:
Good morning, everyone. Welcome to the House of Commons Standing Committee on International Trade.
We are a very busy committee. We deal with international trade. This year has been quite busy for us because we're dealing with CETA. We have many U.S. issues with softwood lumber and agricultural products. Right now we're dealing with TPP. TPP, as many of you know, is composed of 12 countries with 40% of the world's GDP. There are over 800 million people in this trade block. When you take a good look at it, it will affect all Canadians whether you're producing something or buying something. It's going to potentially have an impact somehow on your lives.
Our committee has been travelling across the country and also having meetings in Ottawa. This is our ninth province now. We're finishing up with Atlantic Canada. We also had video conferences with the territories.
My name is Mark Eyking. I'm the chair, and I'm from Cape Breton, Nova Scotia. I don't live far from this rock; I'm from another rock. Lots of Newfoundland people live in Cape Breton.
We don't have all of our committee members here. Some had to stay back in Ottawa to keep an eye on things for us. Our committee comprises MPs from right across the country from all parties. We have Tracey Ramsey and Dave Van Kesteren from southern Ontario. Mr. Ritz is from Saskatchewan. Ms. Ludwig is from New Brunswick, Madame Lapointe is from Quebec, and Mr. Dhaliwal is from British Columbia.
We've received over 125 briefs. We've had almost 300 witnesses. We're also doing something different that most committees have not done. We are receiving input from the public, from average citizens, and we've received over 20,000 emails so far. We are going to receive those emails, and continue on with our study until the end of October.
The other thing is we have an open mike at the end of each session, so if citizens want to say a few words, they can come right to the mike. That's been quite well-received, and we have a lot of uptake on that.
We are probably going to continue with this consultation process until the end of October. Then our analysts will put together a report with us, and we will table a final report with the House of Commons probably later on in the year or at the beginning of the following year.
As you know, more Canadians are looking at trade now than they did ever before. When you look at the U.S. presidential debate the other night, trade was right up front. It always makes us a little concerned, as Canadians, what the Americans are thinking, and where they're going because it has a big impact. Of course, they're a big player in this TPP, so we're watching that closely.
We're glad to be here in Newfoundland. We had a wonderful flight. We had the tailwinds coming with us from P.E.I. yesterday. A bunch of us went down George Street where I had cod tongues, and that was good. We weren't screeched in yet, so I don't know when that's going to happen. It's always great to be in Newfoundland and Labrador. I remind my colleagues that it's not Newfoundland, it's Newfoundland and Labrador.
We'll have three or four panels today. For the first panel, I'm thanking you people for coming today. We have Citizens against CETA, Canadian Manufacturers & Exporters, Newfoundland and Labrador Federation of Labour, and St. John's Board of Trade.
Folks, we ask that you keep your opening remarks under five minutes. That way we can have enough time for a dialogue with every MP who is here.
We'll begin with the St. John's Board of Trade.
Mr. Whelan, go ahead, sir.
:
Thank you, Mr. Chair, for the opportunity to speak to the committee today about the Trans-Pacific Partnership Agreement.
I'm speaking to you today, as you mentioned, as the chair of the St. John's Board of Trade. The St. John's Board of Trade is the voice of business in Newfoundland and Labrador and an advocate for sustained economic prosperity.
As a business owner and an active member in the board of trade for many years, I'm passionate about the components to make up a healthy economy. The opportunity to work with the Asia-Pacific region to make a meaningful impact on our economy is something the St. John's Board of Trade fully supports.
The main principle for trade is what economists call “comparative advantage”. That is the ability of an individual or a group to carry out a particular economic activity, such as making a specific product or service, more efficiently than another activity. In other words, find out what you're best at and export it. But it's a two-way street. If we have a specialty or an area of expertise and are able to trade that with another country for their specialty or area of expertise, then both nations benefit.
Across this province and country there are countless examples of where we have been more successful working together. There are many reasons that we support a TPP agreement, but in the time I have today, I will outline three.
The first is about economic opportunity. Trade is an area in which we in Newfoundland and Labrador have not been performing particularly well of late. In many parts of Canada, and in Newfoundland and Labrador, there are opportunities to enhance the number of companies that export. Part of the problem has been our failure to diversify trade towards high growth markets like the Pacific Rim. The Asia-Pacific region is an increasingly important market for Newfoundland and Labrador and Canadian businesses. In 2014 Newfoundland and Labrador businesses exported to nations such as Japan, Chile, and our biggest trading partner, the U.S., to a tune of over $7 billion. However, that is only three of the 11 other nations in this trade partnership. We could be trading with many more. The TPP offers a huge growth potential for our province and for our country. If Canada does not ratify this agreement, these other 11 nations will offer each other privileged arrangements that we will be locked out of. A TPP that eliminates trade barriers will open up new opportunities for businesses in Newfoundland and Labrador, Canada, and the Pacific.
Another reason that we support the TPP agreement is modernizing our international trade agreements. Innovations and technology have changed the world in which we now do business. Today over 10% of goods traded and 60% of services traded are happening online. Knowledge industries like financial services, management consulting, and information technology are among Canada's top five fastest-growing export sectors. That said, nothing in our current trade agreements prevents countries from blocking data flows or imposing local data storage obligations. A TPP would help extend free trade into the online realm and bring our international trade agreements into how we do business in today's technologically advanced world.
The third reason is similar to the position of the Canadian Chamber of Commerce. A TPP would be favourable for environmental reasons. The TPP requires participating countries to maintain and enforce strong environmental laws and regulations under threat of economic sanction. One environmental group went as far as to say that TPP has the strongest environmental provisions of any trade agreement in our history.
In conclusion, we recognize that there are those that could be negatively impacted by such an agreement, and there are tough choices to be made ahead. I echo the words of the Canadian Chamber of Commerce's CEO, Perrin Beatty, who said: “There are workers and companies who face challenges, and those concerns deserve respect, but if we stop doing trade negotiations except in cases where no one is affected, we stop negotiating at all.”
We think this province and country would fare much better for generations to come by taking advantage of opportunities available to us through the TPP. We at the St. John's Board of Trade support the TPP agreement and hope for a swift ratification.
Thank you very much for the invitation and for your time this morning.
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Thank you and good morning.
[Translation]
Good morning, Mr. Chair and members of the committee. Welcome to our beautiful province of Newfoundland and Labrador.
[English]
On behalf of the 65,000 working women and men and the affiliates that make up our federation, we'd like to thank the committee for the opportunity to express the important views of working people on the impact of a ratified TPP, not only on Newfoundland and Labrador but all across Canada.
We'd also like to acknowledge the recognition by this government of the need to have an open and transparent dialogue on the TPP, a trade agreement negotiated by the previous administration in secret, with only corporate interests at the table.
The history of international trade agreements negotiated by previous governments in Canada has rarely ever resulted in working people being better off, in our opinion. Areas such as health care, procurement, public services, labour laws, and wages have all been impacted by past trade agreements in a manner that has cost working Canadians and their families. These agreements have become less about trade and more about increasing the wealth and influence of corporations.
A substantial body of independent research points to the negligible positive outcomes that will flow from this agreement and the negative impacts that will be felt by workers, especially lower- and middle-income earners. These include a 2016 study from the C.D. Howe Institute, which predicts that the macroeconomic impact of the TPP on the Canadian economy would be a mere 0.068% growth in GDP by 2035. Perhaps even more interesting is that the study predicts only a 0.026% drop in GDP by 2035 if Canada does not ratify the TPP.
This mirrors the recent U.S. international trade commission study that showed that the TPP will increase the U.S. trade deficit and will have almost no positive impact on the U.S. economy. A Tufts University study also shows that Canada will actually suffer a net job loss across all sectors of 58,000 jobs if the TPP is put into effect, and that the problem of income inequality will be made worse.
The temporary entry commitments contained in the TPP cover a wider range of occupations in sectors than past trade deals. It also prohibits countries from applying any form of economic needs test or numerical quota, including labour market impact assessments. Therefore, employers hiring migrant workers under the TPP will be able to do so even in areas where unemployment is high and qualified local workers are available.
Furthermore, unlike the temporary foreign worker program, which can be reformed, the temporary entry system in the TPP cannot easily be altered once the treaty is ratified. Allowing multinational corporations to bypass the current regulations around assessing foreign workers does not contribute to a healthy labour market, and will only increase unemployment, suppress wages...and working conditions.
Due to the smaller size of the Newfoundland and Labrador labour market relative to most other provincial jurisdictions, the ability to absorb such numbers is challenging and the impact magnified. The collective impact on the national labour market would be significant as well, and would result in downward pressure on wages, higher unemployment, as well as higher inequality.
In addition to the impact on labour markets is the absence of any binding requirements that will see improvement in and increased protection of the rights of workers. As per chapter 19 of the agreement, employers are only required to comply with the labour laws and regulations in their own countries, however bad they are. The attempt in this part of the agreement to establish and promote labour rights actually serves to diminish the strength of Canadian labour laws.
While requiring parties to have laws governing minimum wages, hours of work, occupational health and safety, and unionization rights, the TPP is void of any minimum standards that govern these areas. Without any acceptable minimum standards, the recognition of the importance of workers' rights carries little weight.
The enforcement obligations are equally light. There would have to be a sustained failure to enforce labour measures over time to the point that it negatively affected trade and investment before any form of remedial action could be initiated.
When you compare this level of protection for workers with the investor-state dispute settlement at the disposal of corporations, it clearly shows how much the TPP is weighted towards the interest of corporations and not workers. This area of TPP accelerates lowering the floor for workers and the global race to the bottom, especially in the areas important to working people.
A highly problematic aspect of the TPP agreement is the inclusion of generous foreign investment protections enforced by the investor-state dispute mechanism. Giving international investors the right to seek compensation when public interest regulation interferes with their commercial objectives clearly weakens democracy. It restricts our ability to create and apply legislation that protects our standard and quality of life, as well as laws that govern occupational health and safety, labour standards, and even areas such as climate change and the environment.
Newfoundland and Labrador has seen the impact of this measure first-hand.
I'm pleased to be here on behalf of Canada's 60,000 manufacturers and exporters and our association's 2,000 direct members to discuss the Trans-Pacific Partnership. I want to come at this from a Newfoundland and Labrador standpoint, to give an NL perspective on TPP.
From a CME Newfoundland and Labrador point of view, members and non-members who represent the manufacturing and exporting sectors seem to know very little about the TPP and the positive and negative features and benefits. Those who know about the TPP are only focused on the impacts, both positive and negative, that affect their specific industry sector. The seafood sector appears to be the one that's keeping the closest eye on the TPP trade agreement process, but they are not asking a lot of questions.
Out of Newfoundland and Labrador's top 10 export destinations, the United States and Japan are the two that are in the TPP. One of them is worth $6 billion. Japan is worth $190.8 million.
The people who know about TPP understand that all the countries must ratify the deal. Any specific country can veto the deal. There's a strong sense that the U.S.A. does not have an appetite to enter into large trade agreements post the 2008 recession and that their Buy American stance can block this.
There are three key areas that CME feels strongly about with regard to any trade agreement. The first is that it create a fair and level playing field for Canadian manufacturers and exporters to ensure that they have as equal opportunity to export to foreign markets as our competitors do to import into Canada. The second is that the agreement must allow value-added exports from Canada, not just the export of natural resources. The third area is that the agreement must not undermine the existing integrated manufacturing supply chains developed through previous free trade agreements, especially NAFTA.
CME has supported Canada's entry into and our signing of the principle of the Trans-Pacific Partnership because of Canada's small domestic market, the export orientation of our manufacturers, the deal's inclusion of our major trading partners, and the significant new opportunities it affords.
To be blunt, Canada has a poor history of success in free trade agreements. Aside from NAFTA, very few, if any, agreements have led to an increase in our exports. On the flip side, we have also typically not seen a massive increase in imports either. So free trade agreements are signed, and business generally continues as it did before.
This time it will be different. We're entering into an agreement with very aggressive, export-oriented, and coordinated countries. If we don't have similar domestic strategies for success, Canada has the potential to lose. We need a national strategy that aims at supporting domestic competitiveness with global supports.
One of the things we see first is that free trade has opened the door to increased competition. This can and should be perceived as a good thing. However, we need to be ready for that competition. The private sector is willing and ready to compete on a level playing field, but our business environment is often not level. While our corporate tax regime is world-class, there are many other areas that are not. Canadian companies face high input cost, a much more costly regulatory burden, higher labour cost, and higher energy cost. Meanwhile, domestic supports for investment in innovation and advanced technologies are significantly lacking compared with our international competitors.
CME believes that with the right support network in place for the TPP as well as other international trade, Canada could double manufacturing output and value-added exports by 2030. That's why we launched Industrie 2030, a national conversation on the future of manufacturing and exporting in Canada. We would like to create a long-term national strategy and road map to meet these growth objectives.
Thank you for your time this morning. I look forward to the discussion.
:
Merci beaucoup. Thank you very much for giving me the opportunity to present.
Citizens against CETA is a rather grandiose-sounding name for a local group of concerned citizens. We submitted a brief last June filled with statistics refuting the supposed benefits of the TPP, but today I'd really like to talk to you about values.
In his meticulously researched book on wealth and income, Capital in the Twenty-First Century, French economist Thomas Piketty concluded that we were heading into a period of inequality such that the world had never seen. If we want to change that, he said, we have to bet everything on democracy.
I believe inequality continues to grow precisely because around the globe, democracy is under attack. The aggressors aren't terrorists or rogue nations. The aggressors are international corporations backed by financial elites. The weapon used is a contract.
The TPP and CETA are gigantic contracts that define not what corporations can and can't do in our country. Instead, these contracts define what government itself can and can't do. Any government action, present and future, that is not clearly defined or not written into the contract can be challenged by corporations in those infamous offshore tribunals, where the public good and environmental protection count for nothing. There, it's all about entitlement under the contract.
According to Osgoode Hall investment treaty expert Gus Van Harten, these contractual agreements have succeeded in doing what no parliament has been previously able to do under our English common law system, which is to fetter or straitjacket future parliaments. That is huge.
I believe government is asleep at the wheel when it comes to acknowledging the threat these trade agreements pose for our democratic rights. But then too, I'll acknowledge that so are the passengers in the back seat, and that's the public. The reason in both cases is that we live in an age in which economic values trump everything.
I'm a retired social studies teacher. Around the turn of the century, every single course that allowed a discussion of democracy and politics was deleted from the high school curriculum in this province and was replaced with economic education courses. There was a consequence. In the 2011 federal election, the last election for which we have a breakdown by age, only 29% of our young people aged between18 and 24 years bothered to vote.
I'm going to suggest that the same neglect of our democratic values has happened in government. Economic values now dominate, more precisely the economic values of neo-liberalism with its emphasis on free trade.
This committee now has all sorts of hard evidence—I've read the briefs—disputing the Liberal Party's claims about the benefits of free trade. Two important reports came out last week that I want to highlight. The first was a Tufts University study on CETA. This is a direct quote: “...CETA will cause unemployment, inequality, welfare losses and a reduction of intra-EU trade.” That certainly suggests that CETA is not the gold standard of trade agreements that and maintain it is. Will the Prime Minister and the trade minister now reverse direction and call for a halt to the provisional acceptance of CETA? Well, it all depends, I think, on what their true values are.
The new OECD report that has just come out is even more interesting, in spite of its blinkered call for more trade liberalization. Trade as a driver of GDP has fallen steadily since 2009. In fact, trade growth is now lagging growth in the broader world economy this year. That lag—this is really interesting—is likely to continue, particularly because emerging nations are pulling back from a dependency on exports and choosing instead to develop internal markets as a means of increasing GDP.
As for OECD countries, governments are increasingly being forced by their citizens to question the benefits of a free trade model that has heightened inequality, caused job losses, and straitjacketed government's ability to deal with either.
Consider the way the TPP unexpectedly became a campaign issue in the U.S. elections. Consider Brexit, or last week when 320,000 Germans in multiple cities demonstrated in the streets against the TPP and CETA.
You know, these will not be isolated incidents. According to the OECD report, election results and polls in OECD countries are pointing to a shift away from the traditional left-right divide amongst voters and toward anti-globalization and pro-globalization electorates. That's a very significant development for you to consider.
As members of the trade committee, you hold I think an enormous responsibility, and I know how hard you are working. I'm sure you've been watching closely how public opinion and the research against these trade agreements are developing everywhere. But you're also affected by the unwavering ideological enthusiasm that those who control policy in our two major parties still have for free trade.
Thank you, ladies and gentlemen, for joining us this morning. They were great presentations. Some of it we've heard before, and some of it is a new twist on some of the old ideas. Thank you for the time and energy you put into this.
I want to start with St. John's Board of Trade, because you went first, Mr. Whelan, and also because Mr. Haire raised another point, as well, that I thought was similar to some of what you were talking about.
When you talked about comparative advantage and diversity of trade, Mr. Haire, you made the point that we don't, as a country, spend enough on R and D, innovation, and those types of things. I'm sure Mr. Whelan would echo that.
What is the partnership role of government and business in making sure those things are addressed? What percentage is our role and what percentage is your role?
:
Thank you so much for your presentations this morning. I have so many questions, I think it's going to be tough to narrow it down. You all gave a great snapshot.
Mr. Haire, you said we have a poor history in trade agreements, and that's the truth. Under the previous government, we signed the most trade agreements we ever have, yet we have not seen the benefit of that. Our trade has actually gone down after every FTA we have signed with a country. By Global Affairs' own admission, in the economic impact assessment that was released two weeks ago, trade will go down, under the TPP, with all of our current FTA members. That means the U.S., Mexico, Chile—everyone we currently have a deal with, we will lose trade with.
From what we've heard on this panel, the largest trading partner we have is well known; it's the U.S. To enter into an agreement that would put that in jeopardy, or see that trade go down, wouldn't make sense from a business perspective either, because that is the market where most people are trading. I am certain that would be reflected by you as well.
I want to talk about jobs. I want to talk about the potential 58,000 jobs lost. I would like to ask my colleague Mr. Dhaliwal to please submit the brief he was referring to, because I haven't heard of it either. I'd ask him to please submit that brief to the committee so that we can study it, because the only study that has labour included—our own impact assessment does not include labour—shows 58,000 jobs lost.
I want to ask you, as a representative of 65,000 members, what would the impact be? Can you also give us a snapshot of your current situation around jobs, the unemployment, and inequality that you are experiencing?
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In our recent budget, the government predicted, just based on its own budgetary decisions, that the unemployment rate in this province is going to rise to almost 20% within the next five years, that the labour market is going to be reduced to the same numbers that it was in the year 2000, and that economic growth will slow down, obviously, because of that. We are already seeing signs of that. We are already seeing the closure of some manufacturing places. Scotsburn dairy just closed down last week, throwing 300 people out of work.
That's happening anyway. Obviously, in a resource-based economy, the price of oil and the decisions the government makes are having an impact on that. When you throw in what can happen....
We already, as a nation, export a lot of raw materials. When we talk about diversification, we are talking about how to change that. How do we export things that are already finished, value-added? That will be restricted under the ISDS. Anything that has local procurement or, from our point of view, anything that will make it a little easier to employ Newfoundlanders and Labradorians will be challenged and has been challenged already under previous trade agreements.
Besides the actual loss of employment that we see predicted from this, the other thing is the downward pressure on wages from things like an influx of temporary workers or skilled workers from the countries that signed the TPP. Although they talk about labour standards, there is nothing written in the TPP that's going to ensure that those labour standards ensure a good quality of life: there are no minimums there, and there is no enforcement, or the enforcements that are mentioned are very weak. Those things in the trade agreement are real signals for us that it is not going to benefit workers in this province.
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When it comes to the protection of working people, I think this agreement and agreements that have come before, which have been the foundation of international trade, have been more weighted in the protection of the interests of the corporation and not of the working people. It compromises, as a country, our sovereign right to enforce our legislation and laws that protect workers and working people.
The investor protection pieces in these agreements are weighted to the corporation. If there's a violation of any form of labour standard, it has to happen over a sustained period of time, more than once. It has to negatively impact trade or the bottom line of the corporation before any remedial action can happen. If a corporation is thought to have its ability to earn a profit infringed on, they can use the investment protection mechanism for one instance for remediation. We've seen first-hand here how skewed that framework is.
When we spoke about R and D, we had ExxonMobil that was.... We have an agreement here called the Atlantic Accord, which governs local benefits. Companies that extract resources here have to invest in R and D in the local economy. That's economic development, training for workers, innovation. Under the investor-state protection mechanism, Exxon made a complaint. The decision was in their favour, and they were awarded $17.5 million. We all know that ExxonMobil is one of the biggest oil companies in the world, and a lot bigger than the Newfoundland and Labrador economy. That just—
:
Good morning, and thank you all very much. Thank you for your presentations. They were quite interesting and very thought-provoking.
I'm going to try to get my questions out quickly, but I will give you a bit of my background. I have an international trade designation that I earned in the late nineties. That probably puts me in a different viewpoint in terms of trade, but in terms of trade education, I taught trade education for almost 20 years. There has never been a time when I have not oriented students and businesses toward focusing on corporate social responsibility. I think that's critical.
On that, my first question is for you, Mr. Whelan. You said that in terms of getting prepared for trade and looking at opportunities, certainly joining a board of trade or working with the Canadian Manufacturers & Exporters is really critical. What I've talked about with my colleagues and with other witnesses is that so often businesses don't know what they don't know, so they're not exporting in their second or third years.
At the St. John's Board of Trade, do you work with your businesses to focus on some element of corporate social responsibility, whether domestic or international?
For about seven years I worked back and forth with Cuba, not only on trade education but also on social development, and teaching with the University of Cienfuegos. Certainly I've seen first-hand, where countries are not heavily involved with trade, particularly with the restrictions with the United States, the devastating effects it can have.
We are a country of 33 million people. If we only traded interprovincially from coast to coast to coast, where would that leave us, currently and looking to the future, in terms of trying to provincially cover costs of education and health care? Can we sustain ourselves from within with very limited trade and export—and also import?
This is for anyone, because we also have to look at the importing side.
Thank you all for coming and thank you for this invitation. This is a wonderful place to be. Every time I come here I feel so welcome.
I appreciated the questions by Ms. Ludwig. I was going to go along the same directions, but I'm going to take a bit of a twist.
When I was first elected, the United States represented 28% of the total world GDP. Think about that: 5% of the population and 28% of the GDP. Now, they have slipped significantly. I think the last figures are somewhere around 20% or 21%, or something like that. Nevertheless, we live next door to the largest market in the entire world. We are the luckiest people on planet earth. Quite frankly, I'd rather be here. Once I listened to some South Koreans complaining about the United States; I said I'd rather live here than next door to Red China.
At any rate, the Americans, interestingly enough...because we've heard quite a discord, actually, about whether or not we should go forward or even scrap these things. The Americans are in a heated debate, at this present time, on scrapping free trade, scrapping NAFTA. TPP is not even being discussed, or at least the Democratic Party doesn't have the nerve to discuss it because there's such an appetite to scrap this.
I'm going to use a different line. I'm going to ask every one of you: what do you think the effect to the Canadian economy will be if the Americans take the approach that we need to scrap or stop having free trade agreements?
I'll start with you, Ms. Reid, and then we'll go to Mr. Haire and across.
:
I would ask all the MPs to take their seats, please.
Welcome, panellists, to our House of Commons international trade committee. I don't know if you heard our earlier remarks, but we are a very busy committee. This year we are dealing with the European agreement being tidied up. We have many issues dealing with the United States—softwood lumber and agriculture products. We have some issues there with them now.
One of the biggest things we're taking on this year is the TPP and how it will impact Canadians, the opportunities and challenges that we face in this agreement. It's a huge agreement. There are 12 countries, 40% of the world's GDP. We're talking about 800 million consumers. One way or another, this agreement will affect all Canadians in various ways.
We've been on the road quite a bit, and in Ottawa, receiving briefings. We had over 125 briefings and heard almost 300 witnesses. We've done pretty well eight provinces. We're here now, and we're going to Nova Scotia tomorrow, and we've had video conferences with the territories.
We're one of the first committees in the House of Commons to open up quite a bit to the public. We've been getting emails. We're at over 20,000, and we're still getting them in. We also do an open-mike session at the end, where the audience can have some input.
We're very proud of our committee and we're getting a lot of input. We're learning a lot, too, about what's in the agreement and the details of how it affects Canadians.
We will be finishing up our consultation process at the end of October, then we'll put a report together for the House of Commons, then let the members of Parliament decide where we go from here.
Without further ado, I welcome the panellists here today. What I'd like to do over the next hour is make sure that you guys get your input in and have a dialogue with each of the MPs here, so if you can keep your briefings to five minutes or under, it would be appreciated.
We'll start here with the Social Justice Cooperative of Newfoundland and Labrador. We also have the Association of Seafood Producers and Ocean Choice.
Bill Hynd, go ahead.
:
First, let me thank the committee for allowing the Social Justice Cooperative to present.
The Trans-Pacific Partnership is being sold as another free trade agreement that will expand trade opportunities and thereby help economies grow. If only.
The trickle-down impact, we are told, will lead to increased economic activity and more jobs for everyone. If reducing tariffs and increasing trade was the start and end of this agreement, I am sure the opposition to the TPP would be much more muted. However, any serious cost-benefit analysis of the TPP will tell you that social, environmental, and political costs are simply too great, and the economic benefits limited.
At its core, TPP is less about increasing trade and more about securing corporate investor rights. That is why there is such strong opposition from people like Joe Stiglitz, Nobel Prize-winning economist. In a recent CBC interview, Mr. Stiglitz called the TPP the worst trade deal ever, and he called on Canada to demand renegotiation. The problem is that renegotiation is not part of the equation or on the table as a possibility. Stiglitz has also co-signed a letter with 200 of the U.S.A.'s leading law and economic professors, and gone to the U.S. Congress opposing the inclusion of investor-state dispute settlement, ISDS. These scholars are firmly opposed to the inclusion of such a regime because it creates a parallel legal system granting multinational corporations undue power.
A few weeks ago, hosted a Global Fund replenishment conference to fight AIDS, tuberculosis, and malaria. The Prime Minister's website explains the Global Fund this way:
By uniting around a common vision of a better and healthier future, the international community can fight diseases more effectively, and tackle the associated issues—including poverty, lack of access to education, and social and political inequality—which disproportionately impact women, girls, and young people.
Our Prime Minister should be congratulated for his vigorous support of this worthy effort. However, his concern for the Global Fund does not square with the government's support for the TPP. Doctors Without Borders, one of the most prestigious medical humanitarian organizations in the world, has called TPP one of the worst trade pacts for restricting access to affordable life-saving medicines for millions of the world's poorest people. Doctors Without Borders depends on accessing generics to treat people with HIV, TB, malaria, and other infectious diseases. The new intellectual property rules will see them lengthened and strengthened, and they'll allow for new patent and data protections for pharmaceuticals. This will only lead to higher prices and could affect thousands or millions of desperate people who need access to generics.
It's our view that public health needs should trump commercial greed.
Bringing it back to Canada, Canada is the only developed country with a universal health care system that does not provide national coverage of prescription drugs. Canada has the second-highest per capita drug costs in the world. There are simply too many personal stories of sick people who have had to forgo their prescriptions simply because they could not afford them. For far too many, the choice is food or medicine.
Canada needs an affordable pharmacare program that makes available selected medicines at little or no direct cost to patients in need. Canada should not be supporting any deal that will force extended intellectual property provisions, including patent and data protection, which, for the general populace, will mean higher drug costs. Research by the Canadian Centre for Policy Alternatives has estimated that Canada could add $636 million annually to the price of drugs in Canada, and Canada should not be signing any deal that ratchets up the ISDS, that allows pharmaceutical companies to bypass Canadian courts and take their case to a non-judicial arbitration process. How can it be that government has no right to bring a claim against a foreign investor, yet foreign investors are granted the power to sue sovereign nations?
With this ISDS, we're seeing Eli Lilly sue Canada for $500 million. We're seeing, right now, a Canadian corporation trying to sue the U.S. government, that's trying to take action on climate change, for $15 billion.
We're just saying that, if you sign on to these things, this is the road we're going down, more of this behaviour. If we can sign a UN climate change pact in a transparent way, then maybe it's time that we renegotiated a trade deal that was more transparent, that supported people, and advanced the Universal Declaration of Human Rights, which was initially drafted by a Canadian. That's the core.
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Good morning. My name is Martin Sullivan. I'm the CEO of Ocean Choice International. Thanks for the invitation to appear before the committee and share our thoughts on the TPP.
First of all, I'd like to give you a little overview of our company, and then I'll give you our perspective on the TPP.
OCI, as we're commonly known, is a family-owned company based here in Newfoundland with operations in the Maritimes as well. We employ about 1,700 people on an annual basis, with most of them in Newfoundland, and others in the Maritimes and in sales offices around the world. We also buy fish from over 1,400 fishers here in the province. The total payroll for both fishers and employees is about $130 million per year. We operate six processing facilities and six offshore vessels in Atlantic Canada.
In our global sales and marketing network, we sell about 80 million pounds of seafood, and that's 20 different species, to more than 400 customers in over 30 countries. We have sales offices in six countries. We've invested heavily to try to maximize the value of all the products we sell.
Our annual sales are about $280 million Canadian, with about one third each to North America, Europe, and Asia. We are strong proponents of sustainable science-based fisheries and we engage regularly with DFO with respect to science and research on many species. About 90% of our seafood is either certified by the Marine Stewardship Council or is in the process of being certified.
With respect to the Trans-Pacific Partnership, we believe opening up trade opportunities like this for our industry is extremely important, as our industry relies on trade for its existence. We believe trade agreements like this are an important factor in increasing the size of the economic pie and will lead to increased returns for all participants. Too often we engage in battles over sharing a smaller economic pie rather than trying to work together to increase the economic pie so that all participants can experience a better return.
As you know, the TPP is a major trade initiative involving 12 countries, including seven new free trade agreement partner countries, with a combined market of nearly 800 million people and a GDP of almost $29 trillion. The biggest incremental opportunity for us is in the Asia-Pacific region. Our company currently sells in six of the 12 countries in the TPP, and we see many opportunities to increase sales in those six countries and expand to many of the others.
We have seen from past trade agreements the tremendous opportunities and extra value that resulted after implementation. The lower tariffs will lead to increased opportunities and make the Canadian seafood sector much more competitive in the international marketplace. This is especially true when you look at competitors in countries such as China, Russia, South Korea, and Thailand, which are not part of the TPP.
In this particular agreement we will see tariff reductions on many species that are important to Newfoundland and Labrador and the rest of Atlantic Canada. This includes snow crab sold to Japan. We'll see the elimination of the 4% tariff come into force immediately upon entry. There will be an elimination of the 5.3% duty on shrimp and processed shrimp into Japan immediately, which will provide more opportunities for our cooked and peeled shrimp sector. There will be a reduction or an elimination of tariffs on lobster in several of the TPP countries. The 15% tariff on scallops to Japan will be eliminated over 10 years, and on frozen fillets tariffs it will either be reduced or eliminated.
For a country like Malaysia, all tariffs will be eliminated immediately, which will open a lot of new opportunities for our seafood.
There are many other examples too numerous to outline in detail here. We will also have strong provisions on non-tariff measures, which are important with respect to dispute settlement provisions.
As an industry, we've experienced the benefits that trade liberalization can provide and the huge impact it has on the incomes in our sector. This is particularly true in rural areas, which is where most of our employees and fishers who supply us live. When you combine the reduced tariff access, as well as the resulting new market opportunities in these countries for many new product forms, there are many examples where it has led to increased prosperity for our people and communities. For example, on snow crab, which is important to Newfoundland and certainly to the other maritime provinces as well, we have seen the expansion to Asia, and particularly to Japan in addition to the traditional U.S. market, resulting in significant price increases to fishers, this year, in the range of $3 a pound. I can remember when we were paying 35¢ a pound in the 1990s before we had some of these trade agreements in place. This has meant significantly more money in the economy of rural Atlantic Canada, and on other species we have seen similar results.
As we expand tariff-free access, we open up whole new markets to buy various product forms that add significant value to our industry and result in a larger economic pie shared by all participants. For example, we may get the best value from fillets in the U.S. market, raw crab sections and parts in Japan, whole fish in China, raw scallops in Australia, and headed and gutted fish in southern Europe. Each market has its own unique culture and tradition of eating fish in different ways than we're used to. As we expand our free trade agreements to more countries, we bring back significant value to Canada. We believe this has a very positive impact on incomes for people in the industry, and greatly enhances the communities in which they live.
In conclusion, we strongly support the TPP, we strongly support lower tariffs and better market access, and we encourage Canada to finalize and implement this very import trade agreement.
Thank you.
Let me first of all thank the Standing Committee on International Trade for the opportunity to make these few brief remarks with respect to the Trans-Pacific Partnership.
In case there is any doubt, let me say unequivocally and with the strongest conviction, right from the start, that I do not support the TPP.
On September 16, 2016, I did submit a written submission on behalf of the St. John's chapter of the Council of Canadians. I'm here today to express the concerns of my chapter on this controversial trade deal. While I represent a local chapter of the Council of Canadians and the council in general, I wish to state that I am not simply and blindly regurgitating the official position of a much-respected and widely supported, citizen-led organization. The council did not come to us. I and my chapter or colleagues came to the council, because it represented our values and views on a number of critical issues, including trade. The views expressed here today on the TPP are not just the views of the council; they are my views and those of my chapter compatriots.
The Council of Canadians was founded in 1985 to bring Canadians together to act for social, economic, and environmental justice here and abroad. We are Canada's leading social action organization, mobilizing some 100,000 Canadians and a network of 60-plus chapters across the country. Through our campaigns we advocate for clean water, fair trade, green energy, public health care, and a vibrant democracy. We educate and empower people to hold our governments and corporations to account.
Let me be very clear: the Council of Canadians, contrary to the stated opinion of some political and corporate leaders, is not anti-trade. We are for fair trade. We support trade deals that respect the rights of people, labour, and the environment and that reduce inequality between and among nations.
An early definition of “trade” was the act or process of buying, selling, or exchanging commodities within or between countries. Modern-day trade deals are no longer just about the exchange of goods and services between countries or about the reduction of tariffs. No, modern-day free trade agreements have morphed into a comprehensive and complex bill of rights for huge and powerful multinational corporations that desire to enshrine and protect their right to maximize profits at the expense of the rights of people and the environment.
Perhaps the most offensive and insidious aspect of FTAs is their investor-state provisions or investor-state dispute settlement mechanisms. As a Newfoundlander and Labradorian, I am quite familiar with investor-state provisions as a result of chapter 11 of NAFTA.
In 2011 Stephen Harper paid a record $130 million to AbitibiBowater to avoid a chapter 11 challenge. In 2012 ExxonMobil won its challenge to premier Danny Williams' insistence that it spend a few paltry million dollars on R and D.
Under NAFTA, Canada has twice as many claims against it, 34, compared with the U.S. and Mexico. Canadian investors have zero successful claims, while we have paid out nearly $180 million. There is some $2.5 billion in eight outstanding claims, including a $500-million challenge by Eli Lilly.
Investor-states are an infringement on the right of nation-states to enact laws, policies, and programs that are in the best interest of citizens. The underlying premise in such laws, policies, and programs interferes with a corporate entity's right to make profit. Fundamentally, the concept of investor-state provisions is an affront to democracy and an assault on the sovereignty of a nation.
A further affront to the oft-promised open transparency and accountability of our democracy is the ultra-secretive manner in which the TPP and other trade agreements have been negotiated. Canada first engaged in discussions on this mammoth deal in October 2012. Then, for years the Harper government continued negotiations in absolute secrecy. That's a far cry from what happened in New Zealand, which held a series of stakeholder sessions with the country's chief negotiator to keep business groups and the public informed. There are many other issues with the TPP that others have dealt with, all of which are of concern to ordinary Canadians.
Most Canadians are very busy earning a living and living a life. The matter of an international trade deal may not seem important or top of mind most days. But the more they learn about TPP, the more they oppose the deal. Interestingly, citizen opposition to the deal is growing steadily on both sides of the political spectrum. Both Bernie Sanders and Donald Trump attracted millions of supporters because of their respective positions on trade deals in general, and the TPP in particular. Clearly, citizens are waking up to the false promise of these new generation trade deals. It is also very interesting that both U.S. presidential candidates oppose the TPP.
With all due respect to committee members here, I can't help but wonder if this whole process of conducting these cross-country hearings is nothing more than a charade by the Trudeau government in the hope that the U.S. will scuttle the deal in due course anyway. There is some irony in the fact that I find myself depending on the U.S. government to save Canadians from a trade deal that is not in their best interest.
Thank you, Chair.
Welcome to our province, and thank you for the invitation to appear before the committee to share our position regarding the Trans-Pacific Partnership trade deal, or TPP.
Let me first make some quick remarks regarding the association—who we are, what we do—and then provide some additional brief remarks with respect to the TPP.
In short, we're an industry trade association and we represent seafood producers, both small and large, in the province of Newfoundland and Labrador. Our membership includes mostly family-owned companies and some harvester-owned as well.
ASP's members produce the vast majority of the province's seafood by value and by volume, ranging from 90% of the province's inshore shrimp production and 80% plus of the snow crab—those two represent most of the value in the industry—and a large majority of pelagics, such as capelin, mackerel, herring, and varying percentages of groundfish. ASP is also the client for several fisheries holding the Marine Stewardship Council, or MSC, label, a third-party, independent, eco-certification. We certified the first fishery in Canada, the first on the eastern seaboard of the continent, and the largest cold-water shrimp fishery in the world.
Achieving MSC certification is an important element in maintaining market access. I call it the democracy of the marketplace, assuring consumers who want to buy from sustainable fisheries that the fish from Newfoundland and Labrador are sustainable. We now hold four certificates for shrimp in the Maritimes and Newfoundland and Labrador, as well as snow crab in the province. I raise it here because I think it is a trade issue and is of interest to you.
I've appeared more often before trade committees of the House than I have before fisheries committees. I like that, because we are a trading industry. It is 80% to 90% of all Newfoundland and Labrador production that is exported. It's a considerable figure.
Since ASP's founding in 2004, a rough estimate would place our industry exports at $10 billion. That is a significant contribution to our economy, to the region, through transportation linkages, and to the country as a whole. While some are quick to say that we lost the fishery in the 1990s, which we did with the moratorium, and while it is true that the fishery's overall contribution to provincial GDP has declined in relation to the overall growth in the economy, the value of the fishery has more than doubled from what it was in the groundfish days with the rise of shellfish. It remains the largest private sector employer in the province. Just last year, I'm pleased to say, it reached its highest ever historical production value, of $1.2 billion.
As a trading industry—this is the reason we're here today—we support the Trans-Pacific Partnership. This trade agreement, with reduced tariffs, can mean more exports to the participating countries. There's room to grow. The issue is not just what is sold now, but what that could be in the future.
As I said in a press release when the deal was announced, we're an export industry, pure and simple. Eliminating tariffs and ensuring fair market access is imperative for us. While we're pleased to sell in our home province and across the country, the reality is that 80% to 90% of Newfoundland and Labrador's seafood will be sold in international markets. Thus it ever was and ever shall be. That was the reason we were settled in the first place. Cod, in our case, was a proxy for the European stock market. It's quite amazing.
We have hundreds of years of experience in exporting, and that will always be the case. While other business sectors might be engaging consultants or attending seminars in light of the TPP or CETA or the South Korea deal, figuring out how to enter those markets, Newfoundland seafood producers, like Martin, are doing what we've always done: selling internationally, exporting the world over.
Very importantly in this instance, the countries in TPP represent a significant and growing proportion of the world's key markets for seafood, both established and new markets. As you will know, the tariffs on seafood in the countries represented in the TPP have been quite high, in some instances as high as 34%.
If you think about any business and what margins might be required to make that business sustainable, and then think about those kinds of tariff rates, well, essentially we're prevented from selling and we prevent consumers from accessing quality fish. These kinds of tariffs thwart market access. They limit where we can sell.
Another point I made in May, when I testified before this committee via telephone, is worth repeating. Reducing tariffs is not really only about the straight math calculation of what happens in those given markets in the TPP countries. When tariffs change in a given market, or several markets, as represented by this deal, the trade flows can be impacted in other countries outside of the TPP. It might mean additional returns from existing markets that now have new competitors, even though the trade flows might not change.
In closing, let me simply say that we support the TPP. We support reduced trade barriers. We support better market access. We think it makes everyone winners.
Again, I want to thank the committee for the invitation to appear, and I'm available for any questions you might have.
Thank you.
That finishes our presentations. Before we go on, I'd like to remind everybody we operate in our two official languages, so there are translators in the back and you can wear the earphones provided. There's also coffee there. You cannot take pictures or videos here when we're in session, but in between sessions you can.
I have a quick question before we go to the MPs, and I guess it's to you two gentlemen here, on that certification process. I'm from Cape Breton and I know our fishers there are into it.
First, how much of the wild seafood in the world is under certification now, what percentage? I'm thinking of a company like Red Lobster in the United States. Do they put that on their menu? Do they look for it? Is it a big deal with our buyers, like Japan, the United States and Europe? Is that certification something that's really taking off and they're looking for it? What's your scope on that?
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We have 1,700 employees in Atlantic Canada, and we buy from over 1,400 independent fishermen. In responding to new trade agreements and opening up new areas, we always look for new ways to increase value. When you have more places to sell your product and more opportunities, it creates more leverage for companies that are selling in the market. If we have five new countries to sell to, and we're now selling a particular species in two or three, then we can spread that around, allocate some to each, and get the price up.
That's what I've seen in our industry. As we've expanded our trade agreements, we have more opportunities. We used to sell 70% or 80% to the U.S. market in the 1980s, and we didn't have other opportunities. The North American Free Trade Agreement, together with other trade agreements Canada has negotiated, have created more legs on the stool. We now have more leverage going to market. If you're going to a single market, you're not going to get the best price. But if you're going out to several markets, then you have leverage to tell them you're not going to sell them all your product, but you'll sell them a little bit if they give you a certain price.
From what I've seen in our business, that's really what's happened with these trade agreements. It's been a real opportunity to bring greater value back to our province and the country. That value gets shared among all the participants. Trade means higher prices for the fishermen, better opportunities for companies, and increased revenues for government as a result of higher incomes. It's a win-win, as we see it, and that's really what happens, because we have a finite supply of fish.
This is the chapter that is really concerning to a lot of Canadians, because this chapter contains a provision that will extend drug patents and increase the cost of drugs to Canadians. I think someone in our earlier panel spoke to exactly this type of situation, where when you see the benefits and you're looking at it sector-specifically, you're taking a narrow view of an extremely huge piece of trade legislation, at 6,000 pages. I would venture a guess that neither of you would want to support increased drug costs for Newfoundland and Labrador people.
I'm going to ask our other participants, Mr. Kavanagh and Mr. Hynd, if they can elaborate on what the impact of increased drug costs would be to the people in Newfoundland and Labrador, and if it's similar to what we've heard in other provinces where people are already struggling under the high cost of drugs.
Mr. Sullivan, you mentioned that you employ 1,700 people here in Newfoundland and Labrador and that you have six international sales offices. In the event of a change regarding trade agreements—let's say, for instance, we did not ratify the Trans-Pacific Partnership but the U.S. and Japan did ratify—how might that complicate, challenge, or create opportunities here in Newfoundland and Labrador for the fisheries industry?
Perhaps you could then tie that into the high cost of drugs, because that certainly is a concern we've heard from coast to coast to coast. How will that affect it, and how can we also pay for the drug costs, even as they are right now, from a provincial level?
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Well, there are a few questions in there.
Ms. Karen Ludwig: I know.
Mr. Martin Sullivan: If we're not part of it and our competitor countries are, it certainly will put us at a trade disadvantage. There's no question about that. We've seen how even a small country like Iceland, which did a trade deal with China, increased their competitiveness vis-à-vis other competitor countries in the North Atlantic, as an example. Really, from our perspective, if we can have these trade agreements and provide opportunities for better incomes for people, then they can afford more.
As I said, we don't fully understand all the minutiae of the agreement, and I wouldn't profess to be an expert, but as exporters and producers here, and as employers of a lot of people, we're trying to increase the value back to the country so that people have better incomes and better lives and we can have sustainable rural communities. I mean, that's really what we're about.
Thank you, gentlemen, for your presentations. The one thing you have in common, even though you differ on the issues, is that you're very passionate. We welcome that and thank you for it.
Mr. Butler already corrected Mr. Kavanagh on the Abitibi thing, so I won't do that, but I will make a comment on the whole secretive nature of the TPP and other trade agreements. There was the ability to sign a non-disclosure, and hundreds of individuals and businesses took advantage of that. They were briefed on the day-by-day, issue-by-issue basis that pertained to them. That was available to people. No governments negotiate through public, through media, or whatever. We're seeing that right now with health care. We're seeing it with Petronas moving forward with the LNG. It's not done in the public purview because it just can't be. So there was the ability to sign those non-disclosures and move forward.
I want to move on to you, Mr. Sullivan and Mr. Butler. Thank you for your presentations. I understand that you're coming at it from the tariff only, but there is certainly overview on labour standards and environmental standards that will pertain to you as you go into foreign countries and here. It really levels the playing field on a lot of the ancillary parts to a trade agreement.
Would you be interested in making investments, to move forward into the world economy, if they weren't secured?
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That would make it extremely difficult, of course.
Hon. Gerry Ritz: Exactly.
Mr. Martin Sullivan: As we've traded with countries, like China, for example, sure they have a lot of questionable practices, but we've seen that the wages of people have increased more than 10-fold since we started trading with them back in the early 2000s.
Trade agreements may not be perfect, and there are concerns, but when you look at it in balance, can we have some impact in those countries in terms of increasing how they look at things, changing their view? I think we have a significant impact. I travel quite a lot in Asia and a lot of these countries, and I've seen a dramatic change in China, as an example, and in some of the other Southeast Asian nations as a result of opening up trade.
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I've always said that trade stability and predictability drives investment, drives efficiency, and drives innovation. You guys are living proof of that in the expansions you've done. You also need to have diversity in your trade portfolio, the same as you need to have diversity in your investment portfolio.
By dealing with more countries, as you rightly point out, Martin, instead of selling everything to the U.S., you keep the U.S. honest, because you're dealing with six other nations as well that are also looking for your product. So that builds strength into Canada. In order to pay for health care costs and all the social costs in this country, you need to have taxpayers who are paying taxes. When you're driving up the rural economy in Newfoundland by doing all of this, of course, you're setting the stage to be offering all of those social programs. It's a self-fulfilling prophecy at the end of the day.
The one other point I wanted to make is that we hear a lot that trade agreements have done nothing, that everything is stagnant. Yet I think it was you, Martin, making the point, and Derek to a certain extent too, that in every trade deal we've made you've seen positive steps coming out of that, incremental at times, but always positive steps.
I would like you to build on that a bit, because we're hearing about Tufts University—it's American, and that was their study—and 58,000 jobs being lost, but they never start to look at the positive side. We're hearing from a lot of small businesses. One young fellow today increased his by 25%. It was only one, but it was 25%. It's about the ability to build your footprint.
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Welcome, sir, and welcome to everybody else who just came in.
This is the last of our panel and we'll continue now with our study on TPP. We've done most of the provinces and dealt with the territories, and we've had a lot of submissions from individuals. It is over 20,000 emails now, almost 300 witnesses, and 130 briefs. It's a big undertaking and we'll be doing this until the end of October, then we'll put a report together and present it to Parliament.
As you're well aware, Mr. Taylor, it's a big agreement. It's 40% of the GDP, it's 12 countries, and 800 million people. I think it's one of those agreements that one way or another is going to affect all Canadians, some maybe more positive than others, but our job is to listen to Canadians. We'll have an open-mike session after this. I think with all the goings-on in the United States, trade has become more of a topic now than it ever was before.
Without further ado, sir, you have five minutes. If you can keep it around that, we'd appreciate it. Then we'll open with dialogue from the MPs.
Go ahead.
I'm Ron Taylor, the CEO of the Newfoundland and Labrador Association of Technology Industries. I want to thank you all for inviting us to come here today.
I find it interesting, because being in the technology sector I get to travel all over the world and I see various levels of security. I think in the 14 years living here in St. John's, it's the first time I've seen this level of security here. It was kind of interesting seeing that here. I'm certainly used to it, because I go to a lot of places where I don't get through the front door because it's bullet-proof glass, but it's interesting to see it in my own backyard.
Thank you very much for inviting us here. International trade is very much a part of the technology sector here in Newfoundland and Labrador. We've seen some exponential growth in the last number of years.
I'll tell you a little about what we do and what we affect. We oversee about 165 or 170 companies here in Newfoundland and Labrador. Annual sales are about $1.6 billion a year. Interestingly enough, 10 years ago that was $460 million. We're looking for that to double again in the next 10 years. Most of that is coming from outside of Canada. In a lot of cases it's coming from outside of North America. As far as international trade, if you're a technology company in Canada and don't have access to international markets, well, you're not going to grow very much.
In terms of open trade, obviously, if you've been around a long enough time you go back to the NAFTA days and some of the apprehension that was felt by people at that time, the sky was going to fall and the Americans were going to come and take us over with NAFTA. Of course, that didn't happen. As a matter of fact, a lot of people say today that Canada certainly saw some real benefits of being part of NAFTA.
I think we take the same approach with both TPP and CETA—you know I'm going to talk about that today—in the sense of open trade and the lowering of the barriers and tariffs. I understand that about 18,000 barriers and tariffs are being lowered here. It has a huge effect for us. When you're with a sector where most of its trade is outside of the country, being able to not have to deal with these types of challenges makes life a lot easier for us.
We're fortunate enough in that we're in a part of the world that can be a little bit challenging, moving goods back and forth, but with technology we don't have those impediments. As such, our sector has grown quite a bit and we continue to see that kind of growth.
If we look at some of the tech giants that are out there, the Apples, the Googles, the Facebooks of the world, they all support TPP. The fact of open border trade with easier access to markets plays a huge part. The fact that the TPP will protect things like....will restrict governments from throttling data on us, and will not allow governments to say that we have to store the data in any particular place, which leaves us open to using the cloud as much as possible, is definitely a benefit to us.
From a technology standpoint, from what we're doing as an organization, I realize some of the details are still forthcoming, but from what we see and from talking to some of the larger technology players out there in North America, this seems to be very, very much in our best interests. As a technology community, we don't really see anything that causes us any concern. We like the idea of open markets. We like the idea of people coming here. We don't see foreign companies coming in to Newfoundland and Labrador in the tech sector as an impediment, we look upon it as a partnership and an opportunity.
From the standpoint of our organization, our membership, we certainly support this initiative.
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Before we move to the MPs, there are a couple of things.
We operate in two official languages. There are translating machines in the back, and some coffee. You cannot take pictures or video during the process.
Before we move on, though, I have one other witness here, Kathleen Connors. I don't know if she's here. Her name was on the list.
If she's not here, we'll move on. That's fine.
We'll go right to the MPs. We'll start off with Mr. Ritz.
Go ahead, sir, for five minutes.
You don't see our names on a lot of products, but we're inside a lot of products. As a matter of fact, we do an incredible amount of work in the United States, in aerospace and defence, ocean security. We're dealing with a lot of the major defence integrators in the U.S. We deal with a lot of the major aircraft manufacturers in the United States, major financial institutions. We do a lot of things in the way of money laundering, terrorist tracking, that sort of thing. We have software-based companies out of here that are world leaders in that.
As a smaller organization, the easier the access is to market and not having to second-guess things going into it.... Traditionally we'll start off, if we're going into a market where there isn't a free trade agreement, by asking what are the impediments, what do we have to concern ourselves with—
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I think people are always concerned about their personal information: financial, health, legal. They want to know that this information is protected. They know that within Canada we have regulations, firewalls, and ways to protect that information. I think the unknown for people is what happens when it goes outside the borders. What happens when it goes up in the cloud? From my experience, I know how secure that is, but nothing is 100%.
People think, well, what happens? Is my information safe? We deal with that here just on a provincial basis, when we have data breaches and people have access to things they shouldn't, but we have ways of checking that here. We need to understand that as part of the TPP the same type of protection is there. and if it's not, I think people are going to be reluctant. They are going to be concerned. I think that's a normal reaction by people. I want to know that my data is safe. I want to know that my data is secure. I want to know that some third party 10,000 miles away is not accessing things on me it shouldn't.
We are dealing with that regardless of the TPP. We are dealing with that on a global basis with all of the big providers that are out there, and we've seen some of the challenges. Technology is not like a lot of the traditional industries. It moves at the speed of light, and it changes so quickly. There are so many opportunities that are opened up, but whenever you open an opportunity, there can be some portals, things that are created that people can get access to and do some nefarious things with. I understand that.
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I can remember when I moved here 12 years ago, people said to me, “You've worked all over the world. Why would you go to Newfoundland?” My answer was that was where the opportunities were. There are some great things happening here.
If you talk about wireless technology, for instance, wireless power, a lot of our stuff goes under the water. Traditionally, even for things like the ocean gliders, their weak points were where things connected, because of corrosion. You don't have that when it's all housed. You reduce that risk quite a bit.
Even from a standpoint of just looking at what's on your desk today, look at how many wires connect everything. Coming up with a way to wirelessly power things and recharge things is the future. Goodness gracious, any of us can look behind our desks today and see what's there in terms of wiring. It's unreal.
We have a world leader company here, Solace Power, that has the attention of people like Boeing. They are doing things with the U.S. military. Think about the average soldier out there. As I understand it, they carry about 25 pounds of battery packs on them. Being able to jump into a vehicle where all they are wearing is wirelessly powered, when it goes to the next location, whether that be a truck, a car, or a ship, and getting off there and being automatically re-powered up, is pretty incredible stuff. We're doing that here.
One of the things people are surprised by when they come here, and they are blown away by, is the fact that we are a world leader in ocean technology here. We're very successful at it. We're doing some world-class things in fraud, money laundering, terrorism, and movement of capital. These things exist here, and the sector as a whole has done incredibly well.
I talk about doubling it again in 10 years' time. I sat in a room last night with 130 young people who wanted to do technologies that go into the health care system, and the stuff that they're already working on themselves is mind-blowing. I'm always amazed about Newfoundland and Labrador, how innovative our society is, how entrepreneurial it is, and the fact that in such a small population we have so much talent here on the ground. It's one of the things that brought me here, and it's certainly one of the things that keeps me here.
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We're trying to create that kind of environment here. I think if you looked at Newfoundland and Labrador in a traditional sense, it was heavily reliant on the natural resources that we have. Natural resources are cyclical. They come and they go, and the price points fluctuate. All we have to do is look at what's happened to the oil and gas over the last couple of years.
The great thing about the technology sector, where we're selling knowledge, is that we are not disadvantaged here. The growth for the advanced technology sector and all the things that go with it is endless. It's growing exponentially. Newfoundland, being an island, perhaps does inhibit us sometimes. It isn't easy to move things off and on here. But with technology, we don't have any of those impediments. We are no more advantaged or disadvantaged being here in Newfoundland than in Toronto or in Silicon Valley. As a matter of fact, we have a lot of our companies that are out in Silicon Valley, that are in incubators there.
In February I'm taking 16 companies that are in the gaming business to the biggest game developer show in the world. We're doing things in New York City. There they call themselves “Silicon Alley”, and are trying to position themselves as being, if you're in the technology sector, the place to go if you're on the east coast.
We're just at the beginning of it here. Every time I turn around, we've done incredible work with setting up startup ecosystems, taking innovation outside of just the major centres, working on that, and creating a place where all these young talented people can produce top work.
If you look at a lot of places, there's so much talent on the ground there, but then they don't know where to start. It's about creating those ecosystems, those innovation systems, where if you have an idea, then you know somewhere you can go and you can talk to someone tomorrow. Of course it will lead you into some of the federal and provincial departments that can assist you, but it's about getting it up off the ground. That's a huge part of what we do. We're a huge player in the startup ecosystem here. I don't really care where it falls, as long as it happens.
:
Thank you for this opportunity.
I'll confine my remarks to some of the negative impacts this agreement would have on the environment and on the most vulnerable in our society.
Canada has promised to transition to a low-carbon economy. As Canadian governments are involved in discussions on how we might work towards a clean energy future, we're at the same time facing what might be termed a derailment of this process in the TPP agreement, which threatens to undermine economic environmental progress.
This agreement poses a devastating threat to the common good by favouring multinational corporations. In similar trade agreements, Canada has already been sued 35 times, and 63% of these claims have involved challenges to environmental protection. The TPP would most likely only serve to increase the number of these suits, especially in investor-state dispute settlements.
With the removal of gas export restrictions, this agreement would further encourage the extraction of fossil fuels and advance the rate of exploration and extraction of natural gas. In addition, there is a high probability that Canadian manufacturing jobs would be outsourced to Vietnam and Malaysia to avail of cheap labour. There the production of goods is two to four times more carbon-intensive. Added to this, the added shipping-related greenhouse gas emissions would have significant negative environmental implications, thus further severely impacting the lives of this and future generations of the entire earth community.
Clearly, the dangers involved in signing an agreement that would protect the interests of large multinational corporations—
:
Good morning, ladies and gentlemen. Thank you for the opportunity to speak to you today.
I have been very concerned with the protection of the natural environment in this province for probably the last three decades. On a number of occasions I have been concerned with environmental assessments. That process is under Canadian law, and we're hoping that it is there for Canadian people, not just companies but individual people. Government should be concerned with the millions of individual Canadians and their rights, and the rights of the environment in the country we live in.
I don't know a great deal about the details of this TPP. I do know that NAFTA permitted challenges, as in Digby Neck and the quarry there that was proposed by Bilcon, an American company, I believe. They wanted to have a quarry and a port and to send ships through the Bay of Fundy. The environmental assessment process worked when the people who lived there objected, but now the company is coming back with a NAFTA challenge. They want $101 million American dollars from the Government of Canada.
This is all very fine. Big companies can afford to bring challenges to court. What about the people? If the quarry were to go ahead, if the company were to win the NAFTA challenge, would the people be compensated for the quality of life they have lost? Would they receive several hundred thousand dollars each for the loss of their property value? What about the whales in the Bay of Fundy? How will you be able to compensate them?
I work for the International Brotherhood of Electrical Workers. One area I want to touch on is labour mobility. In this province we have a resource-based type of economy. We have several ongoing projects in gas and oil, hydro development, and that sort of stuff. Our concern, when we buy into the global economy and all these sorts of things, is the protection of Canadian workers. Canadians come first. That's our priority.
I've negotiated agreements for the fixed-link transmission to Nova Scotia, the Muskrat Falls hydro dam and the transmission lines from there, and of course all the equipment that's going into that project. We're in partnership with the energy company, Nalcor, in developing that project. Our concern with the TPP is whether we can build these partnerships internally with our own corporations and protect the rights of Canadians to these jobs first.
There's absolutely no doubt that we need expertise. If a piece of equipment was made in a certain part of the world, we have provisions, in collective agreements that we bargained, that enable us to bring those people in so that we can have a transfer of technology from wherever it was manufactured to the people who can maintain it into the future. That's a concern of ours when we talk about that.
There's also the issue of labour mobility and being able to go across Canada. If there's a shortage of power line technician workers in Newfoundland, we would like to be able to go to all the other provinces and take those workers if they're available. If they're not available, then we can go to the United States or we can bring them in from foreign countries. We're not opposed to that at all as an organization. As a matter of fact, we have language that covers all of that in the project agreements we've signed off on in the building of these hydro projects.
Equipment for this project comes from all parts of the world. It is made in China, made in India, made in Turkey. It comes from everywhere. Of course, with that equipment to be installed, there are going to be manufacturers' representatives. We work with those folks to make sure there is that transfer of technology, that Canadian jobs are protected, and that we can sustain a future for the people who make their living from the construction industry.
When I talk about mobility, this is exactly what we want; we want Canadians first. If we have aboriginal groups within our communities that are close to these construction projects, we look at them and give them the first choice to get that type of work if they have the skills and qualifications.
:
My name is Tony Middleton. I'm a retired computer science professor, and I'm here as Joe Citizen.
In Canada and the U.S., wealth inequality is increasing. Quality jobs are being offshored. Debt loads are threatening economic stability. In the U.S. in particular, stability is maintained by increasing debt. Stability would disappear if they couldn't increase debt. Independent studies suggest that trade treaties may make things worse.
Furthermore, trade treaties limit our ability to repair the damage that's already been done. ISDS lawsuits can neutralize government attempts to stimulate their own economy. That can result in huge lawsuits, which can depend on projections of profits that can be rather fictitious.
ISDS lawsuits essentially make offshore tribunals superior to nation-state courts. They effectively rewrite the constitution of a country. They don't literally rewrite the constitution, they just declare that it's increasingly irrelevant.
Thank you.