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]

Tuesday, May 4, 1999

• 0835

[English]

The Chairman (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): I would like to call this meeting to order and welcome the minister.

Thank you very much for coming, Mr. Marchi.

I want to remind members that the minister has cabinet this morning. We're going to finish at 9.50 a.m. at the very latest.

As well, good morning to Mrs. Steidle and Mr. Wright.

Minister.

Hon. Sergio Marchi (Minister for International Trade): Thank you very much, Mr. Chair. It's a pleasure to be back.

You all know Rob Wright, the Deputy Minister for International Trade, and Doreen, director general for the corporate division within the department.

I'm going to be very brief in the opening statement so that we can leave enough time for comments and questions.

Generally speaking, let me say that as trade minister, I'm proud that Canada is on the right course in terms of trade internationally. I think that's because our course is clear.

First, we've always been a trading nation. We therefore need to both maintain that in a increasingly competitive world and broaden the base.

As I've said before, we need to do the following: expand the trade culture beyond simply the top and biggest corporations of our country and make our small and medium-sized firms truly international; encourage our youth entrepreneurs as well as our women entrepreneurs, who own or direct 30% of our companies, to go beyond our borders; and harness the aboriginal entrepreneurship nationally so that trade isn't the purview of only a few large corporations but is thought of automatically by all of our companies in Canada.

As a result, not only will we maintain our premier trading nation status but I think we also will maintain that competitive edge in terms of our competitors abroad as we concentrate on broadening our base of exporters, with more exporters sending more goods as well as services to more destinations around the world.

With regard to trade promotion, clearly this is an area where government tries to assist in the promotion of those products, goods, and services by our companies. Last year we had $367 billion worth of exports. That's the seventh consecutive year of record-breaking levels. So the exporting community continues to do not only well but also better than years gone by.

As well, last year foreign direct investment increased by $29 billion, which brings the total to $217 billion in terms of foreign direct investment in Canada.

Earlier this year I had the pleasure to lead a trade mission to the Middle East. It was very successful, particularly in terms of our 30% increase in trade with Israel, a free trade agreement partner. As well, we took some very innovative and first-time steps in both the West Bank and Gaza with the Palestinians.

In California in April, we took the first-ever youth entrepreneurs mission as a statement of the capabilities of our young entrepreneurs. We focused on three sectors in the Silicon Valley—the Internet, the environment, and animation technologies. We took 62 participants. It was a very successful and very eye-opening mission to that part of the world.

Next month the Prime Minister will be leading both a state as well as a trade mission to Ireland. Trade will be a focus, but we'll also be learning from them in terms of what they are doing to attract incredible amounts of foreign direct investment in that country.

Next month as well, together with Bill Daley, we'll be hosting the first-ever United States-Canada business women's summit. This builds quite successfully on the first-ever mission to Washington two years ago and on the research coalition put into place.

This is an attempt to try to understand not only the role women entrepreneurs are playing domestically in our country in a big way but also the challenges facing those women entrepreneurs as we encourage them to also become exporters.

• 0840

In the fall, there most likely will be another Team Canada mission. The destination hasn't yet been finalized, but it continues the very important series of Team Canada missions. This would be the fifth.

As you will recall, last January it was postponed. Rather than lose the cycle, the Prime Minister and the premiers want to ensure that we get a Team Canada mission in this calendar year. Again, in all likelihood that will be slated for the fall.

To build on the trade mission's efforts, we've tried to engender a greater discipline within the federal government. We created, as you know, Team Canada Inc. We started with three departments, ours and the departments of industry and agriculture. I'm happy to say that we now have all 20 of the federal departments that have anything to do with trade under that one umbrella.

So we're beginning to have one-stop-shopping delivery. There's nothing more frustrating for business people than to either not find the right information, and sometimes get contradictory information, or to see the buck get passed from one department to the other.

Not only that, but the provinces have also bought into Team Canada Inc. There's a positive government synergy there that tries to complement the very exciting opportunities the business community is clearly finding.

As well, we want to pay a little more attention to the investment side of the equation. Clearly, investment is leading trade around the world. It's the flip side of trade. We need to probably be more aggressive on the investment side. I think our investment figures are going up, but when you look at market share, our market share has gone down.

The world has become more competitive. Countries who weren't in the business of attracting investment now are, and are offering very attractive inducements to that global movement of investment.

To be frank, if Canada is to keep up with the Joneses around the world, we need to talk about not only trade promotion but also investment promotion.

One of the programs created following the second red book platform was PEMD-Investment, which borrowed from the very successful original PEMD. Now that we've put this into place, the federal government is working with municipalities to try to help support their programs for attracting investment in those local communities. This has also been a project that I think speaks well of the Team Canada concept at home, and not only with municipalities; it also enjoys the buy-in of the provincial governments. In fact, provincial government representatives are on the local committees that screen the applications for PEMD-I.

The KPMG study has said we're on top in terms of a comparative analysis, but obviously, as we all know, it's tougher to stay number one. There's strong competition from the United States. When we look at investment coming into North America, our competition is obviously our neighbour to the south.

Another initiative upon which we're embarking as a new initiative this summer is to move four or five investment counsellors to four or five key posts around the world. This is an attempt to reflect the importance we wish to put on investment. These counsellors are not only trade commissioners but obviously experts in the investment business. They will try to leverage that kind of message to those four or five key posts.

As a result of that pilot, if you will, we obviously will be evaluating how many investment commissioner corps we wish to develop to complement the trade commissioner corps, who are, generally speaking, doing a good job. That comes from the community as well.

So promoting trade and investment means helping our entrepreneurs walk through those new doors of opportunity. On the trade policy front, we try to keep those doors open.

On the trade policy front at home, we need to engage Canadians, as this committee clearly is doing. We want to find out from Canadians how they line up in terms of the new round at the WTO that will probably be launched at the Seattle meeting of WTO ministers later this year, and how they line up on the Free Trade Area of the Americas initiative.

• 0845

That's why we have the Canadian Gazette notice. It's to invite public opinion from far and wide.

As well, later this month we will be holding a meeting with the multi-stakeholders. With business, we consult with them through the SAGITs and the Team Canada Inc. advisory board.

With the provinces, not only have we had, and have now again, regular federal-provincial ministerial meetings, which have worked very well—I compliment all of my provincial colleagues—but we also have, of course, our officials.

Beyond our borders, on the policy front, the meeting in Seattle this year is going to be absolutely crucial in launching the round and in deciding the ultimate shape and tone and time of that round.

As we talk about WTO, I think the accession of China will be increasingly an issue of importance as we come close to launching that round, given its size and the state of negotiations.

As you know, when Premier Zhu Rongji visited Canada, he and the Prime Minister were able to in effect get an agreement in principle on goods. I think we've narrowed the gap on services, but there's still some work and movement from the Chinese on services. I predict they will be able to successfully close on goods and services. The American negotiators are there as we speak, and we will be sending ours soon after they are complete to try to keep the momentum that I thought he generated through his visit to Canada.

Next week the so-called quad members are meeting in Japan. This includes us, the Americans, the Europeans, and the Japanese. Traditionally it's been a very important meeting, a very straight-up meeting, where you do quite a lot of business.

The number one topic on the agenda is clearly the WTO round, to see if we can build a consensus among the four members that we can then leverage in terms of creating a critical mass of support and momentum going into Seattle.

The Free Trade Area of the Americas continues to be an important policy goal of this government. As you know, Canada is currently the chair. In Toronto in November, we will have the ministers of trade from the 34 countries. That will be preceded by an Americas business forum, which will attract over 1,000 business leaders from those 34 countries. That will culminate our chairmanship before we hand it over to Argentina.

Just recently, as you know, we had the fifth anniversary of NAFTA, which has been, I think by any measurement, a very significant success in the first five years. There are still other opportunities, and challenges, quite clearly, to overcome, as we chart the next leg of that journey.

In terms of Europe, I would hope that we can conclude a free trade agreement with the EFTA partners. We continue to work on our action plan with the EU. The Prime Minister will be having his EU-Canada summit next month in Cologne, right on the eve of the G-8.

APEC is moving to New Zealand this year, as you know. Hopefully we can ramp it up from where it was in Malaysia and then move some of that work into the WTO, given the prognosis for that round.

As we do all of our policy work, clearly Canadian values and Canadian bottom lines will continue to run through all of our negotiations.

Finally, you will appreciate the challenges we face as a department, doing all of those things and more with our current financial resources. The main estimates for 1999-2000 indicate $1.35 billion, an increase of about 6.6% from last year. There's very little additional funding for any new initiatives. You should know that.

Basically all of the moneys will be used for the following: (a) higher costs abroad, thanks to inflation; (b) membership in a number of international organizations; and (c) to make sure our computer systems are ready for Y2K.

To a certain degree, our financial base acts as a constraint. If you look at the demands from the exporting community and civil society, they want more trade and investment promotion. They want more of our people to negotiate the right deals in terms of policy, because that keeps the doors open. Canadians want more, not less, consultation. However, all three mean more dollars.

• 0850

To a certain degree, then, we're facing a constraint, given the fact that all the moneys for trade, with the exception of $16 million for both PEMD programs, goes to paying salaries.

Now, I'm not apologizing, or saying that's bad, because our greatest strength is people—people on the ground in Canada and people on the ground abroad, helping our companies do what they do best—but you should know that the discretionary part of the trade department is only $16 million in terms of the PEMD programs.

I will conclude my opening comments there, Mr. Chair, and certainly would be happy to entertain questions and comments.

The Chairman: Thank you very much, Minister.

Having just spent our time going back and forth across the country in the consulting process, we would certainly agree with you that Canadians are showing a real interest in being engaged. The problem is going to be to find the resources and the ability to allow them to be engaged at the level they want to be. It's certainly going to be difficult enough for us, and it's going to be a big pressure on the department as well, I think.

Mr. Penson.

Mr. Charlie Penson (Peace River, Ref.): Thank you, Mr. Chairman.

I welcome the minister and his officials.

I would just pick up on what our chairman was saying about our week of cross-country hearings. After the MAI, some of the groups have had some new-found energy to attack the expansion or liberalization of trade and investment through the WTO. I think you're going to be hearing lots about it from the groups that appeared before our committee.

I want to pick up on what you said about investment. I notice you said that direct foreign investment in Canada is $217 billion this year. I'd be curious to know the figure for outward investment by Canadians. I know the last two years it had surpassed the direct foreign investment in Canada.

I'd like to remind you, Mr. Minister, that when you talk about Canada being a good place to invest, I agree, but we are facing strong competition from the United States. I would suggest that a big part of that could be lower taxes. We certainly see that in Ireland, where they're attracting a lot of foreign investment with their tax system.

I'd also like to ask a question in terms of China entering the WTO. I know you've held talks in the last few weeks. I'm wondering what Canada's priorities are in terms of what criteria we would put in place for China to enter.

For example, on the state trading enterprises, what is our goal in terms of how their state trading enterprises have to be transparent, or perform?

As well, how are they going to be entering? Will it be as a developing country in terms of meeting the timeframes of developing countries or will it be on the same timeframe as most other industrial countries, who have to meet certain schedules?

Mr. Sergio Marchi: Thank you, Charlie.

On the first point, outward investment continues to grow and be greater than the incoming foreign direct investment. The year before, it was $188 billion to $171 billion. The new figure I quoted is for FDI inside Canada. The figure officially last year for outward investment was $239 billion.

What that says for me, though, is that companies are really coming of age. It means Canadian companies are aggressive in other markets. It also means we have to recognize, if we want investment in Canada, that investment is a two-way street. We can't expect to say to companies, okay, you invest here, you do joint ventures with our companies, and you create jobs as well, but we won't invest in your markets.

So clearly Canadian companies are very aggressive, and that's part of what we have seen in the last 10 years in terms of Canadian companies adopting a very outward-looking characteristic to their business plan.

As well, outward investment also creates jobs and trade on its own. We're finding that when many companies do the initial investment in particularly developing countries, that then strengthens and bolsters and creates new trade links between those two countries.

So I see it as a very positive statement. It also means we still have to interest ourselves in the whole issue of investment rules.

• 0855

I know the MAI at the OECD has run its course, but the concept of multilateralizing the more than 1,500 protection agreements is very important. This figure shows that it's not simply a question of what companies doing business in Canada can enjoy in terms of law but also the need for our companies abroad to have protection agreements that would ultimately protect the investments they are making.

With regard to China, we've always believed we should have China come into the WTO sooner rather than later. We believe this would be a win-win. China would gain both politically and economically, I think, by its membership in this club—if I may call it that—and the WTO clearly would be more complete with the economic power China is and will continue to become.

As well, we would be profiting from the fact that in the WTO, China would obviously have to live under the rules of the WTO. For Canadian companies, I think this will translate into more trade and more successful investment. Clearly the transparency of rules is very important, and in a country like China, where things are quite ad hoc....

For instance, on the issuing of insurance licences, we were able to obtain this, after many years of knocking on their door, for Sun Life, the second one after Manulife. Under the WTO, that ad hoc side of the business would fall by the wayside.

Our priority now would be to try to close the gap on the services side. I think there is still room for improvement in terms of telecoms, which are very important to us, information technology, and the financial services sector.

These are areas that parallel the United States'. Many people thought they were going to close their deal while Mr. Zhu Rongji was in the United States, but it was the services side of the bargain that was still showing some gap. I'm hopeful that by the time we get to Seattle in November for the meeting we will have been able to close the gap on the services side with the Chinese.

Mr. Charlie Penson: What about the STEs? Are you going to leave that to the future round to resolve? If China is part of the deal as of September, if the announcement's made at the ministerial, how are you going to treat the state trading enterprises? They do have the ability to subsidize...unless they're transparent.

Mr. Sergio Marchi: Ultimately, those large enterprises, which certainly occupy a lot of the political attention in terms of the premier of China....

I think it's probably his number one priority to get those state enterprises under control. I think there's been a lot of work done in this location that he's had to worry about. Ultimately, though, I would envision that those would fall under the guise of the WTO.

I'll allow my deputy to perhaps offer a more technical response to the question, Charlie.

Mr. Robert G. Wright (Deputy Minister for International Trade, Department of Foreign Affairs and International Trade): Definitely we'd want to see the general rules that we're negotiating with the Chinese apply to their state trading enterprises to bring more transparency to the system. It's a way for us to look in and ensure that the systems they have in place conform to the rules that are already existent in the WTO.

Mr. Charlie Penson: I'd like to make a short follow-up on the investment side.

I'm happy to see the investment by Canadians outside of Canada growing. Largely I would agree with you that it shows a new confidence by Canadians investing outside of Canada, but there is another element. Sometimes policies or other factors drive Canadian companies to look for other opportunities. I think Chile is a good example of that with our mining industry. B.C., on the other side, is one of the ones that's losing investment in Canada by Canadian companies.

So I think we also have to be conscious that it's a double-edged sword to some extent. Canadians leave for other reasons as well, not just new opportunities. They may not be happy with the investment environment here at home.

Mr. Sergio Marchi: Domestic policy instruments ultimately affect the comings and goings in terms of investment. Clearly that is the case.

• 0900

I think we have a very competitive and very attractive environment for investment. The kind of work I think our government has been able to do since the first mandate, putting the fiscal house in order with regard to our inflation and interest and monetary policy, and the competitive nature of our dollar along with the quality of life that sometimes is seen as the soft side of the equation—all of this, added up and compared with constituencies around the world, shows a very healthy, very welcoming investment environment.

Now, I would say the job certainly is not done. We should continue to build on that attractiveness. I for one think the gap on taxes between the United States and Canada needs to continue to be closed. The Prime Minister and the Minister of Finance have stated repeatedly that we have started that work, and that work needs to continue. Whether it's going to be on par with the United States, the challenge clearly is to continue to close that gap.

The whole issue of how to retain the bright people coming from our schools is another question. How do we create Silicon Valleys in Canada, as we have started to do? We're producing world-class individuals. How do we continue the work of building an environment that retains more of them for the growth of Canada's new-technology side of the economy? How do we attack the whole question of stock dividends? That's something the high-tech community has been bringing to my colleague, the Minister of Finance.

Talking about increasing salaries is almost yesterday's discussion. When we went to Silicon Valley with our young entrepreneurs, it was incredible. Three things hit you as soon as you got off the plane—one, the incredible energy found in San Jose and San Francisco; two, the entrepreneurial culture and attitude that embraces that area; and three, the whole question of risk after 30 years of venture capital history. Those venture capitalists will tell you that sometimes they get two out of ten. They lose eight, but, boy, when they score on those big two, it really makes a difference. Here in Canada, it's almost the reverse.

So we need to build on and learn from that energy, from that entrepreneurial culture. They will tell you that the play is on the stock actions for their young employees. The more they get to make, the more they will work, and the more they will be creative. The more they become creative and work, the larger the company grows and the more job opportunities.

What, then, are the inducements to creating that kind of culture or strengthening that culture at home? Those are areas that clearly we need to continue to work on, but to say that our environment is the driving force behind these statistics is simply not on. These statistics are as a result of, first, Canadian companies coming of age, and second, business being very much global. They need to be in those marketplaces to continue to do well.

Mr. Charlie Penson: Tell that to the companies that are still left in British Columbia, Mr. Minister.

Mr. Sergio Marchi: But I do. When we take companies with us on those trade missions, clearly we continue to build on our domestic policy tools.

Charlie, the world is not as dark in Canada as you and your party would like to make it. There are a lot of assets going for this country.

Mr. Charlie Penson: It's just that they seem to be moving to Alberta now.

Mr. Sergio Marchi: Yes, we need to continue to build it up, but don't put it down. Let's build it up. Let's continue to improve. Let's do it at a bottom or basement level. Let's not question every report that shows Canada is doing well, as your party likes to do.

Mr. Charlie Penson: Well, Mr. Minister—

Mr. Sergio Marchi: Whether it's the KPMG, whether it's working with Brazil against Canada, you take a very negative, hard attitude against your country instead of saying, look, we're doing well—

Mr. Charlie Penson: That's nonsense.

Mr. Sergio Marchi: —and our companies are doing well. How do we continue to make sure we do well?

Mr. Charlie Penson: When you talked about being in the Silicon Valley, I noticed that you said one of our best exports was our school system. I wonder about that attitude, exporting all our bright young people to the United States.

Mr. Sergio Marchi: First, when you read the speeches, you should quote them back accurately. I talked about our schools producing world-class students.

Mr. Charlie Penson: That seems to be our best export.

Mr. Sergio Marchi: For instance, Waterloo University is certainly a university that Microsoft looks to. Sheridan College is producing world-class animation graduates.

• 0905

We shouldn't apologize for that, Charlie. We shouldn't apologize for having schools that produce world-class candidates.

Now, the question then becomes, how do we retain more of those graduates in the animation industry in Canada, or in the high-technology area in Kanata? Clearly, that's something we're working on, and I would like to see more of those students retained in Canada.

Are you suggesting that somehow we shouldn't be producing world-class students?

Mr. Charlie Penson: It starts off with government attitude towards business, I would suggest.

Mr. Sergio Marchi: Are you suggesting it would be better for the Silicon Valley not to look to Canada because they assume we're not producing the kinds of grads they need?

What I'm saying is, yes, our schools are world-class facilities, and if you're not proud of that, tough, because I am.

Mr. Charlie Penson: If you're asking me the question, I would answer that I think it starts off with the government attitude towards business.

Mr. Sergio Marchi: But now you're going all over the place. You're misquoting speeches, you're bouncing around.

Mr. Charlie Penson: We could debate this, if you like—

Mr. Sergio Marchi: If you start an issue, you should finish it.

The Chairman: We're going to have to move on, I'm afraid. We're well over the 10 minutes allotted to Mr. Penson.

I'm going to go to Mr. Sauvageau.

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Marchi, I would like to wish you good morning, and also to Mr. Wright, Ms. Steidle and the dynamic team with you. I am pleased to meet you.

Mr. Marchi, it might be a good idea for you to go and express your love in Mr. Penson's riding to show how well Canadians understand each other, since things do not seem to be going so well there.

[English]

Mr. Charlie Penson: Things are going very well there, in spite of your government policies.

Mr. Sergio Marchi: Charlie hasn't had breakfast.

Voices: Oh, oh.

[Translation]

Mr. Benoît Sauvageau: My questions will deal with the estimates you tabled. I would like to ask you a number of questions, but I will try to be brief.

My first question deals with table 3.1, entitled “Capital Expenditures, by Sector of Activity” on page 56 in the French version of part III of the 1999-2000 Estimates. Under departmental services, it shows a budget of $136 million for 1998-99, and $111 million for this year, followed by $103 million and $55 million for the upcoming years.

I wanted to ask you for fun if those departmental services were for your personal expenses. If so, you are being very frugal. Seriously, could you please explain this budget item of departmental services that is shrinking so quickly.

Along the same lines, I would like you to explain the reductions under Contributions, Trade and Economic Policy, in table 6.1 on page 60. Last year, $85.7 million was budgeted, while for this year and the next two years the amount is $26.3 million.

Could you explain that to us?

[English]

Mr. Sergio Marchi: I'll ask Doreen to get into the specifics, but on the first one, the ministerial services, in English it translates as “corporate services”. As part of the program review, we've had to tighten the belt, obviously, and this is one area we've committed to tightening. So it's on a downward slope.

In terms of the differential between last year and this year with regard to trade and economic policy, that decrease has to do with the softwood lumber agreement in that we've been collecting these fees and then reimbursing the provinces. That's why there's a differential.

I'll ask Doreen to give the full answer to both those questions.

Ms. Doreen Steidle (Director General, Resource Planning and Management Bureau, Department of Foreign Affairs and International Trade): Thanks very much.

Perhaps I could add a word of explanation.

The forecast spending column has to do with spending in the fiscal year that's just finished, but this book was published in January. Consequently, we forecast how much money we would be spending in each of these categories.

The forecast spending is our main estimates appropriation, plus any supplementary estimates we receive through the year, plus vote-netted revenue.

• 0910

So there's always a bigger portion of money, a larger sum, in forecast spending than in planned spending, because the department is heavily reliant on money received from Treasury Board during the course of the year.

In the case of table 3.1, corporate services, that does reflect money the government has given us for 2000 to modernize our computers for export/import control systems, etc. A portion of that money is from the receipt of revenue generated from sales of our property abroad.

That explains the large increase year over year, but normally our base is quite low.

With regard to the policy on trade and economics, it is exactly as the minister has explained. Money comes into the department from Treasury Board for softwood lumber and is given back out immediately to the provinces, but because the amount varies each year, it's only reflected in that initial column.

[Translation]

Mr. Benoît Sauvageau: Thank you.

Mr. Minister, in your message on pages 1, 2 and 3 that serves as an introduction to your Report on Plans and Priorities, the last sentence of the first paragraph reads as follows:

We engage Canadians to reinforce awareness of the links between our foreign and domestic interests as well as Canadian values and culture.

In the middle of the second paragraph, it says:

The Department similarly promotes Canadian culture and studies abroad as a means to give expression to our values...

I would question those statements. At a time when you say you are promoting Canadian culture, the Department of Canadian Heritage is carrying out Canada-wide consultations to define what Canadian culture is and to develop a policy on it.

When we went together to Chicago, the cultural stakeholders that we met there asked us what Canadian culture was. At the end of our meeting, you seemed to be a little shaken by the honesty and sincerity of what was said.

I have questions about the definition of this so-called Canadian culture that you are promoting and especially about the role you are giving Quebec culture. In their speeches, do officials promote a regional aspect or a distinct entity as it is defined in Quebec, that is, Canadian culture but also Quebec culture?

[English]

Mr. Sergio Marchi: And I think Céline Dion is both—

Mr. Benoît Sauvageau: Oui.

Mr. Sergio Marchi: —unlike what some colleagues in your party believe.

I think Canadian culture, in this reference, is two-fold. First, when we talk about Canadian values in culture, it talks also about an approach to the world, an approach to how we can engage, an approach to how it's not any deal, any where, any time, at any price.

The second is pure cultural exports. I don't have the figures at my fingertips, but in terms of exporting Canadian culture and assisting in the promotion of our Canadian artists, whether they be our books, our poetry, our movies, or our singers, the pure export of Canadian culture is increasing dramatically.

I think this reflects the strength of not only the product but also the viability of that culture beyond our own borders. There is an appetite and a market for that.

Finally, I think this country builds on the strength of its regions, but when you ask how I view Quebec culture and whether it is regional or it meshes with and contributes to the national fabric, I would say clearly it does both. There are regional cultural manifestations that truly are attractive across Canada and across the world, and then the Quebec culture, the francophone culture, meshes nicely with the culture brought to the table by all Canadians, and gives it a very unique, attractive dimension.

So I don't think it's a question of either/or. It's a question of both, of trying to understand that, and of trying to encourage both a regional and national pan-Canadian culture.

• 0915

[Translation]

Mr. Benoît Sauvageau: You are saying at the same time that it is an aspect of our national culture and that it is unique. Your department is changing the focus of the negotiations on culture, putting aside the cultural exemption and focussing more on a world cultural charter. If Quebec culture is unique, will it be able to be heard and given a unique place in that charter? How will it be heard through the voices of federal officials in the negotiations for the development of that charter?

[English]

Mr. Sergio Marchi: What I've been saying in terms of culture from an international trade perspective is that I very firmly believe we will need, sooner rather than later, rules at the WTO on trade and culture, the same way we try to approach trade and the environment, trade and labour, and the other disciplines.

As trade becomes increasingly local, and as domestic trade and foreign policy become more intertwined, I think it's clear that domestic policy issues will be on the international tables around the world. It's not that trade can be the saviour of all the ills of the world; it's just that trade needs to be seen as part of the solution and not part of the problem.

That's why I think what's missing at the WTO is the whole issue of rules on culture. What are legitimate versus illegitimate forms of cultural protection or promotion? Increasingly, more countries rather than fewer want to be clear on how culture works at the trade level. What are areas that should be off limits and what are areas that clearly should be within the trading regime?

Now, within that, I think that will be an added support for a country like Canada, which prides itself on promoting the differences between us and the Americans, for example. Within that, I think it will be a clarifier for Quebec as it will be for other provinces that seek that same clarity.

So I don't think it's a question of changing our tactics; it's a question of having the WTO change with the times, not only for Canada but I think for many countries in the international community.

The Chairman: Mr. Reed.

Mr. Julian Reed (Halton, Lib.): Thank you very much, Mr. Chairman.

Minister, I'd like to welcome you here this morning.

Just before we get into it, I want to set the record straight about the tax wagon that the Reform Party is on here.

They talked about Ireland and tax regimes. To put some balance into the equation, the last I heard, the consumption tax in Ireland was 33%, totally hidden.

So let's put some balance into the thing when you start to argue taxes.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Reform research is an oxymoron.

Voices: Oh, oh.

Mr. Julian Reed: I won't get into that.

Minister, the bulk of trade we do around the world is done problem free, especially with the United States. The very largest percentage of trade is done without problems. But there is a small percentage that is vexatious from time to time, and it seems to repeat itself and raise its head and so on. It's the stuff that gets the ink. It gets the press.

It's like an airport having a thousand safe takeoffs and landings every day; let one plane come in with a nose wheel that's not all the way down and, boy, it's on the front page of the paper.

We experience a very similar thing in trade. It causes a lot of knee-jerk reactions among protectionists who say, oh, well, it just shows you; this stuff isn't working.

• 0920

I wonder if you would mind commenting on the effectiveness of the dispute-resolving mechanisms we have in place. Are they good enough? Are they doing the job Canada would like them to do?

Mr. Sergio Marchi: Thank you, Julian.

I think the fact that Canada has been able to do so well vis-à-vis the United States, despite being...[Technical Difficulty—Editor]...due to the abilities of our Canadian firms and the quality of the services and goods for the United States.

Secondly, it's due to the types of rules, including the dispute settlement mechanisms, that have been built into both the original FTA and NAFTA.

That clearly is the message of the modern age vis-à-vis trade, that without rules, you won't allow countries to prosper, particularly countries that are smaller or may have disadvantages not facing other neighbours.

I'm not just talking about our lot in life. When you look at Latin America, where you have the giant Brazil, or in other parts of the world, clearly there are various sizes of country economies and different economies based on different goods and services.

You need rules to be the levellers. Where you have rules, then it's up to the competing countries and companies to do well. I think certainly that's part of the success story of NAFTA, and that's why we bring that discipline of rules into all of our negotiations, whether it be the Free Trade Area of the Americas or at the next round at the WTO.

Secondly, you're right that we're fond of quoting 96%-plus of the $1.5 billion Canadian that moves between our two borders every day, hassle free. If you take a look at the size of that relationship, it should be a pleasant surprise, given the protectionist mood of America, that 96% of all the things that come and go do so without a problem. That's a huge success.

You're right that the last 4% or 5% are the usual suspects, or the usual culprits. We've been unable, as the two countries engaged, to settle the areas of the commodity differences—that is, fish and lumber. I think it certainly drives a message to both countries to do better and try harder—and we have. Ever since the governors blocked those trucks, once those trucks were let go we sat down at the table and hammered out an approach and an agreement as to how we would be able to settle those disputes, not only between governments but also among our respective stakeholders so that they can be familiar with the facts and not the fiction of what goes on south of the border, or sometimes on both sides of the border.

Commodities have taken a huge whack in the last number of years, in good measure because of what's gone on in Asia. As a result, those sectors are hurting on both sides, which manifests itself in representations to the political arena for some kind of assistance or intrusion.

So we have to de-escalate that. We have to show American farmers that our farmers are also hurting, that our farmers aren't playing according to the myths that perpetuate, and that our farmers want to play by rules that are good for both sides. We have to do a better job, quite frankly, of how we address the last five yards before the goal line.

Thirdly, what has I think cropped into the equation as well is that because of the increased protectionist mood of Congress, and the inability sometimes for the administration to ride over or around these unsubstantiated pressures, we get an administration that sometimes is too focused on managing the trade, on trying to limit our goods and services.

It's a free trade agreement, not a managed trade agreement. It's not a one-way agreement but a two-way free trade agreement. I think we need to avoid that tendency in America to manage, to cap, to limit, to put a ceiling on things.

• 0925

I think that's why there's now debate in, for instance, the softwood lumber industry. A few years ago, the industry was virtually unanimous in asking the government to negotiate an agreement on softwood lumber that would give them a market share guarantee. Now there are rumblings from those who want to keep it or change it or amend it, and there are those who want to have nothing to do with the agreement because they've seen the shortcomings involved in freezing an industry.

So those tendencies have grown, and we've tried to push the administration to push their congressional pressures. We have them as well, but we don't always jump just because an individual or an interest goes to a senator or a member of Parliament or a minister. Their system, though, is very much more hyper than ours. Sometimes one senator and one congressman makes the administration jump.

I don't think they should, because every time they jump, we get the phone call. I don't want to be answering those phone calls on a daily basis, because I think they need to push it back. Otherwise, they will never sell to America the prospects of liberalized trade the way they should.

Mr. Julian Reed: I can tell you that in the riding I have the honour to represent, liberalized trade has meant more to its economy than any other single thing. I think Canada has done a phenomenal job that often goes largely untold to its own people, perhaps, in terms of the impact of the freeing up of trade. There are industries, medium- and high-tech industries, in the riding I serve that were near extinction a decade ago but are now prospering because of liberalized trade.

Thanks, Mr. Chairman.

The Chairman: Mr. Blaikie.

Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Chairman, my apologies to the minister for not being here for his statement. I had another meeting I had to attend.

I wanted to ask you a question or two coming out of the meetings between the minister and the U.S. and Mexican trade representatives, mostly having to do with the investor state mechanism.

I notice that Barshefsky said you did not discuss—and I quote—“the substance” of the investor state mechanism. Given that it was one of the goals of Canada going into this meeting to try to get some changes to the investor state mechanism...or at least I hope it was. I know you didn't get any changes. You were looking for a memo or an interpretive note, and you didn't get that.

What did she mean, do you suppose? Now, you might say I should ask her, but when she says you didn't discuss the substance, is that true? Did you not discuss the substance of the mechanism?

Mr. Sergio Marchi: No, I think we discussed the substance....

Let me preface my remarks by saying that this was an issue that Canada certainly did make an issue. We were instrumental in organizing two meetings among officials prior to the NAFTA commission, strictly on the whole question of chapter 11, from the standpoint of making it more transparent when a company challenges a country under the clause and with an aim of restricting, not expanding, the definition of expropriation.

There was to be a third meeting in preparation for the commission, but it didn't take place.

Secondly, it was on the agenda as a result of Canada's insistence. As Charlene talked about, I think it was reflective of an issue that I think Canada and the United States see eye to eye on. Mexico is still not there yet. As you know, in a commission of NAFTA, it takes three to tango.

• 0930

We had a good, long discussion, but in the end it was the position of Mexico that they did not feel this was an issue that required change at this time. None of the issues had been dealt with by a panel, in their conclusion, and there was a preference to see these issues through the various panel stages.

Notwithstanding that position, all three of us agreed that we will continue to do the work and analyses that I believe are necessary on this issue to try to anticipate a challenge that is going to perhaps get more acute than better in the short term.

So I think that was their way of saying there wasn't unanimity. Clearly it has been an issue, was on the agenda, was well discussed, and will continue to get discussed. Two of the three partners saw eye to eye, but the third was yet to be convinced.

Mr. Bill Blaikie: Just following up on that, Mr. Chairman, the minister will recall that in the late, unlamented MAI, Canada was trying—and it was said many times by Mr. Dymond, by you, and by others—to replicate the NAFTA agreement in the MAI.

Given that you'd now like to change the NAFTA agreement, particularly in respect of the investor state mechanism, does that mean, in any future discussions at the WTO, perhaps if there is an investment round, you will no longer be doing what you were doing in the MAI—that is, saying you want in the MAI what you have in NAFTA?

Will you be now taking the experience you've had in NAFTA to any future discussions about investment, saying you don't want to have in any future investment agreement what you have in NAFTA, but something different? Because that's the position you're taking at the NAFTA now.

Mr. Sergio Marchi: What we said, Mr. Dymond and I and others, in terms of investment at the MAI was that we were prepared to do both what we did under NAFTA, not beyond, and how we did it vis-à-vis the sectors as well as with the federal-provincial relations in terms of the investment chapter under NAFTA. We thought we should not and would not go beyond what was agreed to with the provinces at the time of the NAFTA and the FTA. That was the first statement.

Secondly, Bill, at the MAI, Mr. Dymond was in fact one of the individuals around the table of 29 who moved wording to actually provide a rider that would make the interpretation of expropriation much narrower. So the work at the MAI in fact started the work of trying to bring a narrower interpretation that would allow, and permit as a right, the governments to regulate and legislate for the national interest.

What we have taken into NAFTA, Bill, has been exactly what Mr. Dymond was trying to do on the expropriation basis at the MAI. Consequently, if investment is to be a sector in the round, we will continue to argue there what we've argued at NAFTA and what we've argued at MAI to make it consistently the same.

Mr. Bill Blaikie: Well, I have to say I have a completely different impression. I heard over and over again that what Canada was trying to do at the MAI was to replicate—and that word was used over and over again—what we had in NAFTA. But fair enough.

This has to do with the committee, in many respects. On a couple of occasions now I've seen statements coming out of your office about what Canada hopes to achieve at the next round of the WTO negotiations, yet this committee is actually in the process of having hearings about not just what Canada's strategy should be...although that's the formal title. Certainly we've had a number of witnesses who have tried to make arguments about there not being a need for another round at this point, that developing countries need time to get the Uruguay round implemented, and that there are other things that need to be sorted out before we plunge the world into another round of change.

My concern, having seen some of these, is that it seems to me the government is on the one hand asking the committee to hear Canadians on the WTO when certainly we've heard from some Canadians the view that there shouldn't be a round. We've heard not just from people who are dead set against the whole thing but also from others who are in favour of multilateral trading rules but feel there needs to be more time, etc.

• 0935

The government seems to be jumping the gun here, saying, well, the government has already made up its mind, or there should be another round and this is what we're looking for.

They're making presumptions, it seems to me, about the judgment or the work of the committee in that respect. What if we were to recommend that there not be another round? I'm not saying we will, and I doubt the committee would recommend this, but it seems to me the government has already made up its mind.

Mr. Sergio Marchi: First, Bill, I think there's already a built-in round from the Uruguay round. We already have services—

Mr. Bill Blaikie: It's on the agenda, but not a full round.

Mr. Sergio Marchi: —and agriculture on tap this year.

Second, when I came to the committee as I guess your first witness on your WTO reference, I gave my preference as to what I think should happen. I also listed a number of areas that I thought would be valuable for a country like Canada to add to the whole issue of services and agriculture.

If it stays at just those two sectors, services and agriculture, particularly agriculture, then I don't think we'll have any success whatsoever. So I think there's a need to have an add-on.

Third, what I also said in that statement—and I'm basically using your word, “replicate”, or my word, since you were using mine—is that I replicated that address in various places. I didn't go beyond it. I basically said, okay, here is what I think ought to happen, and here are some sectors.

We also said that we take some degree of exception to those who want to have a totally comprehensive round—that is, anything that wasn't finished in Uruguay, let's do the whole waterfront now. Let's do another seven-year journey.

We've expressed disagreement on that front. I would agree that would probably intimidate a number of countries who are still consolidating, as you suggested, from the Uruguay round.

We also took exception to the American view a year ago of cherry-picking. They would say, no, let's just do one sector at a time. But those probably would be sectors they would want to cherry-pick.

As long as you're picking the cherry, that's okay, but if you're the cherry, you're going to say, well, hold on a second, Lone Ranger, because kemo sabe isn't very happy about this.

So we suggested that a sectoral approach wasn't the answer either. We've tried to articulate a more manageable, more digestible, and more timely three- to four-year round. A round has a lot of different meanings for a lot of different people, but we believe that middle course would be attractive for Canada, given that many stones have been left unturned after the Uruguay round. I think it would be an attractive approach to dealing with the international community.

That's been my approach. I'm glad the committee is going across the country and is preparing a report of those submissions to see whether that is corroborated or not, or what sectors you have found that should be added to or subtracted from the list. I certainly look forward to getting that report.

What you got from me was a sense of where the Government of Canada is looking, what we're looking at, and how we should approach that. Clearly the country needs to be taken into the consultations—to subtract, add, completely eliminate, or move it onto a whole new course.

The Chairman: Thank you.

Mr. Bill Blaikie: Mr. Chairman, I guess we'll all have the task of reflecting on the metaphor of the cherry-picking Lone Ranger.

Voices: Oh, oh!

The Chairman: When you say kemo sabe, we know what you.... You might just say de nada.

The minister has only 11 minutes left, so we'll go to our 5-minutes rounds now.

Monsieur Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): Thank you, Mr. Chairman.

[English]

Thank you, Minister. It's been very interesting.

I have two very short questions. Maybe I could share my time with one of my colleagues.

First, with regard to the answer you gave Mr. Penson on the entry of China into the WTO, what about the other countries who want to be part of the WTO—for instance, Russia?

Second, from travelling with the committee in the province of Quebec, I would say people do agree with the WTO, but they have many concerns.

• 0940

Are you satisfied right now with the way WTO operates? In the resolution of conflicts, when you have a resolution, the reports of the panels are binding on the country. Are we losing a bit of our sovereignty here? That's a question our citizens in Quebec were asking us.

Those are my two questions.

Mr. Sergio Marchi: In terms of countries other than China, there is a list of other countries that have made application. You mentioned Russia. I think their work plan for WTO accession is not as well advanced as China's. I think ultimately it is fitting to see Russia in the WTO. I also think it's fair to say that Russia has to do a great deal more work on both the goods and services side.

Saudi Arabia is another applicant, and our ambassador to the WTO, Mr. John Weekes, is actually the chair of the working group looking at the Saudi Arabian application. This was a good part of the discussion when I was in Saudi Arabia earlier this year. As well, when the Saudi trade minister visited Canada, Mr. Weekes was in Saudi Arabia. I understand they're making a new submission in the coming weeks to improve on their package.

Other countries have made application to the WTO. From its economic impact and the proposals it has made, I think China's application is probably more advanced than some of the other countries'. That's not a criticism of one country or the other. That's simply a reflection of where the situation stands for the time being.

On the WTO, am I completely pleased with the way in which it operates? No. For instance, when we were in Geneva last year on the 50th anniversary of GATT/WTO, there were two issues. There was the substantive issue—i.e., what other sectors we need to do at the WTO beyond services and agriculture, and if there was to be a fuller round, what that means—and then there was the process question: How transparent is the WTO? How engaging is the WTO? How quickly do those reports that you suggested get translated and communicated before they get leaked and positions get hardened in a false way?

That is to say, how does the plumbing of the WTO work in order to match the poetry it seeks to serve?

I think it's fair to say that in Seattle at the WTO ministerial meeting, there will be, yes, a healthy discussion on the substance, but I think there will be an equally passionate discussion on the process question. How do we engage Canadians? How do we engage citizens from other countries? What is the role of civil society? How do we look at the two side agreements in NAFTA, labour and environment, from a more international perspective?

Those issues increasingly, because trade is becoming local, will occupy a lot more attention, I think, and we need to resolve that well as opposed to being dismissive.

On both process and substance, then, the WTO can certainly go a longer way toward bringing it closer, with greater credibility, to all of our constituencies.

The Chairman: We don't have any time left in that section, Mr. Patry, but it was good of you to offer to share your time.

We'll move to Mr. Obhrai and then the minister is going to have to go to his cabinet meeting.

Very short, Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Ref.): Thank you, Minister, for coming.

I have three questions here, but I'll make them short.

In reference to the defence contract, there seems to be some confusion. You have stated that with regard to the defence contract, the rules are on hold while negotiations are going on for extension, yet we understand the restrictions are there; the Americans are saying the restrictions are there; and you're evaluating the damage that can do as opposed to the restrictions...and things have been worked out.

Following that, on May 16 I think you have the WTO ruling that applies to Europe in reference to beef exports there. Are you prepared if Europe does not go ahead with removing the WTO...? What's the action plan? Are you prepared to put some measures against Europe or are we still going to see things slipping out of hand, as the defence contract did?

• 0945

Finally, on EDC, you stated that the focus is on small and medium-size business, and EDC is one of the tools to do the financing there. But it's come to my attention that in Argentina, for instance, EDC has been giving money to TOTAL, which is, in case you don't know, one of the largest oil companies in the world, from France. They got money out of it.

The question is, why is EDC giving money to a multinational corporation? I understand they find it's cheaper to go to EDC and get money from EDC out there.

Following that, with the entry of China into WTO, are we actually asking for a code of conduct from these countries that come in? Will the WTO be asking these countries for transparency in their dealings in global trade?

Mr. Sergio Marchi: On the question of ITAR, it wasn't a question of confusion so much as where the issue rests. When I said this was something that was a surprise to me, it was because this issue was not between the trade department and the United States trade representative; it was handled between the State Department in the United States and Foreign Affairs, each supported by their respective defence portfolios.

So the trade ministers, per se, were not engaged. Therefore, I was surprised when the decision was handed down by the Americans, because it was preceded by 40 years of good cooperation, not only between the two countries, where we enjoyed an exemption, but also between the two respective business communities.

That's why we said this issue will not only potentially hurt Canadian industry but I think will also provide some kind of disadvantage and disincentive for American firms.

I was pleased that Mr. Axworthy in his dealings with Madeleine Albright was able to get this 120-day review. I remain hopeful that once that review is completed, the Americans will see fit to see the so-called new rules in a different light. I'm hoping American firms will give voice to that need as well.

On the beef hormone, yes, Canada is serious about the issue. As you know, the WTO ruled in our favour over a year and a half ago. We have been patient during that year and a half. Normally, once countries lose a WTO case they put in force the changes or the stated changes within 30 to 90 days. So I think we have been patient for a year and a half.

We've essentially consulted with Canadians on this list. We're hopeful that the May 13 deadline will elicit a commitment from the European Union. If it doesn't, certainly all options are still on the table.

Third, I don't know the reference with regard to EDC and a multinational corporation in Argentina. I'll certainly get my officials or EDC to check on that. Candidly speaking, I don't know the case, so I'm not going to speculate one way or another. I'll certainly flag that with EDC and get back to you either verbally or by letter.

The Chairman: Minister, we heard some interesting evidence about the need for a more sophisticated form of export financing when we were in London, Ontario. Will the EDC review be coming before the committee sometime in the fall rather than the spring? Is that your understanding?

Mr. Sergio Marchi: That's the plan. I haven't received the final report from the group that was initially to study the EDC review, but it would be my intention to send the issue to this committee.

I realize, though, that right now your main committee has the WTO reference. A subcommittee has the Free Trade Area of the Americas, so I don't want to add the EDC review now, but by the time we get to the fall, when you will have discharged the other two issues, I think you will be primed to take that review and make it as broad as possible so that people can see what is I think the good-news story EDC has become, and what, as you said, are new product lines, or a new and creative way to approach different sectors or business lines from an EDC perspective.

• 0950

So my intention would be that as soon as I get that final report, which might be in the next month, I will certainly give it over to the committee, but not with the understanding that you're going to work on it right away, because you have other impending work.

The Chairman: Thank you.

Mr. Deepak Obhrai: You forgot to answer my question on China.

Mr. Sergio Marchi: There was a question on China?

The Chairman: No, I'm sorry; his time is way over. He has to leave for a cabinet meeting.

Did you say you have a 30-second question, Mr. Sauvageau?

[Translation]

Mr. Benoît Sauvageau: I would first like to recommend to your expert negotiating team to avoid overextending itself on the various agreements by not dealing with the interprovincial trade agreement, since we have been told that it was easier to trade between sovereign countries than between Canadian provinces.

My question is on the negotiators. At the beginning of our study on the upcoming WTO negotiations, we asked you for a meeting with the Canadian negotiators who will be representing us at the WTO. Will that be possible? I know that Jonathan is here today.

The Chairman: Next week.

Mr. Benoît Sauvageau: All right. We had not received any answer.

[English]

The Chairman: I was just going to announce that.

[Translation]

Mr. Benoît Sauvageau: My question anticipated your announcement.

[English]

Mr. Sergio Marchi: On the interprovincial, though, Benoît, I think it is a difficulty we haven't been able to overcome. One or two provinces are holding out. But that's clearly not in the Department of Trade; it's Industry Canada.

I'm not sloughing it off here, but it would be unfortunate if you blamed officials in my department—

Mr. Benoît Sauvageau: No, no, I blame no one.

Mr. Sergio Marchi: —who aren't working on the file.

I think one or two provinces are holding out. We hope that will come to an end so that, as you said, we can trade as freely in Canada as we do with the rest of the world.

I'm glad, Bill, you mentioned that John Weekes is coming before your committee. I fully support that.

Mr. Benoît Sauvageau: Merci.

The Chairman: Thank you, Mr. Minister. I know you have to run. We appreciate very much your time this morning. It was very good, very helpful.

Members, please don't leave. We have some other business to do. I have a couple of announcements.

Bill S-22, cited as the Preclearance Act, has been referred to the committee.

Mr. Obhrai, I'm going to ask people if they'd speak for a moment about their experiences across the country. You were on one part of the trip, and Mr. Penson was on the other, so maybe you could stay for a few minutes.

I'd like the chair of the committee that went out west to stay as well, or we're not going to have any kind of a discussion. Can you just stay for a few minutes for that discussion?

Very quickly, members, S-22, the Preclearance Act, has been referred to committee. The first meeting will be on Thursday, May 6. We'll have departmental officials. Then we'll try to have witnesses on clause-by-clause.

Can I get a reading on this, though? This is not politically controversial, is it?

[Translation]

Bill S-22 is very clear. Its purpose is to authorize the United States to do pre-clearance in Canada for customs, immigration, public health, food inspection, and plant and animal health inspections.

Mr. Benoît Sauvageau: Fine.

[English]

Mr. Charlie Penson: I'd like to have a look at it.

The Chairman: You can have a look at it, but it's not....

Mr. Charlie Penson: We'll see.

[Translation]

Mr. Benoît Sauvageau: That will depend on the decision by caucus.

[English]

The Chairman: That's fine.

So the first meeting will be on Thursday. The departmental officials will come. Then next week we'll have the meeting with witnesses. It should give everybody a chance to have a look at it.

Mr. Blaikie.

Mr. Bill Blaikie: When you say a meeting with witnesses, do you mean we're going to have a meeting to decide what witnesses we're going to have?

The Chairman: No, the witnesses they've lined up. The two witnesses proposed include—

Mr. Bill Blaikie: The Canadian Bar Association?

The Chairman: At the moment, it's not the Canadian Bar Association but the Canadian Airports Council and the Air Transport Association of Canada.

Mr. Bill Blaikie: There were a lot of amendments to this bill in the Senate, and a lot of the amendments came forward—

The Chairman: On the charter obligations.

Mr. Bill Blaikie: —as a result of suggestions made by the Canadian Bar Association having to do with the application of the charter on Canadian territory. There was also the whole question of the ability within American law to detain, etc.

• 0955

So a lot of concerns were met in the Senate, but there are some outstanding concerns, and it seems to me that one of the groups we should hear from is the Canadian Bar Association. They can say what's been improved in the bill as far as they're concerned, and what are some outstanding issues the committee may or may not want to address.

The Chairman: That's a very helpful suggestion. I recall that there was quite a controversy in the Senate on this. We'll have a look at that.

Secondly, there's a request for a meeting with the Speaker of the Irish House of Representatives on June 7 or 8. We'll just do the usual A and B team with that in terms of the Speaker of the Irish House.

Finally, can we take 10 minutes to share with one another what went on in the various trips across the country? The researchers are telling me they hope to have the draft by the end of this month, but we all went off in different directions, and at some point we're going to have to try to....

Is it worth calling a meeting, perhaps, where we could spend an hour together to say, look, here's what we were hearing, here's what you were hearing, and exchange that?

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): I would strongly suggest that we do an hour, because I don't think 10 minutes gives everybody the chance to—

Mr. Charlie Penson: On a point of process, Mr. Chair, I will not again be part of committee hearings that don't give enough time to adequately question witnesses who come and make presentations. Because we had so many people appear, in the interests of time they had to be pushed through, and to just make their presentations.

That comes, as part of the record, without an opportunity to ask them about, or to suggest that there are, errors, for example, in some of the things they're saying. There isn't the opportunity to have the back and forth that would expose, one way or the other, their ideas—whether they're making a presentation that is accurate, for a start—with regard to the information they're presenting.

Therefore, in any future hearings we have, I think we simply have to either accept fewer or build more time into it, in fairness to the members.

The Chairman: Again, we could have this discussion on process as part of the thing.

Our experience on our part of the trip was that there were some witnesses who were saying the same things over and over again—particularly, say, the Council of Canadians, where the local chapter would turn up in four different places. It got quite repetitive. Having a long back and forth with each one would elicit the same answers, but you wouldn't have been getting necessarily satisfactory ones, whereas in other cases one wanted to have time.

So we were a bit flexible about grouping some, and maybe more, where there were some types of interventions. After awhile we got onto that.

But I agree with you; it's better to have an exchange.

Mr. Charlie Penson: We're allowing those myths to keep bubbling along and get bigger all the time when we don't address them. That's my concern.

The Chairman: Okay.

Ms. Sarmite Bulte: Just as a point of information, Mr. Chairman, certainly in Vancouver, the Council of Canadians had rented a room next to ours, where the hearings were, and they made sure all the witnesses checked in with them first before they came to see us.

An hon. member: Oh, oh; Big Brother.

Ms. Sarmite Bulte: Now, it's all very well to engage in discussions among a civil society, but when we're being used, knowingly, by the Council of Canadians, it takes away from the benefit of really hearing from the rest—

Mr. Bill Blaikie: They did that in Toronto.

The Chairman: But it worked out all right in Toronto. We didn't have any problem with it.

Ms. Sarmite Bulte: Oh, we didn't have any problems, but I have to agree with Charlie—

Mr. Bill Blaikie: I thought it was kind of crafty.

Ms. Sarmite Bulte: —that it's an opportunity to challenge people, because we couldn't challenge their statements when we had 12 or 14 witnesses packed into two hours, or an hour and a half.

The Chairman: It's a problem, I agree, but we have a problem as well. If we're going to discuss this, bear in mind how much time we can spend going out across the country. Will the whips...?

Yes.

[Translation]

Mrs. Maud Debien (Laval East, BQ): Mr. Chairman, if we plan to spend an hour discussing this issue, do we really have to start the discussion here and now?

The Chairman: No, we are just discussing the process.

Mrs. Maud Debien: I believe we will also have to discuss the process.

The Chairman: We can discuss the substance in more depth.

Mrs. Maud Debien: But it would be important to discuss—

The Chairman: We can talk about both aspects.

Mrs. Maud Debien: All right, but I would like to make certain comments about the process.

The Chairman: Perhaps we should plan a one-and-a-half-hour meeting, where we will first discuss the process for about 20 minutes, and then the substance.

• 1000

[English]

So we'll set aside that time on Thursday.

[Translation]

The meeting will take place Thursday. Agreed?

Mr. Benoît Sauvageau: Did you get any information about the trip to Geneva?

The Chairman: It is impossible for us to go, and that is why Mr. Weekes will come here to meet with us.

Mr. Benoît Sauvageau: Very well.

[English]

The Chairman: That's it. Thank you very much for staying.

Mr. Charlie Penson: On a point of order, please, there were some questions asked of the minister that he either didn't have time to answer or didn't answer. I would request that the committee ask him to address those.

The Chairman: By correspondence?

Mr. Charlie Penson: Yes.

The Chairman: Which ones in particular were you thinking of?

Mr. Charlie Penson: I had asked him about the criteria on how China would enter, whether it would be as a developing country in terms of longer terms with regard to tariff reductions and so on. He didn't address that.

I think my colleague also asked him a question about China that he didn't answer.

For any of the ones that weren't answered, there's a record of the questions, is there not?

The Chairman: We'll try to pick them up, but I wonder if maybe we could get another crack at it with Ambassador Weekes. He'll have a pretty good understanding of where they're going with China, I would think, when we get him on.

Ambassador Weekes is the chair of the—

An hon. member: [Inaudible—Editor]

The Chairman: Well, “political”; I would have thought that question would be, “Where are the Americans and a whole bunch of people on this issue?”, wouldn't you?

Mr. Charlie Penson: No, I think it was a question of whether they should come in as a developed country. Surely the minister can answer that question.

The Chairman: He can answer it, but I'm telling you that I think you might get an equally effective answer from Mr. Weekes. But we'll see. We can certainly drop him a note. And we'll pick up those two questions that weren't answered.

Thank you very much. We're adjourned until 3.15 p.m. today, for a joint meeting on Kosovo.