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]

Wednesday, October 24, 2001

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[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, can we come to order, please?

Colleagues, we're pleased to have the Minister of International Trade before the committee this afternoon.

Minister, welcome. Thank you for coming.

You'll recall, colleagues, we have a very charged agenda this afternoon. The minister will be speaking to us first about the upcoming ministerial meeting in Doha. Then, Minister, as you know, we are considering the amendments to the EDC Act.

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We have you until 5:30. Maybe we could go until 5 o'clock. I would propose we take the first hour to talk about Doha. We could use the last half hour to talk about the EDC Act, if that would be all right with you, rather than jumbling the two of them up since they're so distinct.

Perhaps you could speak to us about your perception of the ministerial meeting in Doha, the potential of it taking place, and how you see the Canadian negotiating position. In one hour, we'll break and go to the EDC Act. Okay?

Mr. Duncan, sir.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): I have a point of clarification. Do we have any idea as to how much time will be presentation time and how much time will be question time?

The Chair: Maybe the minister could answer.

Hon. Pierre Pettigrew (Minister for International Trade): Mr. Chair, I have not heard Mr. Duncan's question.

The Chair: Yes, the acoustics in this room are less than perfect. Then again, many things around here are less than perfect, including some of the members and certain chairs.

Some hon. members: Oh, oh!

The Chair: Perfection is not part of parliamentary life.

Mr. Pierre Pettigrew: I can be as long or as short as you want. Doha is important. I think you all want to know what has happened in Mexico and Singapore. I don't mind not talking. If you don't want me to talk, I won't talk.

The Chair: No, we want you to talk. The members also want to be able to ask questions.

Mr. Pierre Pettigrew: Mr. Chair, I would not want to preclude questions on softwood lumber or other things. I was leaning towards Doha and EDC because it's very active. I don't want to exclude anything.

The Chair: I think, Minister, rather than doing it in the way I proposed, let's do this. Why don't you make your remarks about Doha and EDC? We'll do both at once. If we have an artificial break and limit the last bit to EDC, members may have questions on all sorts of things.

Mr. Pierre Pettigrew: Yes. Our colleagues here may want to raise issues related to September 11, trade, borders, or whatever. I don't know the preoccupations or concerns you're hearing in your constituencies. I decided to speak only on Doha and EDC. I don't want to preclude members from raising preoccupations, questions, or giving me advice on other topics.

The Chair: We'll do so.

[Translation]

Mr. Pierre Pettigrew: And I'm...

[English]

The Chair: We will go that way, Minister.

I want you to know, in my own constituency, my constituents talk of little else except the work the Minister of International Trade is doing to get trading opportunities for our country.

Mr. Pierre Pettigrew: You have a good riding.

The Chair: It's a really wonderful riding. If you'd come to us more often, it would be even better.

Minister, why don't you go ahead? We'll turn it over to questions when you're finished.

Mr. Pierre Pettigrew: Thank you very much, Mr. Chairman, and members of the committee. I'm very pleased to have the opportunity today to speak to important developments on both sides of my portfolio, trade promotion and trade policy.

I want to present to you, and table, Canada's objectives at the upcoming fourth ministerial meeting of the World Trade Organization. I will be tabling the Canadian position today before your committee, Mr. Chair.

I will briefly outline Bill C-31, an act to amend the Export Development Act. Afterwards, I shall be happy to receive your questions on any subject you want to raise.

First, I think it's important to address the current environment for our trade promotion policy activities. Times were already difficult before September 11. You've seen the numbers for July. The attacks clearly worsened an already difficult global economic situation.

The global economy was in its first synchronized slowdown in two decades. The U.S. economy was, in the words of Alan Greenspan, grinding to a halt, as was the Euro zone. The technologically trade-dependent east Asian economies were contracting sharply. We felt this in our trade numbers. In August, Canadian exports fell 3.4%. The heightened border security in the wake of the attacks proved how vulnerable Canada-U.S. flows of goods, services, and people were to disruption.

The government's priorities are now to demonstrate our solidarity with the United States of America, to communicate our commitment to action in the United States and combat misconceptions of Canadian policies, to protect against congressional action on the Canada-U.S. border, and to work within Canada to develop a strategy on the border that balances security and trade facilitation.

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In short, we have to find a new North American space within which we can continue to share trade, investment, and the movement of people. One way to do this is to put trade investment into movement of people. One way to do this is to put even more energy into our efforts to strengthen our rules-based trading system. Fortunately, WTO members have been working hard to ensure a successful launching of a new growth and development round of negotiations at the next ministerial meeting in Doha, Qatar.

[Translation]

The government's objective for the fourth WTO Ministerial Conference, which will be held in a little less than two weeks' time in Doha, Qatar, is to launch negotiations on an agenda that will deliver growth and development, here in Canada and around the world. Most of our specific objectives were announced in the lead-up to the Third WTO Ministerial Conference in Seattle in late 1999, in particular in the government's response to the committee's report on Canada and the WTO. However, there are some changes of emphasis in our current positions, because we have been listening carefully to Canadians' views on international trade policy and responding to changing international circumstances.

Our extensive consultations with Canadians show that they generally support Canada's trade agenda. Business organizations recognize the opportunities resulting from access to foreign markets as well as from inward technology and business flows.

Consumers want access to quality goods and services, whether domestic or imported, and at the same time, assurances that the government will maintain our valued policy flexibility in key sectors, notably health, public education, culture and social services.

Some interest groups and citizen-based organizations are also concerned about the social and environmental impacts of trade, and want Canada to address the priorities of developing countries in any new round of trade talks.

Provinces and territories have long been key partners in the development of our trade agenda, through their broad interests and their specific responsibilities alike. They too generally endorse the Government's trade agenda, and continue to make significant contributions to our trade strategy and tactics.

And of course, Mr. Chairman, members of this committee are well aware of the ongoing and important role of Parliament in the development of Canada's trade policy. Accordingly, the agenda I bring to you today has been tested and revalidated: these objectives seek to promote the best interests of Canadians both as citizens of this country and as citizens of the world.

[English]

I shall not enter into the details, as I have brought a fuller, written statement for distribution to the members of your committee. However, as you know, since Seattle we have begun negotiations on agriculture and services. There is much more that could and must be done.

Canada, therefore, supports negotiations on a broad range of issues, including: non-agricultural tariffs to provide better and more secure access for our industrial fisheries and forestry exports; trade facilitation to make border procedures simpler and more transparent, a particular interest of our smaller and medium-sized exporters; transparency in government procurement to allow Canadian suppliers to form a realistic assessment of their chances in foreign procurement opportunities; rules to clarify and strengthen disciplines in anti-dumping and subsidies, to limit unnecessary restrictions to trade and legitimate subsidies while improving our capacity to deal with unfair trade practices; and improvements to the dispute settlement system to improve its efficiency and resolve certain procedural ambiguities.

I believe this is a realistic negotiating agenda and one that would reinforce progress on the ongoing and vitally important negotiations on agriculture and services.

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Though we hold the middle ground in this debate, there are many other proposals in play for broadening the agenda still further. With regard to competition policy, Canada is prepared to engage in negotiations that exclude the development of obligations subject to dispute settlement. Though anti-competitive practices can hurt Canadian interests, our intent is to build capacity in this area worldwide, and we must be sensitive to the constraints faced by our developing country partners.

Regarding investment, Canada supports the inclusion of investment in the WTO negotiating agenda in order to pursue greater transparency with regard to investment regulations and non-discriminatory treatment for Canadian investors in other markets. Consistent with all of our other international investment undertakings, a WTO agreement on investment that is acceptable to Canada would have to respect Canada's right to regulate in the public interest.

You will also find in the written statement an outline of how we propose to address various issues that lie outside the normal trade agenda but are clearly relevant to it—for example, environmental matters. In this regard the environmental assessment that will be conducted of any new negotiations will allow us to take account of their implications for Canada's environment and to incorporate appropriate responses into our overall approach.

Returning to what is likely to be negotiable, I have said that this agenda is a realistic one. But is it likely? Many are asking whether the forthcoming ministerial conference will see the launch of a broader negotiation or will suffer the fate of the Seattle meeting. I am now quite optimistic. From my discussions with trade ministers around the world, I find that support for a launch is indeed growing. It is clear, however, that real differences remain between some members on the scope and ambition of the negotiating agenda. The major developed traders, including Canada, continue to narrow their differences, and no one can doubt our joint commitment to broader negotiations. But many developing countries are not yet convinced of the benefits of such a step.

[Translation]

There are several reasons why support for a “Growth and Development Round” has grown. First, there is the moral imperative of doing more to eliminate poverty and marginalization. Secondly the economics of the situation demand it. The world economy was already slowing down before the murderous events of September 11, and they aggravated this situation.

However, moral and economic imperatives are not the only reasons the next round must be built around the theme of growth and development. To be blunt, the politics of the situation also demands it. Developing countries constitute the majority of countries in the WTO and they will not agree to a launch unless they feel their concerns are being addressed. There are important developing countries such as China, soon to be a member, that are committed to a new round. Other developing countries have particular views on the matter of the implementation of the results of the last broad negotiation, the Uruguay Round, and therefore set conditions to any new launch.

Implementation, however, raises many sensitive and difficult issues: how WTO rules serve the development interests of countries; whether their governments are able to implement complex undertakings; whether their economies have the capacity to take advantage of opportunities. We support pursuing the resolution of legitimate implementation concerns. It is simply unrealistic to expect the scale of changes some demand - rewriting rules and commitments all around - outside the context of broader negotiations.

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On the other hand, it is perfectly reasonable to learn from the past and make it possible for poorer countries to take on and benefit from WTO rules and commitments. In tangible terms, Canada's support for a “Growth and Development Round” means being prepared to give enhanced trade-related technical assistance to administrations, and support for capacity-building in developing economies and societies. It means adapting to the reality of more inclusive WTO decision-making. And it means new negotiations should aim at more general improvements to the WTO system that directly address developing countries' need for improved market access, particularly on agriculture. There will be many demands placed on us for money and markets, and I doubt we could or should meet all of them, but I am confident that we and our WTO partners can find a way forward that is in our collective best interest.

That is why I believe that, with compromise and pragmatism on the part of all Members - both developed and developing - further progress can be made on implementation issues. From my contacts, I would say that a growing number of members now accept that a new round is the only practical way to resolve concerns about the outcome of the last round.

We will begin a journey in Doha. It is a voyage of discovery: we know what we hope to find, but all we control right now is the course we set. That is why it is important to get the right agenda, and the right negotiating approaches. It is also why, in our view, it will be crucial to conduct the negotiation in the right way, that is with the greatest possible transparency and inclusiveness, so that all members will be effective participants, and all citizens, not just Canadians, will see the negotiating process unfold and be able to contribute to their national positions. I shall continue to press this position in all my meetings with my fellow trade ministers.

[English]

I would now like to take a few minutes to speak to you about Bill C-31. As you know, the current legislation governing the EDC includes a requirement that I, in consultation with the Minister of Finance, review the Export Development Act after five years and report the findings to Parliament. This review process, which commenced in 1998, has included extensive study of EDC's operations, Canada's export finance needs, and the international trade environment. This review has also included stakeholder consultations, as well as detailed surveys and research.

This committee produced a substantial report on the EDC and on the whole the government has endorsed your findings. We agreed that EDC should publicly demonstrate its accountability by reflecting the full range of public policy concerns in its activities and should introduce appropriate transparency measures concerning its activities.

I also believe there is a need to balance the competitive needs of Canadian exporters with the desire for EDC to exhibit leadership in corporate social responsibility practices.

I believe the proper balance has been achieved in the government's response to the review of the Export Development Act. In June of this year I announced steps to update the mandate of EDC, including the provision of policy guidance on environmental reviews, and I signalled my intention to table legislation as part of a broader package of changes to the corporation's policies and practices.

In this legislation, which the committee is reviewing, there are amendments that will change the corporation's legal name to Export Development Canada, as well as measures to update governance and administrative practices. The principal change, however, is a new legal requirement for the environmental review of projects that EDC has been asked to support.

This bill will allow Canada to position itself at the forefront of environmental review policy for export credit agencies around the world.

Increased attention to environmental issues has led to a general acceptance of the need for a formal environmental review process at EDC. This view is shared by EDC, its business clients, citizen groups, and other stakeholders.

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The Gowlings report submitted to this committee recommended that EDC adopt a legislative framework and substantive approach similar to that of the Ex-Im Bank of the United States, which bases its environmental practices on those of the World Bank. This committee then drew similar conclusions and added a recommendation that the Auditor General should oversee the framework.

EDC was among the first export credit agencies to introduce an environmental review framework, putting Canada and the EDC at the forefront of current practices in the environmental review of export projects. Bringing the force of law to the environmental review of EDC projects shows that the Government of Canada is serious about this issue, just as it is about the protection of human rights and transparency at EDC.

In conclusion, let me return to our objectives for the fourth WTO ministerial meeting. We have always known that a broader new round was necessary to advance the interests of Canada, and we have been advocating a balanced and realistic agenda for some time.

But we also know that this is not just about trade any more. Success in launching a new round will require a combination of political commitment to take development into account and evidence of how we are prepared to deliver this commitment. Success in conducting the negotiations will require Canada and the world to look beyond the WTO and to use the entire apparatus of international cooperation to address the broader social, environmental, and economic aspirations of our peoples.

The overarching goal of the WTO should thus be to manage the multilateral trading system in a manner that keeps pace with changes in the global economy and provides maximum opportunity and benefits for all members, developed and developing alike. Our next ministerial conference will give us the opportunity to set a collective course to achieve that very goal.

Mr. Chairman, before we turn to questions, I would be remiss if I did not introduce to you our new Deputy Minister for International Trade. I should have done it at the beginning, but I neglected to do so. I have a bad case of the flu, so that explains why I'm not completely with it at the moment. I would like to introduce to you Mr. Len Edwards, who became our deputy minister in June. He was our ambassador in Tokyo. He replaced Mr. Rob Wright, who has now become our ambassador to Tokyo. So Len Edwards is our new Deputy Minister for International Trade. I would like members to recognize him, and I'm sure you'll appreciate his talents.

Thank you very much.

The Chair: Thank you, Minister. If you collapse from the flu during the hearings, Mr. Edwards will have to take over.

Welcome to the committee, Mr. Edwards. The only thing I can say in Japanese is sayonara, but I think that's goodbye, not hello.

Some hon. members: Oh, oh!

The Chair: We can say sayonara to Mr. Wright, who has gone to Tokyo, but to you we say hello. Welcome to the committee.

Colleagues, we have an hour and five minutes with the minister. If everybody goes on for ten minutes on the first round, we won't get many people in. If you could keep it down to around eight minutes, we could get more people on. Perhaps we could watch that.

Mr. Duncan, sir.

Mr. John Duncan: Are you trying to get everybody on once then?

The Chair: The rule is ten minutes the first time around with the minister and then five minutes after that. But with 60 minutes and with everybody around.... Anyway, see what we can do to cut it down.

Mr. John Duncan: You talked about the WTO at some length. Canada definitely has a vested interest in rules-based trade, with so much of our economy based on exports and our small population.

The minister is going off to the WTO talks next month with a Canadian delegation.

My concern is that you are being marginalized and we are undercutting the WTO because of the behaviour in subsidizing Bombardier.

When the announcement of the Northwest Airlines subsidy was made in July, we flew in the face of a WTO judgment. We could apply tariffs. We had fought for three or four years to get that ruling. I said at that time that this was undercutting the WTO.

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Now we have a judgment by the WTO saying that indeed was a bad decision, and we have the Minister of Industry saying we're going to continue to do that. Can you tell me why the government, the cabinet, is allowing this to occur? At the very time when we need to be supporting the WTO, we appear to be putting a stick in their eye and not supporting them.

Mr. Pierre Pettigrew: First, I'd like to know if the member has seen the decision of the WTO.

Mr. John Duncan: I haven't seen the specifics.

Mr. Pierre Pettigrew: So let's not jump to conclusions through rumours that are reported in the papers. There is an intermediary report, and I cannot comment on it because we must respect the WTO.

Second, in no case have we subsidized Bombardier, Air Wisconsin or Northwest Airlines. They are loan guarantees to clients like Air Wisconsin and Northwest Airlines. So we cannot talk here of subsidies, and we should not talk about that.

The OECD rules on financing allow a country like Canada to match any financing that has been offered by other countries. We have checked the OECD rules very clearly. The Brazilians have decided to call a panel on the Air Wisconsin transaction of January, not the one of July with Northwest Airlines.

I cannot comment on that decision. When we can, I think you will find the decision is more balanced. We have already commented. We are preparing our comments to the WTO right now. You will find that a lot of the things we've been saying at the WTO will be confirmed by that decision.

There have been four WTO decisions that found illegal subsidies and support by the Brazilian government to Embraer. In January, we decided to match the offer the Brazilians had made, in terms of loan guarantees. We will see what the WTO says, but let's not jump to conclusions.

It is important at this stage for us to go back to the negotiating table with the Brazilians and negotiate with the Brazilian government for a level playing field on which both Bombardier and Embraer can take their rightful places. There is room in that market for both companies, and it is imperative that we go in that direction.

Mr. John Duncan: The other minister is saying he doesn't care what the WTO says, he's going to continue to support Bombardier. So that's a contradiction to what you're saying. I'm saying that's hurting the Canadian position and undercutting—

Mr. Pierre Pettigrew: I don't think my colleague is saying he doesn't care about the WTO.

Mr. John Duncan: He is saying he doesn't care what they say.

Mr. Pierre Pettigrew: No. When there were these rumours last week, there was a drop in the price at the stock exchange because people said the Government of Canada would not be able to respect its obligation on Air Wisconsin. That was absolutely wrong.

I was in Asia and Shanghai, and my colleague said very clearly that we have a commitment, a deal is a deal, and nothing can change that. The proof of that is the WTO found the Brazilian government had provided illegal support to Embraer four times, and they've never changed it. So we said we too would stick by a commitment we had made, in order to secure the stakeholders. I think it was a very responsible attitude we took, as a government.

Mr. John Duncan: I'd like to move on to softwood lumber. You made that invitation, and I will do that.

You have said repeatedly that we can win the softwood lumber dispute on the merits, but as a prudent measure we're pursuing track 2, which is the alternative to litigation, and appearances are important.

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I have a couple of questions. Why are you allowing Canada to make all the concessions and proposals, all the presentations, while the U.S. is basically doing none of that, in these track 2 discussions?

When are you going to schedule a national stakeholders meeting? Once these meetings in Vancouver and Montreal are over, surely that's the most appropriate time to do so.

Mr. Pierre Pettigrew: Would you do it before or after the dumping decision has been announced by the United States? We expect a decision from the United States on October 30.

Mr. John Duncan: I think you know I was asking for it to be before these meetings. Now that these meetings are going on, I think it has to be as soon as possible. I don't know if there's any room to request an extension. We had an extension on an anti-dumping decision, consequent to the events of September 11, on a different case. But I don't know if October 30 is still the date the anti-dumping will come down.

I think you will need to have everybody on the same page when that decision does come down, so the stakeholders' meeting would have to be announced this week, and it would have to take place prior to next Wednesday.

Mr. Pierre Pettigrew: Okay. Well, thanks for your advice.

On the substance of it, we are maintaining the litigation. I have said time and again I was very convinced that our case was a solid one, and I will absolutely stand by that statement. I think the American producers' case is much weaker than I thought it was. I read it when they tabled it, and I was frankly amazed and even flabbergasted when I saw the 19.3% countervailing duty chosen by the commerce department. I felt there was a lot of politics in all that.

I absolutely stand by that. I believe the litigation road is absolutely imperative. We're before the WTO on six different U.S. allegations and accusations. I'm very convinced we will win.

As you know, winning takes a long time legally because of all the recourses and that sort of thing. We are parallel after much consultation with industry from all over the country—British Columbia, Québec, Alberta, and Ontario—all the provincial governments that have an interest in it. After much consultation, we have had this approach of a track of discussions.

First of all, I think it's important that the member realizes that the Minister for International Trade is leading in all these negotiations. I saw some statements you made in the press while I was away in Asia, and I was amazed when you said the provinces were all having individual negotiations. It is absolutely not the case.

The Minister of International Trade is leading this exercise, participating in and coordinating it all. As you know, we work with the provinces, because 90% of the American allegations deal with provincial programs. So of course we have to include and work with the provinces. We think it is the right thing to do. No concessions have been made by anyone.

In your own province of British Columbia, a government was elected some months ago, led by Mr. Campbell, and the Minister of Forests is Mr. de Jong. They were elected on the program of making some alterations to their forestry practices, for the benefit of their industry, not for the United States.

They're having discussions on how the industry is evolving, how forestry management practices are evolving, and getting a common understanding between the United States and Canada on how a level playing field could develop out of that. I think this is a very responsible approach. I'm very proud of the Canadian team we've built around this issue. I'm very proud that the provinces and industry are participating constructively in it.

Mr. John Duncan: I just—

The Chair: I'm sorry, I can't, Mr. Duncan. You're at 12 minutes already. No, I'm sorry.

Mr. John Duncan: I just want to say you called them negotiations, for the first time in your brief response.

Mr. Pierre Pettigrew: Sorry, I missed that.

The Chair: We won't go any further down that road.

[Translation]

Go ahead, Ms. Lalonde.

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Ms. Francine Lalonde (Mercier, BQ): Thank you. I will be splitting my time with Mr. Paquette.

Here's my first question. In today's edition of Le Monde, I read that people in Geneva are saying this:

Ramadan starts on November 14 and the emir has made it known that he does not want any Christians on his soil at that time.

Based on that statement, will the meeting in Doha go ahead?

Secondly, you noted in your presentation that under no circumstances would our public health and education systems and our social services be on the negotiating table and that we would maintain the necessary flexibility to pursue our cultural policy objectives.

Are you worried about the emir?

Mr. Pierre Pettigrew: No, I...

Ms. Francine Lalonde: I can give you a copy of the article. I have one here with me.

Talk of our public health and education systems could be cause for some concern. Quebec's private education system at the secondary and collegiate level is funded by the government to the tune of 80 per cent. Are all state-funded education services guaranteed to be maintained? You talked about public health and education systems, whereas in reality, these systems are often partially or wholly privatized, albeit publicly funded and accessible to everyone.

Mr. Pierre Pettigrew: Our public education system will not be on the negotiating table. There is no question whatsoever about that. Now then, there may be private schools and private classes for students. Some American schools already give private courses in Quebec in such field as information technology. These institutions also provide training through programs that are often international in nature. However, Canada's public education and health systems will not be open to negotiation.

The reason why we don't want to take this particular matter off the agenda, has some have asked us to do, is that varied interests are at stake, particularly in Quebec. When I was Minister of Human Resources Development, I recall heading a delegation to Morocco with nine Quebec colleges, Laval University and a number of CEGEPs involved in development.

Mr. Pierre Paquette (Joliette, BQ): Like the Collège de Joliette.

Mr. Pierre Pettigrew: That's right. We want to be involved in developing rules in the field of educational services at the international level to ensure that the interests of our exporting businesses are met. However, there is no question of our negotiating any provisions.

Ms. Francine Lalonde: Could we possibly be seeing traces of Chapter 11 in the document that you have given us stating that the 142 countries represented in Doha will be consulted? I would appreciate an answer to this question. Are we seeing traces in point 18 and in point 26? Point 18 states that investment will be one area of negotiation and that this will also include mechanisms for settling disputes among governments. Will that be the only way of resolving these problems? You realize that I'm referring the Chapter 11 of NAFTA. Are we seeing traces of it in point 18 or in point 26?

Mr. Pierre Pettigrew: On the subject of Chapter 11, I would just like to tell committee members how pleased I am with the improvements the trilateral commission was able to make at its August 1 meeting in Washington. Some progress has been made in terms of my commitment to you to seek improvements to Chapter 11 of NAFTA. I can assure you that my US and Mexican counterparts intend to seek additional improvements and changes in this area. Efforts in this respect are ongoing.

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Canada would be prepared to negotiate on the investment question if all WTO countries agreed to this and to the extent that it would not stop us from adopting legislation for the sake of the public interest. I can assure you that if negotiations on investments were eventually on the meeting agenda, we would bear in mind the North American experience with NAFTA. Some clarifications would be in order, particularly on the subject of expropriation. We will proceed with greater caution.

Ms. Francine Lalonde: Therefore, you're not saying no. I have nothing further, Mr. Chairman.

The Chair: Mr. Paquette.

Mr. Pierre Paquette: I'm not certain I understand the gist of your response to Ms. Lalonde's question.

Yes or no, by opening a chapter on investment... Clearly, we favour protecting investments, but not along the lines set out in Chapter 11. Moreover, you saw yesterday how the NAFTA arbitration tribunal refused to hear from the postal workers union in the matter of UPS versus Canada Post, which to our minds is unacceptable. Some improvements are warranted and the amendments that are being proposed here are inadequate.

Is it possible that in the WTO negotiations on investment, we could encounter similarities with Chapter 11, which you claim not to want in the negotiation of the Free Trade Area of the Americas? This is a question to which I would like a clear answer.

I also have two more quick questions. Is culture on the agenda? We were told that it was not, particularly since the Francophone Summit was cancelled and we were therefore unable to agree on a common position.

As far as agriculture is concerned, in the documents concerning the Free Trade Area of the Americas that have been made public, there is no mention of defending supply management. That worried us at the time, and it still does. What position does the Canadian government plan to take with respect to the supply management question, particularly in light of the interim ruling on milk?

Mr. Pierre Pettigrew: Obviously, that ruling was on export milk. You're well aware of the price difference. We are challenging this ruling, but I can assure you that we fully support and will maintain the supply management system in place in Canada.

On the subject of agricultural trade, we're looking at export subsidies and certain domestic subsidies, including those on international markets, but it's clear that we continue to strongly support the supply management system. I'll look at the more pertinent documents, if you wish. However, I don't believe there will be a problem with this.

As far as culture is concerned, our position remains the same... I was talking with Louise Beaudoin yesterday and we...

Mr. Pierre Paquette: Will culture be on the agenda?

Mr. Pierre Pettigrew: We don't wish to discuss the export of cultural products in Doha. We want to maintain the right of governments to regulate cultural issues, without seeing our export goods penalized as a result of traditional supply management rules. Trade rules should not, in our opinion, apply to cultural products. Governments must be able to create areas through regulations or supports for their cultural institutions.

We are ever vigilant on this front and we appreciate the help we get from the coalition for cultural diversity everywhere we go. We face a difficult battle, in that not many countries are as attuned to this as we are. Therefore, it's always good when you go out and meet people.

Regarding Chapter 11, there are more improvements still to come. One request that was blocked last time was the possibility of making amicus submissions to these arbitration panels. Canada continues to press this point and I hope that authorization to make such submissions to these panels will soon be forthcoming, since this would improve the situation, as you noted yesterday.

It's not clear, however, if investments will be on the table. I don't know yet. The Europeans are adamant about this point, while still others are equally insistent that this issue not be negotiated. I won't be stopping 142 countries from negotiating because of this. I just want you to know the kind of parameters I have set for myself. For the time being, no one country has submitted a proposal calling for the introduction of a provision respecting investor states, like the one in Chapter 11. No one is talking about anything like this at this point in time.

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The Chair: Thank you very much, Minister.

[English]

Madam Augustine.

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Mr. Minister, we learn as we go along. And I'm sure that looking at the free trade agreement, there were some lessons we learned there around the whole issue of transparency and also around the small agreements.

For example, right now we've just dealt with the agreement with Costa Rica. What have we learned in that setting that we can take to Doha? What have we learned from the FTA around transparency that we will take there, and how are we going to move those issues along from what we've learned?

My second question, again, has to do with developing countries and the level of dissatisfaction. They felt they were not well dealt with in the last round. How do you see these developing countries faring in the upcoming negotiation, and what is Canada's position there? I know you made some statements in your opening remarks, but can you be a little more specific in terms of the supports those countries could expect from Canada as you negotiate.

Lastly, on a much lighter note, we were all very concerned about you in Seattle as we watched you hopping fence or jumping, trying to get into the safe and secure... What are the conditions and what is the environment like in Doha, as your intelligence tells you, that would make for the safety and security for that meeting?

Mr. Pierre Pettigrew: Thank you for opening on this. It will give me the opportunity to answer the question that Madame Lalonde had asked me on Doha and I just didn't have the time to answer.

The Qatari government has been doing an outstanding job of preparing Doha, and they have done an extraordinary job on the security front as well. They've worked very hard and very well at it. A team of people from Geneva have visited lately.

So we are continuing to prepare around this. We did a mini-ministerial in Mexico, another one in Singapore, and we are absolutely determined to maintain the dates of November 9 to 13, because the momentum is there. We want that launch. It is a development round much focused on the needs of the developing countries. They're there, so we don't want to lose that.

We are continuing to monitor the situation and the information that Madame Lalonde has given us on the Ramadan. The meeting is from November 9 to 13, so that gives us a few hours. We continue to monitor the situation very closely from a security point of view, and we'll make the right decision, but there will be a fourth ministerial meeting from November 9 to 13.

The Chair: In Seattle you had to climb a wall. Are you planning to learn how to ride a camel so you can be ready for whatever comes along?

Mr. Pierre Pettigrew: On the most pertinent questions about what we learn by negotiating with countries like Costa Rica, I'll join your two questions together because they're very much related.

The GATT was created, as you know, in 1947 by 23 developed countries, and indeed it took a long time before the developing countries joined either GATT and now the WTO. We're at 142 members now, including many of the developing countries. It's a completely other dynamic.

Many of the rules we have developed, they believe, suit better-developed economies and they want us to review some of those, and I understand that very well. That's what we call the implementation measures.

We have a much better appreciation of that because of two things. In Seattle I personally chaired the working group on implementation. That has made me very sensitive to the preoccupation and concerns of the developing countries, and I think we've learned a lot from that. By negotiating with a smaller developing economy, like Costa Rica, we've also had another measure of appreciation of what their challenges are.

Anyone around the world, in Buenos Aires at the FTA, at the WTO table, ministers like Tony Hilton of Jamaica, will say very clearly that Canada is a country that cares for the developing countries and the smaller economies.

• 1620

We work through CIDA. We work through the G-20, which is led by our colleague, Paul Martin, the Minister of Finance. And we do the best possible job to help smaller economies and the developing economies to achieve the capacity they need to participate and get the full benefit of their membership. They're members, but they don't always have the full benefits of their membership.

I'll give you an example. Sometimes they have a very good case. They can't take it to the WTO because they can't afford the very expensive lawyers. So we've created a legal fund now that these countries can use to go and get the best lawyer to defend their case.

There are a number of things on which we're moving. I must commend the work of my deputy minister, Leonard Edwards, who participated with QUAD, the European Union, United States, Japan, and Canada.

The ministers have asked the deputy ministers to do whatever they could to help on the developing countries and the implementation measures. They had listed 93 implementation measures. Of the 93, we've fairly much dealt with about 50 of those implementation measures that we know we can solve. And for the other 43, we will have another round and the capacity of resolving a number of them.

So indeed there will be no round if it is not a round much focused on the need of the developing economies, because they are the majority there. They are much focused, well-organized. And that showed in both the mini-ministerials in Mexico and Singapore.

The Chair: Thank you, Minister. Thank you, Madam Augustine.

Mr. Robinson.

Mr. Svend Robinson (Burnaby—Douglas, NDP): I join in welcoming the minister to the committee. I would like to pick up on the questions that were asked by my colleague, Ms. Augustine, with respect to the issue of a new round, and in particular the concerns of the least developed countries.

I have a copy of a statement here by Ambassador Mchumo of Tanzania, who spoke on behalf of the LDCs in response to the draft ministerial declaration. He spoke just a couple of weeks ago. He voiced his deep concern about the draft ministerial declaration and indeed he said it falls far short of what was acceptable and that it had not adequately taken into account the interests and views of LDCs as expressed by their ministers in Zanzibar.

So when I look at the minister's statement, and he's revealed his agenda at the WTO to this committee, and I place that against the concerns raised by the LDCs, I find it certainly does fall far short in a number of respects, certainly in respect of agriculture.

I wanted to deal particularly with the issue of the TRIPS agreement. As the minister is of course well aware, one of the greatest concerns of the poorest countries is the section on TRIPS in the existing provisions of the WTO. Developing countries, mainly led by Brazil, India, and the African group of WTO members, want a much clearer statement that would make it easier for developing countries to ensure affordable access to essential medicines without fear of TRIPS retaliation.

Certainly, it seems that Canada is among a small number of developed countries, including the United States and Switzerland, that are resisting this, that have dug in their heels.

I don't know how much more evidence we need of the power and the abuse of power of these pharmaceutical companies...and what's happened here in Canada with Bayer just in the last few days.

I want to ask the minister a specific question. What is Canada's position with respect to the concerns of the poorest countries around the TRIPS agreement?

Mr. Pierre Pettigrew: This is a very pertinent question that was the object of discussions in both the mini-ministerials in Mexico and in Singapore.

I have not seen the statement of the Tanzanian ambassador.

I have met Minister Simba of Tanzania, who is the lead of the least developed countries. I have seen him in Singapore, and indeed they do believe that the Stuart Harbinson draft ministerial falls short of their expectations. That is exactly what is taking place now. That is what we've been involved in since then, and we are awaiting a new draft ministerial. It is trying to see what more.... Of course, you would not expect an extraordinary statement of support when they're negotiating. You too know the unions well. It's very rare that they don't say that the offer is absolutely abysmal before they accept it. I can tell you that the mood around the table from Mr. Maran from India and Minister Simba of Tanzania indicated that they appreciated the fact that there had been movement. They're not there yet. I want to be cautious here. They're not there yet. They continue to say that there need to be improvements on a number of fronts before they can move. I'm comparing this to where we were some weeks ago, or certainly before Seattle.

• 1625

What is Canada's position? We'll do our very best on agriculture. As you know, the European Union and Japan are a lot more protectionist than we are. On that front, we are working with the developed countries to try to crack some of those markets for the developing countries. There is indeed a great effort being done on that front through TRIPS.

The discussions we've been having in Geneva and in those meetings do show quite clearly that the present TRIPS agreement has a lot of flexibility many developing countries did not realize it had. Indeed, we are working very cautiously but very effectively right now at identifying exactly what we can do in the present agreement because there is a flexibility that many of the developing countries, and some of us as well, had underestimated. Our position is that the TRIPS agreement is probably acceptable, probably good, as is. Indeed, with the built-in flexibilities in the existing agreement, we will be able to find room to accommodate the needs of developing countries.

Mr. Svend Robinson: Mr. Chair, that is not the position of the developing countries. In fact, the ambassador's statements say specifically in the section on TRIPS that it is extremely disappointing.

I would point out to the minister that in fact some text that was in the pre-Seattle ministerial text is absent in the draft declaration, for example, provisions from the ACRI group and other countries to clarify that all living organisms and living processes cannot be patented. Moreover, the sui generis national plant varieties policies that protect the rights of local communities to their traditional practice of saving and exchanging seeds were recognized in the pre-Seattle text. They are not in this.

I'm very disappointed to hear the minister say that TRIPS in its present form is acceptable. Certainly, this is a slap in the face to developing countries.

I want to ask the minister—

Mr. Pierre Pettigrew: Well, we'll let the developing countries speak for themselves.

Mr. Svend Robinson: They've already done that.

Mr. Pierre Pettigrew: I don't think they see that as a slap in the face. This is not exactly the tone of the discussions we've been having. I wouldn't call that a slap on the face.

We are working in the Doha declaration right now to reassure them that the present agreement allows them to get the medicines they need in emergency situations, and they're accepting that already.

Mr. Svend Robinson: Developing countries know the present agreement very well, and they say it's not acceptable.

My last question is about the EDC legislation, Mr. Chairman. It is with respect to the recommendation made by this committee, a unanimous recommendation, that section 10 of the Export Development Act be amended to explicitly make reference to Canada's international obligations to ensure that we respect those international obligations. We heard evidence from witnesses before this committee that indeed that is the position already taken by the EDC, that they are mandated to respect our commitments.

I want to point out as well, Mr. Chairman, that the Australian legislation for EFIC, which is Australia's export credit agency and the equivalent to the EDC, explicitly requires that corporation to have regard to “Australia's obligations under international agreements”. I want to ask the minister whether he's prepared to agree to an amendment that would implement the unanimous recommendation of this committee and that would implement the provisions already in the Australian legislation to ensure that we pay, that EDC is required to pay, attention to Canada's international obligations under statute.

Mr. Pierre Pettigrew: Canada has a great number of treaties and other international obligations. The vast majority of these are declaratory, or it is a case of subscription by Canada to a set of principles. These declaratory or principle-based commitments do not come with a common framework to assess adherence, internationally accepted criteria, or internationally agreed definitions. It's very difficult to put legally binding obligations on a lot of that, so we cannot phrase it and maintain it that way.

• 1630

Mr. Svend Robinson: The Australians manage to do it with exactly that wording.

Mr. Pierre Pettigrew: We'll monitor them. It doesn't mean that just because another country does it...I would have to see the exact wording they've chosen or exactly what they will do with it. When we put something in a law in Canada, we like to be in a position to implement it.

The Chair: Thank you, Minister.

Now we'll go to Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): Thank you, Mr. Chair.

Minister, thanks for your briefing to our committee today, and I'm going to take you up on your suggestion that we can ask you questions on other pressing issues.

My question is on the subject of steel, and of course more specifically Canadian steel trade concerns.

This issue, Minister, is of great importance in my hometown of Hamilton, Ontario, home to Stelco, Dofasco, other steel producers, and of course steel centres. Let me preface my remarks to you to say that I'm heartened to hear that the government and the Canadian Steel Producers Association are working together to address the pressures facing this important industry.

But, Minister, urgent—and I want to repeat “urgent”—action is required on two fronts. One, there's the recent decision by Canada's trade authorities to throw out the Canadian cold-rolled and hot-rolled sheet steel anti-dumping cases. Then on the other side, we have yesterday's American ITC decision saying that imports of most key steel products were the source of serious and substantial injury—and that's under the ongoing section 201 trade cases.

Now, for the life of me—and I've heard it said a dozen times today—I don't understand how two trade tribunals could reach very opposite conclusions. To be honest, I side with the American decision and how they've protected their borders. I read in the paper today, more specifically the Globe and Mail, a quote from Sandy Adam at Algoma Steel, and he says:

We tend to have to prove our case and the dumping countries don't even have to appear to defend themselves. In the U.S., clearly there's a presumption of guilt if there's dumping and people have to present their case as to why they have not been injured.

They're not injured. Frankly, given this situation on both these fronts, it appears that Canada is truly being dumped on—and dumped on twice.

My question is this. The Canadian government most certainly must take prompt and effective action. So what are you going to do, Minister, to protect our borders, our domestic steel industry, and the literally hundreds of thousands of high-paying Canadian jobs that go with that industry in particular?

Mr. Pierre Pettigrew: You're absolutely right that the situation in the steel industry, which has already been very difficult for the past few years, is becoming extremely difficult to manage, given the U.S. actions.

I met with the steel industry leaders last night. We had a good, frank exchange on where they want us to go, and it was a very useful conversation we had. It was a working meeting, with a number of my colleagues attending. Jim Peterson, Secretary of State, finance department, was there. Mr. Tobin, the Minister of Industry, was there as well. We are really working very hard on that file with the industry right now.

Yesterday I also spoke to Don Evans, Secretary of Commerce of the United States, and I was very direct with him. I told him that I did not think it was correct that Canada, as a NAFTA partner, should be included—and by “correct” I mean “legal”. I do not think the Americans can legally apply an action under section 201, as they did on steel, to Canadian products. We are not changing our point of view. I told them it is with this attitude that we will present ourselves to the remedy phase we're embarking upon now. In the remedy phase, there continues to be a dialogue and discussion. It is going to be so.

• 1635

There is also the other angle. The industry feels if we take the safeguard actions they are promoting, it would help the industry. They have been working very narrowly with our industry. This deal is a global problem. The problem is not between us in North America. It is us vis-à-vis the rest of the world.

Mr. Stan Keyes: Yes. You'd almost want to strike up a perimeter border around North America to prevent other countries from taking cheap steel and dumping it in our countries, not our country. Since Canada and the United States are the only two countries in the world that import steel, maybe it's time we stood up for our industry. If we have to implement the safeguard proposition, then we are going to do it to protect ourselves.

At the same time, we have to work with the United States to ensure there is an understanding that we shouldn't be involved in section 201 cases. We're trying to fight those who would dump cheap steel on us. We've been trading, I think, fairly for many years. We can continue to do so. If it takes tariff rate quotas, then we have to move.

Minister, given the timing, I understand President Bush will only have about seven or eight weeks. He'll make a decision on this issue. We have to be there. We have to ensure our industry is protected. Minister, I believe you can take this into your hands. You can go and see the minister down there, just as the former transport minister did with Mr. Pena. Tell him the way it is and start to protect our industry.

Mr. Pierre Pettigrew: I hear you very well. I can tell you, with American trade laws, I live with it on the softwood lumber issue. You know how long Canada has been complaining about American trade laws.

I will continue to argue very strongly and promote the case. We are very focused on it right now. The decisions to be made around safeguards have to be taken by Finance, in consultation with International Trade, Foreign Affairs, and Industry. There are ongoing meetings to assess the situation right now. I can guarantee you our full commitment to continue to work with industry.

The Chair: Thank you.

Mr. Stan Keyes: Thank you, Mr. Graham.

The Chair: Mr. Lunn.

Mr. Gary Lunn (Saanich—Gulf Islands, PC/DR): Thank you, Mr. Chair. Welcome, Mr. Minister.

If I could start by using the identical words Mr. Keyes used a minute ago, Canada is being dumped on and dumped on twice. As you are fully aware, Mr. Minister, next Tuesday we are expecting an anti-dumping decision from the United States on the softwood lumber file. Word on the street from some of the people in the U.S. is that it's going to be about 15%. When you add 15% to 19.3%, our crippled industry, where tens of thousands of jobs have been lost, is going to be unbearable. To use your own words, winning takes a long time.

Unfortunately, Mr. Minister, we do not have a long time for this. We may win the litigation war two or three years later. I'm not suggesting we shouldn't be pursuing it. Again, I want to draw a parallel. We're facing unfair trade practices from the United States of America. Let's call a spade a spade. The United States is making unfair accusations. We've been to the WTO, as you've said many times, on three occasions. We won each and every time.

When you look at the Air Wisconsin deal of last January, they were facing unfair trade practices not unlike the softwood lumber file. Of course, the government intervened and provided $2 billion in loan guarantees so they could compete with the unfair trade subsidies.

I know you met with the U.S. trade representative, Mr. Zoellick, on many occasions. Our industry needs to hear of more concrete steps on exactly when and how you think this is going to be resolved. The times are becoming desperate.

I know your officials met in Vancouver and with local governments. I applaud them. Including local governments in the decision is imperative. If they can help facilitate a solution, it's great. As we speak, they're meeting in Montreal.

• 1640

What specifically are you and your department doing right now? Can you give any encouragement that this is going to be resolved in weeks and months, not sometime next year? I don't know if we can survive.

My second question is with respect to the interim decision from the WTO on the Air Wisconsin file. In January you told us the OECD rules allow for a country to match and that in fact it is the law. Thankfully, it is not the law.

I appreciate there are some wins for us in this interim decision. They have ruled matching is not allowed. It is against the rules. Obviously, we have not followed the rules. Matching is not okay. Of course, we've gone on to do it with Northwest Airlines.

Where do you see this going in the future with the Brazilian government on the Embraer file?

Mr. Pierre Pettigrew: I think it's imperative to sit down again with the Brazilian government to provide a level playing field for both Embraer and Bombardier.

I do not accept the premise in your question that we've lost. Don't believe what you see in the papers all the time. I can tell you the interim report has concluded a lot of things that Canada has been arguing for five years. We have won four decisions.

I cannot comment with respect to the WTO. I can tell you our strategy and approach are working on the Bombardier and Embraer file. I'm confident we'll go back to negotiation.

Unfortunately, the Brazilians walked out on us last year to do the Air Wisconsin transaction. It's when we decided to match them, as the OECD allowed. We will see what the WTO has really said in due course. I cannot comment on it for the time being.

On the softwood lumber issue, what is my department doing now to help? We're doing a lot of things. First of all, we are continuing all of the diplomatic exercises we have to do in Washington. It's more difficult to get the attention of Washington legislators now because of the extraordinary times in which we live following September 11. They do a remarkable job working with our allies trying to better explain the situation.

We are pursuing the litigation. As a matter of fact, tomorrow or on Friday I will be bringing another panel on the U.S. claim to the WTO. We're continuing on it, but I'm not taking any chances. We have to maintain the litigation role.

With industry and the provinces, I'm very grateful they are contributing to this exercise with professionalism. We are trying to get at the root cause to exactly identify the problem Americans have with some of our practices in Canada. It often seems to be on stumpage fees in the down cycles.

We're narrowing it down to the exact problem. If we can solve it in the next few weeks, through a common understanding to agree on what would be causing unfairness to the labour market in Canada, it would be good. We could really try to address it.

Right now we're working on all kinds of prejudices and misconceptions in the United States. We don't understand a thing. There are prejudices about crown lands and crown corporations. They don't see all of the obligations that come with it. We're having a good dialogue of substance instead of screaming slogans at each other. I believe it could allow us to avoid going through litigation until the end and find a long-term solution.

Mr. Gary Lunn: I appreciate your comments. The problem in the industry, as I correctly pointed out, is they are facing unfair trade practices right now. As you have stated, you're having a dialogue. Unfortunately, this didn't happen in 1996 at the beginning of the softwood lumber agreement. You could have educated the U.S. administration. You could have educated the U.S. trade representatives so they understood.

It's only happening now. Unfortunately, we have tens of thousands of employees across this country, not just in British Columbia where there's a huge component of 45%. It's across the entire country. As we have a downturn in our economy, they're facing a very grim future for their livelihood. So I point that out to you.

• 1645

They have been coming to us—and I know Mr. Duncan is facing very similar concerns in his riding—saying they need a solution and they need it now. This does not mean negotiated settlement; it means they know we are right on this case, that we have won, so let's get this resolved.

Can you give the people in this industry any timeframe at all, and where you see this going? As you correctly pointed out, winning takes a long time. If this runs its course through litigation, we're looking at years, and we don't have years on this file.

Mr. Pierre Pettigrew: As you know, the last time we won. They went much further in litigation in 1992. They went to the end of the litigation process. At that time, the Americans had collected $800 million in countervailing duties that they had to reimburse to the Canadian producers.

I am very confident we're right, but I cannot give you a date. This is a complex file in which a lot of programs are being analyzed. I'm doing my best. The rhythm of these discussions has accelerated lately. We will do everything we can to provide an early solution. But what can I do?

The Chair: Thank you very much, Minister.

Mr. Casson.

Mr. Rick Casson (Lethbridge, Canadian Alliance): Thank you, Mr. Chairman.

Mr. Minister, I want to ask a question about agriculture and agricultural subsidies.

Over the last number of years, many of the producers in Canada have looked toward this next round of WTO negotiations with a great deal of hope, especially in the grains and oilseeds sector. Production-distorting subsidies, particularly in the EU and the U.S., continue to put our producers at a great disadvantage.

The European Union and the United States are both saying they're going to support their farmers and are not going to reduce their subsidies. The developing countries want access to our markets—and we look at the agreement with Costa Rica on sugar. Our sugar producers are somewhat concerned about that being used as a pattern in other negotiations. So what progress has been made on that file on production-distorting subsidies?

You made a comment in the document here that our producers have to make decisions on investment. What can you tell them is going to change to help stabilize their industry?

Mr. Pierre Pettigrew: Thank you for this question on agriculture. This is really a tough priority for our government, entering into these new negotiations.

Since the Uruguay Round, there were mandated negotiations on services and agriculture. Those mandated negotiations did not make a lot of noise, but a lot of work is being done on measuring these distortions of the market from inaugural subsidies. So we're technically a lot better prepared to have a real crack at it; to make a real dent in it. Americans are very much with us in fighting export subsidies that the Europeans are using a great deal.

I agree we also have to do something on some domestic subsidies that the Americans, with their deep pockets, can offer their people, which are not acceptable. But we are allies with many of the developing countries in the Cairns Group.

We realize, however, that the mandated negotiations on agriculture, without all the good technical work that has been done in better understanding agriculture, gives no room to the protectionist parties, like the European Union and Japan. They don't have enough room for concessions that could make it acceptable to their public opinion.

If they are going to make concessions in agriculture and lower their export subsidies, they need to explain to their people what they got in services or industrial exports. You have to do that, and that is why we need another round. We've made a lot of good technical progress, but it's not sufficient to deliver on lowering those subsidies, precisely because there's not enough room to manoeuvre in other fields.

• 1650

We are calling for major reform in agricultural trade around the world, and I am confident we will not have a round next time without substantial improvements in the agricultural trade. I'm positive about that.

Mr. Rick Casson: Are you saying then that in order to have enough negotiating ability, more issues have to be brought into the mix? It sometimes concerns me, and certainly agricultural producers, that they always seem to lose out. The agricultural end of it is always traded off for other areas.

Are we going to look at a change in that? Are you saying agriculture is a priority, indeed?

Mr. Pierre Pettigrew: I think it has become a priority for too many countries now. You're quite right. Ironically, in 1954 the Americans brought forward a waiver of the GATT rules on agriculture, so that was when we got onto that track.

Unfortunately, we have had a very hard time bringing agriculture back into the rules-based system of the GATT and the WTO. That's what we're trying to do now, but we have a lot of catching up to do. You're right that we haven't really negotiated in agriculture, until now.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): You're doing well, despite your cold.

Mr. Minister, my question is also on agriculture. I know we shouldn't believe everything we read in the papers, but there is a story out of Washington today on the same old rubbish we've heard so many times about the Canadian Wheat Board. According to the newspaper report, the North Dakota Wheat Commission is claiming that the pricing practices of our Canadian Wheat Board are costing American farmers $100 million a year and are depressing global prices by 8%. They are asking the Bush administration in Washington to impose import duties on Canadian wheat up to 30%.

I think it's rubbish. I think it's ridiculous. We've heard these things so much, but in this particular climate I guess we can't dismiss anything we hear from across the border.

So I want to know, in the face of this latest round of ridiculous charges, if you take them seriously, and if there is anything you can do. I know the Americans are looking at the Canadian Wheat Board again for the umpteenth time. Are you confident we'll come through this unscathed?

Mr. Pierre Pettigrew: You're so right to raise this point. I've read what you're referring to on the Canadian Wheat Board. It is very frustrating for me because the Canadian Wheat Board is smaller than Cargill alone, in terms of its influence on prices and all that. Cargill, the U.S. company, alone controls more of the market around the world than the Canadian Wheat Board.

The frustration we have is that they've pursued us eight times before tribunals over the Canadian Wheat Board, or panels or things like that. We have won eight times. Now they want to go at it a ninth time. So this is the frustration we have with American trade laws. They are very protectionist, and they are tools that are very often arbitrary. So many countries around the world want to have a look at national trade laws on dumping and countervailing, precisely to try to narrow the use of these tools that Americans abuse.

On the Canadian Wheat Board, we will defend our case again and we will win again.

The Chair: Mr. Minister, I wonder if I could follow up Mr. Harvard's question.

The Byrd amendment now prevailing in the United States, as you will recall, provides that people who launch anti-dumping actions will keep the dumping duties themselves, rather than having them go to the general revenue fund. Wouldn't it be fair to assume that American trade harassment actions are not going to be reduced in the immediate future, but multiplied one hundred times?

• 1655

In the softwood lumber case, the lawyers that were setting up the case wrote all the softwood lumber producers in the United States and said, “Join in the action, because if we win $500 million we'll split it with you.” If the lawyers are going to be out ambulance-chasing to bring in clients on this basis, if the law in the United States now permits them to share in the spoils, and if they can all charge contingency fees, it doesn't seem to me there's a likelihood that this is going to stop.

Mr. Pierre Pettigrew: No. The Byrd amendment is absolutely objectionable, and our government is pursuing this Byrd amendment before the WTO. We are not going to accept that. I believe this is an absolutely abusive way to conduct...in particular with the way they do these countervailing duties and that sort of thing. So we're going to fight it hard.

As you know, the Byrd amendment has not been implemented because President Bush followed the actions of President Clinton and suspended it. So the Byrd amendment has not been enacted in the United States. It is there, but President Bush, like President Clinton before him, has opposed its implementation. So it is not in action.

The Chair: But am I wrong that the softwood lumber lawyers were actually encouraging the softwood lumber...?

Mr. Pierre Pettigrew: It means a lot of money for them. It's very good for the lawyers, I'll tell you.

If I had to redo my career, maybe I'd be an American trade lawyer.

The Chair: There's a future for all of us yet.

M. Paquette.

[Translation]

Mr. Pierre Paquette: I'd like to use the remaining time to talk a little bit about the bill to amend the Export Development Corporation Act. Mention is made in the bill of the environment. Obviously, these provisions are not satisfactory to us, but at least we're willing to discuss them.

Nothing at all has been said on the subject of human rights and the rights of workers. What's more, in the WTO statement that we have seen, reference is made to the ILO statement of 1998. Wouldn't it be normal for EDC to evaluate a project in terms of its compliance with the rights of workers and human rights, as is the case with environmental projects? Although we may be dissatisfied on the environment side, at least we're talking about the subject.

There is also the incident raised by the Leader of the NDP in the House, namely the case of the Bulyanhulu mine in Tanzania. You responded at the time that Amnesty International had been unable to find proof that any miners had been killed when evicted from the mine site. However, I've read Amnesty International's 2000 report which noted that the organization was unable to conduct an investigation and was calling for an independent inquiry into the matter. As part of the process of amending the Export Development Corporation Act, I think we could have focussed somewhat on human rights. That should have been a fundamental consideration.

Mr. Pierre Pettigrew: On the subject of human rights and politics in general, EDC works closely with the Department of Foreign Affairs, complies with departmental guidelines, observes embargos and boycotts ordered on countries for reasons that you have described to us. This level of cooperation already exists. EDC is subject to Canada's foreign policy and must therefore comply with the embargos, boycotts and any other measures taken.

With respect to Tanzania, when Ms. McDonough put this question to me in the House, I relayed to her information that I had received about Amnesty International. The facts have been verified and you are correct. Amnesty International did examine the papers submitted, but was unable to conduct an investigation on site. It therefore amended its statement about the incident.

Mr. Pierre Paquette: This is not the same answer you gave in the House.

Mr. Pierre Pettigrew: What else can I say? Neither the investigation by the Tanzanian police nor the inquiries by the EEC and the World Bank revealed any basis to the charges that miners had been assassinated. Both the EEC and the World Bank are continuing to monitor project developments and to consult with the parties to ensure that commitments made in terms of social and environmental standards are being met.

Mr. Pierre Paquette: I'm not surprised the Tanzanian police came up empty in their investigation, since it has been accused of aiding and abetting the forced eviction.

• 1700

Mr. Pierre Pettigrew: Yes, but the World Bank investigated this matter quite thoroughly.

Mr. Pierre Paquette: In any event, I think you should look into this incident.

Mr. Pierre Pettigrew: You're right that we must remain vigilant.

[English]

The Chair: Madam Jennings, was it very short?

[Translation]

Is your question fairly brief?

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): It is, Mr. Chairman.

The Chair: Go ahead then.

Ms. Marlene Jennings: My first question relates to what my colleague Mr. Keyes said about steel and the interim report, to the recommendations that will be made to the US government and to your response, namely that we have won our case eight times in the past and that... and yes, the Americans still will not give up.

Isn't there some possibility of including in the legislation provisions whereby administrative tribunals and parties like Canada that are accused of violating the law can take steps to have the plaintiff, that is the party claiming to have been victimized once, twice or three times, fined? Maybe this would serve as a disincentive. The same allegations are made each time. There is not much in the way of any substantive differences, aside from the fact that the year of the complaint changes.

Secondly, couldn't we call for amendments so that countries like the United States are not allowed to keep the tax revenues or tariffs while awaiting a final ruling that cannot be appealed? That's my first question.

My second question concerns the talks that will be held in Doha, Qatar. Since many of the issues to be discussed relate to developing countries... We have made considerable progress in terms of international cooperation and international development. I'm wondering if the minister or ministers of international cooperation from the various countries might not have a role to play in these negotiations.

Mr. Pierre Pettigrew: Yes, absolutely. Moreover, I did underscore CIDA's tremendous contribution to the process of strengthening the ability of countries of the South to participate in the WTO. We greatly appreciate everything CIDA is doing. Moreover, we have a small gem by the name of CIDA Inc. which is helping our Canadian companies do incredible work with developing countries.

Regarding your first question, the idea of fining countries that are at fault goes against our judicial system. Our laws are not made that way. We would have to battle long and hard before the Americans accepted a provision of this nature. Admittedly, it's frustrating, but what can we do, it's all part of international law. Often, they institute proceedings against us in their own courts. Nevertheless, taking a look at national laws is still something that we would like to bring up at the WTO meeting. However,

[English]

don't hold your breath.

Mrs. Marlene Jennings: We're in it for the long haul.

Mr. Pierre Pettigrew: Yes.

Mrs. Marlene Jennings: We always are, and we're very tenacious.

Mr. Pierre Pettigrew: Very good.

The Chair: Minister, on terminating, I'd just like, on behalf of the committee, to thank you once again for coming. I'm sorry you have the flu.

Some of us will be going to Doha with you, as you know. I'd like to thank you and the Government of Canada for being a prominent supporter of the creation of a parliamentary assembly for the WTO. We are concerned about the transparency of the process. We believe strongly that parliamentary input will enhance the work of the WTO.

We understand there are many problems in getting this enterprise underfoot. Some countries don't see it the same way we do. You may know there will be many parliamentarians in Doha who will be meeting to discuss this initiative, and we do appreciate the Canadian government's support of what was an important recommendation of this committee some years ago.

Secondly, on behalf of the Federation of Canadian Municipalities, to whom I spoke on Sunday on your behalf, I would like to thank you, because as you will recall, the municipalities are very interested in where their prospects are in the international trading environment. They're also concerned about their jurisdiction. They appreciate your offer to meet with them and discuss these important issues.

• 1705

So with that, Minister, thank you very much for coming. We appreciate your sharing your thoughts with us. We look forward to the next time we have you back with us, and Mr. Edwards, whom we will welcome again the second time.

Mr. Pierre Pettigrew: Thank you very much. See you in Doha.

The Chair: Now, colleagues, we'll adjourn for, literally, 30 seconds, because we have to move into the EDC legislation. So please resist the normal temptation to drift off somewhere. We're going into the EDC bill.

• 1706

• 1711

The Chair: Colleagues, I call the meeting to order.

We are now moving to the part of today's meeting when we will be talking about the Export Development Corporation bill. As you know, we'll be doing clause-by-clause consideration tomorrow. We have one hearing this afternoon and one hearing tomorrow morning with witnesses. We were set from 5 to 6. We're already 15 minutes late. Hopefully, we'll continue after 6.

We have some five witnesses lined up, and if each of you were to take 10 minutes—you can do the math—there wouldn't be much time left for questions. I understand that each and every one of you has filed a paper with the committee. If you could keep your opening statements as short as possible, that would leave more time for questioning.

With that in mind, Mr. Allmand, we'll ask you if you're going to go first.

Mr. Warren Allmand (President, Rights and Democracy): I'll be very brief.

The Chair: But what does that statement mean? Please do not take a leaf out of Madam Jennings' book. She's being very sneaky.

Some hon. members: Oh, oh!

Mrs. Marlene Jennings: Mr. Chairman, as you well know, I followed in the Honourable Warren Allmand's footsteps in terms of representing the riding.

Mr. Warren Allmand: Outstanding work.

The Chair: I'm glad to see that you two are at the same end of the table.

Mr. Allmand.

Mr. Warren Allmand: Mr. Chair and committee, I want first of all to thank you for the opportunity to appear on this important bill, Bill C-31, which contains amendments to the Export Development Act.

As you know, I appeared before the committee on this issue on November 16, 1999, when you were considering the Gowlings report.

It's interesting to note that appearing with me on that date was Kimy Pernia, a leader of the Embera Katio indigenous people in Colombia. He testified to the fact that the Export Development Corporation had financed a dam on the territory of his people in Colombia. The dam had led to the destruction of their livelihood and had seriously harmed the health of his people. We were in Colombia this past June. Because Kimy has been standing up for his people all these years, two days after we were there he was kidnapped by the paramilitaries in Colombia, and he hasn't been heard of since. It's presumed that he's dead, another tragedy in Colombia. He was a witness before this committee, as I say, the last time I appeared on this issue.

The EDC is an important Canadian agency with a public policy mandate with regard to export trade. It has the backing of the Canadian Parliament and the Canadian government. Because it has that backing, it's essential that it's fully accountable to Parliament and the Canadian people. It's extremely important that as a crown corporation, its operations and mandate are consistent with other Canadian policies and law, especially with the commitments that Canada has made under international treaties.

• 1715

Mr. Chairman, we believe that Bill C-31 has made some improvements, especially with regard to the environment, but it has not moved ahead very much with regard to disclosure and human rights. I won't touch on environmental matters, because there are other organizations better placed to do that than I am.

I want to point out that we believe that section 10 of the Export Development Act, which refers to the purpose of the corporation, should read that:

The Corporation is established for the purposes of supporting and developing, directly or indirectly, Canada's export trade and Canadian capacity to engage in that trade and to respond to international business opportunities in a manner consistent with Canada's international obligations.

We're putting that forward as a proposed amendment to the act.

The Standing Committee on Foreign Affairs and International Trade, in its report of December 1999, recommended such a change. I must say that we fully supported the committee's report of December 16, 1999. I believe it was an outstanding report. I refer you to your recommendations 21 and 22 where you said that in carrying out its mandate and exercising its powers, the corporation shall give due regard to the benefits to Canada to be derived therefrom and to the commitments and obligations undertaken by Canada under international agreements.

Minister Pettigrew himself suggested that these changes would be made in the act in a statement he made on June 26, 2001. In the backgrounder on the legislative review of the Export Development Corporation, Mr. Pettigrew noted that a report to Parliament in May 2000 included undertakings to require the EDC to take account of benefits to Canada and Canada's international commitments, especially in human rights, core labour standards, and the environment.

With regard to disclosure, Mr. Chairman, although the Gowlings report, this committee's report, and the Office of the Auditor General found the Export Development Corporation's level of disclosure to be inadequate, Bill C-31 places no requirement on the EDC to disclose information to the Canadian public. The Gowlings report said at page 104 that the EDC should be required to post on a regular basis specific information regarding transactions it has supported.

The review of the Export Development Act by Gowling, Strathy & Henderson in June 1999 and by this committee in December 1999.... Minister Pettigrew recommended that the EDC be required to disclose information related to transactions. It's true that the EDC has developed a disclosure policy, which they implemented on October 1, 2001, but that's a policy of the corporation and not a requirement of law. It's interesting to note that in the mid-1980s the EDC unilaterally decided it was not going to disclose information it had previously disclosed. So a policy of the corporation can be withdrawn whenever they want if it's not required to do certain things by Parliament. The members of the committee said in your report that you wanted mandatory disclosure; so did the minister and so did the Gowlings report. We're asking you to make amendments to the act in that respect.

With regard to human rights, Mr. Chairman—and these are my final words—in the 1999 committee report you recommended that section 10 of the act, which I already referred to, be changed to refer to our obligations under international law, especially our obligations under the International Convention on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights, and that they be made part of the act. This is in recommendations 21 and 22 of your excellent report. We're suggesting that you should make amendments to that effect.

• 1720

Mr. Chairman, with respect to disclosure, I simply want to say that for the last two years we've been preparing a report on the implications of Canadian corporations developing high technology for surveillance and control of the pro-democracy movement and the human rights group in China. Last week we published this report, China's Golden Shield.

In trying to get information from the government on what role was played by the EDC in financing Nortel and other companies developing this technology for the very repressive government in China, we tabled 17 access to information requests. We got back blank pages. We got back blank pages—17—because the EDC is not subject to the Access to Information Act.

As an example, the Business Development Bank of Canada, another crown corporation, is subject to the Access to Information Act. Both American export credit agencies are subject to the U.S. Freedom of Information Act, and that includes OPIC, the Overseas Private Investment Corporation. So we believe that, in accordance with the recommendations you made, you should make amendments to the act.

In conclusion, I want to say this. First of all, there has to be cohesion between this law and other Canadian obligations undertaken with respect to human rights, to labour, to environment, and so on. If the ratification of international conventions means anything, it has to mean it has some impact in Canada. They must be read vis-à-vis other laws, and the Parliament of Canada, in passing laws, must assure that one law is consistent and coherent with other laws and other obligations.

As I said earlier, your report of December 16, 1999, was an excellent report. We fully supported your recommendation numbers 20, 21, and 22 in that report, but these recommendations are not to be found in Bill C-31.

I have to say that the credibility of your committee is at stake. You have the power, in the committee, to amend the legislation to make it consistent with your report, and I'm asking you and the members of your committee to do just that. Thank you, Mr. Chairman.

The Chair: Well, thank you, Mr. Allmand. Maybe I'll just leave you, however, with a reflection. You're an experienced parliamentarian yourself, so you'll be aware of the fact that this bill is coming to us after second reading. The House has pronounced on the bill, so the number of amendments.... We're looking at them as they come forward, but obviously we have a limited power to amend after second reading, as opposed to after first reading. So that will have to be a consideration for us when we're—

Mr. Warren Allmand: In short answer to that, you also have an opportunity, as members of Parliament, if you can't make the amendments here, to do it at the report stage.

The Chair: Certainly, but I just want you to bear that in mind. We all have to bear that distinction in mind.

Also, I want to make an announcement. By the way, I'm sorry to interrupt; Ms. Nowlan will be next. The minister asked me to announce that at the end, when I asked him a question about the Byrd amendment, he said it had not entered into effect, but in fact it has entered into effect. He was thinking of another portion of another law that had been set aside—the Helms-Burton amendment, which has been set aside for the present. In fact, the Byrd amendment is presently law in the United States, the one that allows petitioners in anti-dumping cases to get the money instead of the government. But he wished me to say that the Canadian government is actively disputing that law in the WTO, along with many other countries.

Mr. John Duncan: May I just add to that point? That was said in the House during the emergency debate two weeks ago, and I tried to confirm it through our embassy and other places, so I'm glad to receive this clarification that the Byrd amendment is actually in effect.

The Chair: It is in effect, and they are using it as a way to attract people to join onto petitions.

Mr. John Duncan: Of course. Thank you.

The Chair: You're welcome, Mr. Duncan, sir.

Ms. Nowlan, I believe you're next.

Ms. Linda Nowlan (Executive Director, West Coast Environmental Law Association): Thank you, Mr. Chairman, and thank you, members of the committee. I appreciate being invited back to talk to you again. I was here two years ago, and in the intervening two years there have been a lot of changes.

I completely support Mr. Allmand's endorsement of your report. I thought it was an excellent report, and the government's response indicated it would accept most of the recommendations in your report of almost two years ago.

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There have been many changes made. You'll be hearing from EDC witnesses tomorrow, and I'm sure they will tell you about all the positive changes that have been made, including the release of a disclosure policy, release of an environmental review framework, and public consultations on that environmental review framework such as you and the government urged them to have.

These are policies. They can change at any time. I would suggest one of the chief reasons these policy changes have been introduced at the EDC is because of the scrutiny of groups like this committee and others.

Once this bill is through, the eye of the public, the eye of the government, will be off the EDC for five years until the next legislative review. So I would urge you—and I hope you still do have the power to consider amendments—to try to ensure that your previous recommendations and the recommendations from civil society groups on ensuring the EDC upholds environmental and human rights and other standards do become binding law rather than policy. There is a big difference, as you are aware.

I provided a brief to the committee and won't go through it in detail because of time constraints. But we do have serious concerns about the environmental provisions of this bill. It's great that the EDC is at last required by law to do an environmental review of its projects and transactions. That will be a statutory obligation and is an improvement over pure policy.

However, I must disagree with the Minister of International Trade, when he spoke earlier, that Canada is at the forefront of all export credit agencies in the world. It is not. The U.S. Export-Import Bank is certainly far ahead in terms of statutory requirements for export credit agencies. Australia is also a leader. Canada may be near the front; it's not at the forefront. I urge you to bring it to the forefront and strengthen those environmental requirements.

The main problem with the environmental provisions—proposed section 10.1—as currently worded is that it's completely up to the EDC to decide what to do about the environment. They decide on the content of their directive. They decide how it's applied. There's no duty to refuse support. If serious adverse environmental effects are found, they can go ahead. They can decide that they're justified. There are no limits on their discretion.

If nothing else, I would urge this committee to consider amending that proposed section to require the EDC to refuse to support projects or transactions that will pose major unreasonable environmental health or safety hazards. This is an important enough matter that it should not be left solely to the discretion of the EDC.

The Auditor General's review, which was done and released in May 2001, showed that there were serious deficiencies in the way the EDC was operationalizing its voluntary environmental review framework. You have the opportunity to strengthen the environmental review framework the EDC is currently operating under and to limit their discretion. At the very least, give them statutory direction that when their review shows the environmental risks are too high, support should be denied.

Similarly, in proposed subsection 10.1(2) it's totally up to the EDC's discretion what they do about the environment. They have to issue a directive, and the directive “may” include certain matters—not “must”. It doesn't even have to include definitions. I know the trend in a lot of legislation these days is to be discretionary and to use “may” rather than “shall”, but this is one case where discretion should have some bounds placed on it.

I urge you to put some mandatory content into this environmental directive—mandatory content about what a good, thorough environmental review consists of. I've given some suggestions about what that might mean in the brief I've provided to the committee.

In particular, I will repeat Mr. Allmand's and other committee members' earlier questions about treaty commitments. This should be a requirement. The EDC should be required to satisfy itself on reasonable grounds that any proponent is in conformity not only with all applicable environmental laws, but with environmental and other international commitments that Canada has made. As Mr. Robinson has noted, Australia does have this requirement; it is possible to put it in legislation. I urge you to make the same amendment and bring Canada to the forefront.

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Another way to ensure that the EDC's discretion in this area is limited is to do as you recommended in your report and as the government indicated it supported. It is to create the position of an independent ombudsperson to oversee the implementation of the environmental review process. That is another amendment you could make.

I completely agree with the submissions on disclosure. This is a very serious omission from the bill. Disclosure has been a key problem with the way the EDC has worked. Every review that's been done in the past two years has shown that. I think the blank pages you were just shown amply demonstrate that there is a big problem with disclosure. Disclosure is at the base of the public's ability to oversee what's going on. It's at the base of your ability to oversee what's going on. Disclosure requirements are now completely absent from this bill.

Again, the minister was very interesting in talking about the upcoming WTO meeting and stressing transparency. I would submit to you that there is no transparency here at home. How can we expect the WTO to have transparency when we can't even get our own export credit agency to do so? That's a really serious flaw with the bill.

Another problem with the bill is that it exempts the EDC from the application of the Canadian Environmental Assessment Act. As you all know, this is an issue that's currently being litigated. Without a very thorough, legislated, statutory process for environmental review, exempting the EDC from CEAA is having it both ways.

If what was in the bill was a thorough, environmental CEAA-like process, then perhaps the exemption might be justified, but as it now stands what we have is a completely discretionary, self-directed, self-overseeing process. And we also have an exemption from the only tool the public has at their disposal, in very limited circumstances, to challenge the EDC's decisions.

It's extremely expensive and time-consuming to bring litigation. Public interest groups really don't have the resources to do it except in very exceptional circumstances. They won't abuse that power. If they did, the courts would stop them.

I urge you to delete this exemption from CEAA.

My final comment relates to the provision in proposed section 24.2 that creates a new offence of misusing the name of the EDC. I would submit to you that this provision is offensive and should be deleted. Existing copyright and trademark law is enough to protect the EDC's name, logo, trademark, etc. Creating a new offence with a fine of $10,000 for using EDC's name for any “business purpose”, the words used in the act, is offensive and an attempt to limit public debate. I know of groups who have been threatened with lawsuits by the EDC for using the name EDC.

What is a business purpose? As the bill now stands, you would have to get written permission from the EDC before you would be allowed to use their name. I submit that this is simply unreasonable and I ask you to delete that. I think it's overkill. We don't need to have additional protection other than that already provided to all copyright and trademark holders in Canada.

So I urge you to make some amendments to this bill, to bring Canada to the forefront. It's the end of the long legislative review road. You've done a great job at the committee level and I hope the government listens to what you propose at the committee stage.

The Chair: Thank you, Ms. Nowlan.

We'll go to the Canadian Chamber of Commerce. Mr. Keyes, please.

Mr. Robert Keyes (Senior Vice-President, International, Canadian Chamber of Commerce): Thank you, Mr. Chairman. Ladies and gentlemen, members of the committee, I'm pleased to be here this afternoon.

As you know, we represent a nation-wide network of some 170,000 businesses of all sizes, so we understand the importance of exports to the Canadian economy and the role of an institution like EDC.

For trade and investment in an internationalized world economy to run smoothly, it requires insurance. Companies must have access to export credit agencies to get the support they need to break into foreign high-risk markets and to remain viable players in a global competitive marketplace.

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In the post-September 11 world, with all the additional uncertainties and risks facing business, the role of an export credit agency is more important than ever.

EDC's capacity to perform these roles for Canadian companies has been a significant asset for Canadian business, a vital cog in the wheel that sustains Canadian firms abroad.

I'm sure we all want this to continue.

As a starting point, we feel that reforms to the legislation governing EDC not compromise the ability to provide its services to Canadian business. We all realize and accept that EDC is operating in a changed world in terms of public expectations for environmental responsibility and transparency. However, lumbering EDC and its customers with unproductive processes that are impractical, time-consuming, and potentially damaging is not what's needed. Ensuring an efficient, timely, and responsible framework for EDC should be the goal.

The proposed environmental review framework, as envisaged in this bill, is an appropriate level of reference, and its application is going to be regularly monitored. EDC is not operating in an oversight vacuum. The Attorney General will be looking over their shoulders. There will be public scrutiny, there are consultative mechanisms, and this mechanism of environmental review is being referenced in law. It is not simply a policy matter.

In designing and applying the framework, the business community is ready to work with EDC and with others to ensure a workable process. I submit there are limits on what an agency like EDC can be expected to do, what it can do, and what it should be requiring its customers to do. EDC is not a “regulator”, and there are limits to the discretionary actions that an export credit agency can be expected to demand or apply.

Moreover, at its core EDC is different from other crown entities. It has a commercial role to fulfill. Expecting that EDC can fulfill lofty expectations on issues involving environmental matters moves it away from that commercial basis and onto a slippery slope of complex analyses for which a rigorous framework or hard numbers and details can be problematic.

To the extent that EDC has the internal expertise to assess environmental risks of a project and incorporate these in the financing and ensuring of projects through its established environmental assessment framework, it is fine, and it is already doing this. Moreover, every significant project in the world is subjected to environmental analysis commensurate with the level of impact and potential disturbance. This information as well is available when projects are being assessed by EDC.

The environmental process has certain imperatives. It has to be practical and time efficient. It has to represent value added and contribute to better environmental results. We think the proposed process will indeed do so.

The proposed system must be in step with Canada's OECD partners. The OECD countries are hoping to conclude an agreement on officially supported export credits in the environment before the end of this calendar year. If EDC's environmental framework gets too far ahead of the OECD consensus and ends up imposing owners' requirements on EDC that other countries' agencies are not required to follow, this could impact upon its competitive position, and this means Canada loses exports and consequently jobs. People source elsewhere.

Environmental framework must be predictable, fair, and transparent, with expectations and requirements being clear.

Another one of our concerns is the proposed requirement for disclosure. EDC has a disclosure policy, which is currently out for comment, that they are going to be implementing.

While the disclosure policy is not directly addressed by this bill, the proposed 45-day period for posting of information relevant to social and environmental impacts remains to be tested to see how it's actually going to work in practice. Moreover, we are very concerned the proposals for prior disclosure could require commercially confidential information to be made public, thereby putting the bids of Canadian companies at risk.

Finally, competitiveness both of EDC and its customers must be a guiding principle within any environmental review framework.

In closing, let me say that environmental issues have to be addressed, but we must ask which forums are best suited to the task. While EDC should continue to evaluate environmental risks in the projects it funds, as I said earlier, it can't become a “regulator”. Any attempt to do so would hamper its efficiency.

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Moreover, because EDC is rarely the sole organization involved in financing major projects—as we know, these are done on a consortium basis—just how much leverage EDC might have at the end of the day to influence some project's modus operandi is open to debate. We don't want a situation where our processes have put Canadian suppliers on the sidelines but nothing has been achieved on the ground.

I draw a parallel between burdening EDC with unrealistic expectations to similar calls to overburden the WTO, essentially turning it into a world negotiating organization. It won't work. EDC has proven its competence and flexibility. It's good at what it has done. It has a role to project Canadian environmental goals and values, but it alone cannot effect meaningful change. It can do only so much, and it's critical to address many of the problems and issues that we're all concerned about at their source, in the countries where they occur.

Mr. Chair, we're sympathetic to the principles underlying proposed section 10 of Bill C-31, and we agree that EDC must be credible and accountable. But we must not lose sight of the fact that it's raison d'être is to support Canadian exporters, and if it's going to do that, we must ensure we don't unduly handicap it.

Thank you.

The Chair: Thank you very much, Mr. Keyes.

Our next witness will be from the Canadian Manufacturers and Exporters.

Will both Mr. Myers and Mr. Blackburn be speaking?

Mr. Jayson Myers (Senior Vice-President and Chief Economist, Canadian Manufacturers and Exporters): I'll make the first presentation.

The Chair: Thank you.

Mr. Jayson Myers: Mr. Chairman, ladies and gentlemen, mesdames and messieurs, thank you very much for inviting us here today.

My name is Jay Myers. I'm the senior vice-president and chief economist of the Canadian Manufacturers and Exporters. I'm joined by Mr. Robert Blackburn, who's the senior vice-president for government and international development institutions at SNC-Lavalin International. I think Mr. Blackburn's experience will provide a somewhat more pragmatic perspective to some of our discussions today.

EDC is a very vital financing and risk management service for Canadian exporters. As Mr. Keyes pointed out, given today's very uncertain international economy, those services are more important than ever before. Canadian Manufacturers and Exporters represents approximately 95% of the total value of Canadian exports, and our members are very much the clientele that EDC services.

The CME supports Bill C-31, with one proviso that reflects the concerns of Canadian exporters with respect to the provisions that would require EDC to determine whether international projects are likely to have adverse environmental impacts and whether the corporation is justified in entering into those transactions. The CME recognizes the government's commitment to providing a legislative mandate for environmental reviews of projects financed by EDC, and we believe the environmental review of such projects should both be credible and effective in assessing environmental impacts.

At the same time, EDC's environmental review process has to be practical, and it really has to reflect business sensitivities about the disclosure of commercially confidential information. Above all, EDC's determination process must sustain the competitiveness of Canadian exporters.

We've consistently supported the amendment of the Export Development Act to include a provision that would require EDC to apply an environmental assessment framework to international projects in which it's involved. However, we've also emphasized that an effective process for environmental review of EDC-financed projects has to be simple, clear, and expeditious. It has to avoid subjecting exporters or the EDC to costly and time-consuming litigation; ensure the protection of commercially sensitive project information; avoid imposing Canadian regulatory requirements on EDC's foreign clients; establish a level playing field for Canadian exporters by reflecting OECD standards for environmental reviews conducted by export credit agencies; and avoid undermining EDC's important role in providing financial support to Canadian exporters.

In light of these considerations, we believe Bill C-31 should contain a privative clause to protect EDC's environmental review practices from frivolous third-party intervention and legal challenges. As has already been pointed out by Ms. Nowlan, U.S. Ex-Im Bank is frequently cited as a model for how EDC might operate under a legislative environmental review process. However, U.S. legislation also explicitly recognizes that nothing in that act should be construed to create any cause for illegal action.

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This privative clause was established in order to ensure the bank could render timely decisions on clear and known rules without the threat of potential abuse of process, legal appeals, or applications by interveners to challenge the application of those rules and thereby block transactions.

We believe such protection can be afforded only through the inclusion of a privative clause in legislation mandating environmental review. The absence in Bill C-31 of provisions that would prevent frivolous lawsuits not only creates additional uncertainty with respect to potential litigation, it also places Canadian exporters at a disadvantage with respect to their international competitors by imposing more onerous requirements on EDC than on other export credit agencies.

CME will continue to work closely with EDC as it implements its environmental review framework. We want to ensure EDC's disclosure policy, particularly that part pertaining to the disclosure of information relevant to assessing social impacts of environmental projects, is both workable and competitive with respect to the requirements of other export credit agencies.

The danger is if EDC moves too far ahead of prevailing international practice, it will make its project financing business highly uncompetitive for Canadian exporters. Larger firms will turn to other sources of export financing, but small and medium-sized exporters, the companies that are most dependent on EDC for financing, are very likely to lose their ability to participate in international projects altogether.

For EDC, over $500 million in project-related revenue will be placed at risk if capital projects are excluded as a result of the corporation's disclosure policy. Such a loss would also diminish EDC's capital base and reduce its capacity to finance other export transactions.

Ladies and gentlemen, in conclusion, we would like to express our dissatisfaction and disappointment with regard to both the conduct and outcome of the Export Development Act review. From the beginning, over three and a half years ago, CME has consistently emphasized this review must focus on the changing needs of Canadian exporters and EDC's capacity to serve the export community in Canada. We're very concerned now that the outcome of the review may actually weaken EDC's role in servicing the financing requirements of Canadian exporters.

In today's difficult economic environment, Canadian exporters need strong, responsive, and flexible financial and insurance services more than ever. The government should ensure EDC continues to meet the changing requirements of Canadian companies in international markets. For that reason, we urge the government to amend Bill C-31 to include a privative clause.

Thank you very much.

The Vice-Chair (Ms. Jean Augustine): Thank you, Mr. Myers.

The chair expresses his regret at having to leave at this specific point in time, but we'll proceed with the questioning.

We'll start with you, Mr. Duncan. We're into a five-minute round each.

Mr. John Duncan: The first question I'll ask of Ms. Nowlan. It relates to her concerns on the proposed environmental amendments. From your perspective, can you tell me what the impact on EDC will be if they lose the Three Gorges litigation?

Ms. Linda Nowlan: I'm not sure I'm the best person to ask that question of.

Mr. John Duncan: But do you have a point of view?

Ms. Linda Nowlan: It may not be the EDC that is affected as much as the Department of Justice and the Government of Canada, which has been fighting this litigation. As you probably know, there was a leaked Department of Justice memo that said the Sierra Club's case was very strong.

I saw Prime Minister Chrétien on the news the other night in China celebrating the opening of a CANDU reactor and urging the Chinese government to proceed with further purchases.

It is, I suppose, possible, if the Sierra Club wins their litigation, documents would have to be disclosed about the previous loans and guarantees given to allow those purchases to take place.

• 1750

I don't think it would have an affect on any future business. Certainly if this exemption from CEAA goes through, there would never be any other application of the act, so there wouldn't be any litigation, at least related to those sections.

I don't know if that answers your question. You might ask the EDC representatives when they testify tomorrow.

Mr. John Duncan: As a follow-up to that, would making the environmental review framework a statutory document address some of your concerns?

Ms. Linda Nowlan: Yes, it would, especially a revised environmental review framework. They're currently in the process of revising their framework. It is relatively thorough, and I would be happy to see it become a regulation under the act.

I must also say that in relation to the whole question of litigation, the rules of court of each province and of the Federal Court contain provisions preventing frivolous and vexatious lawsuits. Anytime the opposing party feels that the lawsuit is frivolous or vexatious, it has the power to use those rules. So there's no need to introduce similar provisions into this particular piece of legislation. Courts have that inherent power.

Mr. John Duncan: You're referring to the privative clause statements that were made.

Ms. Linda Nowlan: Yes.

Mr. John Duncan: The next question I would like to direct to the Canadian Chamber of Commerce, to Mr. Keyes.

You said in your testimony that EDC is fulfilling a commercial role and that you didn't want to see inappropriate burdens placed upon their ability to do that. Some of the criticism is they are fulfilling a commercial role, but they're doing it on a non-commercial basis. In other words, the backing of the taxpayer allows them to make decisions that a commercial operation would never make, and therefore there have to be some checks and balances on that.

Would you concur that this logic might lead one to say that there are some parts of EDC that lend themselves to privatization?

Mr. Robert Keyes: Well, the notion of privatization has been kicked round. I would toss back a question. If EDC is not doing what it's doing, do we have a commercial alternative that will do it? Will the banks step in?

Mr. John Duncan: That was my question to you.

Mr. Robert Keyes: I don't think it's clear that the banks would step in on some basis.

I might ask Robert Blackburn to comment as somebody who has dealt with this in a very practical fashion.

Mr. Robert Blackburn (Senior Vice-President, SNC-Lavalin Inc.; Canadian Manufacturers and Exporters): My company does about half of its business outside North America in about 100 countries. As was said earlier on the panel, getting financing for those projects is a key part of any international business, particularly on large projects of the sort we tend to get involved in.

We see a very important role for an export credit agency in Canada, as in all of the other OECD countries. Our concern is that the EDC be in a position to provide the support in a way that is competitive with other ECAs. Perhaps I could just give you a couple of concrete examples.

We've just finished a large gas processing plant in the southern desert in Algeria for Sona Trach, the national oil company there. That was a very complex financing where EDC was in for approximately 20%. The European Investment Bank, the Belgian ECA, the Spanish ECA, and the Italian ECA were all part of that deal. Of course, whenever you deal with an export credit agency there is a string attached that says you have to use Belgians, or Spanish equipment or people, etc.

We would have liked to use a lot more Canadian supplies on that job because, among other things, Canadian suppliers were a lot cheaper than European ones. But because EDC was there for only 20%, we did use 60 Canadian small and medium-sized businesses on that job in addition to ourselves.

In a similar job on a light-rail system in Malaysia, we used 100 Canadian small and medium-sized businesses from across the country, starting in Sidney, Nova Scotia, all the way to Vancouver.

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If EDC isn't available and competitive to do that kind of work, it's not that the Sona Trach deal isn't going to go forward; it's just that the 20% Canadian content won't be there. So those Canadian companies won't be working.

It's essential that there be ECAs to do this business because they're not the sort of thing that commercial banks, particularly in Canada, will support. If SNC-Lavalin and some of the larger companies can't deal with a Canadian ECA, since we're dealing with a variety of ECAs around the world, we won't be able to use EDC. We want to. It's really important to have Canadian government participation. It goes to credibility and other things. We're just concerned that if the EDC becomes uncompetitive—gets too far out ahead in what is a commercial world—it won't be able to participate.

I think we and companies like us in the engineering and resource business make up about 7% only of the EDC's business. I believe that is the $500 million Jayson Myers cited. I gather this is an internal EDC number of what they think the business loss may be if they were to go ahead with the total environmental framework package they're looking at.

So we're very concerned about that. We're very concerned about introducing uncertainty, because as you know, markets hate uncertainty. If you're financing a package, you don't go to the places that are uncertain. If you can go to any number of other places where it's certain, why go to a place that's uncertain? That's what we're worried about. We're worried about legislation being put in place that weakens the EDC's ability to be competitive and our ability to use it—as Jay says, the ability of small and medium-sized companies that can't go elsewhere to ECAs and will end up being excluded from this business.

The Vice-Chair (Ms. Jean Augustine): Thank you, Mr. Blackburn.

We'll now move to Madam Lalonde.

[Translation]

Ms. Francine Lalonde: Thank you, Madam Chair.

Thank you very much for coming. These impromptu meetings are always very important because fundamentally, this is a complex piece of legislation. We're being asked to comment on provisions that are difficult to evaluate. The environment, disclosure of information and human rights are all important issues. You maintain that these provisions will impede our competitiveness.

How is it that export credit agencies in the US and Australia have agreed to publish project-related information so that the public can comment before any funding decisions are made? How is it that they can do this—and we can't say that they aren't competitive—whereas here, this would supposedly hinder competitiveness? That's my first question.

Secondly, how can we accept the fact that no mention at all is being made of human rights? You just said that businesses are worried about instability. That is certainly true of a number of businesses, but many see their profits increase in uncertain times. There's no need for me to give you examples. I'm sure you're familiar with companies like this.

My third point is this: this export credit corporation is a public corporation. It's all well and good to say that an initial investment was made, but when we ask administrators whether the corporation could operate with the same rates if it were privatized, they argue that this certainly would not be case. The risks and the rates would be different in the case of a private corporation. This is a public corporation and it has a public responsibility in terms of the ethical behaviour of businesses. US and Australian corporations are competitive.

Those are my questions and I await your answers.

Mr. Robert Blackburn: I'll try to answer them if I can.

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The US Eximbank has a prior disclosure system in place which includes many provisions prohibiting the disclosure of business- related information. Ms. Nowlan maintains that a privative clause is not essential. The Americans have decided that such a clause is indeed vital to safeguarding information that may be disclosed about a project and to avoiding any potential legal uncertainties. It's not necessarily a matter of proving that a project would be harmful to the environment or to human rights. It's a question of slowing down the project and raising some doubts. Once problems of this nature arise, people look elsewhere for their project financing.

We work closely with the US Eximbank. It uses a system that protects business information and that includes a privative clause and disclosure provisions. The system is no way resembles what EDC is proposing. For instance, project sponsors are not required to publish information 45 days in advance. If we search their Website, we find the name of the project listed. However, if we go to the Eximbank site, we find that very little is said about the project. There is no question whatsoever of all relevant commercial documents being made available.

Consider this example: the government of Algeria publishes information about all of its environment-related activities. Sona Trach is an agency of the Algerian government. If it were asked to publish on the Internet all project-related information 45 days before a decision is made, it would refuse. That would never happen at Eximbank.

Not many projects are financed in Australia, especially not large projects. Unless I'm mistaken, according to my information sources, Australia's disclosure legislation has been used only once. I'm not 100 per cent certain about this, but that's what I was told. Information is not often disclosed. However, EDC's proposed disclosure policy would apply to all of our projects. Virtually every single project would be subject to EDC's proposed disclosure policy. It would in effect be impossible to work with EDC under the circumstances.

The Vice-Chair (Ms. Jean Augustine): Thank you, Mr. Blackburn.

Ms. Francine Lalonde: I would imagine that some of the other witnesses would like to respond as well.

[English]

The Vice-Chair (Ms. Jean Augustine): Very briefly, please.

Mr. Robert Keyes: Very briefly, I would just note that under the definition of environmental effect, any social impact is included. There's reference to relocation of human settlement. So to say that the human rights issues are being totally ignored is incorrect. It's in the draft. The social issues are there, and those are considered by international agencies. Again, we're not operating in a vacuum.

[Translation]

Ms. Linda Nowlan: Thank you for your questions. I apologize for not being able to answer them in French.

[English]

In relation to this disclosure policy, it's a policy not in law. There are no human rights or disclosure obligations in Bill C-31.

In relation to your very good question about disclosure of information, I think Mr. Blackburn did say commercially sensitive information wasn't disclosed by the U.S. Export-Import Bank, and certainly no NGO would want such commercially sensitive information to be disclosed. That's not what we're asking for.

We're asking for the opportunity to find out what our government is supporting and whether that fits all of our public policy goals.

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I'm sorry, I missed the most obvious response to your question, Mr. Duncan, which fits in with this. If the EDC and the Government of Canada lose this lawsuit, what will happen is that Canadians and the Chinese public will be able to say whether in fact CANDU reactors are a technology that they welcome, because a full environmental assessment will be required. That will be the result of the lawsuit, and in my opinion it is certainly a good result. So I do welcome your question.

I also would note that Mr. Blackburn does have the commercial experience that I do not, but I know that his corporation uses the Export-Import Bank, at least I think it does, so obviously it's not a business impediment for SNC-Lavalin. I suggest that it wouldn't be an impediment for other Canadian corporations if we had a similar statutory policy here in Canada.

We've had conversations about this before. Just so you know, we had a very interesting subcommittee of the regulatory advisory committee to the Canadian Environmental Assessment Act with long and protracted debates about this. We do not agree, but we respect each other's right to put forward our positions.

The Vice-Chair (Ms. Jean Augustine): Mr. Allmand.

Mr. Warren Allmand: Very briefly, the Export Development Corporation is able to finance these projects because it has the backing of the Canadian government and the Canadian people. Consequently, I believe the Canadian people have the right to know how that government backing is being used, especially if it's being used to transgress international conventions with respect to the environment, with respect to human rights, and with respect to labour rights. How else can the Canadian people assess that if they don't have the disclosure of information?

This is a corporation that can only do what it does because it has the backing, the credit rating, of the Canadian government, which means the Canadian people. Consequently, in principle, I believe the people have the right to know how that backing, and power, and support is being used.

I can't understand the position taken by some of my friends at the table here. Either they don't support the international convention on human rights, on civil and political rights, or economic, social, and cultural rights, and think Canada should abrogate them, or if they don't take that position, then how else should Canada assure that the obligations they undertake internationally are implemented and not broken? There has to be some way of assuring that the right hand isn't doing completely the opposite of the left hand.

The Vice-Chair (Ms. Jean Augustine): Thank you.

We will now go to Mr. Robinson.

Mr. Svend Robinson: Thank you very much.

In fact, I'd like to put that question directly to Mr. Myers and to Mr. Keyes, because I think it's an excellent question. Before I do that, I want to seek clarification. I think Mr. Blackburn or Mr. Myers indicated that the American bank was able to protect commercially sensitive information under their legislative framework. Is that correct?

Mr. Robert Blackburn: Yes, there's a whole process it uses in this area that is very protective of competitive information.

Mr. Svend Robinson: Are they not subject to freedom of information legislation in America?

Mr. Robert Blackburn: I don't know that. I think the suggestion earlier was that they were.

Mr. Svend Robinson: They are. So the point I'm making is that it seems to me that the EDC in Canada could be subject to the access to information legislation and at the same time commercial sensitivity could be protected. It's done in the United States. It could be done here as well.

Mr. Robert Blackburn: It might be. I'm not an expert on this.

Mr. Svend Robinson: Right.

I do want to come to the point that Mr. Allmand made and ask for a response to that. I'll put two questions.

One is on the issue of frivolous lawsuits and the privative clause. Ms. Nowlan has indicated, and quite rightly, that there exists in any provision for civil litigation a discretion of the court to dismiss frivolous and vexatious lawsuits. I can recall from a distant past when I practised law bringing one or two applications of that nature myself, so frankly there's absolutely no need for a privative clause if that's the objective of the privative clause because the courts already have that discretion.

I want to ask two specific questions. One, you say that the requirement under the draft disclosure policy imposes an unreasonable burden if you have to disclose the environmental and social aspects of the entire project and not just the portion related to EDC funding. Frankly, I find this a rather bizarre argument. If EDC, for example, is funding a portion of a project—let's say they're funding a contract for turbines in a dam, the Urra dam, for example—but not the whole project, why on earth shouldn't we be aware of what the overall impact of that project is?

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What I hear you saying is, look, if we're only financing part of it, we're just financing the turbine. Even if it has appalling environmental, labour, or human rights consequences, we shouldn't be worried about that because we're only financing a part of it. In fact, I heard that argument specifically on the Urra dam project when I was down in Colombia; it was, “We only have a small share, so why should we be worried about what happens with that project?”

So I'd like to have a comment on that. But I have a question on the legislation specifically, and this is a really key question, it's one that Mr. Allmand alluded to.

Mr. Myers, you say in your brief on behalf of the Alliance of Manufacturers and Exporters of Canada that you consistently supported the amendment of the Export Development Act to include a provision that would require EDC to apply an environmental assessment framework to international projects in which it's involved. And in fact in the evidence that Mr. Neals gave, speaking on behalf of the organization, to this committee, he said it's entirely appropriate that the EDC should be required to follow international norms, including human rights norms. I could read the whole paragraph. I'm sure you recall it.

If it's appropriate and acceptable for this committee to include, and for the government to include, an amendment with respect to the environmental assessment framework, why wouldn't we want to also include similar provisions with respect to core labour standards and international human rights covenants?

Mr. Jayson Myers: I could begin. Please don't understand us as saying that we oppose the inclusion of environmental review framework in this legislation. We don't, and I think a good environmental assessment is a very good part of any risk assessment of any international project, as is an assessment on the impact on social dislocation and on human rights. I think that is good risk analysis and a good part of what EDC does, so we're certainly not opposed to that sort of assessment being made.

I think our concerns, and specifically using the example of a project where EDC is financing a part of that project, are that this has to be done in a practical, workable way in order to make sure EDC is in the game in the first place here. By having measures that would require EDC to go to a project sponsor and require them to make an environmental assessment, to disclose that openly, to disclose what could be commercially sensitive information at that point, I think, first of all, Canadian participants in that project would simply be out of that game at the beginning, and secondly, I don't think Canadian companies would go to EDC under those terms.

So this is very much around how this risk assessment is to be done and what sort of information is to be made public.

Mr. Svend Robinson: So I can understand clearly, are you agreeing then that if it's appropriate to do an environmental assessment, that it's just as important to do an assessment of the respect for international human rights standards and core labour standards?

Mr. Jayson Myers: I think that risk assessment should be a part of the ongoing risk assessment that EDC does, and from what I believe to be the management practices of EDC, it is a part of their project and risk assessment.

Mr. Svend Robinson: So you wouldn't have any objection, speaking on behalf of your organization, to including an amendment that expanded the references to international obligations, as this committee initially recommended.

Mr. Jayson Myers: It is my view that it was already looking at not only environmental assessments but social assessments as well. I would have thought that this would have been a part of it.

Mr. Svend Robinson: Exactly, and I'm pleased to hear you confirm that, because the legislation itself doesn't refer in any way to respect for international human rights obligations or core labour standards. Mr. Keyes, I believe, referred to the policy, the environmental review framework, which does make some reference to I think social impact, but—

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Mr. Robert Keyes: It also refers to no justification for a project where there's a contravention of relevant international conventions.

Mr. Svend Robinson: Exactly, but that's an entirely discretionary policy, which could be changed tomorrow. This is law. This is legislation, and I'm pleased to hear—at least I think I hear—Mr. Myers agreeing that the legislation should reflect those same standards.

Mr. Jayson Myers: Obviously, before reading too much into what I've just said—

Mr. Svend Robinson: I'm glad to accept your assurance, Mr. Myers.

Mr. Jayson Myers: —our concerns around the way the environmental assessment process, and the environmental and social impacts are being undertaken by this bill are.... Our view is that social impact assessments should look at matters that may differ from project to project. That's, again, a part of good EDC project management, but, Mr. Robinson, I would like to ask Mr. Blackburn to respond to your point about the frivolous and vexatious legislation as well.

The Vice-Chair (Ms. Jean Augustine): Very briefly, Mr. Blackburn.

Mr. Robert Blackburn: The point would be we're not just talking about frivolous and vexatious challenge. It could be differences of opinion. The point is that we want there to be certainty that if the EDC board makes a decision to finance, it will stand up, so somebody can't go and say, I disagree with that; you may think the environment or some other aspect of the project has been appropriately dealt with, but I disagree.

Mr. Svend Robinson: “Frivolous” is your word.

Mr. Robert Blackburn: No, it's not my word.

Mr. Svend Robinson: Certainly you agree with Mr. Myers.

Mr. Robert Blackburn: I agree with that, but I'm saying, as I suspect you know well, this is not the only thing that.... In fact, the American privative clause, which we've used as a model since the Ex-Im Bank seems to be everybody's model, was certainly not just addressed to frivolous and vexatious. It was addressed to providing legal certainty once a decision was made rather than having the decision-making process open to legal challenge.

Mr. Svend Robinson: And what if in fact there was arguably an error in law in the way in which the decision was made by the EDC? What you're saying is, slam the door and there shouldn't be any opportunity to review that.

Mr. Robert Blackburn: My understanding is—you're a lawyer and I'm not—that a privative clause would militate against challenges on substance, but, as in any B decision, you have the right to appeal on grounds of denial of natural justice or abuse of process rather than on the substance of the decision. Perhaps I'm wrong, but that's my—

The Vice-Chair (Ms. Jean Augustine): Thank you very much, Mr. Robinson.

I'm conscious of the time, and the committee has gone beyond the scheduled time. I thank you for your patience and forbearance. I thank you also for waiting for the start of this part of the meeting and for your input. Thank you very much.

The meeting is adjourned.