a German-based manufacture that is considered the best producer of seat heaters in the world. So in this connection, Windsor is very much linked with the rest of the globe.

To be precise on the importance of trading arrangements—and I believe this is what we're dealing with—and the need to monitor and enhance them, let me turn to a brochure put out by Statistics Canada, figures from 1996. In that year, among the leading merchandise exports, motor vehicle and parts accounted for $58 billion, and that was 22.5% of all merchandise exports. The next closest item, mineral fuels and oils, was only 8.9%. The province of Ontario accounts for $52 billion or 90% of those exports. In fact, within this province, these exports were 41% of the total. The next nearest activity or sector was machinery, at 13.4%.

Trading arrangements like the Auto Pact are successful. In my view, that can't be debated. In recent years in this city, the big three have engaged and are still investing at the rate of $6 billion. That's in new plants, refurbished plants, new technology and new products. In jobs in manufacturing in the city-county—and that's based on our own plant-by-plant survey of manufacturers—we were up 1,600 jobs in 1998 over 1997, and ten days ago Ford in particular announced more manufacturing—300 more jobs starting in January 2000.

In addition, we have probably the largest automotive R and D activity in the country, in an arrangement between Chrysler Canada and the University of Windsor, between Ford of Canada and the University of Windsor, including others like Siemens, Gates, EX-CELL-O, and a host of smaller operators.

In terms of Canada-U.S. trade flows, I saw a recent graph that shows that the Niagara frontier handles 16% of Canada-U.S. trade flows; Windsor, 42%; the rest of Canada, 42%. So obviously there's a little bit more in terms of ship, water and rail. These numbers are from a very recent study from the eastern border coalition. When transportation is combined with tourism, agriculture, and the tooling and metal-working sectors, the gross domestic product of this region approaches $30 billion. If we look at that on a national scale, that's roughly tied with the province of Manitoba, and bigger than Saskatchewan or any of the Atlantic provinces.

• 1055

In terms of productivity—and in my view, that's a sore point when Canada is accused of having low productivity—I guess you can't measure that across the whole country, because this area is at least three times higher in productivity per capita than the national or provincial average, which is somewhere in the range of $26,000 to $28,000 per person. Again, these are 1996 numbers.

On agriculture—and my only claim there is that I'm a farm kid and know a little bit about it—again, we're involved in exports and global trading, be it from Heinz, Archer Daniels, Hiram Walker, Seagram, Family Tradition Foods, or Italia Bakery, which ships copious amounts of baked products to nearby Detroit.

Of Ontario greenhouse production, 75% occurs within about 60 kilometres of this room. Most of it is exported to the U.S., like cactus to New Mexico, tomatoes to Florida, cut beans to Israel, and much more to the U.S. midwest, including, for example, the Windsor-famous pita bread to Lavonia and Dearborn, which has the largest Muslim population outside of the Arab world. We also have naturally grown soybeans in Staples, which is in your area, Susan, isn't it? These go to Michigan to make soya milk. They are in demand because they are organically grown.

I should probably stop there. You may have questions that are more pertinent to what I can speak on here for a while, but I just can't resist, because Susan is here and I happen to live in her riding and happen to know her senator father's position. Let me give you an example of the importance of trade and trading arrangements and our own managed systems.

There was some complaining on Detroit television earlier this winter that a pound of butter in Detroit was close to $4 in U.S. dollars, and we were paying $2.65 in Canadian dollars here in Windsor. As a farm kid, I see that as the need to protect trading arrangements and the need to protect the kinds of systems that have been in place here for a long time.

The Chairman: Sir, you said that butter in the United States is more expensive?

Mr. Paul Bondy: Yes.

Ms. Susan Whelan: In U.S. dollars?

Mr. Paul Bondy: In U.S. dollars.

The Chairman: It's $4.

Ms. Susan Whelan: And $2.65 in Canadian dollars?

Mr. Paul Bondy: Yes. You probably shop there too.

The Chairman: We can afford a bit of GST on that.

Mr. Paul Bondy: Mr. Chairman, I apologize that I forgot to introduce Elaine Prior. She's our manager of administration, and in the event that the committee has questions to which we do not have answers, we would be happy to research them and respond in kind.

The Chairman: We're not going to let Ms. Whelan ask any questions, because she's chair of the industry committee and she's already boosting this county enough in Ottawa. So maybe we'll go to our other members. We have only fifteen minutes.

Mr. Deepak Obhrai: Thank you.

You gave a regional perspective. Nothing stops you from moving to Calgary, if you are worried, and becoming my voter.

What you said was great, and I'm glad that the economy is doing great. Your butter analogy was excellent to show that you are doing well. In reference to the hearings that you're having, I'm curious about your last statement when you gave your butter example, which was that we need to protect. Perhaps you could elaborate on that. In Europe, due to protection, they have mountains of butter that they cannot sell and it is wasted. Could you elaborate on the last statement you made?

Mr. Paul Bondy: I'm far from being an expert, but as a consumer, from time to time we hear that other partners, like the U.S., are taking shots at Canada's managed systems, like marketing boards. When you see butter in the U.S. at $4 a pound... supposedly they have an open, uncontrolled system, but I'm saying that the opposite here, a controlled, managed system, is better for the consumer than their situation. Next week they might be able to get it for $1.50 a pound, I don't know that; but overall, that's not helping their consumer. Our consumer benefits from a managed system.

Mr. Deepak Obhrai: That's interesting, because to some degree the supply management system is coming under review and under attack, and a lot of producers are saying to take it out, as we heard from the hotel association. You are saying that was responsible for lower prices.

• 1100

That statement you made and the butter analogy that you put in—I think there has to be something else in the supply management system than that. I don't know.

Mr. Paul Bondy: Well, I'm not the expert. I'm just giving you an example of reality.

Mr. Deepak Obhrai: I think there is not enough data behind that statement to say they are protected. I'm sure there are other market forces. If anybody wants to tell me what it is... I don't know.

The supply management system, as I'm sure you know, in due course—this is what we hear—will be phased out. Or there is talk toward that. That's all I have to say on that.

The Chairman: It's been being phased out for a long time. It seems to have a life that... Maybe one of the reasons for the life it has is precisely that it's not as bad as people say it is. That's a darned good comparison. I'd like to have used that. I wish we had got that a couple of weeks ago.

Thanks very much.

Madam Debien.

[Translation]

Ms. Maud Debien: I'm going to have to give Mr. Obhrai a lesson on supply management, tariff quotas and the elimination of subsidies. The whole agricultural community came to tell us that we absolutely had to maintain supply management because it's an internal management system that doesn't cause any distortion at the trade level. So we'll talk to each other.

Mr. Bondy, thank you for being here. You tell us that the Windsor—Essex area is doing very well. You showed us, with supporting evidence, that the productivity rate here is three times higher than elsewhere in Canada. You spoke to us specifically about your area.

We're here to hear comments about the World Trade Organization and the negotiations that are being initiated. I'd like to know whether you have any ideas to express or comments to make about the upcoming negotiations concerning agriculture, which will begin in December. Do you have any recommendations to make to the Canadian government and our committee on the start of these negotiations? Since we'll start talking about agriculture in December, what should the Canadian government's position be on agriculture, in particular? If you had any broader comments, we would willingly accept them.

Mr. Paul Bondy: Thank you. Obviously, we're not experts. I gave the example of a situation where the production management system in Canada offers consumers a certain stability. As a consumer and not as a director of the Commission—I can't speak here on behalf of the Commission, but I can give you my personal opinion—, it's important to maintain and protect the system, despite opinions to the contrary; examples show that this system isn't harmful.

In the Ontario auto industry, which is one of the most important sectors in Canada, we'll have to go on protecting the systems already in place. For about five years now, Ford, Chrysler and General Motors have made investments of about $5 billion to improve and increase production in the plants, which have been here for some 90 years. As I said, there'll be 300 new jobs in January because the demand is stronger. Here we make truck engines.

• 1105

In the case of the Ford Company, for example, except for diesel engines, all engines for certain Ford products come from the Windsor plants, such as those for small trucks, etc. They've got six plants here; some assemble engines and others cast aluminum. This is very advanced technology. One of the plants operates under an agreement concluded with a company from England.

When the Canadian government maintained the tariff level on finished vehicles arriving from outside, it was right, to my mind, to protect us this way, because investment by North-American companies has been very high in the last several years. Other companies are also making investments but not to the same extent as the three major ones. Protecting what we have is very important in my opinion.

[English]

The Chairman: Ms. Augustine.

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Thank you, Mr. Bondy and Ms. Prior.

We've been hearing as a committee about a whole series of issues around the WTO almost as a double-edged sword. And since this committee is looking at making some recommendations in terms of the next round, I'd like to ask you, as an individual, if you would respond to the inclusion of a whole series of issues like human rights, the environment, labour laws, and how we can balance that with the discussion around markets and country participation.

Mr. Paul Bondy: I'm hardly an expert to deal with all these issues. But on the local scene, obviously we participated with a whole series of manufacturers who obviously abide by environmental rules, and obviously human rights. Everybody supports human rights, myself and the next person also.

What I hear most about world trade is that it has to do with tariff protection, and if we're going to open our markets to everyone, then we ought to have access to their markets also. So I guess the answer is probably yes, I would support it in a general way, but I have no precise knowledge of some of these detailed issues.

The Chairman: Our problem, Mr. Bondy, is—and we've heard it a lot—that if the trade organizations only focus on access to markets, in fact then you get a race to the bottom in terms of labour standards, human rights and environmental standards, because they tend to be the low-cost producers. It isn't fair competition, and you're not going to have these good jobs and you're not going to have the wealth in your community today. The wealth you described is very trade dependent, and what we're hearing is that it's just not going to be there if in fact everything vanishes. I think Mr. Parent, who was here before, said, look, it'll just all go to Brazil or somewhere else, and the wealth that you've described here isn't going to be there, unless we make sure these international organizations reflect some better standards in this respect.

We've heard a great deal about that, and I think it was the thrust of Ms. Augustine's question. So I don't know, you're obviously looking more from a local perspective. But that's where we're coming from.

Ms. Whelan had a question.

Ms. Susan Whelan: I wanted to ask maybe Paul Bondy if he could expound on the fact that we have tremendous benefits from trade in this region, but we also seem to be—I don't know what you want to call it; I don't want to call it a kicking box—subject to retaliation quicker than other areas because we are a border community. And there are subtle things that take place. Although we have these wonderful trade arrangements, for example with the United States, we have this Michigan business tax that's now been proposed, which would dramatically affect businesses in this area that do business with Michigan, and business that's been done for years and years. So maybe you could comment briefly on that.

• 1110

Mr. Paul Bondy: We tried to be supportive and worked with a number of other organizations to try to convince Michigan that this is not the right way to go, and we understand that they don't think it's the right way to go either but it has landed in their lap somehow.

Probably sometimes in the short term we are more concerned about—and I'm not saying we want to get into it—some of the ways they operate their tax abatement programs and industrial support programs and so on. And I can tell you we've lost some very major... We didn't lose them in the sense that we didn't have them, but when you're the only city in Canada bidding on, for example, a major steel development, and we have little or no support other than some federal programs like targeted wage subsidies and that kind of thing, and we are faced with tax abatements worth $25 million on a $150 million project... I know Canada gets hammered by the U.S. sometimes, or we get criticized by them, but they still go ahead and play a game of their own.

So we have to constantly fight to find a way to overcome these kinds of situations. I'm not saying the City of Windsor wants to get into that kind of tax abatement. In fact, we're prohibited from doing so. But you wonder there about the level of the playing field.

Ms. Susan Whelan: That brings me back to one of my statements to one of the earlier witnesses, which is that we have a number of issues about which we need to bring ourselves to parity with these countries that we have these wonderful trading arrangements with, so that we can compete fairly.

I also want to echo the comment of my colleague across the way about supply management and the importance for maintaining that. I'm sorry Mr. Obhrai is not here to hear this, but I think it's definitely important that we continue to manage certain products. If you look at the recent situation with pork, it's not a supply-managed product and maybe we should learn a lesson from that as a country. We talk about the benefits of exports, and there are some real pitfalls for expanded exports too when you don't have a constant situation to deal with it within your own country.

I like your butter example. We do this on a regular basis in this area, compare grocery carts or shopping carts, and the Canadian shopping cart always comes up lower than the American shopping cart, even when you translate the dollars back and forth. So I think committee members who aren't from this area should be aware of that, because some people have this idea that the United States is a lot cheaper than Canada, and that's not necessarily so.

Mr. Paul Bondy: In fact, if I may, the KPMG study in which we participated by providing some of the funding indicated that on average Canada was almost 8% lower in terms of the cost of doing business than, say, the U.S. Where the U.S. was benchmarked at 100%, Windsor, for example, was 93.6% or something like that, in that ballpark.

I don't want to give you any misinformation. There are ways in which you can compete with the U.S., because we have the dollar differential, the hospitalization scenario, a better educated workforce, and, at the moment, slightly higher unemployment. Therefore, while skills are here and they're a little bit tough to move around, we do have some, as opposed to, say, Michigan, which now has an unemployment rate of 3.3% so it literally has no available labour, general or skilled. We have benefited in a couple of cases by plant expansions here because we do have that kind of infrastructure.

Ms. Susan Whelan: My last comment is that whereas we talk about the next round of WTO and we look at the situation right now with finished vehicle tariffs and where that places us, I hope the committee also recognizes that this area, as I've mentioned, has a number of issues to deal with simultaneously, such as the single business tax, and such as the section 110 immigration aspect in the United States to allow trade to continue. So it's hard to put all your eggs and focus in one basket and be as loud as you may want to be on one issue when you simultaneously have to deal with a number of issues. I think for Windsor and Essex County that's a constant, where we have to be at the front of all these issues.

So I raise that for the committee.

The Chairman: Thanks.

Mr. Pickard.

Mr. Jerry Pickard: To wrap up, Mr. Chairman and Mr. Bondy, I want to say thank you very much for coming today.

There's no question that we've heard some differing viewpoints across the country. My viewpoint on Mr. Obhrai's comment with regard to a supply-managed sector and the rest of the agricultural community is different. I thought the restaurant industry, the supply sector, and the commodity organizations all had pretty much a similar viewpoint, and it's the first time I've seen that, so I think the agricultural community has things together.

But they all raised one voice, and that was that we need to make sure we have opportunity to trade. That was very clear, I think, from every agricultural side. We've heard almost all corporate structures say we need opportunity to trade and gain the best value we can. We've heard from civil groups and organizations that have said very much that they don't feel they're getting the benefits from trade that they should, that we should put the brakes on and examine very carefully what's happening. You very clearly outlined the benefits to this area, the benefits to Ontario.

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My question to you is this. For a lot of people, those red flags go up very quickly when someone takes one side or the other about stopping the trade or slowing the process, and I think many very valid concerns have come forth about environment and the direct effects on people. Do you see things that we should be cautious about in going forward rapidly in the trade negotiations, or would you suggest that expertise should lie with others? I know where you're coming from; I know you manage a lot of interaction between industry and this community, as well as Ontario. So I really wanted your viewpoint about things that we should be cautious about, if you have any.

Secondly, you pointed out what trade means, but what would it mean if we slowed down our world trade actions? Do you feel we would receive negative feedback from that?

Mr. Paul Bondy: I don't think there can be any doubt about that.

I'm not sure how to present this. Looking at the manufacturing sector in Windsor—Essex, there are 52,000 people who work in that sector. That level is probably higher now than it's been for 25 years. It might have been higher in the 1940s, when we had large numbers of individuals doing very manual types of work, but obviously there's a huge change in technology. So today we move from an individual who might be doing a very physical kind of job to one who monitors the computers that control the equipment that does the same kind of work.

We're most familiar with the Auto Pact, which has been in business for 35 years. I can't imagine where we would be without it, because we certainly wouldn't be competitive had we kept on making Dodge or DeSoto and seven or eight things on the same line, or multiple engines and so on. Today, can we debate the Chrysler success with the minivan? Initially this was the only place it was produced, and maybe in time it will again be the only place it's produced. But they've now devised their system in such a way that it is very flexible. You can build a short one, a long one, a very basic one, or a very fancy one. And I think this rationalization has made it possible for manufacturers to do that. I certainly applaud the situation where the tariff on finished vehicles from elsewhere was kept at 6%.

That's a selfish local situation, but let's face it, this area in Canada is the fourth most important manufacturing centre. And I don't subscribe entirely to this new economy. Manufacturing is still extremely important, and every manufacturing job is responsible for four others in the community. We just cannot let that go. So I would be afraid, as an individual, of any situation that has a negative effect on the kind of manufacturing and production that we do.

Mr. Jerry Pickard: My second point, if I may, is that corporate restructuring has been, I guess, the cause of much change in industry and it has added success to this area, quite frankly. I solidly believe that. But it has also received a tremendous amount of criticism, I think, from areas that it may be a trade matter, when in fact it was corporate restructuring. Do you see a conflict or a problem between the clarity, I guess, in whether trade issues are causes for change or corporate restructuring... or how they've blended together? We've had massive restructuring over the last 10 or 15 years and we've had huge trade agreements structured at the same time, and I'm wondering about your thought on the overlap between the two.

Mr. Paul Bondy: I doubt that I'm very qualified to talk about that. Obviously this community has worked very hard to work with the changes and work with its producers and so on. We're very efficient and very supportive of industry, because the city, for example, works to create industrial parks and makes it possible to get very rapid turnarounds, and we live in an era where everybody wants it done yesterday. I've read about corporate restructuring. I'm not very familiar with the exact details, but I'm sure our people have worked through that and we've benefited by being proactive.

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I guess that's the only answer I can give you.

Mr. Jerry Pickard: The reason I was raising that is that we went through a Kellogg's plant yesterday and we were expecting to see a lot of people in the plant, but in fact it was very much automated. The automation reduced the labour, but it's running 24 hours a day, 12 days in a row. In fact, what Kellogg's was telling us was, yes, we have as many workers, only they're not as visible in this climate under which we're operating today in comparison to the way we operated earlier. So there are fewer visible workers at any one time, but there are the same number of workers working in that plant. I was wondering how that was affecting the industries you see in the Windsor area.

Mr. Paul Bondy: I think the point is well taken. Obviously you may have situations where people are clustered or in a control room rather than being at different points along the production system. I know that exists. We have a steel coating mill, for example, where you hardly see anyone on the floor; everything is controlled from the control room. While it's highly automated, it still employs 115 individuals and never stops running—I think it stops four hours a week. So we have some of that also.

Mr. Jerry Pickard: Thank you.

The Chairman: They did say they kept 600 workers. They kept the number in the plant steady over all these years in spite of all these huge changes—

Mr. Jerry Pickard: That's right.

The Chairman: —whereas we're told that in Toronto the auto plants now don't employ as many people as before.

Thank you very much, Mr. Bondy. We appreciate your coming. It was very helpful and very interesting.

Mr. Paul Bondy: Thank you very much.

The Chairman: The rest of us who are not from this area now realize the important engine of Canada's economy that you represent. Ms. Whelan won't let us forget it, believe me, and neither will Jerry. Thanks a lot.

Mr. Paul Bondy: I hope we were helpful, and I appreciate your willingness to listen.

The Chairman: You were very helpful, thank you.

We'll ask the Citizens Environment Alliance, GreenPlanet Social Justice & Ecological Network and the Canadian Auto Workers environment committee to come up to the table right away.

We'll take a one-minute break so everybody can stretch their legs.

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The Chairman: Let's get going. We have Mr. Coronado and Mr. Spring here. Mr. Coronado, you're first on the list, so maybe we could ask you to start. We're running a few minutes late, so I won't give a long introduction. You understand why we're here and what we're trying to do with the WTO and the FTAA. We thank you very much for coming.

Mr. Rick Coronado (Research and Communications Coordinator, Citizens Environment Alliance, GreenPlanet Social Justice & Ecological Network): Thank you very much for bringing the hearings to Windsor. After seeing who's here, I'm a little disappointed. There are no media, and there are just five people on the committee. I would have thought that a subject of such importance to the Canadian public as trade and its implications would have been taken a little bit more seriously by the federal government. However—

The Chairman: Let me stop you there. This committee is travelling across this country. We've had to split in two because we have to report to the federal government by June. The Reform Party is here, the Bloc Québécois is here, neither the Conservative Party nor the NDP is here, and the Liberal Party is here. As far as the media is concerned, we don't control whether or not they choose to cover us. We did our best—

Mr. Rick Coronado: I think that's our concern. Our concern is the media and getting the message out to the Canadian public.

The Chairman: We sent press releases to every media outlet in every area we were going to. That's their decision as to whether or not they wish to cover us. Believe you me, I'm as disappointed as you are about that.

Mr. Rick Coronado: I just thought I would mention that.

The Chairman: You're right. We don't feel we get the attention we'd like to see either, and we agree with you that these are important issues.

Mr. Rick Coronado: Good.

I'm here this morning to talk about environment and trade, obviously. If I say something people don't like, then I'm representing the GreenPlanet Social Justice & Ecological Network, and if I say something you do like, it's the Citizens Environment Alliance of Southwestern Ontario. So we've also split up.

I'm here this morning to talk about environment and trade. I want to talk mostly about alternatives to unsustainable international trade that is challenging our very survival on Mother Earth. I use the term “Mother Earth” because it's a Mohawk term, and we've adopted it.

But let me first put my comments in context. You will most probably hear much comment during your present tour about the hazards and implications of world trade and trade liberalization on the environment and social issues. Most environmentalists here in Canada have been quite vocal in fighting the U.S.-Canada Free Trade Agreement in 1988 and the North American Free Trade Agreement in 1993.

Let's look at some of the facts. This is what we're up against in striving to eliminate corporate power and whose interests will be served if globalization ever achieves its ambitions.

Two-thirds of international trade is accounted for by just 500 corporations, and 40% of the trade they control is between parts of the same transnational corporations. Of the world's 100 largest economies, 50 are transnational corporations. The 10 largest transnational corporations have a total income greater than that of 100 of the world's poorest countries, and many of the transnational corporations have larger corporate sales than some developed countries.

Environmentalists such as Steve Shrybman of the West Coast Law Association have pointed out that the World Trade Organization represents the most important elements of an international strategy to codify the rules upon which a global system of investment, production, and trade depends. This agenda is the project of the world's largest corporations and is also supported by governments such as ours here in Canada. There is a founding on faith that a sustained market-driven growth curve will bring wealth and economic stability to all nations, particularly those of the third world. Irish author Richard Douthwaite points out that the modern way is to pretend that inequalities are transitory and that economic growth will create jobs and raise income. This approach has been dominant since the early 1970s. Since then, the gap between the rich and the poor has grown enormously both within countries and between them.

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Now the World Trade Organization and countries such as Canada are suggesting that the only way to combat this growing disparity is to increase trade in a more liberalized context. I must agree with my counterparts that this would seem like a convenient way to do an end run around the now stalled multilateral agreement on investment process and really install the same thing in a roundabout way. This will mean more domination by the largest and most dominant transnational corporations and super-rich countries such as Canada and the United States. Unfortunately, on their way to the promised land these corporations and governments have been able to capture almost all of the increased income that growth brought about and have been allowed to direct the economic system along a path that made it more environmentally damaging and unsustainable.

This global economic agenda, again according to Mr. Shrybman, is an amplification of the policies of deregulation, privatization, and free trade. What is absent is any mention of ecological limits or of the need to address the grand claims of those promoting liberalized trade and investment rules.

Sergio Marchi stated that international trade has now become a local issue. He says that what happens at faraway negotiating tables has consequences that reach into the kitchen tables and other domains of daily life. It's here where those of us who wish to preserve Mother Earth for the next seven generations and beyond must take our last stand.

In many respects, as was the case in the struggle against the North American Free Trade Agreement, this is a battle for the hearts and minds of the ordinary people of Canada, and we intend to win that battle. We are prepared to struggle and fight against both transnational corporations and their lackey government supporters in the communities, in the streets and the neighbourhoods of this nation, and at those kitchen tables Mr. Marchi talks about.

Environmentalists that I work with have a different vision of the future, and we intend to win the war of public opinion with reasonable, viable, and concrete alternatives to the present disastrous globalization agendas that promote more economic growth, resource depletion, and air and water pollution, which will wind up in a doomsday scenario of social chaos and ecological catastrophe such as we have only briefly witnessed so far.

“If we eat all of our onions and leave nothing for seed, there'll be no onions for the future.” That's a quote from an article in the New Internationalist from 1997.

The two overarching political issues of our time are human inequality and environmental destruction. The goal for environmentalists, community and social justice activists, and others is a sustainable system during the next 50 years.

Herman Daly, formerly of the World Bank, has pointed out that the supporters of free trade have no real answers. Free traders argue that whatever problems there may be with free trade, the economic growth it induces will outweigh them, and free trade is mutually beneficial. Much of the free trade dogma is based on assumptions that the whole world and all future generations can consume resources at the levels in today's relatively high-wage countries without inducing economic collapse.

Professor Bill Rees of the University of British Columbia, in his excellent delineation of ecological footprints, suggests that if all the world were to live as “high off the hog” as we do in Canada in terms of resource extraction, production of goods, and energy consumption, we would need five additional planets just to meet the demand. He states further that his ecological footprint analysis and related studies challenge the fundamental assumption driving economic globalization, international development, and population policies. If humanity is already at its ecological limits, he states, then we must recognize that excessive material and energy consumption by one group compromises the opportunities for consumption by others, present or future, because of natural capital depletion.

Again, Irish author Richard Douthwaite points out that neither the present generation nor the next will likely accept today that the big differences between the rich and the poor are the will of the gods. Many people, present governments included, may think it's impossible to cut the use of resources in the north and achieve a more equal society at the same time. We think there is a way, and I wish now to briefly describe it.

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Presently in North America and all the countries of the western world, we live in an open system, whereby reserves of resources are depleted and our ecological debt is applied to the entire system, such as deforestation, climate change, and ozone depletion; whereas we should be striving for a closed system or a “steady state”, something that Herman Daly talked about in 1973, where all the resources are maintained at a sufficient level for sustainable flows over an indefinite period.

The World Watch Institute suggests we need to build a new economy by converting the existing throwaway economy to a reuse/recycle economy, thus reducing the environmentally disruptive flow of raw materials. It would also mean ridding ourselves of fossil fuels, which have been the source of many of our biggest environmental and health problems. We need to reduce waste and redesign our industrial economy to emulate nature, so that one industry's waste becomes another's raw material.

Environmentalists are convinced that as a people we can achieve a more equal society at the same time as we cut resource use. An outline goes like this—and there are many outlines, but this is the one I decided to deliver today. There are some changes that can be made.

We'll start off with markets. Competitiveness is not measured by profits but by the efficient use of energy and raw materials. Public subsidies for nuclear energy or industrial agriculture are eliminated. The social cost of accidents, pollution, and land use of road traffic are fully charged.

Taxation. Ecological tax reform, tax reductions for shorter distances to work, fuel tax exemptions for air travel and agriculture are eliminated. Also, exemptions and subsidies for auto and truck road use are eliminated, meaning the true costs are applied up front.

Greenhouse gas. Insurance, risk surcharge on all related weather damage done by greenhouse gas emissions. This would apply to industrial and transportation sectors that are emitting greenhouse gases.

Electricity. Decentralized power generation would allow communities the flexibility to generate their own power. For example, here in Windsor we now have five co-generating facilities with enough power to pull ourselves off the Ontario grid. Anti-environment subsidies would be transferred to mass production of photovoltaic—solar power—cells and hydrogen fuel cells.

The following are under the sector of travel and time:

- design—speed and fuel consumption limits designed into road vehicles;

- roads—graduated distances charges applied to all commercial vehicles; products regionally sourced and labelled;

- railways—reduce the need for motorized travel by subsidizing a national transportation strategy—we've talked about it many times in this country, but we never seem to get around to it—that favours rail travel; for example, a rapid rail system, such as GO in Toronto, here in Essex County, and hydrogen fuel cell vans for city delivery.

Production. The focus must shift to materials recycling and product durability:

- recycling—all products made so that materials can be separated after use, reducing consumption requirements;

- reuse—home and office appliances made of reused parts;

- companies—those that survive the shift—and it's always questionable how many of these companies are going to survive the shift to a sustainable economy, but those that do survive the shift—must be responsible for the entire life cycle of their products.

Land:

- organic farming—public utilities support conversion to organic farming of areas supplying drinking water;

- wood—encourage home recycling of all wood products prior to being demolished; all wood fibre would be used for plywood or paper; cellulose could be reused in industry, and we're starting to see a little bit of that now, with the Habitat for Humanity program and stuff like that.

Other infrastructure. The focus will be on human capital, education and health and eco-efficient products and services:

- energy—new incentives for non-utility generating suppliers;

- water—closed cycles to encourage local reuse of water resources, discourage dams and the draining of groundwater;

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- mobility—encourage more foot, bicycle, through effective planning;

- building—increase the use of higher development charges to prevent the use of new land for housing, industry, and transport, an issue we in Windsor are going to be dealing with quite soon.

Development. Focus to reduce consumption in the north toward sustainable levels in the south:

- debt—written off as odious; banks required to reclaim loans from local elites who incurred them;

- adjustment—the International Monetary Fund and the World Bank shift from structural to sustainable adjustment;

- trade—principles of fair trade adopted by the World Trade Organization, and one good example is the OXFAM collaboration with the Fair Trade Exchange people in Central America; our organization sells their coffee and tea, which is all organic;

- taxation—there is the Tobin tax on foreign exchange.

I want to add that that is adopted from a 1988 article entitled “Greening of the North: a Post-industrial Blueprint for Ecology and Equity” by Wolfgang Sachs, Reinhard Loske, and Manfred Linz from the Wuppertal Institute for Climate, Environment and Energy, London.

That's one of the many rules we could apply to a new sustainable program. There are some additions and deletions and some debates that will go on, but what we're trying to do today is suggest that we do have alternatives for a sustainable world.

Professor Rees has summarized our predicament in his book, Our Ecological Footprint. Our message is simple enough: Sustainability requires that human enterprise remain within a global carrying capacity. If global carrying capacity is overshot and advanced countries have taken more than their fair share of the Earth's bounty, then these countries must find ways to reduce material consumption while maintaining their liveability.

But even within rich countries such as Canada we know only too well that consumption is inequitably distributed, so that even as we strive to reduce our aggregate resource use, consideration must be given to improving the lot of those whose basic requirements are not being met today in this country. We must also recognize that people will tolerate measures to reduce material consumption only if they feel such measures will provide a better future for themselves and their children than the next best alternative. Sustainable as sacrifice will not sell.

To conclude, the promise of environmentalists, economists, and social justice activists is that we will strive into the next century to create what is beautiful and useful, to destroy what is ugly and mean, and to protect each other and what can never be replaced. Thank you.

The Chairman: Thank you very much, Mr. Coronado.

Mr. Spring.

Mr. Rob Spring (Chairperson, Environment Committee, Canadian Auto Workers (Local 444)): Good afternoon, distinguished committee members and panellists. Thank you for joining us in Windsor today and hearing our submission about the environment and global trade agreements.

My name is Rob Spring, and I am here on behalf of the 14,000-plus members of Local 444 CAW and the greater interests of the various communities we live and work in. I represent these members as the chairperson of our local environment committee and the co-chair of the Joint Workplace Environment Committee at DaimlerChrysler's road truck assembly plant. I'm also vice-president of the Citizens Environment Alliance of Southwestern Ontario.

As you entered the building today, I wonder if you noticed our city's beautiful waterfront parkland stretching along the Detroit River and offering many picturesque views of Detroit. What you may not have noticed is the amount of pollution already present in our water and air, although I did notice the chairperson recently picking some pollution out of his water.

The Chairman: You have to tell me where it comes from.

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Mr. Rob Spring: The International Joint Commission currently lists the Detroit River as one of 43 areas of concern within the Great Lakes Basin. Cleanup efforts have been underway for many years, and although some improvements have been made, we are far from delisting this river and classifying it as rehabilitated.

Windsor is also currently listed as the city having the worst air quality in Ontario. Free trade and NAFTA have already brought a staggering increase of transport truck traffic to our area. So much of an increase has occurred that studies are currently being undertaken to examine the feasibility of a second bridge to the United States. Airborne particulate matter and greenhouse gas emissions, which are already above average in this region, will only continue to increase if this second span becomes a reality.

We have recently seen numerous other events that have threatened further degradation of our local water and land. Just this last summer only the enforcement of the Clean Air Act stopped Detroit Edison from operating its mothballed coal-fired Connors Creek power plant on the shores of the Detroit River. However, Edison is contesting this ruling, and to compound the matter, the State of Michigan is also challenging the United States Environmental Protection Agency's new clean air standards.

In Canada recently a permit was granted to an Ontario company to divert 600 million litres of water per year from Lake Superior for export to Asia. The permit was only rescinded due to mass public pressure, and the IJC is currently studying the long-term feasibility of bulk diversions or if they should be banned altogether. In March of this year Canadian Environment Minister Christine Stewart made a public statement that voluntary environmental compliance was not working and that the Canadian government needed to return to enforcing legislation.

Just this week Ontario Environment Commissioner Eva Ligeti released a report stating that public health is at risk because Ontario's environmental protection programs are in a shamble. She quoted environment ministry estimates that the current levels of air pollution are associated with 1,800 premature deaths and 1,400 cardiac and respiratory hospital admissions annually.

The dismantling of our environmental protection mechanisms seems to coincide with the expansion of global agreements in Canada and the general push by governments to make our country more favourable to business under the guise of competitiveness. But why is all this important for me to mention? The answer is clear when we examine a few recent events on the global trade front. Also consider that the issues mentioned above will be difficult enough to resolve. If a foreign body representing world trade interests became involved with these disputes, the negotiation of a mutually satisfactory settlement would be next to impossible, and one could question if we would even retain the ability to represent our own interests.

In April 1997 the Canadian legislature banned the hazardous gasoline additive called MMT. The decision was based on the fact that studies had suggested the manganese content of the additive damaged the central nervous system in humans and complaints by automobile manufacturers that the additive interfered with emission control systems. Manganese is recognized as a nervous system toxin at high levels of exposure. It is also a pulmonary toxin and may also be a reproductive and developmental toxin.

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Despite the fact that most of the industrialized world does not use MMT as a gasoline additive, Ethyl Corporation, makers of the additive, sued the Canadian government for $250 million in compensation. Ethyl claimed that the MTT ban was in violation of NAFTA rules that bar the expropriation or taking of private property. In July 1998 the Canadian government agreed to compensate Ethyl Corporation for legal expenses and lost profits. In return Ethyl Corporation would drop the NAFTA challenge and its claim for $250 million in damages. At the end of the day Ethyl has lined their corporate pockets with money, Canadian taxpayers are out millions of dollars, Canada has MMT added to its gasoline again, public and environmental health are jeopardized, and we may no longer act as a sovereign nation in the best interest of our own citizens.

In stark contrast to this situation, in May 1988 Canada filed a complaint with the World Trade Organization in respect to a ban on asbestos in France. Even though asbestos is recognized as a carcinogenic agent in Canada, the federal government cites many articles from many agreements that they claim this attempt by France to protect public health is in contradiction of. Exposure to asbestos can cause asbestosis, a scarring of the lungs resulting in loss of lung function that often progresses to disability and death. It can also cause mesothelioma, which is a cancer affecting the membranes lining the lungs and the abdomen; lung cancer; and cancers of the esophagus, stomach, colon, and rectum.

Workplace exposure limits in Canada and the United States are currently set at 0.2 fibres per cubic centimetre of air averaged over an eight-hour work shift. It is clear that in this situation the profits from the export of this deadly fibre are more important to our own government than the protection of public and environmental health locally and globally.

I could go on longer with many more examples, such as the WTO ruling against efforts in the U.S. to protect sea turtles, or the very first WTO ruling, which was against reformulated gasoline regulations in the U.S. Clean Air Act, but my time here is limited.

When reading through the text of current and draft trade agreements, I found a lot of strong language that protected the free movement of capital. From the above examples and many, many others, we can see that this language has been supported with strict enforcement. But language involving the environment has been relegated to side agreements, lacking both strength and enforcement mechanisms. The environment is not a side issue and it must become a core part of any future trade agreement.

We make the following recommendations to the Canadian government for developing responsible trade policies that protect the environment and public health:

- Trade agreements must protect current Canadian environmental laws and allow them to be strengthened as seen fit by a sovereign nation.

- Trade agreements must require all participating nations to meet mutually agreed-upon minimal environmental standards that are based on a reasonable average of the current world standards, not simply set at the lowest existing standard.

- Trade agreements must require all participating nations to remain above their baseline standards and continue to improve upon these standards.

- Trade agreements must include serious commitments to pollution prevention and rehabilitation of environmental damage already caused by trade and development.

- Trade agreements must target carcinogenic and bioaccumulative toxic substances for expedient elimination.

- Trade agreements must include a bonding or securities system for the introduction of new untested chemicals and substances.

- Canada must ensure its international partners are complying with these minimal standards and requirements.

- Canada must ensure that effective and responsible enforcement mechanisms of environmental policies are in place on a global scale.

- Canada must ensure the dispute resolution system is transparent and open to public access, and that it includes environmental experts from scientific and community groups and organizations.

- Canada must ensure that all trade agreements recognize the fragile nature and diversity of ecosystems within a global scale.

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In closing, the environment must be regarded as a public trust by future and present governments of the world. The fact is that recent government and trade body actions have given little reason for the public to trust either of them. We must recognize the importance of protecting our planet and, as a result, our future as a race. The pollution in our air and water knows no borders and can be found in even the most remote locations of our planet. Science fiction thrillers often depict man living on another planet in the future. But I suggest to you that this is not a practical alternative. If we continue to disrespect our planet, we will only share in its demise. And when that happens, discussions about the free movement of capital will be totally irrelevant.

Thank you.

The Chairman: Thank you very much, Mr. Spring.

Are there any questions?

Mr. Deepak Obhrai: Thank you, Mr. Chairman.

Thank you for coming and giving your point of view. I have a couple of questions here. I'll go to...

The Chairman: Mr. Coronado.

Mr. Deepak Obhrai: Yes.

Mr. Rick Coronado: I would recommend you make it quick, since I have to leave.

The Chairman: What time do you have to leave, Mr. Coronado?

Mr. Rick Coronado: In four minutes.

The Chairman: Oh, so if anybody else has any questions, we'll go to them.

Mr. Rick Coronado: Do you have any undying questions about the environment versus the economy? Mr. Spring has just pointed out that the environment needs to be the outside ring, with the economy in the middle. A lot of the answers to your questions are in a publication called Our Ecological Footprint: Reducing Human Impact on the Earth, by Professor Bill Rees, University of British Columbia. I think David Suzuki has already used some of his material on that series he's doing on CBC Radio as well.

Mr. Deepak Obhrai: Thank you.

I have a simple question, and I'll make it short. You have listed the ecological damage and you've tied it to international trade. Would I not suggest to you this ecological damage started way before free trade came into place? We had inefficient cars and inefficient usage of resources way prior to the establishment of NAFTA and free trade. The degradation that you mention started way before international trade came through. What Rob is saying here is that in future agreements on international trade, we should take that into account. But in your submission, you're just blaming everything—

Mr. Rick Coronado: Where do you think that waste and all that pollution have gone? Do you think it's just disappeared into the universe or something? It's building up, building up, building up. You're seeing climate change. You're seeing greenhouse gases. You talked about MMT in the gasoline. Some of that new technology we're bringing out now is much more harmful than the old technology. At least some of the old technology we were better able to recycle and reuse than some of the plastic and synthetic materials we are bringing out today. If you think the chemical industry is using Responsible Care because they're really responsible, look at some of the new molecules they're releasing into the environment now. As Mr. Spring has pointed out, there are not a lot of controls on what they're doing.

The Chairman: Mr. Coronado, obviously you're not going to have a chance to answer questions, but you made a specific point about road transportation, the use of fossil fuels, and bringing the cost up front. Have you something you could refer us to directly in the literature you referred to, one of the books that would be helpful in that? Others have made that point as well. And is there anything on rail transport?

Mr. Rick Coronado: Yes, there was a very good article in the Alternatives Journal. I think it was 1998, I can't remember. I'll have to refer the date to you. The whole journal was devoted to transportation. A lot of what I have suggested is in there.

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In fact, in about another month we hope to have the Minister of the Environment, Christine Stewart, declare a clean air day for Canada, and much of what we are discussing with her wraps around issues such as green transportation, increasing government support for public transportation, enhancing rail service and encouraging a shift from roads to rails, and mandating higher new-vehicle emission standards—we've gone at that one before.

Currently there's the issue with the sports utility vehicles. You have the big three—GM, Ford, and DaimlerChrysler—all fighting the United States Environmental Protection Agency over the new tailpipe standards they are attempting to bring in. And eight Great Lakes states are fighting it.

So there's a lot of good information out there on the whole issue of rail and road. In regard to fossil fuels, the number one environmental problem in this country today is air quality. Living in this area, we know from the transboundary problems we have, we know from what we generate here in Windsor, and from what people who live 40 kilometres downwind from us are getting, that we are our own worst enemy. We need to get rid of fossil fuels, the number one environmental problem.

The Chairman: We'll get a copy of the Alternatives Journal. Thank you very much for your help.

Mr. Rick Coronado: Thank you.

The Chairman: We'll go back to questions. Do you have any questions for Mr. Spring?

Mr. Deepak Obhrai: You have put in your recommendations that negotiations carry on, but take into account what you have put in there. Is that what I understand?

Mr. Rob Spring: Yes, we would certainly like to see some of these recommendations implemented. We feel that if we continue on the path of global trade... I did not come here today to make a presentation on the merits of global trade. That presentation may have taken on a different flavour. We could speak to my feelings on the merits of global trade. However, what I see is a commitment by governments to go forward with this, regardless; the kind of mentality that we're in it too far to turn back now, so now we have to try to make the best of what we can.

• 1225

If I could take the liberty of commenting on your questions to Mr. Coronado, we do recognize that pollution and environmental degradation existed prior to global trade agreements, prior to free trade. However, there were mechanisms in place intended to improve upon that situation, mechanisms that were supposed to bring more stringent enforcement and protection for our environment. As global trade has come in, these mechanisms have been destroyed, have been replaced by weaker versions. I believe that is what Brother Coronado was really trying to express here, that degradation has accelerated with trade agreements.

Mr. Deepak Obhrai: Thank you.

[Translation]

The Chairman: Ms. Debien, do you have any questions?

Ms. Maud Debien: Thank you, Mr. Chairman.

Good morning, Mr. Spring. Mr. Coronado and you painted a pretty sombre picture of the environmental issues. You said there was already a very significant ecological debt and deficit. Several other groups have also sounded the alarm on all these environmental issues.

A few people, not very many, mind you, have told us that we could increase production and renew our resources by using genetically modified organisms. I'd like to know what you think about this. If you say that there's already a lack of natural resources, it's a sort of admission. Genetically modified organisms are the result of DNA recombination and their use makes it possible to increase production of some foodstuffs, for example.

On the other hand, we've been given opinions to the contrary, which say that in some cases the use of genetically modified organisms has destroyed crops in certain developing countries. I'd like to have your opinion on this.

The Chairman: Stop for a minute, because he's lost the thread of your comments.

Ms. Maud Debien: Is it all right? Do I have to start over?

The Chairman: No, I think he's understood.

[English]

He understood.

Mr. Rob Spring: That was the end of it? I missed the last sentence of your question.

[Translation]

Ms. Maud Debien: I wanted to find out your opinion on genetically modified organisms and what some people affirm, namely that, by using these organisms, we could increase our food resources and even, in some cases, renew them. Some people, however, have come and told us that genetically modified organisms might be pathogenic factors and that the consequences might be harmful. They said that entire crops have been destroyed in some developing countries from using GMOs.

[English]

Mr. Rob Spring: Yes, you're quite correct in the idea that genetically engineered foods and organisms have attacked crops. We have seen on a worldwide scale where farmers have actually started burning fields in protest against these GE foods. I believe that was happening in Brazil. Personally, and on behalf of our local committee, we stand with those people in opposition to the introduction and use of these genetically engineered foods and organisms.

• 1230

Let us not think for a moment that humans are some type of godly beings that can start to adjust the genetic code of what nature has provided us, or that the idea of creating a new breed of seed or food product or any type of thing is really a sensible way to approach the future. We want sustainability. We want to have a future for our children and their children. If we start introducing all of these hybrid-type organisms into our ecosystem, nobody on earth can tell me they've done a conclusive study that says that is safe, that we won't suddenly see some type of rampant mutation—not only in plant life, but how about the insect life and the fowl life and the aquatic life that thrive on the different products for which we are now going to modify the genetic code? This is a very, very dangerous place for humans to be treading.

It is interesting that just this morning I received an e-mail from one of the many mailing lists I participate in on the Internet. In Britain, just yesterday, they passed legislation that bans the use of genetically engineered foods. They have gone with most of the other European communities in stopping these genetically engineered organisms and foods. Yet North American governments are not very quick to get on this bandwagon, and they don't even seem to be doing much to study what's going on.

But we are opposed to the introduction of these organisms and, quite honestly, afraid of what that can bring to an already messed-up planet.

The Chairman: Thank you.

Mr. Pickard.

Mr. Jerry Pickard: Thank you very much, Mr. Chairman.

Rob, I want to say to you that I commend the position you've taken in doing what you can to enhance our world for the future. There is no question about that.

Industry and, quite frankly, our world have not handled a lot of the environment well in the past, but I've seen a tremendous movement forward and I have seen a change of attitude in much of our industrial sector. When I look back at some of the dumping that was going on in the river systems and at the clean air total disregard, and I look at the movement that is going on now, I believe people like you, industry itself, and everyone else are taking a role.

Quite frankly, when we get to a lot of the discussions, governments very much do push, and have pushed, for quicker action to deal with environment. Industry is moving in a direction... and a lot of people say, well, if we go too far too fast, it's going to mean a tremendous amount to labour, to jobs, and to whether or not we can survive as an industry. Somehow, a tremendous amount of debate around the world—not just in Canada but around the world—has been going on, and I believe most world governments are trying to move to a far better environment, far better rules, to move industry in that direction. But again, there is a resistance in cases where the speed at which all the technology that's being developed hasn't been put in place.

• 1235

So do you see a balance or a trade-off? We've moved eons from where we were, and you're right, we have a long way to go, and that's why Christine Stewart has tried to set goals and move us forward. But how do you see this trade-off? And I don't think it's a world trade question. I think in fact it is a question of how we deal with all of the environmental issues with industries that are surviving and competitive with other industries, with people themselves. It's a people issue. How do we strike that balance?

Mr. Rob Spring: It certainly is a people issue, and our environmental issues and problems will exist whether these corporations are performing in the global trade front or the local trade front.

I believe also, with you, that the environment is becoming more popular, shall we say, that companies are starting to pay more attention to their environmental record. However, I see companies that put out literature that promotes their recycling programs in the plant or promote the fact that they now use a hemp fibre instead of a cloth fibre. They promote minor green efforts that they've moved towards. Yet when you ask these same people who are looking for the pat on the back for what they've done environmentally to commit capital moneys and invest in solar generation of power or in wind generation...

Brother Coronado mentioned that there were five co-generation systems in Windsor, and if that Pillette road truck assembly plant of DaimlerChrysler was expanded and that project took on a major expansion face, the possibility exists that it would then need another co-generation program. Well, is that corporation going to be willing, on its own, to step up and make the commitment to wind generation or solar generation, to something that truly is cutting edge? No, they're not.

We've already had discussions on this on a preliminary level, and basically, preliminarily, the first thought is the capital expense and then suddenly comes the excuse, “Guys, we're no longer going to be competitive on the global market. If they can burn coal over there and I must invest $250 million in clean technology over here, oh my, we can no longer compete.”

Where do we find that balance, Jerry? The governments have pushed for more. But I should point to the fact that pollution in Mexico—although hard data are not available—far exceeds pollution levels in Canada and the United States. But did you know that Mexico has stronger environmental legislation than both of our countries? What lacks is enforcement. What lacks is mechanisms to make that enforcement. And that is something we've seen provincial and federal governments in this country cut and cut and cut and cut, until there's no longer enough left to be effective.

Mr. Jerry Pickard: Rob, I agree with the goal. But I worked in an auto plant 35 years ago, and I see the auto plants today and I see the movement forward. I can remember when they used to burn garbage, and clouds of smoke would go up, and I see the scrubbers that are put on the kinds of... There is a tremendous amount, but we're not doing enough, and I think that's what you're saying.

Mr. Rob Spring: But these scrubbers... Look at Detroit Edison, just over on the other side of the river. They wanted to reopen that coal-fired plant. They were told by their own government protection agency, “No, you must improve the emissions controls to open that plant.” They said, “No, we can't spend that kind of money. We've got to open that plant. Give us permission to open that plant. Don't make us spend that money.” This is the problem. It's not going to happen by itself. We need advocates; we need public involvement in this.

You're right that it's about us. It's about people, it's about this planet surviving, and that's why people have to become part of the program. We are an intricate part of the program. Yes, I have a family to feed, I work there, I need to make money. I need to fill this wallet up, and the corporation needs to make money because they need to expand my plant so that more of the people I live with can make money. We all need to make money. But where is the balance? Where is the moderation? We need to make money today, but guess what? My kids and their kids and their kids need to make money tomorrow, and we need to lead them with that ability.

• 1240

That, in part, is why companies are starting to come around. They're burning up their resources. They have to genetically engineer seeds to do things that they used to be able to do just by going out and harvesting. And why is that? Because we've abused. We have not operated in a sustainable manner, and that is the major mentality shift that has to take place among the policy-makers. We must act responsibly and sustainably.

The Chairman: I think that's a very good plea, and I thank you very much for your very helpful paper.

I must say I picked up on where you say that pollution of our air and waters knows no borders and can be found at even the most remote locations of our planet. A couple of years ago this committee did a study on the Arctic. We found in the Arctic traces of the pollution from all over the world, and several members of the committee—

Mr. Rob Spring: Chemicals that have never been anywhere even remotely close to the location in which they were found.

The Chairman: Well, they start in pesticides in South America and they end up being washed up there.

We agree with you. I think the committee pretty clearly agrees that it looks as if the train of the WTO thing is going, and we have to decide if we get on, or if we can slow it down. But it's very clear that there has to be a much greater focus not only on the environment issue but also on labour standards and human rights and other issues, in that if it's going to have the public's support and if it's going to be effective, it's going to create a better global society.

The whole idea that the rising tide lifts all boats is good in theory, but it's obviously not working as well as it should in practice. So we'll take your submission very seriously.

Thank you very much for coming, Mr. Spring. We appreciate it.

We'll adjourn until 1.30 p.m., members.

• 1245

• 1413

The Chairman: I would like to call this session to order.

Thank you very much, everyone, for coming. We appreciate your coming to share your ideas with us this afternoon. I won't go into a long introduction about what we're doing. I think you know we're trying to prepare a paper, a report that we will give to the government about people's ideas and issues respecting the WTO negotiations, which may begin in Seattle in November of this year, and the free trade area of the Americas negotiations, which seem to be sort of going on and off at this particular time. There are a lot of problems with the U.S. Congress and other things as to whether these negotiations will go ahead, how long they'll take, and everything else. But it's important for us to at least get ideas on paper so we can get them to the government in time for them to have them before November, if the negotiations begin in Seattle in November. So thanks very much for coming and sharing your ideas with us.

I'll just take you in the order you are on the order paper. There are five of you, so I hope maybe if you can keep it to about ten minutes each, then we'll have time for questions afterwards. We always find the question period one of the most interesting times to exchange views with everyone.

We'll start with the MAI-Day Coalition for Human Rights, Mr. Signorile. Good afternoon.

• 1415

Mr. Vito Signorile (Spokesperson, MAI-Day Coalition for Human Rights): Vito Signorile here, and my colleague Renzo Zanchetta, MAI-Day Coalition for Human Rights.

We're very pleased the government is holding these hearings. We think it's a valuable exercise in civic responsibility. We also hope it's not an exercise in futility. In fact we have very serious concerns about where the world is going with economic globalization.

We're going to read our presentation in turns. Mr. Zanchetta will take the first turn and I'll come in, and so on. Thank you.

Mr. Renzo Zanchetta (Spokesperson, MAI-Day Coalition for Human Rights): As you may judge from the name of our organization, we were orginally formed because of our opposition to the MAI. The fact that member states in the OECD gave up on the MAI came as a relief, but our relief was short-lived when we learned that the MAI agenda is now to be moved back to the WTO, where it first surfaced briefly as the MIA.

We are not encouraged by the statement of the Minister for International Trade, the Honourable Sergio Marchi, that the WTO is the proper place to forge an MAI agreement. There seems to be a misperception that the opposition to the MAI was based on its form—that is, on the manner in which it was being negotiated. While there is some truth to this—for example, we did have concerns about the secrecy and general opacity of the MAI proceedings, a problem we also have with the WTO—we want to emphasize again that we were unhappy primarily with its content. For this reason, we look with great disfavour on any attempts to institute the content of the MAI by expanding the functions of the WTO into areas of investment, competition, government procurement, and intellectual property rights.

As a supervisory body, the WTO no doubt serves a useful function. No one, least of all our group, argues that we should have no rules for international trade and finance. But the problem with the WTO is the single-minded focus of formulating its rules along extremely narrow lines of commercial enterprise. Rights of investors, corporations, bankers, entrepreneurs, and the like are explicitly invoked, while the economic, social, cultural, and civil rights of the human community are scarcely noted in the decisions of the WTO and its kindred organizations like the IMF and the World Bank. As a result, the current rules of the economic globalization have produced far too many casualties, far too much human misery.

The WTO must be subject to the Universal Declaration of Human Rights already established by the UN. What is needed before any expansion of international commercialagreement, and this includes the FTAA, is the establishment of a firm and legally binding declaration that gives clear priority to the basic human rights, including rights to a healthy and sound environment. Ideally, they would be written into the agreement themselves, and so these rights must take precedence over all other rights contracted through international instruments.

Two interconnecting issues may serve to illustrate our point. They involve the impact of rampant globalization on both democracy and the environment.

Mr. Vito Signorile: On both counts, the problem can be seen as a problem of scale. To quote a famous phrase from a book by E.F. Schumacher, “small is beautiful”. From both our own government and the WTO, we get the opposite message—that is, big is voluptuous.

• 1420

For Canada, we learn, international trade and finance is a growth area representing an ever more important segment of our economy. We are told that our competitiveness is at stake, that Canada must participate in this international competition lest we fall hopelessly behind. In any event, the argument goes, it is inevitable. However, as Schumacher observed, “for every activity there is an appropriate scale”. Not every activity delivers human benefit through sheer growth. To quote Schumacher again:

...we suffer from an almost universal idolatry of giantism. It is therefore necessary to insist on the virtues of smallness...

What Schumacher recommends is that social policy apply a principle of subsidiarity. Simply put, the principle states that nothing should be done at a higher level of organization that can be done by a lower. He argued that this not only makes for a humane organization of affairs, but an efficient one as well.

Smallness may also be the key to environmental sustainability. While growth and expanding trade have been the mantra of organizations like the WTO, too often this is pursued without seriously taking the environment into account. To cite David Suzuki on a recent CBC program, Canada, as a member of that small club of nations that dominate the world economy, has an inordinately large ecological footprint. If everyone in the world consumed the way we do, we would need five planets like the earth to sustain the demand.

The lesson of this is that we urgently need to shift our focus from questions of growth to those of sustainability.

Despite recent joint symposia on sustainable development, the WTO has been moving in precisely the opposite direction. Gerard Greenfield of the International Union of Farmers describes the WTO's program as “the systematic destruction of local capacity for food self-sufficiency and sustainable agriculture”.

The question of intellectual property rights is significant here. Included in this category of rights is the ownership of seed stock and traditional medicines in the form of patents. One recent case that comes to mind is that of the U.S.-based firm, Ricetec, claiming sole international rights to traffic in basmati rice due to its securing a patent on a rice of that name. Rights of access and control are increasingly shifting out of the hands of local peoples into those of transnational corporations.

One defence of expanding markets frequently touted by those who promote economic globalization is that we thereby achieve economies of scale. But this is not uniformly nor consistently true. Again, to use the example of agriculture, it has been shown that the smaller-scale family farms are far more efficient and productive than the massive operations of agribusiness.

David Morris, director of the Institute for Local Self-Reliance—and this is in an article from the Ecologist magazine—cites two studies by the U.S. Department of Agriculture that showed that

Medium sized family farms are as efficient as large farms... Above about $40,000-$50,000 in gross sales... there are no greater efficiencies of scale.

This kind of observation is not confined to agriculture. He also cites a study that concludes that the average factory “could be significantly reduced in size without suffering major price increases”.

Note that these assessments do not take into account more holistic ways of counting efficiency. For example, while capital-intensive farming may produce more per worker, smaller farms produce much more per hectare.

John Maynard Keynes, perhaps the single most influential economist of the century, had this to say on the subject, and he's quoted by Morris:

I sympathise with those who would minimize, rather than with those who would maximize, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel—these are things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible and, above all, let finance be primarily national.

Mr. Renzo Zanchetta: Thus the single-minded ambition to expand the WTO represents an assault on democracy that is both pernicious and dangerous—pernicious because, in the name of freedom and democracy, it is operating in a way that serves to subvert both freedom and democracy.

• 1425

Take the following example. Among the reasons given for why it must expand beyond the original GATT, the WTO identifies what it calls loopholes in agriculture, which it says produce a distortion in the economy. Just what are these loopholes that are distorting our economy? The WTO lists such things as import quotas and subsidies. So-called loopholes like quotas and subsidies are rejected by the WTO in the name of free trade or trade liberalization. According to this rubric, we, ideally, would remove all impediments to free trade and to free enterprise. For example, national programs to help small farmers would be characterized as interfering with the free operation of the market and represent outmoded protectionist policies. Thus, they issue solemn calls for removing the protectionism that hampers the global operation of competitive markets, as if protecting one's own community is one of the seven deadly sins, while avarice and greed are not. In any case, the freedoms favoured by these measures are those demanded by commercial interests for their own enterprise.

The WTO does not envision the freedom of people at the local, regional, or even national level. Any measures citizens might take to protect their interests, their values, are seen as barriers and distortions. As matters now stand, it is an axiom of economic globalization that any increase in the freedom of international commercial operations is accompanied by a corresponding decrease in the freedom of citizens to decide on policies that impact on their collective welfare.

The more we facilitate our dependence on international trade and finance, the more we hasten the demise of citizens' democratic voice in the affairs of their community. We also see the expansion of the WTO in present circumstances as dangerous, because these policies are taking us on a road to a catastrophic social and environmental collapse. The distortions and deceptions of transnational commercial interests in trashing the global warming initiative serves as a case in point.

As presently constituted, the WTO is not equipped to deal with these issues. It is therefore our recommendation that there be a moratorium on any further expansion of its mandate, as well as the expansion of NAFTA into the FTAA, until a proper international forum is put into place to address these issues. An organization fashioned along the lines of the International Economic Council, as described by Roy Culpeper, president of the North-South Institute, is a good place to start—although the full range of human race issues must be added to the function that Culpeper listed as the organization's mandate.

Mr. Vito Signorile: To summarize our position, before any MAI-type expansion of international commerce, we need a binding declaration of the priority of human rights over any other category of rights, a clear policy on reasonable limits to size, including support for regional and local commercial activity, and finally, a binding recognition that no agreements can be made that will effectively deprive citizens of their rights and duties respecting the communities in which they live.

Thank you.

The Chairman: Thank you very much. We appreciate that.

We would like to go to the Windsor and Area Social Justice Coalition, Ms. Beer.

Ms. Anne Beer (Spokesperson, Windsor and Area Social Justice Coalition): Thank you very much.

I came to Canada over 50 years ago from Hungary as an orphan and a Holocaust survivor. I learned to love Canada because it was working towards social justice. The gap between the rich and the poor was decreasing, non-anglophone people were starting to be able to step up on the ladder of success, and those who were not able to make it were increasing helped. The success of growth of production, employment, incomes and government revenues was partly contributed to by foreign investment.

• 1430

Under the leadership of Lester Pearson the care was enlarged to include the poor nations of the world. Canada was truly fulfilling its obligation of adhering to the Universal Declaration of Human Rights. By 1970 the Government of Canada was concerned by all foreign investments and therefore asked the Honourable Herb Gray, member of Parliament, to look into the matter. The report on foreign direct investment in Canada, known as the Gray report, in 1972 concluded that foreign investment must be contained in order that Canada should be able to control its economy and its social environment.

What has happened to this once-caring country? Today the gap between the rich and poor countries and individuals is increasing. Real income for most people is decreasing, and agreements among corporations control the world of commerce, where governments are unable to pass laws to the betterment of their people. All economic problems are said to be cured by the functioning of the free market, which through natural competition will cause the best products and the best prices to prevail for the betterment of all.

Free markets always make the best choices and will fashion the most perfect society. But a closer look at how the economic and political systems function, at which country gets to be a favoured nation, at which country gets subsidized, at who pays for taxes, at how are tax moneys spent and who gets subsidized and who does not, reveals that the free market system as stated does not exist in reality. In its place, a complex system of tax laws, government manipulation of public money and ideas, regulations and various tax exemptions ensure that certain businesses will thrive regardless of whether the free market will support them or not, and certain countries, whether they uphold the democratic ideas of human rights or not, will thrive.

Welfare for the rich comes in an endless variety of forms, such as capital gains cut, increased tax exemptions, reduced health and safety regulations, reduced personal tax, cuts in health and educational funding, and many others. How could further trade agreements, whether it is at the WTO or under FTAA, where only economics is taken into consideration, enhance the well-being of all people in the member states? Yes, these agreements have created wealth, but only in the hands of the rich few. They also increased poverty for the majority of the world's population and created unsustainable patterns of production and consumption. These agreements seem to function principally to open markets for the benefit of transnational corporations at the expense of national economies, workers, farmers, and their environment.

Furthermore, the WTO system rules and procedures are undemocratic, untransparent, and unaccountable, and have operated to marginalize the majority of the world's people. We are told that globalization with relentless capitalism is the only way the world can go. Then this rigid system is not any better than communism was. We are living in a world where individuals are regarded only as consumers and producers, and health and education are seen as mere commodities. Do we really want a world where people are considered only as economic actors? The failure of the Organization for Economic Cooperation and Development's multilateral agreement on investment demonstrates broad public opposition to the deregulation of the global economy, the increasing dominance of transnational corporations, and escalating resource use and environmental deregulation.

• 1435

We applaud Prime Minister Chrétien when he stated to the Mexican Senate, and this was reported in the Globe and Mail on April 10:

We must be vigilant and firm in ensuring that the essential promise of the democratic way is fully realized. ... In my judgment, new prosperity has meaning only if it serves to enhance the well being and security of the many not just the few. If it helps to give people wider access to health care, cleaner environment, better working conditions and more confidence that their fundamental rights will be respected.

As it is questionable that people's rights are being respected, Canada should demand a moratorium on any new issues or further negotiations that expand the scope and power of the WTO and the starting of the FTAA. During this moratorium there should be a comprehensive and in-depth review and assessment of existing agreements. Such reviews should be conducted with civil society's full participation and address the WTO's impact on communities, development, democracy, environment, health, human rights, and the rights of women and children. That is, all agreements should be in harmony with the Universal Declaration of Human Rights and its covenants. If no agreement is found, effective steps should be taken to change the agreement, and the rights stated in the UDHR should be written into all further international agreements.

The time has come for Canada to take the lead once again toward an economy of care in the industrialized nations. Submission only to the laws of markets and economic flows does not serve human beings. We need to build human relationships that are less unjust, violent, and oppressive than they are now. We would like a world where everyone has opportunities for meaningful work, for meeting basic material needs, for environmental sustainability, and preservation on non-commercialized art and culture. The Universal Declaration of Human Rights and its covenants must become legally binding and enforceable. Humanity is not created for production, but production for humanity.

Thank you.

Voices: Hear, hear.

The Chairman: Thank you very much. That was a very effective line to end with. Thank you.

Ms. Anne Beer: I think I did it in time, too.

The Chairman: That's excellent. I think some of these lines are going to end up on our report. We'll have to make sure we give fair attribution to them.

We would like to turn to Sister Anne Bezaire, please.

Sister Anne Bezaire (Spokesperson, Ecumenical Coalition for Economic Justice of Wallaceburg): I would like to compliment the two groups that went before me, because you're going to hear a reinforcement of many of the things they have said. I want to address my remarks to issues around the social dimension of trade agreements.

• 1440

In the news release of February 8, 1999, Trade Minister Marchi stated: “We enter into trade agreements to better the lives of our citizens.” I would like to believe that Mr. Marchi was sincere when he made this statement, but we have now lived ten years under NAFTA, and we just have to look around us to see the effects it has had on the lives of our citizens. During the past decade Canada has experienced the longest period of sustained high unemployment and the worst social and economic conditions since the thirties. The number of poor people has risen by over 40%, the number of children living in poverty has grown by 58%, and the number of families needing social assistance has increased by 68%, in spite of a booming economy that has allowed the number of millioniares to triple in number. There is something very wrong here.

Companies have been moving their operations to the south, to Mexico and Latin America, where they can produce the same products at less than 25% of the cost without any regulations concerning health or safety to constrain them. Companies can use sweatshops and pay starvation wages, all in the name of profit for the company and its shareholders.

I live in Wallaceburg, and the Libbey Glass Company, which has been a major employer for nearly a century, is closing in June to take its operation to Mexico. Under NAFTA our government is powerless to do anything about it, and it leaves at least 400 people without jobs.

Some time in 1993, the 29 richest countries of the world began a series of negotiations whose purpose was to establish a global free trade agreement modelled on NAFTA. These negotiations were kept secret not only from us ordinary citizens but also from our members of Parliament. That became embarrassingly evident when the document was leaked out and we began questioning our MPs, and they said they hadn't heard about it.

• 1445

This multilateral agreement on investment, known simply as the MAI, was a plan to strengthen the control of trade not by national governments but by transnational corporations. The goal was to minimize the extent of government regulations on foreign investment. It's truly a mystery to me why a country such as Canada would relinquish its power to govern and hand it over to the large corporations.

Let me just outline a few of the powers the MAI planned to give to the transnationals. First, it would allow the transnationals to assume the same political rights as national bodies and be able to sue countries who try to regulate them. Witness the lawsuit in which Canada paid $20 million to the Ethyl Corporation over a Canadian environmental law they objected to. Second, it would remove federal and provincial governments' power to enforce performance standards such as wages and working conditions, among others, in their own jurisdiction. It would allow companies to unilaterally purchase and own any structure or productive capacity of any country, with no requirement to sustain its viability, employment level, or location in the home country. It would allow foreign companies to take control of natural resources such as local water and sewer systems if they are privatized.

The president of the U.S. Council for International Business stated in a letter dated March 21, 1997:

We will oppose any and all measures to create or even imply binding obligations for governments or business related to environment or labour.

• 1450

The MAI was not signed, as planned, in May of 1998. The Canadian government is maintaining that since it is now dead, there is no point in talking about it. But the point is that the MAI is not dead. It has just changed its name. It is now called the world trade agreement under the jurisdiction of the World Trade Organization, known as the WTO. This, in effect, will make the resulting agreement even more devastating to the average citizen of any country, because this world body controls trade in every country, not just the richest ones.

Having told you what is obvious to everyone—that free trade has not been good for Canadians, only for corporations that have been able to maximize profits for themselves and their investors—I would like to turn now to the possibility of an alternative to free trade. The alternative is called fair trade.

I think everyone agrees that we now live in a global village and are connected to every part of this planet through the huge network of trade and communication. No one in their right senses would argue that global trade is necessarily bad. It is inevitable, but that does not make it bad by definition. In fact fair global trade could lift all of us out of poverty and oppression, spread the wealth around more justly, and allow governments to carry out their role of working for the welfare of their people.

In reading the literature around free trade, it became evident to me that the supporters of unfettered free trade all have the same bottom line, and that is money. The effect on people, on their rights as citizens to a decent living, to peace and security, and to a life where their human potential can be achieved does not even get a mention.

I'm not so naive as to believe that total equality can be achieved in this imperfect world, but when the disparity of income between the top 20% and the bottom 20% is now 150 to one, we can hardly speak of any kind of equality. The richest 20% now receive well over three quarters of the world's income, and the poorest 20% have less than 5%. Also, the top 1% of households now own 47% of shareholder equity, while the bottom 80% hold only 2%.

There is only one word for that, and it is greed. Greed affects the lives of the poorest among us as well as the richest. The problem is that world organizations are geared to foster the greed of large corporations, to the detriment of the ordinary people.

Large corporations do not have a conscience, since no one person owns the responsibility, and when no one person is responsible, then no one is responsible. It's up to governments, then, to provide controls and protection for their people. But corporations are telling governments, “No, no, that is not what you should do. You should provide to business the freedom to invest and make huge profits. That is what is best for your country.”

My question is, are corporate rights more important than the rights of individuals? What has happened to the Universal Declaration of Human Rights, which was signed with such great celebration just a few short years ago?

My proposal to the Canadian government is that they should launch a strong protest to the new trade agreement, which will undoubtedly be proposed at the G-7 meeting in June. Also, they should reconsider the clauses contained in the proposed FTAA in terms of the rights of people, and not just of companies. There are alternatives.

• 1455

As we approach the end of the twentieth century, we face some of the most important choices in recorded history. What kind of world do we want? Are we prepared to accept a new world order run by big banks and big corporations for the benefit of the wealthy and the powerful? Or do we prefer to keep our national identity and the power to run our own affairs for the benefit of all citizens, rich and poor?

I believe that our government must remain sovereign. It must not allow unregulated capitalism to be foisted on the country through trade agreements that serve only the top 20% of society. It must reclaim control over part or all of the money creation function in society. It must strengthen the social fabric, which has been severely stretched by cutbacks, which have weakened our basic human and democratic rights. It must work diligently to get the Tobin tax accepted as part of international law, and it must insist that social and ecological standards strong enough to protect human and environmental needs be written into all trade agreements.

I urge Trade Minister Sergio Marchi to take the lead in the way Lloyd Axworthy did for land mines and call together a coalition of countries who do not see free trade as the solution. I would also remind him that the very first version of a treaty to protect mainly American business interests, which was presented to the first meeting of the WTO, was blocked by the developing countries as a dangerous form of neo-colonialism. It can be done, but only if this government has the political will to fight for its people.

I repeat what I said a few moments ago: large companies do not have a conscience, since no one person owns the responsibility, and when no one person is responsible, then no one is responsible. I beg our government to be responsible.

Thank you.

The Chairman: Thank you very much, Sister.

Our last presenter will be Mr. Hayes, chairman of the Windsor Council of Canadians.

Mr. Douglas Hayes (Chairman, Windsor Council of Canadians): Good afternoon.

I'd first like to thank you for allowing me to appear before this panel and allowing all the other people and NGOs to appear before this panel—although I was very disappointed that I didn't see any more publicity from our media about these hearings. I didn't see one word, actually.

Trade is a complex issue. We need to trade if we want our country to grow and prosper, but there are other things to consider before opening our border to foreign goods. In order to remain a free and sovereign country, we must be able to enact laws that benefit all citizens of Canada, not only big business interests.

First and foremost, our social programs must be protected from annihilation by people who think they should be non-existent or transferred to the private sector so that we can become, as they say, more competitive in the world economy and make more profits for shareholders.

Second, we must be able to protect our environment and the environments of foreign countries from unscrupulous operators. Polluters must be held responsible for damage done in any country.

Third, the rights of human beings as persons and citizens must come before any agreement between countries and corporations.

Fourth, health and safety of workers around the world must come first, before corporate profits.

At one time Canada had some of the best universal social programs in the world: health care, Canada Pension Plan, old age security, unemployment insurance, baby bonus, youth allowance. We are constantly being told by groups such as the Business Council on National Issues, the C.D. Howe Institute, and the Fraser Institute that in order to become competitive in a global economy we must bring down the national debt and deficit by chopping back these programs. Yet they are the first ones with their hand out for government grants and tax write-offs. Some of these programs have been cut totally. Others are subject to means tests and clawbacks.

• 1500

As we change from a caring society to a dog-eat-dog, survival-of-the-fittest country, what will happen to those citizens who don't make it? Will we see more and more people living on the street, depending on food banks and charity to live? Or will we maintain our social safety net in order that they can live a decent and happy life, with a roof over their heads? We know this is totally unnecessary in a rich country like Canada, if corporations were to pay their fair share.

Another place where government workers are about to be ripped off is their pension plan. This money belongs to the workers, and should not be used to pay down the debt. Instead, employees should be given a contribution holiday, like that being given by OMERS. If the government is allowed to do this, private companies will want to do it also. This will lead to inadequate pension plans in the future and more dependence on welfare programs.

The so-called employment insurance has been called an unfair subsidy. Therefore, it has been cut back, clawed back, and reduced. This has created a large pool of workers' money, which Paul Martin plans to use to pay down the debt also. This is what is called levelling the playing field to the lowest common denominator. I have heard it said that they would like to bring us down to the level of the Chinese. This shows that it is workers' safeguards that are being reduced in the name of debt reduction, while corporate profits increase. They would have us believe that these unfair subsidies need to be eliminated.

On the environment, Canada has become the dumping ground for the United States, and we can't do a thing about it. NAFTA has made it impossible to stop the ever-increasing importation of hazardous waste from the U.S., which has risen by more than 300% between 1993 and 1997, according to statistics by the Canadian Institute for Environmental Law and Policy. This coincides with tough new regulations in the U.S., making it difficult and costly to dump this waste in U.S. landfills. As in the S.D. Meyers case, on the importation of polychlorinated biphenyls, we would be sued if we tried to stop these imports.

Do we want to include all of the Americas and Mexico in a system where corporations are given the status of sovereign nations and can sue a country if that country tries to protect its environment?

As a signatory to the Universal Declaration of Human Rights and its covenants, we must make sure that all people are treated fairly, and not let trade agreements take precedence over the rights of people. Time and time again we are told that human rights have no place in trade agreements. Our government does not even bring up human rights abuses until public pressure is brought to bear.

I don't begin to know how we can enforce the Universal Declaration of Human Rights in countries with tyrannical governments without hurting the very people who should be helped. Allowing corporations that exploit them to do business in Canada is only contributing to the problem. World bodies like the WTO and the UN must put pressure on these leaders to uphold the rights of their citizens.

In Canada we have some pretty good health and safety regulations, but they still need improvement. We didn't get these regulations because of the benevolence of Canadian corporations; they came because our unions fought hard for them. In developing countries laws are enacted to prevent the formation of unions, which allow those same corporations to bypass our laws and export their products back to this country without considering the health and safety of workers who make the profits for them.

How can we compete in an atmosphere like this? Should we be forced by an unelected world body to be party to this? Whatever happened to democracy?

Health and safety must be a concern before a product is put on the world market. Consider asbestos. This product has been banned in Canada because it is a known cancer-causing substance. Yet our government used the World Trade Organization to force it upon France.

We also have farmers in Mexico and South and Central America spraying their crops with pesticides that are banned here in this country, and then we allow these products to be imported. Who knows the effects of these chemicals on our children and the children of these farmers?

• 1505

What will our next fight be? Will it be the importation of beef containing hormones and antibiotics, or the use of bovine growth hormone in our dairy cattle? Under the agreement on sanitary and phytosanitary measures, Europe was prevented from banning the importation of beef produced with growth hormones.

The World Trade Organization has become a powerful tool for corporate globalization, with little thought to the effect on countries, their citizens, and the environment. We can see that it is the rich and powerful who benefit most from trade agreements, while they damage the quality of life and democratic rights of most Canadians for the sake of the almighty dollar. Will the WTO protect us or do we need protection from the WTO?

In closing, the government must protect our social programs from further erosion. We don't want an American-style two-tiered or privatized system. Include environmental protection and allow for improvement to our environmental law in all trade agreements. Honour our commitment to the UN Universal Declaration of Human Rights by making it binding and enforceable, and protect the health and safety of all workers when negotiating trade agreements.

Thank you.

The Chairman: Thank you very much, Mr. Hayes. Thank you, everyone.

We'll turn now to questions. Madam Debien.

[Translation]

Ms. Maud Debien: Good afternoon, ladies and gentlemen. I'd like to begin by thanking you for being with us this afternoon.

I'm a member of the Opposition, of course. You all know a little bit about my party's philosophy. Some of your concerns are similar to ours. Moreover, we've often asked the government about the dramatic increase in poverty. One of our colleagues tabled a bill last week or this week concerning poverty in Canada and Quebec. In Quebec too, there are lots of poor people.

Your concerns are also similar to those of numerous organization members of society, unions and NGOs we've met since our hearings began. I think that my colleagues on the committee also share these worries. We don't have all the answers. You have some possible solutions to suggest. Your solutions will be an integral part of the report we submit to the Minister.

I'd like to talk to you about an event you probably know about, concerning Quebec more specifically. You know that one of our young colleagues, Stéphan Tremblay, left the House of Commons with his chair on his head. Our young colleague was concerned about the negative effects of globalization on all our fellow citizens.

Stéphan's gesture had a very strong impact in Quebec, with the result that the Quebec government, the Parti québécois and the Bloc Québécois began to give some thought in January to the effects of globalization on our Quebec society. At present, a bit like our committee, we're at the thinking stage, receiving submissions and briefs from organizations, particularly from the Quebec community. We're doing more or less the same thing throughout Canada these days. I hope that the Minister will be attentive to our recommendations.

• 1510

I'd like to address a question to all of you. One of your chief recommendations is that there be a moratorium concerning the WTO negotiations, which are supposed to begin in November, as the Chairman said a while ago. If there isn't a moratorium, what do you suggest that the government do? I think that the Canadian government won't be able to withdraw from negotiations. You talked about a social clause, respect for the environment and respect for human rights. If Canada doesn't manage to get the message across to the other countries negotiating at the WTO, what should it do then?

The Chairman: Sister Bezaire.

Sister Anne Bezaire: May I speak in English?

The Chairman: Yes, certainly. You may speak in French and English.

Sister Anne Bezaire: I'm going to speak in English because I don't know the French terms well enough.

[English]

I'm sorry.

I think Canada has a role to play as a middle power that is accepted by the stronger countries. It's in a unique position to assemble around itself those countries that are going to suffer the most—the developing countries throughout Africa, Latin America, Mexico, and even the Far East. They are all becoming victims of this globalization. It puts their currency at risk, and they end up in sweatshops and there are all the rest of the bad things that can happen.

I would like to see him leading a coalition and going step-by-step in all the agreements. As practically all of the other groups have said, there must be incorporated into whatever is written as a trade agreement the awareness of the social impact. We cannot remain at just making money. There are too many millions of people whose lives are devastated by the impact of globalization at the economic level, with no concern for the human dimension.

The fact is that sweatshops are allowed. We tried to raise awareness—don't buy material that's made in the sweatshops—but it doesn't have any impact. I would hope that Canada could play that role.

Does it make any sense?

The Chairman: Mr. Signorile.

Mr. Vito Signorile: Thank you.

I think the issue is really whether Canada has the political will to pull this together. We are in a position to make a difference. The issue is very critical, as you put it, supposing they are going to continue with the millennium round of negotiations of the WTO. The trouble is, if we have more of the same we're in deeper trouble than we would be if we actually pulled out. That's my impression. The fact is, we would be in very deep trouble. The world actually is at a very serious crossroads at the moment in regard to the amount of power, you might say divestment of our democracy, into the hands of transnational corporations.

We have to grapple with that. If Canada had the political will, it could make a difference. If the millennium round is to continue, then Canada should be there with a very strong message and try very much to gain more and more recognition of the primacy of human rights provisions.

We have to be there and we have to put that fight up. I don't think we should sit back and say we're going to be forced into the kinds of negotiations that will take place, simply because we might be left out. We want to be in, but in the right way.

Thank you.

• 1515

The Chairman: Thank you.

Mr. Pickard.

Mr. Jerry Pickard: Thank you very much, Mr. Chairman.

Ladies and gentlemen, I must first say to each and every one of you I think you've done a great job at bringing forth the concern of people. Any trade agreement that occurs and any actions that occur affect—as Mr. Marchi has been quoted—people sitting around the supper table and people in every country. The human dimension is extremely important and you voice that very well.

Mr. Vito Signorile: All we have to do is practice it.

Mr. Jerry Pickard: Secondly, the issue of the environment is very important. Over the years, we've tended to separate the human dimension, the economic dimension and the environmental dimension. We're hearing from many people across the country that it's now time to change direction. It's now time to incorporate all three into a body in which we can have not only rules that will enhance the environment and people's lives, but also rules that are enforceable and will help all countries move in a positive direction. I think that is very relevant.

We talk about corporate interests, but I think some corporate interests are very responsible. Quite frankly, if we look at where the auto industry was 50 years ago and where the auto industry is today, with the concerns they have in this community and the efforts they've put forward, they are serving this community well. They are certainly changing the lives of many people, but that's not consistent with all nations around the world. That's not consistent with all workforces around the world. As Sister Bezaire clearly pointed out, some of the interests and corporate world structures have not been concerned with the betterment of people, but with corporate greed. We know that.

• 1520

Clearly, it is extremely important to give Canada the direction, as I think all of you have said, to join with like-minded countries to work toward the incorporation of viewpoints that will be similar to ours to enhance people's lives and the environment. Through our hearing this week and over the last month, this committee has very clearly heard the message from many directions across Canada—from national groups to regional groups, such as yours.

As a committee, we're formulating a report. We don't have the final decision on exactly where Canada will go. But our role is to take your voices back to Ottawa, incorporate them into a report, and make sure the report is voiced at the Ottawa level with the minister and his ministry. So I commend you for coming forward. I think the message is very clear.

As far as the communication, we wish there were more press at these meetings. There was notice given. Both Sister Bezaire and I did an interview with The Chatham Daily News. At least that was done in one community. But unfortunately, we're hearing across the country that kind of message wasn't out in all communities. We wish that wasn't so, but certainly we are interested in all voices in this case, and thank you very much for expressing yours.

I don't really have a great number of questions to ask you but I think your efforts are important.

The Chairman: Mr. Signorile.

• 1525

Mr. Vito Signorile: One of the reasons we called for a moratorium on the WTO negotiations was because there seemed to be a kind of greenwash attitude emanating from the kinds of things we've read the WTO expressing itself about. In particular, I would like to refer to what Renato Ruggiero said in his opening remarks and I think in his closing remarks at the symposium on sustainable development and the role of the WTO that was recently held with various NGOs. After all of this, the main message we get is that the solution is more of the same: it's freer trade and more liberalization. That's not good enough. It seems to me that they are not listening. So that's the reason. If the WTO would listen and start really considering these things seriously, then perhaps that's what could happen. Maybe the WTO could go forward. But that's the main reason we think there should be a moratorium, to just clear the air and try to get some priorities straight.

The Chairman: Ms. Augustine.

Ms. Jean Augustine: There isn't much more one can say. Mr. Pickard has more or less amplified the fact that we have been hearing sentiments across the country and that we hear you quite clearly. I want to thank you for giving us these documents, which we can take with us, where you have delineated your concerns. Just the fact that you're here today says that you are committed to ensuring that we follow up on the concerns you expressed.

There's a question going around in my head as we say let's call a moratorium, let's stop the clock, let's do whatever. At the same time there was the suggestion that we must do this and the other and we must ensure that we continue, whether it's the Tobin tax, the environment, or human rights. What I'm trying to grapple with is how we stop the clock and at the same time continue the discussion. Perhaps you could address that in some way. Do we have to get in there and continue to talk and to put those issues on the table? How do we stop the round from occurring? With regard to the recommendations that are put on the table in Canada and the values and the ethics and all that you're asking us to put on the table, where do we get the opening to put those on if somehow we withdraw or stop the clock as some have said to us?

The Chairman: Ms. Beer.

Ms. Anne Beer: I look at the moratorium as a time to study, and I wonder if more systematic research would be needed. We talk about the GATT and about this and that and whether it would be more enforceable or the corporations would listen more if you have very strong facts and figures. I feel that might be a good way of looking at the moratorium. We have ample evidence even now, but maybe it's not as strong as it could be. So that's a way of going ahead.

What we have to decide is whether we are willing to take that road to concern about human beings, the environment, etc. I think that's the primary role for Canada to decide. Then it might be, do we have enough information to be persuasive and then have a moratorium and do these studies, or do we have enough and can we go ahead? Maybe we can do both. That's my feeling.

The Chairman: Mr. Signorile and then Sister Bezaire.

• 1530

Mr. Vito Signorile: I think stopping the clock is not the right metaphor. There's something inevitable about time, and it seems impossible to stop the clock without time itself stopping.

I'd rather look at it as stopping the train. The train is going somewhere. We're going somewhere we don't want to go, and I think it's time we kind of look over the terrain and see what other direction we might want to take down this road.

The problem we have with thinking this thing through is inevitability. We have this thing where everybody's rushing in a particular direction, and I don't think we are well served by this. We should see ourselves as empowered. We should view the country as empowered to do what it wants to do when it wants to do something right.

Thank you.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much.

Sister Bezaire.

Sister Anne Bezaire: I just wanted to add that I think when speaking of a moratorium, it is not stopping everything. What I'm concerned about is that the MAI pattern is the one that's going to go into the WTO. There's every evidence that the content of that MAI agreement, with all those restrictions against our own individual government, is there. That's what we need to stop. We need to rewrite a trade document, not stop negotiations but look at the content and say there is nothing in there—and there are dozens of items in the MAI—that has any benefit for the human, the social, or the environment, rather than starting from scratch.

I would recommend that everyone who's involved in this read Linda McQuaig's The Cult of Impotence and Paul Hellyer's The Evil Empire. They both really give a lot of material that I think is apropos to what we're talking about.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much.

Ms. Whelan.

Ms. Susan Whelan: I have just a quick comment for Sister Bezaire. It's not that I don't agree with you that we should be pursuing fair trade. I do agree with that. However, with respect, I disagree that free trade has not been good for Canadians. I say that because you're lumping all free trade in one big bundle there, and I don't think you can do that. You have to recognize that prior to the free trade agreement 75% to 80% of our trade with the United States was free. That benefited this area in particular, Windsor, Essex, and Kent County, to a dramatic degree, so that our economy in this area, our GDP, is equivalent to that of the entire province of Manitoba. So I think there have been a lot of benefits that came out of that trading relationship.

Now, the expansion with what was called the free trade agreement, which I don't think is a proper title for it because it went on the other 20%, caused other hardships in certain areas. I think we have to look at that and see where we have succeeded and where we have not.

I only put that out there because I do agree with you that the goal is that we want to have fair trade, and I think it is possible to have fair trade. But I don't agree that all free trade has been bad.

Sister Anne Bezaire: The Auto Pact has been—

Ms. Susan Whelan: The Auto Pact was of substantial benefit to us.

Sister Anne Bezaire: Yes.

Ms. Susan Whelan: I think we all have to recognize that.

The Acting Chairman (Mr. Jerry Pickard): Ms. Beer, you had a comment.

Ms. Anne Beer: I just was going to say yes, but that was between two industrialized countries where the wages were somewhat comparable.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much. I believe that does wrap up our... Did you want to add something?

Ms. Susan Whelan: Yes. The free trade agreement was between the same two industrialized countries.

We have to learn from what we've done as we move into the future. We have to ensure that we cover all the necessities people require as well and remember that people have to be the focus.

Mr. Vito Signorile: Could I comment?

The Acting Chairman (Mr. Jerry Pickard): Do you have one follow-up remark? We're running a bit late.

Mr. Vito Signorile: I just want to say that it isn't a matter of being against trade to begin with. Whether or not it's called free trade is another kind of issue.

• 1535

The problem is that overwhelmingly what has happened in free trade is a lot of these other important issues have been ignored, and in fact a lot of the decisions that have been made have been against our ability to protect our own environment, our own public health, etc. This is what's happening. This is what we're against.

I'm an internationalist, and I believe in free concourse between nations. On the other hand, I also feel we should have some kind of local control over what we would like for our own communities. If we don't have that, then we're in danger of losing more of it. That's basically the issue. It's no good to put the issue down as simply being against trade or against free trade. The issue is we're for local democracy. We'd like to see that at least built into whatever occurs in the trade agreement. This has not been on the agenda.

The Chairman: Could I just ask you a question about your paper, sir? You say in it that you don't want to see the WTO expand into areas of investment—I understand that—and competition in government procurement. But competition laws... As we understand it, this would mean the WTO should be enforcing against the great transnational conglomerates to try to stop them from merging and getting so big. I would have thought you would have been in favour of that. Most of them seem to end up feeling that's one dimension that's missing there—that they're allowed to grow bigger and bigger, and there's no control on them.

Mr. Vito Signorile: You're absolutely right about the need for control. Our problem is the mindset of the people right now in the WTO and how they work out the nitty-gritty. The devil's always in the details. This is what we've discovered in respect to almost all of these agreements. On the face of it, it looks like they're protecting this or that. When it comes down to arbitration and negotiation through panels and the rest of that, we find it's not there. This has been happening time and again. Something has to be done about that.

The Chairman: So you're not against competition laws, provided they're properly enforced—

Mr. Vito Signorile: No, no.

The Chairman: —like our antitrust laws.

Thank you very much. I think we've got a good understanding of what everybody's telling us: that nobody is really against fair trade if it allows society to benefit as a whole. The trouble is the present system is missing on the environment, on human rights, on culture—which I think is something you didn't raise but something that concerns us a lot in other parts of the country—and on labour standards, and that we have to bring back the message that somehow Canada has to be working harder to strengthen all those dimensions, both internationally and even in our local governments. We will certainly take that message back, and we appreciate very much the time you took to come and give it to us. Thanks a lot.

Mr. Vito Signorile: Thank you.

Sister Anne Bezaire: Thank you.

Ms. Anne Beer: Thank you.

The Chairman: Thank you for coming.

Could I ask the next presenters if they would be good enough to come up to the table. I believe we have three more. We've got the National Farmers Union and two individuals who are going to come and make a presentation. Come and join us.

We'll take a one-minute break while we do that.

• 1538

• 1542

The Acting Chairman (Mr. Jerry Pickard): I guess we're ready to get under way now. I believe on the list we have two separate individuals, as well as Perry Pearce from the National Farmers Union.

The process has been basically ten to twelve minutes, in that area, of presentation. Then we'll go to a question period.

Would you like to take the floor, Perry? Welcome.

Mr. Perry Pearce (Spokesperson, National Farmers Union): I believe everybody has copies of my little presentation, so if I mess up, you guys can tell me.

First I'd like to say thanks for putting me on the agenda. Some of you know me quite well, and some of you don't. That's okay. We'll get to know each other here in the next ten minutes.

I'm a farmer in Essex County, alongside my wife Julie and my daughter Becky, who's in the audience today. I've been farming 21 years and have done my best to contribute to the Canadian economy. Our farm involves two families, one being my parents. We crop about 500 acres of land and we have a swine herd.

Julie and I have been active members of the National Farmers Union, the Pork Producers Association, church organizations, women's groups, land use and environmental issue groups. It's quite a long list. The common denominator in all of these organizations is the commitment to equality and cooperative action. In church work it's always good to listen well to the problem before suggesting an action. The same problem is often seen differently by people of different interests, work experiences, proximities to the problem, etc.

Today I'd like to ask the honourable members to take a few minutes to listen to what I have to say in regard to the trade issues we're facing today. It's my sincere attempt to help you understand the problems of agriculture from a perspective of the family farm struggling to survive in these hostile circumstances.

• 1545

Twenty years ago I started farming. The world said we needed more food, so I built a pig barn that houses a hundred sows and went to work. The pork basically moved into the Ontario economy, and everybody was pretty happy. That was 1978. You have to understand—and two members here understand it very well—that Essex County has some of the best land and some of the best climate in Canada. So we're not talking about marginal farming circumstances; we're talking about as good a locale as probably any in the North American continent.

In the early 1980s the farm world came apart, with high interest, high debt, low prices, and it bankrupted a lot of farmers. A lot of my neighbours, lots of them that were my age, today do other things. Today my wife works three part-time jobs, we drive a 12-year-old pickup, and we worry about the future.

Out of the 1980s came the corporate farm model, with a simplistic assumption that bigger is better. The outgrowth of this model was the push to expand acreage, production, and exports. I believe we're still in the midst of this expansion prosperity way of thinking. Trade agreements, beginning with the Canadian-U.S. trade agreement, and down through the list, have all been about expanding trade. It comes down to designing the trade agreements to force sovereign nations to grant access to food from wherever it may be grown. This access is an essential component of the expansion-based agriculture that has proven so devastating to the Canadian family farms.

Agrifood exports today are five and a half times higher than 1975, but net farm income is 25% lower. So despite the complete failure of increased production and exports, they have not translated into increased net farm income. And the government persists in making export growth the key plank in its agricultural policy.

In 1993, federal and provincial ministers set a target of $20 billion in exports by the year 2000, double the 1989 level of $10 billion. Having reached the $20 billion ahead of schedule, in 1998 the minister set a new goal of $40 billion for the year 2005. Pork exports were to be the flagship of the push to double and redouble exports. And despite the market uncertainty around the world, the federal government projects strong growth in pork exports, with the year 2000 level 48% above 1998.

Today, however, hog farmers are wondering what happened. In the fall of 1998 I sold 100 kilograms of pork for $35. Now, I know a lot of people probably have a hard time understanding what 100 kilograms of pork is. I'm proud to say I weigh a little bit more than 100 kilograms. Or you can put it another way: that's enough to feed a normal Canadian family of 2.5 people, or whatever it is today, at least six months in meat protein, considering that they would get tired of pork and probably want to eat something else besides pork every day. So that's a lot of meal for $35. That's not very much. That was a major reduction in the price received the year before, less than half what we were receiving in 1978, when I began farming.

• 1550

The members have to contemplate that the MPs' salary and allowance totalled $38,900 in 1978. Do you foresee any difficulty meeting the ends at your family level if you cut that in half and were asked to survive? Pretty tough go.

We work hard for our money. We do the best we can with our family. We should not be asked year after year to do more for less.

On my farm, the break-even price is around $130 for 100 kilograms of pork. We normally ship 30 pigs a week. At average prices we make between $10 and $20 a pig, so that's $300 to $600 a week income. Not bad—that's okay. But over the last month we were losing up to $3,000 a week. As you can see, it takes a lot of good weeks to make up for one bad week.

In late 1998 and so far in 1999, packer profits have remainded strong, exports have continued unaffected, retail pork prices and retail profits have remained unchanged. One hundred percent of the economic pain resulting from the oversupply, as they call it, has been borne by the farmer. I'd have to add there “and some by the federal government in their aid program”. How can there be an oversupply and yet the wholesale and retail prices do not fall? Export-oriented, expansion-based models of hog production are functioning perfectly. It just happens to be bankrupting the farmers, even if it heats the profit for the packers, the exporters, and the retailers.

• 1555

To double and redouble exports requires market access. To gain access to foreign markets, we must first give up access to our own. As we focus on export markets, we are often, at the same time, giving up domestic markets at an equal or greater pace. The result is often that we trade stable, high-priced Canadian markets for volatile, low-priced foreign markets. Since the packers make nearly the same money per pig, no matter where it goes, this does not affect them. Since retailers face so little competition that they can constantly raise grocery prices despite declining farm gate prices, this does not affect them. But because farmers must survive on what's left, after everyone else is paid their cost and profit, it does affect them, and the results are some of the lowest net farm incomes since 1930.

I've printed in here a recommendation, that at this point the government should craft a strong domestic policy to ensure farmers have a positive net income.

So how does the farmer cope with this situation? We basically have two choices: find a job in the urban setting or expand our business—more pigs, more cows, more land, etc. On many family farms, one or both spouses are already forced to take an off-farm job, and there's an attached graph to demonstrate that. Now we're at a point where 28% of a typical Ontario farm income comes from the farm. That's a pretty sad statement, sitting on some of the best land, some of the best climate of this country. Ontario farms have a lot of assets. A typical farm has something like $882,000 in assets, which I find hard to believe, but that's what the stats say. This system isn't coping when you have those kinds of assets and they're getting $8,000 and $9,000 in return for equity, labour, etc.

The other method of coping with constantly declining prices and rising expenses is to expand. Under the corporate model this is commonplace—cover more acreage, build bigger barns, produce more animals, hire more people, invest more shareholder funds, etc. In the hog industry the logical extreme of expansion is the corporate hog megabarn, producing 50,000 or 100,000 pigs a year. These are just unbelievable numbers. As a producer, I can't comprehend these numbers.

• 1600

Further along this extreme, they build 10 or 20 barns at multi-site locations. They begin looking across the border into the United States. There we see single corporate producers producing six million pigs a year. That's more than the Canadian economy. Expansion is billed as a survival strategy for the family farm. Note, however, that in this scenario the family farm does not survive; they're replaced with a corporate barn.

The U.S. hog production model is a huge corporate farm seamlessly integrated into packing companies, grocery chains, etc. These megaproducers are not more efficient than my own farm. They have advantages that lie in the intimate relationships with the packers and the retailers. Last year, as a note, the U.S. packing industry profited somewhere around $1 billion worth of cash because they were making huge money when they were buying cheap pigs. What did they do with that money? They bought corporate pig farms. They bought their market share. Now they don't have to worry about acquisition because they own it. It's pretty smart thinking if you're a corporation, but it's way out of the league of the family farm.

Given a choice to buy pigs from your own corporate barn, with a captured profit, or from the local farmer, the vertical integrated corporation will buy from its own barn.

In the presence of all this, can a farmer compete? Few family farms can assemble the capital needed to produce these huge farms, these 6,000 hogs a year, let alone 6 million. Even if we could expand production tenfold, would it merely mean that I survive on the backs of nine other family farm pork producers because I just took over their right to earn a living by swallowing up their production?

Saying all of this, I recommend that this government institute policies that support the family farm. Export expansion and other expansion-based policies do not do this. Instead, they pave the way for corporate scale production and undermine the very markets that family farms depend on.

In conclusion, the negative effects on my family farm that I have outlined occurred during the time of unprecedented growth, both in agrifood and in pork. That growth continues. It is not that this government has failed in its export strategy. It's that the strategy has failed farmers. Do not be deceived that it's merely growing pains, that after an initial painful period the prosperity will return to the land. The future for Canadian hog farmers is clearly visible in the U.S., and increasingly in western Canada. That future is one in which family farms do not participate in hog production. Free trade policies facilitate the growth of even larger production processing and retailing entities. Production and export expansion promote the growth of such entities. Free trade policies have devastated my family farm in the short term and will displace it in the medium term.

I'm sorry I don't have better news, but I think it's important that you hear what the upcoming WTO and the FTAA talks... that you don't have illusions about what's happening at the farm level. Expand trade if you must, but do not do so in a mistaken belief that this may help us at the farm level. As I've presented here today, it won't.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much, Perry. I appreciate that.

Our next presenter is Carol Monk.

Ms. Carol Monk (Individual Presentation): Thank you. I've never done this before, so I'm a little bit nervous.

The Acting Chairman (Mr. Jerry Pickard): That's fine.

• 1605

Ms. Carol Monk: I would like to thank the committee for the opportunity to speak at this hearing. I am here as a concerned citizen of Canada.

The presentation I am making is on the World Trade Organization, but let me start by saying there aren't nearly enough people who know what is going on with the WTO. The people I have spoken to have heard of the WTO, but they do not know of the wide scope of its activities, nor do they know about the authority the WTO carries when it makes a decision in a dispute. Therefore I would suggest the Canadian government should inform the people of this country of the issues concerning the WTO.

I am also concerned about the fact that the WTO is closed to the general public and also non-governmental organizations. It only hears through its tribunals from governments that are in dispute. NGOs can only be heard if governments endorse their submissions, which is not very likely to happen. This fact needs to be changed, because the issues that are brought before the WTO have an impact on the citizens of the countries represented there, be it negative or positive.

Submissions by NGOs or the general public could be useful in that they could provide valuable information that could help the WTO make a more balanced decision.

The WTO has already made some of these decisions without any regard to the public. The Clean Air Act in the United States was withdrawn when the WTO decided it was violating trade rules. In the European Union, a ban on beef containing artificial hormones was also lifted for trade violations.

Another example comes from Canada, where a tax was implemented on split-run American publications. These are Canadian versions of American magazines, and they can offer cheaper advertising costs than all Canadian magazines. This was also found in violation of the rules and the tax was removed.

I have heard that the Auto Pact is now being brought to the WTO. The Auto Pact was put into place to promote jobs in Canada. Countries who signed on would be allowed to bring in their products without paying a tariff. In return they would guarantee jobs. Now, countries like Japan that did not sign on to the Auto Pact are saying it is discriminatory. This leads me to believe that this is not a political issue but one of corporate greed. If the WTO decides against Canada, the safety net that was provided by the pact would disappear and jobs would be lost.

I would also like to talk about bringing the MAI to the WTO. The MAI is the multilateral agreement on investment. It is a set of rules put on governments to allow the free flow of capital. It would be a mistake for the Canadian government to support this. Canadians have already spoken out and opposed this agreement as it stands today.

The government needs to look more closely at the impact this agreement would have on our country and also other countries around the world. This agreement threatens the democracy of Canada. I say this because it doesn't matter which government is elected or what good it wanted to do, the rules of the MAI would have to be followed without interference. Through it, transnational corporations would be allowed to move from one country to the next without having to abide by the laws of other countries. If a law was found to impede profit, then the corporation would be allowed to sue a government for loss of profits.

Any legislation meant to better the lives of citizens of a country in areas like the preservation of the environment, food safety, public health, and human rights would be eliminated if it interfered with corporate rights.

I feel we should be reminded of a similar case that occurred in 1997. A ban on a gasoline additive called MMT was deemed in violation of NAFTA rules. The government tried to eliminate a known toxin from the environment, when it was challenged by a corporation named Ethyl Corporation. In the end the government gave in, dropped the ban, and paid the corporation's legal fees and loss of profits. In return, the corporation agreed to drop the case. Now MMT is back on the market, and Canadian taxpayers have not only lost millions of dollars but are left with this toxin in the environment. The MAI would only enhance this ability to sue the government.

• 1610

I often hear of the rights of corporations, but what about the rights of the working people? Should a corporation, which is not a living being, have rights before the people who have worked hard, been injured, and in some cases lost their lives, to make it possible for the corporations to get where they are today? I would have to say the answer is no. There are too many people being exploited, and they are not getting the rights they deserve.

I understand that there needs to be a body that governs trade and investment rules. I also understand that there should be a balance between these rules and workers' rights. The Government of Canada should lead in this discussion and work with other countries to accomplish this task. The International Labour Organisation, a United Nations agency, has implemented some core labour rights. These include the right to form free trade unions without interference from the state, the right to free collective bargaining, equality of employment, and freedom from forced and child labour. These rights should be brought to the WTO to create the balance needed to make trade and investment rules work for the corporation as well as the working people.

The WTO should work with the ILO, which is knowledgeable in workers' rights, in order to enforce these rules. Although these suggestions will not solve the problems associated with globalization, it is a start to make things better for the working people of the world.

Thank you again for hearing my presentation. I also added a little picture showing how I feel about globalization and the workers, at the bottom. Thank you.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much, Carol. You did very well.

Mansfield Mathias.

Mr. Mansfield Mathias (Individual Presentation): Thank you.

Before I get into my submission, I'd like to make a couple of observations about some of the remarks that were made in the last panel. I believe one of them started about the benefits of the auto trade agreement.

Canada is one of the major auto-producing countries in the world, and has been for a great many years, yet we do not have a Canadian auto industry. We are a branch plant economy as far as the auto industry is concerned, and people keep forgetting that. There are countries much smaller than we are that got into the market much later than we did and that have their own car. We don't. All the cars are American. I wanted to make that point.

In the 1960s, when this agreement was being debated, when the Bladen commission was dealing with the auto industry, investing in the auto industry, many of us in the auto companies opposed this agreement. We did it for very valid reasons. We wanted a Canadian car developed here, and we had some help from a Conservative government in that respect.

First of all, about the agreement and the reason we opposed it, Bladen came out with a recommendation for the federal government, which then was the Diefenbaker government. I believe it was 1962. The Diefenbaker government came out with a trade policy that was called a duty remission on the automobile industry. It started off with parts. That turned the economy around for the auto industry, and we started working without a trade deficit in the auto. That was the first year we gained a trade balance in our favour.

The second year he included major vehicles. As a result of that, money flooded into this country from the United States to support the Liberal government, to defeat Diefenbaker, because he was challenging the American hegemony in this country, the American right to rule the goddamned industry here.

This should be remembered, and this goes back a number of years. Your dad remembers this. He was involved with some of the discussions we had here. That's what happened. Diefenbaker came out and pumped the auto industry with a duty remission program that was designed to increase Canadian content, which was going in the direction of developing a Canadian car. That was sabotaged by American industry with the help of the Liberal government.

• 1615

We got this information from Paul Martin senior. He told us about the money that was coming. He even told us to our faces—with a challenge, sort of—your UAW in the U.S. sent $150,000 over here to support the Liberal Party when they were nominally supporting the CCF back then. It was the new party, the NDP, by that time, I guess.

That's what was going on. Diefenbaker went down to defeat because of his nationalist policy. He was promoting a program to develop our industries here. That's down the gorge now. Whether it helped us in the long run, it looked pretty good. It kept a lot of us at work. It gave me a half-decent pension. Fine.

We still do not have an auto industry. It was the foot in the door, the wedge, which started the drive for this globalization. Rationalizing the American industries across national boundaries developed the global economy. That's where we're going today, and that's why we're having some of these discussions.

An article this morning in The Windsor Star kind of gives you some idea of who is in charge here. The Windsor Star of Friday, April 30, on page A-9 said “U.S. eases sanctions on Sudan, Iran and Libya.” Now who's in charge? We can all start doing business with these countries. The new Caesar says we can do business with these countries now. What are we wasting our time here for?

Just a minute. That gets me into my remarks.

I have one more observation. We talk about whether we are in control of our own affairs here. The immediate post-war period saw a rapid development of industry in this country. Ontario Hydro couldn't keep up with the demand for hydro. They were exporting hydro to Con Ed, a contractor in the U.S. that produced hydro for the United States. They had an agreement for what they were selling, and they could alter it, cancel it, or do what they liked with one year's notice.

They served one year's notice on Con Ed and told them they wouldn't be supplying them with hydro one year down the road. The very next day the American ambassador in Ottawa had a meeting with the government and told them straight: “If you cut off the export of hydro to the United States we will consider that an unfriendly act”.

Yugoslavia just found out recently what an unfriendly act invites.

Now I'll get into my submission.

These are things I think we should keep in mind. These are part of our history and part of our development. Let's remember that.

Just before I retired I irritated my employer, the Ford Motor Company, and they told me I would be disciplined. The manager of labour relations met with the president of my union and agreed on a six-day suspension. After the penalty was decided I was given my day in court. At the conclusion of the hearing I received notice of the six-day suspension.

This is the old cliché, “hang him and have the trial after.” It's a classic example of the concept of natural justice. It's in a sad state of disrepair today. This is a mere facade.

This hearing engages the same deception. It is for window dressing only. Discussions taken by the World Trade Organization will disregard any proposals presented here.

National governments are powerless today, in the face of the new world order, which will only allow each sovereign nation or state to conform, to toe the line. Yugoslavia refused, and the result is on your TV screen. That, of course, is covered up by 500 years of ethnic problems, but that's window dressing. The problem is economic. They were told to privatize some of their industries and they refused.

Canada was told to privatize their industries or much of their government involvement, and they're conforming. Yugoslavia refused. That's what's happening over there—much of it. There's a hell of a lot of other stuff going on too that we disagree with. I think everybody disagrees with it.

The Windsor Star of April 9 reported that China had been trying for 13 years to break into the global marketplace, first through General Agreement on Tariff and Trade, GATT, and now through the World Trade Organization. That brings us to the headline here, “Who's in charge?”

• 1620

The article went on to state that China was negotiating with the United States to get into the World Trade Organization. Again, who's in charge? There's nothing like going right to the boss to get things done. As history is wont to repeat itself, we see today the high-tech information age, computer-assisted global development paralleling the comparative development of the late 1920s, with a promise of the 1930s condition looming ahead of us—conditions in which a nation like Canada, with unparalleled wealth, found workers and their families languishing in destitution and despair. It was a situation eloquently portrayed by A.A. Heaps on November 21, 1932 in the House of Commons, as recorded by Hansard:

As a nation, I believe we are wealthier than ever before in our history. Yet paradoxical as it may seem, the more bread we have the more breadlines there are. The more clothes we manufacture, the more people there are without clothes. The more homes we build, the more there are looking for shelter. The more wealth we produce, the greater is the poverty.

It follows what my farm friend was saying in his submission. He may well have pronounced the same thing for today. Today, while wages are stagnating and household incomes are in decline, profits are going through the roof and executive salaries are pornographic. The gap between the rich and the poor is rapidly widening, while we contemplate our navels. Does anyone not recognize the parallel?

Further than that, in 1939 just before we started spending massive amounts of money, and God knows where it comes from, in January 1939 in a speech in reply to the Speech from the Throne in the House of Commons as recorded in Hansard included the following. This is from Woodsworth:

As democracy fails, I suggest it has never really been tried. A system which gives wealth and power into the hands of the few and reduces the vast majority to insecurity and poverty cannot long endure

Then he moved to alter an amendment to the motion and add the following, to the effect that:

We are of the opinion that these conditions can be remedied only by effective control of financial institutions on monopolistic enterprises which are exploiting the Canadian people.

We can bring this up to date today. They're not only exploiting the Canadian people, they're exploiting the population of the globe.

The moneylenders today force nation states into unsustainable debt by charging interest on ledger entries representing non-existent capital.

The Acting Chairman (Mr. Jerry Pickard): I apologize, but we're now at eleven minutes, and we do have a time—

Mr. Mansfield Mathias: I have one more—

The Acting Chairman (Mr. Jerry Pickard): If you could help us by wrapping it up, I would very much appreciate it.

Mr. Mansfield Mathias: This is called creating money. This is pauperizing the globe and inviting universal bankruptcy. These financial bandits today parallel in macro-relief the robber barons of the 1920s, who drove the country into the hungry 1930s of yesterday, and will expend such devastation into the future global economy with a direction taken today.

Presentations to these ineffective pony shows will not prevent such disaster, but provide instead a false sense of effective participation, a sense of natural justice in which the peasants have been heard from. If the present-day financial mafia is allowed free reign in the global marketplace, the aftershock will make Harris look like Mother Teresa.

This is the course mapped out by the architects of the World Trade Organization, whose only loyalty is to the multilateral conglomerates with economic imperatives that are enforced by a Yankee war machine. Check Yugoslavia. Brush aside all the propaganda and you'll find an economic delinquent that didn't toe the line.

• 1625

Who will speak for the people? Certainly not the government you will be reporting to. Your government is led by a prime minister who prefers to strangle a demonstrator instead of listening to his complaint; a prime minister who sends his Star Wars heavies to pepper spray students instead of debating the issues with them; a prime minister who now replaces Monica Lewinsky at the feet of the great one, and while enjoying his entrée du jour will obediently take directions from the crown prince of the Pax Americana for world peace on American terms.

This colonial administrator whom we call prime minister will not listen to the people. He will not speak for the people. He will not represent the people. The people must speak and act for themselves.

Non-governmental organizations, NGOs, confronted the global power structure and stalled for the moment the multilateral agreement on investment. This is real people power. We must build upon it. A global movement against the system can be effective, proven with the fight against MAI.

• 1630

Petitioning Ottawa at this stage of the game is a waste of time. They take their direction from the next level up, and not from the lower constituency level where the people reside.

On December 2, 1994, a dog and pony show, much like this one, sat in Windsor, taking submissions to improve social security in Canada. The purpose appeared to be a desire to gain insight from the people in Canada on how best to dismantle the social safety net, to save money to repay the national debt. To the credit of the panel, they took some of the presentations sincerely and constructed recommendations to the government that would have improved social security. That is not what the government wanted, so the report was disregarded and now gathers dust in some “do not hire” file.

If after studying all submissions your report is a reasonable one, supporting a people's agenda, it too will gather dust in some dead letter cubbyhole.

What is the answer? I'll conclude here. Dismantling our bicameral power structure, while necessary for future consideration, will sidetrack the immediate imperative, which is to challenge the global sellout, and to do it effectively. Existing instruments are already in place. The NGOs can be the base and the building blocks to construct a dynamic global democracy uniting all the world's dispossessed into mighty armies to confront the multilateral corporate dictators who rule the World Trade Organization today.

The Acting Chairman (Mr. Jerry Pickard): You're now over fifteen and a half minutes.

Mr. Mansfield Mathias: You have a copy of the thing anyway.

The Acting Chairman (Mr. Jerry Pickard): Thank you very much. The questions can—

Mr. Mansfield Mathias: I'd like to read the last paragraph, just to conclude.

The Acting Chairman (Mr. Jerry Pickard): Fine.

Mr. Mansfield Mathias: I suggested earlier that this committee will be just spinning its wheels taking these presentations and that their efforts will be sidelined. Perhaps I am wrong. Perhaps the sitting members of this committee can sit down and draft recommendations for the government, which will include a leash on corporate power, that may gain the approbation of the general public and force necessary government action in this respect. If this happens, you have not struggled in vain, and I congratulate you in advance. Your effort will require perseverance and diligence, much like my efforts in challenging the company and the union before the Labour Relations Board, redressing my suspension grievance and regaining the wages improperly withheld from me.

May you enjoy similar success. All of which is respectfully submitted. Thank you very much.

• 1635

The Acting Chairman (Mr. Jerry Pickard): Thank you, Mr. Mathias.

Mrs. Debien.

[Translation]

Ms. Maud Debien: Good afternoon, gentlemen, and thank you for coming to meet with our committee.

Mr. Pearce, you made an observation. You told us, and people from other sectors have told us the same thing, that there had been a major increase in production and exports in agriculture, but that producers' incomes hadn't increased accordingly. This morning, the auto unions told us more or less the same thing. I think that this is a situation we'll have to examine carefully.

You said at the end of your presentation that Canada or the provinces had to have policies protecting the family farm. What sort of policy?

I'd like to ask you another question. I don't know much about the pork industry, but you said that in the U.S., the pork industry worked very closely with processors and retailers. What happens here? In the pork industry, is there a marketing board, like those we have in Quebec for eggs, poultry and chicken, in order to ensure a certain stability of income for farmers? I'm not very familiar with your particular situation and I'd like you to give me some information about it.

Mr. Mathias, I can only thank you for rattling the cage, as we say at home, and hope we can respond to your concerns.

[English]

The Acting Chairman (Mr. Jerry Pickard): Perry.

Mr. Perry Pearce: The first question, I believe, was on the issue of family farm policy. To sit here and design it would take hours, but I can say, and I believe you might be from the right area of Canada to understand it, that the province of Quebec and their pork industry is doing a bang-on job. They are processing, I think, about 30% to 40% more pork in their province today than they were five years ago. They're adding value. They've added jobs. They have probably added 5,000 or 6,000 jobs. They're doing a good job. That's my bottom line.

They are exporting products, but it's high value, high quality, and they are doing the best job and giving the best example in Canada.

To further that, as I understand it, in talking to people in Montreal and to some of the producers in the province of Quebec, they feel under attack by the upcoming trade agreement because some of the traditional programs they've done in Quebec through the provincial government, and some of the federal programs they have done, are in jeopardy. People at the trade level are saying they can no longer do that because that's not trade friendly. You're subsidizing; you're doing this; you're doing that. Really what they're talking about is, do you as a sovereign country have the right to set some policy in place or not?

[Translation]

Ms. Maud Debien: When you say there's a risk, do you mean supply management?

[English]

Mr. Perry Pearce: No.

[Translation]

Ms. Maud Debien: You're not talking about supply management.

• 1640

I know that farm producers expect there won't be any more subsidies. I know that quotas and tariffs are going to disappear and that the farming community is prepared to cope with this problem. Nevertheless, with regard to supply management here, whether we're talking about eggs, chicken, poultry or dairy products, I know that the Canadian government agrees and that for most of the provinces, there's no question of touching supply management. But this isn't what you're talking about when you talk about the dangers the pork industry is afraid of.

[English]

Mr. Perry Pearce: Yes. What I'm referring to is not the issue of quota or supply management. I'm referring to that fact that in Quebec the pork industry meets and operates by consensus. When they identify a problem—it may be a labour problem, a health issue, an inspection issue—they find a common ground to solve it. But now they are under the fear that these are illegal trade practices.

It's the same as the Europeans, who are now under attack on the issue of the beef hormone and the genetically modified seed gene. The Europeans are also saying that these are European health issues, and the trade people are saying, no, they're trade. You're using them as barriers. That's what I'm referring to.

To further that whole discussion, this winter the federal government did the best they could, I feel, of putting together a financial package to aid the Canadian farmers. I know from the bureaucratic level the question that was asked was is this trade-neutral? That's a terrible way to run a country, when it's a matter of, well, we want to help you, but gee whiz, somebody halfway across the world is saying that's not trade-neutral. That's what I'm referring to.

Your second question, if I may, asks about the Ontario Pork Marketing Board in regard to how it compares to the U.S. I think I can be very frank in saying that the whole Canadian concept of marketing boards, supply management—in pork we are not supply management—has performed very well in protecting or insulating the middle-class farmer.

Today in the United States there is no middle-class farmer. You're either a very small farmer working off the land, with some job, or some huge corporate monster that really is just a production arm of some transnational—they're not even American companies—corporate food and fibre empire.

Does that answer your question?

The Chairman: Ms. Whelan.

Ms. Susan Whelan: Thank you very much, Mr. Pickard.

I listened very carefully, Perry, to your comments, and to follow up on my colleague's comments, obviously we're very concerned as we go into the next round of WTO about what it's going to mean to the agricultural community. One of the problems you've outlined is the fact that in different commodities we have different systems. Even within ones that have similar systems, we have different ideas of where they should go from the leadership and from the producers. So it's not an easy situation to be in.

Personally, I look at what happened recently in the hog sector. I think that if there had been a supply management system, you may not have seen the devastation you saw. I also do agree with you, though... I know there is an investigation going on in the United States around the processors, the dollars they continue to make and the prices at which they continue to sell. I think maybe we should take a much closer look at what happened here in Canada, because I didn't see a big difference in the grocery store.

• 1645

That being said, I agree with your recommendation that we have to do something to ensure that farmers can have a positive net income, and we have to ensure that one of the things we do protect is our ability to produce food. We don't want to be at the mercy of any other country for that matter.

I have one question. You did mention the different systems. I don't know if you can answer this, but would it be better to once again take a look at the whole farm income program, the safety net program, and start again? We tried, and we ended up with different variations now in the different provinces, and we see some that work better than others in different situations. I'm just not sure what the answer is when we head into the next WTO.

Mr. Perry Pearce: In regard to your last question, Susan, I feel—this is my personal opinion, not any organization's—the whole farm program was something that Charlie Mayer, the acting agriculture minister then, promised would be looked at ten years ago, and nobody did it. Whose fault is it? I don't know. It doesn't matter at this point.

The bottom line is I think you people, as a federal government, foresee the crisis coming at you like a freight train and say we have to throw something together real quick. It's not perfect; it has a lot of flaws. I feel it needs to go back to the drawing board.

I also understand quite well that there are provincial governments that are playing nasty political games with you on it. We have provinces that have ignored their crop insurance commitment to their producers and say it's a federal problem, while some of our provinces have continued on very well. I'd hate to see those programs go in jeopardy.

The whole issue of whole farm income begs the question: Do we want to put farm people on welfare? Because that's where we're heading with it, to some sort of stable floor that says produce what you want, do what you want, but here's your guarantee. And I have to agree with you about your father's vision of supply management: no matter how you paint it, it's still what it comes down to. And, yes, we have a lot of farmers who don't want to admit that, but that's reality.

On the issue of food, it should not be left up to my personal greed as a producer what I want to do with it, nor should it be left up to the corporate or transnational agribusiness to decide. It's a national issue. It is of national importance no different from many other services to this country, and that's how it should be looked at. And if we have to step on some toes to develop a national policy of some sort that says we are going to have a fair food system, so be it.

The Europeans have done it, and I think they've done a very good job. Their motivation was stronger than ours, but the reality is they have taken some bold steps where they took pork production out of Holland, with people in Holland kicking and screaming, and said you have too much production, we're moving it to other countries in Europe; we are spreading it out, we're equalizing it so everybody has a fair amount. I think—

Ms. Susan Whelan: Right. I think your chart at the last page is something the committee needs to really take a look at, where it shows the growth in exports and what has happened to net farm income. I think it's something that hopefully the committee will take a look at.

Mr. Perry Pearce: Yes.

The Acting Chairman (Mr. Jerry Pickard): Jean.

Ms. Jean Augustine: Mr. Chairman, I haven't very much to say. I don't have a question, but there are a couple of comments I'd like to make.

First of all, as someone from a city riding where we're mainly consumers, I want to say that I appreciated the perspective you brought to the committee today and the two recommendations you've left with us. I was going to also focus on the chart at the back, but this again has been brought to our attention.

Mr. Mathias, I can understand why you and your employer had heads butting together. I like your feistiness and the fact that you express yourself in provocative language. I think those comments we need to hear and we need to hear from individuals like yourself, who have a good sense of history, what was said, and what some of the root causes of problems we have before us are. So I appreciate that.

• 1650

I also want to say to Ms. Monk that for me it's a great opportunity to see a young person like yourself concerned about the issue, ensuring that the voice of the young generation is before the committee on an issue as important as this one is. So thank you for the effort in putting this together and coming before us.

I deeply appreciate the spectrum of the three panellists, Mr. Chairman. Thank you.

The Acting Chairman (Mr. Jerry Pickard): Mr. Mathias.

Mr. Mansfield Mathias: On the earlier remark about me making noise, I find that if you're making a presentation, the first thing you have to do is to get the panel's attention. If I did that, then I succeeded. Thank you very much.

The Acting Chairman (Mr. Jerry Pickard): Thank you, ladies and gentlemen.

Perry.

Mr. Perry Pearce: I have a comment to Jean.

In regard to the graph at the back on farm income, etc., I've had some discussion with the Honourable Herb Gray on the fact that maybe there should be some sort of royal commission struck to look at this whole issue of where these food dollars are flowing. He politely told me—and he's probably right—that, gee whiz, that takes everybody in cabinet to be onside, and that probably isn't going to happen. But he said there are a couple of standing committees that maybe should take a look at that issue and do it within the committee structure, whether it's this committee or one of the other committees, the agriculture committee or whatever. So after you look at that graph, you may want to have some discussion with several members on some of the other committees and say here's something we should look at.

Ms. Jean Augustine: We also have the rural caucus, Mr. Chairman; that could maybe be a place.

Mr. Perry Pearce: Okay.

The Acting Chairman (Mr. Jerry Pickard): I would like to reiterate what the role of the committee is and maybe answer a couple of questions that have come up.

This committee is to listen to people across the country, take all different viewpoints that we have, and make sure those viewpoints are recorded for the minister and for the ministry. That's the role. We very much appreciate every witness who has come forward. Some have come forward with very interesting viewpoints, personal initiative viewpoints that are helpful to us in order to formulate our final report. That's critical.

Also, there's one issue I'd like to touch on, and that's the MMT issue, which has been brought up a few times today. Ethyl Corporation did sue the Canadian government and did win. But the reality was two provinces would not agree with the structure the Canadian government had. Therefore, we found ourselves trying to resolve an issue in world trade under article 11, which was difficult to do when we didn't have consistent conformity across the country. With two provincial governments not agreeing with the policy we had, we did find ourselves vulnerable in that case. We have to make sure we're not caught in those situations again. Very clearly, everyone who brought that issue forward was correct that it shouldn't happen again. But it was an unfortunate situation and one we are a lot more cognizant about today than before. So we will do what we can to make sure we don't get caught in those situations.

The auto industry in this community, as Mr. Mathias pointed out, has been extremely successful. I think that is because the community, the workforce, and the government have been very aware of the industry and tried to do what we can to move it forward. So the comments there reflect where I think a trade issue has worked out very well. We have to make sure it continues down the line. I think that's what many people are saying.

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Perry, there is a difficulty in the farm community. We recognize that, and we must make sure that all commodity groups are treated well and fairly. We've had representation across this country. Yesterday in London we had four different commodity groups. We had supply management groups in Toronto. And we have listened to all aspects. Certainly we'll try to gather... It's difficult to make a comment and consider everyone's issues and deal with those, but we will do the very best we can.

To everyone, thank you very much for attending. We very much appreciate it. Have a great weekend.

The meeting is adjourned.