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37th PARLIAMENT, 1st SESSION

Standing Committee on Foreign Affairs and International Trade

COMMITTEE EVIDENCE

CONTENTS

Monday, February 25, 2002

0900

The Chair (Ms. Jean Augustine (Etobicoke--Lakeshore, Lib.))

0910

0915

Mr. Jack Harris (MHA, Signal Hill--Quidi Vidi; Leader, New Democratic Party of Newfoundland and Labrador)

0920

0925

0930

The Chair

Mr. Jack Harris

The Chair

Mr. Jack Harris

The Chair

Mr. Randy Collins (MHA, Labrador West, New Democratic Party of Newfoundland and Labrador)

0935

Mr. Harris

0940

The Chair

Mr. Yves Rocheleau (Trois-Rivières, BQ)

Mr. Jack Harris

0945

The Chair

Mr. Peter Stoffer (Sackville--Musquodoboit Valley--Eastern Shore, NDP)

Mr. Jack Harris

0950

Mr. Peter Stoffer

Mr. Randy Collins

The Chair

Mr. Baker

0955

Mr. Jack Harris

The Chair

Mr. Jack Harris

1000

The Chair

Mr. Jack Harris

The Chair

Mr. Peter Stoffer

Mr. Jack Harris

The Chair

Mr. Randy Collins

1005

The Chair

Mr. Chris Vatcher (Vice-president, Memorial University of Newfoundland Students' Union)

The Chair

Mr. Chris Vatcher

The Chair

Mr. Chris Vatcher

1010

1015

The Chair

Mr. Chris Vatcher

The Chair

Mr. Rocheleau

Mr. Chris Vatcher

1020

Mr. Rocheleau

Mr. Chris Vatcher

The Chair

Mr. Peter Stoffer

Mr. Chris Vatcher

1025

Mr. Peter Stoffer

Mr. Chris Vatcher

The Chair

Ms. Carroll

Mr. Chris Vatcher

Ms. Carroll

Mr. Chris Vatcher

Ms. Carroll

1030

Mr. Chris Vatcher

The Chair

Mr. Chris Vatcher

The Chair

1035

Mr. Baker

1040

Mr. Chris Vatcher

1045

The Chair

Mr. Chris Vatcher

Mr. Peter Stoffer

The Chair

Mr. Peter Stoffer

The Chair

1050

Ms. Emma Rooney (Representative, The Lantern)

Ms. Fay Edmonds (Representative, The Lantern)

1055

Ms. Emma Rooney

The Chair

1100

Mr. Sean Reany (Member, St. John's Mobilization for Global Justice)

The Chair

Ms. Lori Heath (Member, St. John's Mobilization for Global Justice)

1105

Mr. Matthew Cook (Member, St. John's Mobilization for Global Justice)

1110

Mr. Edward Hudson (St. John's Mobilization for Global Justice)

1115

The Chair

Mr. Rocheleau

The Chair

Mr. Matthew Cook

1120

The Chair

Ms. Emma Rooney

Mr. Edward Hudson

Mr. Peter Stoffer

Ms. Emma Rooney

1125

Ms. Fay Edmonds

Mr. Peter Stoffer

Mr. Sean Reany

Mr. Peter Stoffer

Mr. Sean Reany

The Chair

Ms. Lori Heath

1130

Ms. Carroll

The Chair

Mr. Baker

1135

Ms. Lori Heath

Mr. Sean Reany

Mr. Edward Hudson

1140

The Chair

Ms. Aileen Carroll

Some hon. members

Ms. Carroll

1145

The Chair

Mr. Sean Reany

Ms. Carroll

Mr. Sean Reany

Ms. Carroll

Mr. Sean Reany

Mr. Edward Hudson

The Chair

Ms. Lori Heath

1150

The Chair

Ms. Fay Edmonds

Mr. Peter Stoffer

Ms. Fay Edmonds

Ms. Aileen Carroll

Mr. Peter Stoffer

Ms. Emma Rooney

The Chair

Mr. Sean Reany

The Chair

1155

Mr. Baker

The Chair

Mr. Baker

The Chair

Mr. Baker

The Chair

The Clerk of the Committee

Mr. Baker

The Clerk

Mr. Baker

The Clerk

Mr. Baker

The Clerk

Mr. Baker

Mr. Hudson

The Chair

Ms. Carroll

The Chair

1330

Ms. Elaine Price (President, Newfoundland and Labrador Federation of Labour)

1335

1340

1345

1350

1355

The Chair

Mr. Rocheleau

Ms. Elaine Price

The Chair

Ms. Elaine Price

The Chair

Mr. Peter Stoffer

1400

Ms. Elaine Price

The Chair

Ms. Carroll

Ms. Elaine Price

Ms. Carroll

Ms. Elaine Price

The Chair

1405

Mr. George Baker

The Chair

Ms. Elaine Price

The Chair

Ms. Elaine Price

The Chair

Mr. Christopher Youé (President, Canadian Association of African Studies)

1410

1415

1420

The Chair

Mr. Rocheleau

Mr. Christopher Youé

Mr. Rocheleau

Mr. Christopher Youé

1425

The Chair

Mr. Yves Rocheleau

Mr. Christopher Youé

The Chair

Mr. Peter Stoffer

Mr. Stoffer

1430

Ms. Linda Ross (Canadian Program Coordinator, Oxfam Canada)

The Chair

Ms. Carroll

Mr. Christopher Youé

Ms. Carroll

Mr. Christopher Youé

Ms. Carroll

Ms. Linda Ross

Ms. Carroll

Mr. Christopher Youé

1435

Ms. Carroll

Mr. Christopher Youé

The Chair

Ms. Linda Ross

1440

The Chair

Mr. Peter Stoffer

The Chair

Mr. Sean McCarthy (Vice-president, Canadian Manufacturers and Exporters--Newfoundland and Labrador Branch)

1445

1450

Mr. Abbott

1455

The Chair

Mr. Rocheleau

Mr. Sean McCarthy

1500

The Chair

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

1505

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

Mr. Sean McCarthy

Mr. Peter Stoffer

The Chair

Mr. Peter Stoffer

Ms. Carroll

Mr. Sean McCarthy

Ms. Carroll

1510

Mr. Sean McCarthy

Ms. Carroll

Mr. Sean McCarthy

Ms. Carroll

Mr. Sean McCarthy

Ms. Carroll

Mr. Sean McCarthy

Ms. Carroll

Mr. Sean McCarthy

Ms. Carroll

Mr. Sean McCarthy

The Chair

CANADA

Standing Committee on Foreign Affairs and International Trade

NUMBER 058

1st SESSION

37th PARLIAMENT

COMMITTEE EVIDENCE

Monday, February 25, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

The Chair (Ms. Jean Augustine (Etobicoke--Lakeshore, Lib.)): Good morning. It's good to be in this beautiful city. We came in last evening. Not only was the weather agreeable, but we were also part of the big celebration. As we watched the game in the hotel, we cheered with the rest of Canada. We also got a glimpse of what was taking place in downtown St. John's.

Let's begin our meeting today by welcoming the witnesses, as the committee continues its study of two very important matters facing Canada in terms of its role in the world and in North America.

Committee members are eager to hear from citizens across the country on key foreign policy challenges in the G-8 in the North American context. Canada is in the position of being president of the G-8 this year and host of its summit, which will take place in June in Alberta. The major priorities for that summit have been identified as improving the world economic situation, building a new partnership for Africa's development, and pursuing the international fight against terrorism. Canada is putting particular emphasis on advancing an action plan for Africa.

The committee has been asked to report its findings and recommendations to the government by the end of April. Seeking input from Canadians is essential to that purpose. This week, while one group of members is in Quebec, another group is hearing from the public in Atlantic Canada. In early April committee members will be travelling to western Canada and Ontario to complete our cross-country hearings.

Given time and budget considerations, we are also using this as an opportunity to hear the views of Canadians on how they would like to see our North American relationships evolve. All aspects of Canada-U.S., Canada-Mexico, continental, and trilateral ties are on the table for discussion as part of a longer-term study reporting later this year.

This is the beginning of the dialogue. More information with regard to both studies can be found on the committee's website. We invite additional input from Canadians.

¿ (0910)

Please note, should you wish more information or you have other submissions, they should be with us for the G-8 study by mid-April, and by the end of June for the North American study.

We have witnesses before us today. We want to welcome, from the New Democratic Party of Newfoundland and Labrador, Mr. Jack Harris, the MHA of Signal Hill-Quidi Vidi and leader of the New Democrats of Newfoundland and Labrador. With him is Mr. Randy Collins, MHA, Labrador West.

We'll hear from the two witnesses.

We want to welcome you, gentlemen. We are very pleased to be in your neighbourhood.

¿ (0915)

Mr. Jack Harris (MHA, Signal Hill--Quidi Vidi; Leader, New Democratic Party of Newfoundland and Labrador): Thank you very much. Welcome, Madam Chair and the committee, to St. John's and to my own district of Signal Hill--Quidi Vidi, where the hearings are being held.

With me, as you've indicated, is our member for Labrador West, Mr. Randy Collins, who will speak this morning on an issue affecting the seal industry across this country. The Iron Ore Company of Canada, of course, is a very important player in the provincial economy, but is most vital to the operations of Labrador West, as well as the Wabush Mines operating in the other half of the district of Labrador West in Wabush.

This morning, Madam Chair, I propose to talk about a couple of issues. I'll ask Randy to talk about steel, and then I'll come back with some general comments on the role of international trade and how it affects us in Newfoundland and Labrador.

I know this morning you'll hear from a number of other witnesses who will talk about some of the more international issues affecting the G-8 and international trade in general. I'm going to concentrate a little bit on the North American issues, and particularly the kind of issues that affect us in Newfoundland and Labrador.

My theme really is that we in the Atlantic, and particularly in this province, have a strong concern that international trade issues can and should be an instrument of regional equity and not something of which we should be the victims. In that regard, I want to talk about two issues.

One is pretty close to my heart. I'm sure you'll hear other presentations on this issue across the Atlantic and perhaps elsewhere in Quebec and British Columbia. It is the issue of shipbuilding.

We had a recent flurry, in Canadian terms, on the issue of shipbuilding, in the summer of 1991, with the announcement by the federal government of a new policy framework for the Canadian shipbuilding and industrial marine industry. It was the product of a national shipbuilding forum held in St. John's in October 2000 that I attended. This didn't happen overnight. It was a product of ten or fifteen years of work, led in large measure by the Marine Workers Federation and other players in the industry.

It's one of those industries, Madam Chair, where in some respects the Canadian view of this industry hasn't been entirely positive.

I recall a former industry minister, now Deputy Prime Minister Manley, referring to the shipbuilding industry as either a sunset industry or a smoke-stack industry. It's the same message with either comment. It failed, indeed, to recognize not only the importance of the industry to parts of the country, such as this province, the Atlantic, Quebec, and British Columbia, but also the fact that the industry has changed considerably over the last number of years.

We've seen very modern facilities developed in Saint John, New Brunswick, partly as a result of the frigate contract, and we've seen the Government of Newfoundland and Labrador put considerable provincial resources into the development of the Bull Arm facility and the facility in Cow Head, Marystown. We've seen the transformation of that industry from an older type industry to a modern, high-tech industry with new methods of construction and high technology add-ons to the vessels and an industry that could draw on the broad array of skills and talents that have been developed in this province and in the Atlantic area in general.

I'm not trying to blame Mr. Manley for all of this, but to the extent that this type of attitude might inform the development of policy at the national level, we find it to be quite unfortunate. We urge your committee to recognize that it's extremely important we look at support for shipbuilding as an issue of regional equity in Canada.

Recently, we've seen the issue come to the forefront in the potential development of a trade agreement with the European Free Trade Association. There was a recommendation that the 25% tariff that now exists on the importation of vessels was going to be removed and the Norweigian shipbuilding industry would be allowed to participate fully in the Canadian economy. We find it difficult to accept that the government would contemplate that. In fact, it was done with almost no consultation. Apparently, the negotiations have been going on for nearly three years without widespread public consultation and discussion. In the month of January it was almost as if parts of Atlantic Canada and elsewhere had to put on a full-court press to try to stop what appeared to be an imminent agreement to remove the 25% tariff.

It seems that trade negotiations are dealt with on a present-time basis rather than recognizing the historical issues associated with it. In the Norwegians' case, they have spent the last 25 or 30 years developing a policy whereby they give their shipbuilding industry the support it needs to become strong. That has been done through a whole series of programs, subsidies, and tax treatments, which have given them a strong position in shipbuilding for their own country and internationally.

They are very interested, of course, in exporting that industrial base. They have a surplus of 400 or 500 ships, which they would like to use in our offshore oil industry and offshore generally. The notion of cutting off the possibility of developing the shipbuilding industry in the Atlantic area just as we are starting to have a more mature oil industry is particular disturbing.

I'm not blaming Norway. I think Norway has done an excellent job of looking after its own people. In fact, we should learn from their approach, whereby they have been able to protect and develop an industry. We would be able to compete internationally once the playing field is truly level. We don't level the playing field by cutting off our nose to spite our face; we level the playing field by ensuring that our industry is at the same level of development as that of our competitors.

The response to this proposal has been fairly widespread. I note that the four Atlantic premiers have jointly written a letter to Minister Pettigrew. I called on the premier of this province to act strongly, and I proposed that an all-party committee be sent to Ottawa to urge Minister Pettigrew and the Government of Canada not to enter into this agreement. I know there have been considerable efforts in the other provinces as well. The leader of the Nova Scotia NDP, Darrell Dexter, also urged his premier to engage in an all-party committee, and I understand they have plans to send this committee to Ottawa.

¿ (0920)

There has been widespread support across the Atlantic region for a challenge to Ottawa and the Government of Canada, intending to remove this tariff. But it's disturbing that provincial premiers and other industry players in the Atlantic have to, in a sense, act as advocates as opposed to being a part of the process. That's what I find disturbing.

We're making international trade policy. Why should four Atlantic premiers--almost after the fact trying to stop something from happening that's detrimental, obviously without having been consulted--why should the four poorer provinces of Canada be placed in a situation where they're trying to stop some ball from rolling that they haven't been a part of?

It's symptomatic of the national government treating trade as something they alone are interested in, as a national issue that doesn't necessarily have consequences for regions like the Atlantic, or like Newfoundland and Labrador. I think that's a symptom of the problem here that we should be concerned about and fight against.

Again, in the shipbuilding industry, we in this province have had a recent experience with an American company, Friede Goldman International, who bought a shipyard in Marystown. They did the work that was already on the books, weren't able to get any other work, and are now in fact under bankruptcy in the United States. But the reality is that for the last year and a half they have been building ships in their sister yards in Louisiana and other parts of the United States, all of which have been financed under American Title 11 financing, which has allowed them to conduct their activity in the United States.

In Canada, we don't have any similar support for shipbuilding. There's been a recent program announced in January. I think former Minister Tobin was to make a speech in Vancouver on the day he resigned to announce the first item of a new program, but the details of that are not well known and advertised.

We have an irony between the United States and Canada. This is something Mr. Baker and I and others in the House of Commons in 1987 and 1988 raised again and again when we talked about shipbuilding and about the protection the Americans had through the Jones Act.

The Jones Act, as I'm sure is well known, is one that protects the American shipbuilding industry by requiring that vessels engaged in coastal trade in the U.S. be built in America, owned by Americans, and crewed by American citizens. This is something that exists for the Americans; we have nothing similar in Canada. Neither do we have the kind of other support, outside the Jones Act, that the Americans have under Title 11 financing.

So we have a long way to go to create a level playing field in this country. Unfortunately we have a mindset, through the long-standing pressure that comes from all this trade talk, that says “we can't have any subsidies“, or “we can't do this”. The Americans seem to have it both ways: when they don't like something we do, we're unfair traders; we're unfairly subsidizing our industry. And yet they themselves are quite well protected in areas such as shipbuilding for the kinds of things we're talking about.

The other area I wanted to talk about briefly--and the reason I want to talk about it is that I think it's something we need to keep on the agenda, because it consistently comes up and will come up again--is the whole notion of the export of bulk water.

¿ (0925)

We had a debate in this province, as members may know, over the last couple of years because there was a proposal by a private entity to develop a bulk water export proposal from a place called Gisborne Lake. There was vigorous opposition within the province, and at the time the Government of Canada was asking for an agreement for a national ban on bulk water, which apparently was to be exercised by the provinces because the Government of Canada didn't want to take its own action on that.

In this province, of course, the debate was similar to what it was elsewhere. There were issues about what it would to do our environment, what it would do to our being treated as a supply of natural resources. And it was not only natural resources in this case but the very water of life, and the issue of supplying that to others who are prepared to pay, or able to pay, which could lead to the privatizing or commodifying of a vital part of our environment.

We were opposed to it as a party here in the province. Nationally we've been opposed to it and have asked for a national ban on it. We haven't seen the kind of results that we wanted to see. Most recently the House of Commons has passed legislation involving boundary waters, but we haven't seen the kind of national ban that we would like to see.

The concerns, of course, arise out of chapter 11 of NAFTA. We've had have various legal opinions about this. We were assured back in the late 1980s and early 1990s that there was no effect on water, that this is not in the NAFTA agreement. However, that's not the experience so far, certainly in terms of challenges to actions within Canada.

In 1999 the California company Sunbelt sued the governments of British Columbia and Canada because of the cancellation of a licence to export bulk water. The claim borders in the area of $600 million.

¿ (0930)

The Chair: I don't want to interrupt you, but leave a little bit of time for Mr. Collins, so that we can have a back-and-forth after your two presentations.

Mr. Jack Harris: Sure, I'm sorry, I wasn't watching the time.

The Chair: You've been going for 12 minutes.

Mr. Jack Harris: I'll move as quickly as I can through this.

There are various positions on the consequences of the export of water. Our government here in Newfoundland and Labrador sought legal opinions, one from an American-based lawyer and two from Canadians. The American lawyer concluded that if Newfoundland and Labrador allowed the sale for export of bulk water, then Canada is responsible for ensuring that no other province deny the sale for export of bulk water, and that no other province afford treatment less favourable than the treatment afforded by the Province of Newfoundland and Labrador. That was the American lawyer's opinion. The Canadian lawyers concluded that while approval of a bulk water project in Newfoundland and Labrador would create trade consequences to this province, it would not render all water resources in Canada a good under NAFTA and therefore would not create a precedent for the other provinces.

So it's ironic, again, that the American interpretation of the NAFTA provisions is one that is very unfavourable to Canada. The Canadian interpretation in this particular case was that everything is okay. So it's pretty clear that we have a potential problem on our hands if we allow the commencement of bulk water sales, and we'd be calling for a full ban nationally on that issue.

I'm going to ask Randy to talk about the recent concerns that have arisen in the area of steel export and import.

The Chair: Thank you. Mr. Collins.

Mr. Randy Collins (MHA, Labrador West, New Democratic Party of Newfoundland and Labrador): Thank you very much.

Obviously the steel industry is a very important industry in Canada, employing many people in high-paying jobs. In addition to the steel industry, of course, is the iron ore industry from which steel is made, and that certainly has an impact on this industry, because as goes the steel industry so goes the iron ore industry. That affects people particularly in my riding of Labrador Wes, where you have the Iron Ore Company of Canada, you have Wabush Mines, and next door in the province of Quebec you have Quebec Cartier Mining, which at the present time, and for the past two years, has been going through some very difficult times, with shutdowns occurring frequently for months at a time.

The steel industry in Canada is another example of the problems arising in major industries from trade agreements. The North American Free Trade Agreement was supposed to allow free trade between Canada, the United States, and Mexico, yet as a result of the dumping of cheap steel into North America, the United States has been making moves to protect its industry, with the possibility of including Canada in any remedies to protect their own steelmaking industry.

Steelworkers in this country have made representations to the United States International Trade Commission. I think Lawrence McBrearty, who is the president of the United Steelworkers of America in Canada, made a presentation to the United States International Trade Commission asking that Canada be excluded from any considerations under trade remedies to deal with the dumping of cheap steel into the U.S.

Canada is not part of the dumping of cheap steel that is undermining American markets. They're not part of that problem. If anything, the Canadian steel industry is afflicted by similar problems. Both countries have had to deal with increased imports of steel from other countries. Some of these countries include Japan, China, Brazil, Russia, and other European countries.

Between 1996 and 2000, U.S. imports from countries other than Canada increased from 19.5% of the domestic market to 25%. In Canada during the same period, imports from countries other than the U.S. increased from 11.2% to 24.8%, and some figures suggest it could be as high as 35%. Furthermore, the Canadian and American industries do not have an excess steelmaking capacity problem, so the product that is being dumped is not coming from Canada. As a matter of fact, between 1996 and 2000, when imports of steel into the United States were surging, the imports from Canada into the United States actually declined.

It's ridiculous that industry people from Canada have to go, cap in hand, to the United States to beg their International Trade Commission not to impose remedies that may hurt our steelmaking industry, considering that this is a country with which we are supposed to have a free trade relationship. It speaks to the fairness or, more precisely, the unfairness in NAFTA.

The steelmaking industry in Canada is threatened by offshore dumping of steel and the potential effects of a decision expected by President Bush concerning whether or not certain steel products originating in Canada will be hit with duties. As well, there's a threat that offshore steel that is diverted away from U.S. ports of entry may end up here.

In Canada we have the Canadian International Trade Tribunal, the body responsible under Canadian legislation for findings of injury and anti-dumping and countervailing duty cases, and for the provision of advice to the government on other import issues. The CITT recently made decisions on four major cases filed over the past year in response to the steel crisis in Canada. In the concrete rebar case, the steel industry lost the case for retroactivity. In the hot-rolled steel case, the industry won against some of the countries subject to the complaint, but retroactivity was not applied. In galvanized steel, the industry lost outright.

Part of the problem is the CITT itself. Based on its recent decisions, it would appear that it sees its role as promoting unrestricted free trade rather than fulfilling its legislative mandate of administering legislation intended to protect Canadians from unfair competition from abroad. Canada's system of trade administration has to be more effective in protecting Canadian industries and Canadian working people from the negative impact of unfair trade.

The iron ore industry in Canada and the steel industry in the United States of course are linked very closely together. Many American companies are shareholders in the iron ore mines, particularly those in Labrador, which produce about 90% of all the iron ore that's produced in Canada between Labrador West and Fermont, Quebec, or Mount-Wright. It is a very important industry to our province and it's a very important industry to our country in general.

That, Madam Chair, concludes my statement.

¿ (0935)

Mr. Jack Harris: Perhaps I may sum up, Madam Chair, by saying that from the experience of the last number of years with the APEC summit, the various other G-8 meetings, and the FTAA meetings in Quebec City, it's pretty clear that Canadians expect more from our government in international trade negotiations. We want to see the Government of Canada protect Canadian interests, Canadian workers better, but we also expect that the Canadian influence on international trade negotiations should be helpful to those in the third world who need the kind of leadership that Canada can provide.

We want to see harmonization up, not harmonization down. We'd like to see enforceable standards for labour, social programs, natural resource protection, and the environment, and Canada has to find a way to be on the right side of those issues, to take some leadership on them.

That expectation is there in many forms. Unfortunately, some of the more colourful or more sensational aspects of these protests are what get news coverage. But the fact is that a poll done during the FTAA, back in the Quebec City days, showed that two-thirds of Canadians said they would be there in the streets protesting if they could, because they believed--this is before all the negative publicity--the people who were protesting in Quebec City were representing the views and concerns of Canadians that trade negotiations shouldn't be conducted in the back rooms, to the detriment of the peoples of the world, to ordinary people, in favour of industry and transnational corporations, and that we expected more from our leaders than we were getting.

I think that's the message you can usefully bring to the Government of Canada.

¿ (0940)

The Chair: Thank you, Mr. Harris.

We'll now go around the table for questions from our members. We'll start with the member from the Bloc Québécois, Mr. Yves Rocheleau.

[Translation]

Mr. Yves Rocheleau (Trois-Rivières, BQ): Thank you, Madam Chair.

I would first like to thank the witnesses for their presentation and say to Mr. Harris that I share his concerns regarding globalization. This development in our world history must obviously be conducted in the public interest, in the interest of the citizens of the world, and not just of those who hold the economic power on this planet.

I am also very pleased to hear you talk about shipbuilding. It is a very familiar topic in the House of Commons because of the battle being led by one of my colleagues, who is also very dear to me, Mr. Antoine Dubé, Member for Lévis, who has a major shipyard in his riding that is nearly closed. He has toured all of Canada's shipyards and even some abroad, namely in Taiwan and the United States. He is leading a very tough battle along with our colleague Mr. Stoffer. Among other achievements, he organized an event unprecedented in Canadian history, namely bringing together employers and unions in one room in Ottawa so that they could discuss things together. I have two questions on that.

You spoke of Norway possibly being an example to follow and, if I understood you correctly, of a possible trade agreement with Norway. I would like you to tell us what you know about the Tobin plan, which should have been unveiled on the very day Mr. Tobin resigned. What do you know about it? Would you be satisfied with such a plan from the federal government? Are you pleased with the ideas apparently stemming from the Tobin plan?

[English]

Mr. Jack Harris: First of all, I hope I mentioned Quebec is part of the shipbuilding industry in Canada. I know the shipyard workers in Quebec, in terms of numbers, have perhaps suffered more than anyone else in Canada, because it was a very large shipbuilding industry there that's gone into decline.

I would hope we would have a lot of initiative and support from the members from Quebec to get some action on that. I know we do from your colleague, and hopefully from the Government of Quebec as well.

I don't have a lot of detail on it, but I think part of the Tobin announcement on structured financing for shipbuilding was the start of some effort by the Government of Canada to provide some financial support for shipbuilding. There's a whole menu of items that could be chosen.

I think the Marine Workers' Federation have presented briefs on this. A number of them are contained in the new policy framework for the Canadian industry. It doesn't involve a direct subsidy of shipyards but in fact supports them and makes it easier to build ships.

I know the Norwegians offer particular tax advantages in terms of how a tax is calculated on the operation of ships. It stimulates efforts to build ships within their own country.

I don't have a lot of detail on what Mr. Tobin was going to announce. We didn't get the benefit of his speech that day.

¿ (0945)

The Chair: Merci.

Mr. Stoffer.

Mr. Peter Stoffer (Sackville--Musquodoboit Valley--Eastern Shore, NDP): Thank you, Madam Chair.

I'd like to say, Jack and Randy, it's good to see you folks again.

Again, the presentation of steel, bulk water, or shipbuilding is a continuous problem we have when trying to bring issues of the region to central Canada.

Jack, the concerns, though, aren't only to that issue. We can also talk about salmon aquaculture. We can talk about potatoes from P.E.I. and softwood lumber from British Columbia. The Canadian Wheat Board is now being challenged by the United States.

It seems that everywhere we win in terms of being successful and following the rules like the good Boy Scouts or Girl Guides we are, however you want to determine us, the fact is that the United States is beaten. They don't like being beaten, so they put up barriers, take us to court, or pursue these angles through the legal or legislative means at their disposal. In the meantime, workers in our communities have to suffer because of layoffs.

A classic example is what's happening in B.C. right now. This is the sixth challenge in twenty years, Madam Chair, to go after B.C. softwood lumber.

As for the industry of potatoes from P.E.I., the people in Maine who brought the case forward have now dropped their petition. They realized they weren't going to win. In the meantime, while this goes on, our producers have to spend millions of dollars in legal fees in order to combat unfair challenges.

Jack, as the leader of the NDP in this province, looking at it with a peripheral view, and looking at countries from the Far East to the western world, I'd like your perspective.

When we sign these deals, free trade and then NAFTA, we sign them in good faith. We will honour the commitments in terms of subsidies, fairness, and everything else. Everywhere we win with the United States, the United States doesn't seem to respond in a fair way. They tie us up legislatively or through legal means. There are about ten different examples I can give you of steel, potatoes, softwood lumber, and salmon--you name it.

You are a lawyer yourself and understanding the long process. We have to spend literally millions of dollars to fight these things. In the meantime, we lay off all our workers and suffer in our communities. I'd like you to respond.

Mr. Jack Harris: I hate to say it, but we've said it. I think Mr. Baker and his colleagues said it back in 1987-88. I think we were snookered by the Americans under NAFTA when we allowed local law to apply when determining whether there was unfair trade. It was up to a certain level until the tribunal.

What has happened is the American system allows for a greater level of challenge before it comes down to the wire. They can impose all sorts of penalties in the meantime. They have effectively done so.

I think we were out-manoeuvred and it's a continuing battle. I think the Government of Canada may have to respond by providing better support, whether it be at the legal level or by supporting the organizations fighting this, not only the diplomatic or governmental level. Maybe we ought to have other defences that can operate effectively within our own country.

It's not only the Americans. You mentioned a number of items that challenged softwood lumber.

In this province, we're affected by a 20% import duty on shrimp for the European Community. It's a big, serious issue. To what extent is the Government of Canada placing any effort in this area on our behalf? It doesn't affect the whole country. It doesn't affect the aerospace industry in central Canada. It affects this province perhaps more than anyone else. We expect as a province to have our country go to bat for us. We have a feeling down here that this doesn't happen as often as it should and that other interests prevail.

In the fisheries, for example, we've seen concerns about trade affecting our willingness to be as tough as we ought to be on foreign fishing in our waters. There always seems to be a greater interest than the interest we have here in Newfoundland and Labrador. People are fed up with that, and there's a rising sense of nationalism in the province as a result of that. I can give you example after example.

¿ (0950)

Mr. Peter Stoffer: Randy, my question for you is on the perception of unfairness when it comes to deals with the rest of the country. We've already heard in Ottawa that Canada has a trade deficit with the EU and the EFTA countries. When it comes to the argument about shipbuilding or the 20% tariff on shrimp, Canada says, “We don't like that idea. We want to be in a trade surplus situation”. So there's a perception that we may wish to sacrifice industries on the east coast to benefit those of central Canada.

For example, if we allow the 20% tariff to be removed on imports from the supply vessels from Norway, for example, quite possibly telecommunications and pharmaceuticals from central Canada will then have easier access to European markets. So it's a tradeoff. In these trade deals you have to give something to get something. So the perception is that we're going to sacrifice Atlantic Canada--in this case, Newfoundland and Labrador--for the interests of central Canada.

I'd like you to comment on that. Are you hearing in your riding, or throughout Newfoundland and Labrador, that we will sacrifice interests on the east coast to benefit those of central Canada?

Mr. Randy Collins: I think that's a fair statement, and it is the feeling people in this province have. There's probably the same feeling on the west coast toward central Canada as well. That's where the power is.

The steel industry, for the most part, is in central Canada. Hamilton is the major centre, with Dofasco, Stelco and companies like that. The steel industry itself has lost thousands and thousands of high-paying jobs over the last 20 or 30 years, and not all through technology. Some have been through unfair trade agreements and dumping of steel into Canada.

But there's no question the attitude of the people around this province and in Atlantic Canada is that at times we are sacrificed, no question, for the betterment of something that can benefit central Canada more than the peripheral regions of the country.

The Chair: Thank you, Mr. Stoffer. I think that's an important question. At the same time, I'm glad you said “perception”, because there is that perception. But what is the reality? I guess we can pursue that.

Mr. Baker.

Mr. George Baker (Gander--Grand Falls, Lib.): Thank you, Madam Chair.

First of all I want to congratulate the witnesses. Both of them are what we in political circles would call excellent constituency politicians. So I want to put that on the record.

I have just one question for Mr. Harris. It came as quite a shock to me that these negotiations concerning the dropping of the tariff had progressed so far and reached the final stages without people who should be in the know knowing they had progressed that far. The dropping of this tariff would involve not just shipbuilding but the whole marine industry in Canada. It would mean the loss of hundreds and hundreds of jobs to Newfoundland and Labrador and a total decimation of that great complex of marine supply industries in future years.

I don't know what involvement Liechtenstein would have in that, but certainly Norway would be involved with, as you point out so correctly, the massive surplus they now have on their hands left over from the North Sea--huge--that could destroy forever certain branches of the industry in Canada.

What do you know about what we would have received in return? The reason I ask you that question is that I've investigated it considerably and I don't think we would have received anything, or if it is signed, that we will actually get anything in return. Is that your perception?

¿ (0955)

Mr. Jack Harris: I was also astounded, as you say you were shocked, that these types of negotiations got as far as they did and were apparently about to reach a conclusion without many knowing about it. For the life of me, I can't figure out what the big benefit to Canada is. I don't know what we trade with Liechtenstein, or Switzerland for that matter. I don't think we're going to be shipping watches to Switzerland, or anything like that, to justify a deal of this nature.

I don't know what we're getting out of it except some diplomatic effort on behalf of the Government of Canada. As I say, it's almost as if this type of agreement, as it is being portrayed, is being pursued as policy without our own interests being looked at.

It's supposed to be the role of diplomacy to look after the interests of your country, because states don't have morality, they have interests. Well, what about the interests of Canada? What about the interests of this part of Canada, the part of Canada that cares about shipbuilding and has an opportunity? We have a huge coastline in Canada, and yet we don't seem to pay a lot of attention to maritime issues. Our coast guard is not being adequately financed and supported, in my view, and is long overdue for refurbishment. We are developing an offshore oil industry in one of the harshest environments in the world. We have the people who can participate in it and we shouldn't turn it over to other countries that have a surplus because they subsidized their industry for the last 25 or 30 years.

The question really is what's going on in the Government of Canada that this could happen, that somehow or other nobody said to the minister, or the minister didn't say to himself, how is this going to affect our emerging oil and gas industry on the east coast?

We know how important even.... Two supply vessels were built in Halifax by Secunda Marine a couple of years ago--by the way, with a loan guarantee from the Government of Nova Scotia, not the Government of Canada. These two vessels are now operating in the Newfoundland offshore. We have no national program. These two vessels kept the shipyard going for six or eight months. They provided terrific employment and kept people in the region doing things they were trained for and capable of doing.

This is the kind of support the shipbuilding industry gets in the U.S., in addition to the Jones Act protection. And yet the Government of Canada can almost enter into an agreement that's going to wipe out the potential for this industry on the east coast of Canada for the next 20 years. It's astounding.

This is the message, I think, that your committee can bring back to the Government of Canada: when you're involved in international trade issues, you have to look at your own interests first.

The Chair: Thank you.

Mr. Harris, and also Mr. Collins, you would be interested in knowing that the Norwegian foreign affairs committee from the Norwegian parliament visited with us. The issue of shipbuilding and the issue of subsidies and a number of things were put on the table before them, and we had a very active discussion. I think we agreed to disagree.

Mr. Jack Harris: I should leave with the committee, actually.... I have a copy of a letter that outlines the Norwegian situation quite well. It's written by Mr. McArthur, the vice-chair of Irving Shipbuilding, to the Honourable Pierre Pettigrew. It details the Norwegian circumstance and how effective it has been to support the Norwegian industry. And again, we commend them for it.

À (1000)

The Chair: Before I let you go, I'd like to ask a question.

If the current North American trade framework is not sufficiently sensitive to regional development and the concerns you have, if it still exposes Canada to unfair U.S. trade action, how can we fix it? What can you say to the committee as we write our report? If NAFTA needs to be changed, how? What changes? What should Canada seek?

I'm not asking for a quintessential answer right now. Anything that you can feed to the committee in terms of something scripted later on would be of some help to us, but I would appreciate anything you can put on the record now.

Mr. Jack Harris: I suppose one of the concerns was the stand-still provision of the NAFTA agreement that prevented states from improving support for particular industries. Perhaps we should start looking industry by industry--shipbuilding may be one--and saying the Americans do a whole host of things here, here, and here to support their industry, and Canada should not be prevented from equally providing support for an industry that is already heavily supported in the United States. So in areas where there is support and no willingness to remove that protection--I don't see the Americans repealing the Jones Act--there should be opportunities for countries like Canada to say that in that sector, because of the level of support the Americans have, we can notch up our support for a particular industry without offending NAFTA.

So we may need some changes like that.

The Chair: Okay.

Mr. Stoffer, the last question.

Mr. Peter Stoffer: Thank you, Madam Chair.

It's interesting to note that when the recent talks for the Panamax contracts were coming up, the individual state governments said they would do whatever it took to win that contract. The port of Halifax, for example, didn't get that same level of support from its own federal government because of the concerns about potential subsidies.

As we speak right now, the federal environment minister and his provincial colleagues are meeting for the next few days. A lot of the talks about trade and negotiations will stem from the future of the talks about how Canada is going to meet the commitments it said it would meet at Kyoto. Join that with the consultations that are going to get underway with the provinces and industry...and the steel industry, especially, will be greatly affected by this.

Jack, if you were the premier of Newfoundland and Labrador, and Randy, if you were the environment minister, would you ratify the Kyoto accord as you understand it now? What changes would you seek, or what advice would you give the environment minister in order to meet our commitments in reductions of greenhouse gases?

Mr. Jack Harris: I think we ought to support the commitment to reduce greenhouse gases, the essential Kyoto agreement. I don't think we can renege on that.

I think we have to recognize it does represent challenges, but welshing on the commitment that was made is not the way to do it. We certainly need to have full credit for whatever environmental things we are doing right. There's nothing wrong with negotiating for a fairer recognition of what credit we should get.

But I think we have to sign that accord. I think we have to provide some leadership and insist that we not get involved in a trade over credit so much, but in fact take advantage of the technology that exists to reduce these gases in our own backyard. In this province there are so many things we could be doing to play a significant role in this.

The Chair: Thank you.

Mr. Collins, do you have a brief comment?

Mr. Randy Collins: I'd just say that obviously we have to be supportive of all attempts to do things that are environmentally friendly. We have that onus not only for ourselves but for future generations as well. Indeed, the whole world is going to have to take part. It's just a question of dealing with the matter and going about it in the right way so that you have the biggest benefit, but at the same time creating the environment where things are being done. But there's no question; we have to make the commitment to it.

À (1005)

The Chair: Thank you very much, Mr. Harris and Mr. Collins. It was good to meet you, and the issues you've put on the table will be taken into consideration by the committee. It was a pleasure having you before the committee as witnesses. Thank you.

Mr. Jack Harris: Thank you.

The Chair: We'll go on to our next witness from the Memorial University of Newfoundland Students' Union, Chris Vatcher. We were expecting Mr. Liam Walsh from the Canadian Federation of Students, but we have apologies from him. He's ill today.

Mr. Chris Vatcher (Vice-president, Memorial University of Newfoundland Students' Union): He's very sick.

The Chair: Then, Chris Vatcher, you are carrying the flag.

Mr. Chris Vatcher: Thank you very much.

Before I start this presentation, I have a list of concerns that I have composed of behalf of the 12,000 undergraduate students at Memorial University. I will read them out, with the impression that they are grave concerns to us, if I do not state that point every moment.

I'm going to be speaking on the threat of globalization to Canada's social fabric, and the role Canada plays as a member of the G-8.

The Chair: Remember we have to have time for questions.

Mr. Chris Vatcher: Okay, I'll try to get through this as quickly as I can. I can go into the fed's time too. We're all the same family.

I'll start my presentation with a quote I heard recently from our finance minister, Paul Martin, during a speech to the school of business: “The thing with globalization, you dare not be second or third.” So with that, I start my presentation.

As a globalization model, transnational corporations armed with billions in foreign investment are able, by international trade law, to exploit the environment and its people for the corporations' ever-increasing profit margins. Unfortunately, this corporate control is only increasing and infecting all aspects of our civil society. Free trade deals such as the FTAA and GATS look to include all public services as commodities to be marketed and sold on a for-profit basis. A primary social service, such as education, with an annual global expenditure that exceeds $2 trillion, will be placed on the dinner plate of transnational corporations to exploit as they see fit.

Under the current FTAA agreement, foreign for-profit education, health care, and other social service corporations from anywhere in the hemisphere will have the right to establish a commercial presence anywhere in Canada. They will have the right to compete for public dollars with public institutions like hospitals, schools, and daycare centres. With the current fast tracking of the various free trade deals, governmental standards for such social services will now be subject to review by trade tribunals like the WTO to ensure they are not barriers to trade.

These foreign investors will have the right to compete for public dollars with public institutions. The public subsidy, which currently covers two-thirds of Memorial University's operating budget, a subsidy of approximately $100 million, will have to be provided to all private for-profit institutions, or will have to be removed from Memorial's budget. Such government funding to a public institution is seen as unfair subsidy, and government regulation of tuition costs and tuition freezes are seen as predatory price fixing by globalization advocates.

Due to globalization, the accessibility and accountability of social institutions are undermined by the need for increased corporate profit. For example, several schools at the Halifax-based Information Technology Institute Education Corporation, or ITI, were recently bought by an American corporation, EMC, for a mere $5 million. Such commodification puts forth grave consequences with respect to Canada's ability to provide national standards for educational establishments.

A prime example of transnational exploitation at MUN occurs at the hands of the EDULINX corporation. EDULINX, which is 51% owned by CIBC and 49% by the USA Group, profits from student loan programs. This transnational company has acquired a three-year, $96 million contract from the federal government to run a social program. This corporation is able to contract out to companies such as Canada Post, further decreasing the amount of accountability it owes to students.

Furthermore, corporations such as EDULINX are proposing offers to our university administration and are continuously striving for increased influence. During personal dealings with both EDULINX and Memorial, I was informed that EDULINX planned to offer Memorial a payment of $7 per student loan if Memorial agreed to run the verification and loan distribution.

From my current understanding, this deal has not yet been brought back to the table. I have requested on several occasions that MUNSU be included in any and all negotiations where Memorial University would profit off the backs of MUNSU membership. My requests have yet to be met with compliance.

Memorial also has the Mobil Oil corporation not only influencing Memorial's curriculum but actually having labs with Mobil plaques stapled to the wall. We currently see Memorial embarking on a whole series of oil and gas lectures, followed by an elite professional training program intended for corporate retraining. This program has a price tag much greater than any regular Memorial University course and thus will be inaccessible to the average student.

Under this current corporate leash, our public institutions are being forced into mandates that have little, if any, benefit to the populace. Why is it that our university has been forced into oil exploitation for Mobil's profit? Should it not be the function of universities to, instead, search for alternatives to oil exploitation, alternatives without massive environmental burdens?

Unfortunately, capitalism on a global scale forces society into a for-profit mould. Education is no longer interested in social evolution, but is instead interested in producing the next generation of capitalists. Students are forced into studying programs that will find them the highest-paying jobs in the hope that they could one day pay off their outrageous student loans and maybe even afford to raise a family.

Unfortunately, the extent of corporate control extends far beyond simply tampering with course mandates. We have seen time and time again that corporations are able to directly take control of the research and agenda of our country's universities. Such corporate domination was exposed during the well-known Dr. Nancy Olivieri dispute. During her time at the University of Toronto, Dr. Olivieri was vilified after making public her findings that the drug she was testing contained potentially hazardous side effects.

À (1010)

At the same time as Dr. Olivieri was trying to make her findings public, the University of Toronto was trying to win a substantial donation from Apotex, the company funding Dr. Olivieri's research.In their desire for corporate donations, the University of Toronto actively discouraged Dr. Olivieri from publishing her findings, and even attempted to fire her. Such cases have been reported on several occasions by brave individuals such as Dr. David Nobel in an attempt to bring justice back to our universities.

Such corporate control of our country's universities has very grave consequences, not only for the faculty and staff who work at the universities or the students who attend but the general population at large. Corporations are able to undermine the common good, exposing the public to unsafe products, in the pursuit of profit. Under the current corporate dictatorship, how can our universities be expected to fulfill their mandates as beacons of progressive thought and knowledge?

Canadians have already seen a steady erosion of their social security under the new rules of economic globalization and trade agreements like NAFTA and the WTO. Canada looks now more like the U.S. than at any time in its history, with huge gaps between the haves and the have-nots. In fact, Canada has experienced the highest rise in child poverty in the industrialized world in the last decade, the same years in which the number of millionaires has tripled.

On February 22, 2002, when I questioned Finance Minister Paul Martin on this fact, he responded--and I'll paraphrase--that the single biggest social initiative the Liberals had set in place to alleviate such suffering was the child tax benefit.

Unfortunately, this has done little to end suffering and certainly has not put an end to child poverty in this country by 2000, as promised by the Liberal's red book. Therefore, I stress that a stronger commitment must be made by this country's government to put an end to social injustice and, once and for all, put an end to child poverty.

In conclusion, the resulting deterioration of social and economic infrastructures of the last decade will likely undermine Canada's economic prospects for the future. The overwhelming evidence suggests that the kind of tax cuts dictated at the federal and provincial levels in Canada are weak instruments for promoting growth and higher productivity. Toxic water, larger class sizes, and making the poor pay for their health care are not the answers; rather, they are part of the dismal legacy of policies enacted in the 1990s.

The questions therefore pose themselves: Why are we subjecting ourselves to such power structures? What is the state of those who, as Paul Martin stated, finish second or third in this global village? For this and other reasons listed by the concerned citizens here today, the Memorial University of Newfoundland Students' Union seeks to address the hearings on the North American relationship and the G-8 agenda.

À (1015)

The Chair: We'll now go to questions, but it seems to me that in your final sentence you seek to address the hearings on the G-8 agenda. Did your presentation address this, or does your presentation seek to address this? I'm just trying to....

Mr. Chris Vatcher: I feel confident that my concerns have been addressed. That was just for the speech.

The Chair: Okay.

We'll go around the table.

[Translation]

Mr. Rocheleau, do you have a question for the witness?

Mr. Yves Rocheleau: Thank you, Madam Chair.

I would first like to congratulate Mr. Vatcher for his courage. I think those are things that must be said and you have been very firm in your statements. Coming from a youth representative, those words show there is concern about the future of the citizens of this planet, upon which you will reside for much longer than we will, given the way nature works. I think there is need for concern because what you have said raises the question of State involvement in the lives of citizens.

There is one point I would like you to expand on. It is in the fourth paragraph of your brief, where you talk about Memorial University as an example. If I understand correctly, you say it will have to invest a $100 million or part with $100 million to follow the dictates of others.

Could you tell us what you mean by that?

[English]

Mr. Chris Vatcher: The $100 million is approximately the current public subsidy the government provides to Memorial University. Generally, two-thirds government subsidy and one-third tuition funds currently allow our university to run.

What I'm trying to express in that paragraph is that, within a totally free market and within GATS, if social services such as education were included as commodities and actually marketed as such, globalization advocates...as we saw with the softwood lumber dispute, tariffs and government subsidies to these services would have to be removed or therefore provided to everyone. So if the Coca-Cola Company in the United States decides to set up an educational institution in St. John's, Newfoundland, then under the free market rules, as I interpret them, we would have to provide $100 million to the Coca-Cola school, as we would to Memorial University, a public institution.

The Chair: Thank you.

Mr. Rocheleau.

À (1020)

[Translation]

Mr. Yves Rocheleau: Thank you very much.

Does that mean we might have to subsidize McDonald's for propagating its hamburger schools? It could go that far.

If I understand correctly, you are referring to the entire part of the World Trade Organization that will deal with services. It is very worrisome. I know that people in Quebec dread the implementation of such an agreement, because that would mean that there would be a university in Montreal, Quebec City or in my hometown... We always think of the Americans. People talk about globalization, but they could also talk about the Americanization of the planet. The Americans could move to Quebec or to our town with a French or English university, or even set up hospitals.

I congratulate you on broaching that topic. I think it has a direct impact on Canada's relations not only with the United States, but also with the rest of the entire world, or on relations between the entire world and the United States. I think there should be a debate on the evolution and importance of profit because it is the crux of the matter.

Are we, the citizens of the world, just a market or is there a cultural element to be considered? Are there social differences between Oceania, Peru, Quebec and Argentina? I think that is the issue and I congratulate you once again for broaching the topic.

[English]

Mr. Chris Vatcher: Thank you, again.

Should I respond now?

The Chair: You can make any comment, or you can take it as a congratulatory comment.

Mr. Chris Vatcher: Thank you.

The Chair: Mr. Stoffer.

Mr. Peter Stoffer: Thank you very much, Madam Chair. Thank you, Mr. Vatcher, for your presentation.

What you've written down and what you've said is probably what a lot of Canadians feel. They don't know how to say it as eloquently as you have. I want to thank you and the student union, not only here but right across the country, for their presentation. This is the same type of presentation you would hear at UBC, in Manitoba, or wherever else across the country.

You make one statement here that I think is quite disturbing but very true. It says Canada now looks more like the U.S. than at any other time in its history. There's a lot of talk these days, Mr. Vatcher, regarding currency and evaluations of our currency in the money markets. More and more, you hear them talk, Madam Chair, about whether we should have a common currency with the U.S., whether we should adopt the U.S. currency, and issues of that nature. In fact, many companies now, Madam Chair, as you know, issue their Canadian financial reports in U.S. dollars. I find it quite disturbing.

I'd like you to comment, Mr. Vatcher.

Mr. Chris Vatcher: As a concerned youth of this country, I definitely have concerns about moving anywhere nearer to the United States. I definitely have great concerns about common currency. I know Finance Minister Martin actually expressed that he did not support the idea either. So we agreed on that point.

With regard to the United States, I feel our country often plays back-up batter or something to the United States. We see this with the current rumblings of the Kyoto agreement. We dare not support Kyoto if the Americans fail to, because then we'll be fighting an uphill battle. Well, it doesn't matter if we're fighting an uphill battle if our ozone is depleted and we're all going to die. So maybe our government should make an actual firm commitment to the people they represent. Whether Coca-Cola or softwood lumber or whatever is going to make some money this year, it's not going to matter when our environment is devastated and we're all left to deal with the consequences of that.

I urge the committee to stress that we are a sovereign nation with our own individual concerns. Moving towards the United States model, which is definitely not sustainable and definitely in need of major readjustments, is not the answer.

À (1025)

Mr. Peter Stoffer: Madam Chair, I always find it amazing when you go to an airport and you see a GST tax rebate for American visitors or for foreign visitors. Our dollar is, what, at 62¢ American. On top of our dollar being so low, we also give them a GST tax break. Yet if you, Madam Chair, go to Vancouver, you can't get a GST claim back yourself. So we treat foreign visitors a lot better than we do our own visitors within our own country, which I have always found very amazing but not too non-understandable.

Now, sir, the last thing I wanted to ask you about is child poverty, which you talked about. Nowhere is that more evident than on aboriginal reserves in our country and among the indigenous people not only in this country but around the world. We'll be hearing testimony on that later this week as well.

At the G-8 conference coming up in Kananaskis, one of the subjects will be the concerns of Africa. I'd like the perspective of the Federation of Students and you yourself, when you look at the global picture, of the impact we're having and the impact globalization has on indigenous populations throughout the world and within Canada.

Mr. Chris Vatcher: The consequences that have been noted are quite drastic. Victims of progress will definitely explain that.

I think the current state of affairs and the current commitment our government has made to the aboriginal community in this country are quite upsetting. Representation and the government's ability or willingness to actually address the issues, I think, are sub-par. A much stronger commitment has to be made. The problems we have are interesting. Our government has unfortunately forced the aboriginals in this country into....

From a student perspective, within our student union, within the CFS, we are working with the aboriginal community to try to help them end the marginalization and the exploitation that are occurring right now.

The Chair: Thank you.

Ms. Carroll.

Ms. Aileen Carroll (Barrie--Simcoe--Bradford, Lib.): Thank you, Mr. Vatcher. It was very worthwhile listening to your presentation this morning.

What province is home for you?

Mr. Chris Vatcher: Newfoundland and Labrador.

Ms. Aileen Carroll: And what's your course of studies at MUN?

Mr. Chris Vatcher: I'm a biology major.

Ms. Aileen Carroll: Certain aspects of what you said certainly strike concern chords for me. Chapter 11 in NAFTA is a section of that free trade agreement that gives us some pause with regard to how to adequately protect environmental and social programs from challenges by companies that are able to trigger such challenges to that chapter. I think it's worthwhile that you draw the committee's attention to the possibilities of further movement in that direction--not a good direction under FPAA.

At the same time, I think several of your concerns, as valid as they are, perhaps are expressed in very strong terms; for instance, your mention of the case in Toronto of Dr. Olivieri. I think there was a lesson to be learned as a result of her research and the impediment to her findings under the grant as it was set up. I'm not stating that well; let me go back to the beginning.

I think we all learned a lesson there, but I also think the lessons have been learned. In recent discussions, actually, of research that's being done at your university, I was very pleased to hear about criteria that had been very firmly laid out that prevent such an occurrence happening again.

As a member of the committee, I'm very pleased to hear your views. I think they're very important to our study--that's why we get out of Ottawa--and we're able to benefit from your input. But I think it's incumbent on you, as it is on all of us, to refrain perhaps from being too sweeping. While the child tax credit may not have solved child poverty in Canada, it certainly has been a very good instrument in assisting in that regard.

I guess I would see Mr. Martin's comments to the business school with which you commenced your presentation this morning as perhaps somewhat of a challenge. If we are going to benefit from the globalization in which we find ourselves, and about which we have no choice--it's not whether or not we want to participate; globalization, I think, is a fact--either we will be a front runner or, as I think he's implying, our failure to engage the necessary process might see us left behind.

Nevertheless, I thank you for your presentation.

À (1030)

Mr. Chris Vatcher: I have some concerns about those comments coming from a committee member, actually, about the idea of being left behind. I'll try to address your concerns.

You brought up Dr. Olivieri, and that's just one in a pile of examples. I know Professor Noble would be able to comment on that--

A voice: [Inaudible—Editor]

The Chair: The competition is a little much....

Mr. Chris Vatcher: Okay, I'll try to start that again.

As I said, this is an example.... There are many, but just as an example, currently our universities are being taken over by corporate research. I'll just use pharmaceuticals for an example. We have these transnational pharmaceutical companies controlling the research of our public institutions. These pharmaceutical corporations are the same transnational organizations that are, through free trade negotiations in the current structure, stopping the production of generic drugs to third world countries and actually stopping the poor from getting medicines, because the patent rules and intellectual property rights allow these transnational corporations to set standards and set such policy.

When you go full circle, we have our general public funding of public institutions for the betterment of our society. Well, unfortunately they've now been hijacked by transnational corporations for their profit margins. That's the example with the Dr. Olivieri case that I was trying to bring up. That was a specific example; I was trying not to be so encompassing.

Concerning the Paul Martin statement, since the Liberals have taken office, child poverty has increased by 60%. That's unacceptable--period. Whether it's an attempt, or what have you, it's unacceptable to the students of this country. That's why I included that point.

The Chair Again, we're going back to what the facts, numbers, and percentages are, what happened in the case, and what happened in terms of the WTO and the patent rules, etc. There are some updated informative facts on the scene.

Mr. Vatcher, I think maybe an exchange of that kind of information would be helpful for future presentations. Again, we take the remarks you've brought to the table.

Mr. Baker, do you have a question?

À (1035)

Mr. George Baker: Yes, Madam Chair.

Mr. Vatcher, as I read it, a considerable amount of your presentation deals with the university and funding and the influences created through funding on the operations of the university. I suppose the general opinion...could affect the operations of all universities in Canada.

By the way, I would know Mr. Vatcher is from Newfoundland, because the name Vatcher is more prominent in this province than anywhere else in the country. But there's no accent. No, he doesn't have any accent. It's a funny thing. For example, people in Lewisporte have no accent. I grew up all my life in Newfoundland and I haven't much of an accent, except when I am speaking very quickly and in an argument.

Anyway, Mr. Vatcher, the great experiment in Canada, I suppose in North America, to get rid of corporate donations and corporate control of operations in universities and post-secondary education took place at Memorial University in the 1960s. In the 1960s, Memorial University was the only university in Canada that experimented not just with free university education but with salaries for anyone who attended.

Mr. Chris Vatcher: It was for a little while.

Mr. George Baker: The salaries went this way. If you were from outside the city of St. John's, you received $100 a month plus free tuition. You would go to the gymnasium at the end of every month and pick up your $100 cheque. If you were from the city of St. John's, you received $50 a month plus your free tuition. The free tuition was not only for Memorial but for all post-secondary institutions in the province of Newfoundland.

This continued for three years. There was criticism from every university in every other part of Canada. I remember the president of the University of Toronto saying it was twenty years ahead of its time. Of course, twenty years later there was no such thing.

At the end of the three years, it then changed to a means test. A means test was brought in. In other words, you had to get the signature of your parents as to how much money they were making. Under a certain threshold, you would then receive your salary. Free tuition remained, but the salary was dependent upon your income and the income of your parents.

It sustained itself for about a year and a half or two years. It finally concluded because of criticism from politicians, who were calling it “beer money”. It became one of the main issues in a provincial election campaign in Newfoundland. Of course, with a change of government it then disappeared.

Do you think some sort of system similar to that is warranted today? Would it go a long way toward satisfying some of your criticisms or answering some of your criticisms on university finance?

Have you considered another method of relieving this onerous burden on students of having to pay back $30,000 to $50,000 at the end of the process, and having collection agencies chase down young people all across the country for supposedly government-guaranteed loans that no longer exist? That's a most disgusting atmosphere for somebody embarking on a career, especially if you're a major in biology or something like that, and trying to get started.

Would you say that would be a partial answer to your submission here today?

À (1040)

Mr. Chris Vatcher: I appreciate your comments. You hit the nail on the head a couple of times. I'll try to respond to that as best I can.

I'll start by talking a bit about my own job. I'm vice-president of external. I deal with financial concerns on a daily basis from my membership--loan concerns, collection agency concerns, the list goes on. I've seen, on numerous occasions, students being hounded by collection agencies employed by the chartered banks, which are employed by our very own university, which had pledged to shape their minds for the future.

Students come into my office, months into the term, who haven't had their loans processed yet. The situation is grave. Tragedies are occurring every day, and students are dropping out of university because they cannot afford to be there. That's an accessibility problem.

The accessibility problem is due to a number of factors. Ultimately it's the $7 billion that has been cut by the federal government from post-secondary education and services related to post-secondary education over the last decade. Tuition fees, as you said, Mr. Baker, have skyrocketed. So what should we do?

As a member of the student union and the Canadian Federation of Students, I support a system of non-repayable, needs-based study grants for public institutions. That being said, I understand and respect the fact we're not going to find a magic money tree, but there are numerous programs the federal and provincial governments have employed right now, and I'll list them.

The loan remission program is sorely inadequate. The current regulations state you must complete your program of study within four years plus one grace period. That has major concerns for working parents, working students, student parents, students older than average--the list goes on.

Students of today are a new breed. Many are unable to achieve a four- or five-year program because they've been actually working at part-time jobs from the get-go. They have many other responsibilities. As I said, student parents obviously have enormous commitments that go far beyond passing in a report on time.

As I stated, the loan remission program is sorely inadequate for a number of reasons. The government right now accepts a threshold of $22,016, meaning your current loan must exceed $22,000 to actually be accepted into this program. As a student union representative, I think a debt of $22,000 is unacceptable, and any program that sets that forth is unacceptable.

Furthermore, in loan remission we find our government, through the collection of taxes.... What the program does--and I may be telling you everything you already know, but what it breaks down to that is we have our government paying off a portion of our students' loans. Unfortunately, the government ends up paying the banks this money. So we have public donations going into private pockets.

We have the Canada Millennium Scholarship Foundation, which has been marked by students across this country as a boutique program by the Liberal government to publicize the fact that they are attempting to solve the tragedy of post-secondary education. We have the interest relief program.

What I propose to this committee, and I've proposed on numerous occasions to our government, is that these types of structures and these types of programs actually be incorporated, and instead of providing money to million-dollar banks after the student has graduated, we propose that you provide this money up front in a system of needs-based, non-repayable grants. That's our issue on that.

With respect to corporate donations within our universities, I personally do not think that the public sector need aid the business sector or the industrialized sector at all. I think those people do fine by themselves. I don't think public education institutions need to be exploited as well. I think there is room for some sacred land in our society and I think the profit margins of these corporations should be put aside from our social institutions.

À (1045)

The Chair: Thank you very much, Mr. Vatcher and Mr. Baker. Again, that was a learning experience, the history of Memorial and its student assistance programs. It was good having you with us. Thank you. And as we pursue our study of the G-8, if there's anything you want to say to us in terms of what the international community can do as they meet to address the concerns around globalization, which you brought to the table, we'd be pleased to hear from you further. But thank you for today.

Mr. Chris Vatcher: Thank you.

Mr. Peter Stoffer: Are we allowed a second round?

The Chair: No, we've used up our time.

Mr. Peter Stoffer: That study of Memorial. It did it to me again.

The Chair: So you'll have a chance maybe at the next set of witnesses, but I'm trying to keep to the time. We have folks waiting from The Lantern and from St. John's Mobilization for Global Justice, and we'd like to invite them to the table.

Mr. Vatcher, thank you again.

Welcome, witnesses. We want now to encourage you to keep within a ten-minute presentation so that we can have some discussion from the committee, because that gives us an opportunity to pursue some questions with you.

The representatives from The Lantern are Mr. Rooney and Fay Edmonds; and the representatives from St. John's Mobilization for Global Justice are Sean Reany, Lori Heath, and Edward Hudson. Welcome.

We'll start with you, Ms. Rooney.

À (1050)

Ms. Emma Rooney (Representative, The Lantern): Good morning. We're delighted to have the opportunity to present our views, and we're confident we will be heard.

This presentation focuses on the values we believe must be fundamental to any plan for sustainable development in Africa. It is our conviction that the Canadian perspective must challenge the G-8 to root their decisions in the following values: respect for human rights, notably the right to food, shelter, clean water, education, health care, and freedom of speech and movement. We believe that all people are entitled to an equitable share in the resources of our world economy. As Canadians, we demand action that is concrete, measurable, and progressive, with the end result being the creation of a just society for all African countries.

Ms. Fay Edmonds (Representative, The Lantern): Our concern is that in the past G-8 promises have been empty and ineffective in poverty reduction and debt cancellation. The manner in which some Canadian companies extract resources in underdeveloped countries leaves a scandalous list of human rights and environmental abuses. So we ask: do the actions of some multinationals from other G-8 countries prove to be any less horrendous than those of Canadian companies?

To illustrate our concerns, we focus on Canadian involvement in Sudan through Talisman Energy of Calgary. A brief review of the background will help to contextualize our concerns and the recommendations we will make.

Sudan has a history. It hides a brutal 18-year civil war that has displaced 4.5 million people and killed more than 2 million, mostly southern Sudanese civilians. With the aid of foreign oil companies, including Canada's Talisman Energy, the military government exports 200,000 barrels of oil a day. It has pledged to use oil profits to eliminate poverty, but these promises have not been honoured. The World Bank has reported that between 1998 and 2000 little was actually invested to reduce poverty; instead, most oil profits were used to strengthen the Sudanese regime's war-making capacity.

Not only have the southerners received no benefit from the sale of oil, a resource that lies under their land, but international human rights organizations, such as Amnesty International and Human Rights Watch, concur that the Sudanese government is using oil profits to subjugate the people of the south and to push them off this territory.

Oil regions under development in the south have literally become killing fields. To eliminate any threat of attack on oil operations by southern opposition forces, the government has adopted a policy of depopulating the oil concessions. Tens of thousands of southern Sudanese men, women, and children have been forcibly displaced from their ancestral lands. Tactics to uproot civilians are brutal. They include high-altitude bombing and terrifying scorched-earth raids in which people are shot, burned alive in their homes, abducted into slavery, or forced to flee for their lives. International humanitarian aid to war-affected populations is routinely blocked.

In April 2000 a delegation of Canadian church leaders visited Sudan's oil region, where they met with many newly displaced southerners. Visibly traumatized, the Sudanese told how marauding government soldiers had shot their children and burned them alive before their eyes and how they had been forced to flee for their very lives. They also reported that helicopter gunships had participated in the attacks. Human rights experts say these aircraft could only have come from air bases on concessions owned by foreign oil companies, and there is undeniable evidence that Talisman's airstrips have been used by the Sudanese regime for offensive military purposes.

Despite repeated confirmation of Talisman's complicity in these abuses, the Canadian government has refused to take action against the company that is Canada's largest independent oil and gas producer. Even charges by a Department of Foreign Affairs sponsored assessment team that Talisman was adding to human suffering in Sudan were ignored.

More than anything else right now, Sudan needs peace. Sadly, as returning Canadian church leaders concluded, it may not be possible as long as oil development continues. The Canadian government is profiting from this situation, receiving corporate tax revenues from Talisman, as well as interest earned from the investment of our Canada Pension Plan dollars in Talisman stocks.

We are really worried about more plans to reduce poverty through increased trade. It does not seem to work. Business as usual cannot continue in Africa.

À (1055)

Ms. Emma Rooney: In light of this unpardonable situation, the dream of poverty reduction for African countries is unattainable without drastic measures being taken that respect people, resources, and the environment.

All of this calls for a just approach: that the illegitimate and unsustainable debt burdens be removed; that there be fair trade policies and not the present unfair, unfree trade policies controlled by a few wealthy countries; that the developing countries, including the poorest ones, have a voice in the decisions of the global economic institutions that are, again, dominated by the developed countries; that the multinationals work to better the social, economic, and ecological conditions.

Therefore, we strongly recommend that all involvement in African countries respects the unique culture of the people; that local people be directly involved through the process of consultation in all decisions relating to aid, development, and business interests affecting them; that any Canadian company applying for a subsidy, grant, or loan be required to adhere to ethical practices that promote human rights; that appropriate labour standards to guarantee a living wage and safe working conditions be implemented, and the employees' right to organize be respected; that the environment be considered an essential partner with rights equal to human rights in all trade and development initiatives; that multinationals not be allowed to expropriate indigenous people from their lands without full consent and just compensation granted to the people affected; that effective monitoring and conflict resolution procedures be developed and implemented at each stage;and lastly, that Canada take more initiative in influencing G-8 countries to cancel debt owed by African countries.

With respect to monitoring, even Michael Camdessus, former director of the IMF, this week during a UN conference in preparation for the International Conference on Finance for Development in Mexico next month, made monitoring of development pledges by industrialized countries central. He saysthat without it the conference in Mexico, the G-8 in June, and probably the World Summit on Sustainable Development in Johannesburg this August will be at risk of failure.

In conclusion, we believe these recommendations take precedence over economic greed and the protectionist attitudes of the investing countries and/or multinationals.

In closing, we challenge you to risk finding alternative ways to provide and promote development that will guarantee basic rights. We further challenge you to establish trade relations and practices that promote a climate whereby everyone benefits. Anything less will not result in poverty reduction. We must never again allow a situation like the involvement of Talisman in Sudan to be repeated.

Thank you very much.

The Chair: Thank you, Ms. Rooney. Thank you, Ms. Edmonds.

Before we move on to the next group, I just want to put forward two items for the benefit of the committee. One is the IGAD process we've been involved in. Senator Lois Wilson has been our envoy, and some work has progressed on that. There were some things around the corner that showed a bit of progress. I'm not too sure, exactly; we can't say anything definitive, but there is something that's happening there.

Second, the Subcommittee on Human Rights, which is a subcommittee of this committee, is beginning a study. They're just back from Colombia; they're completing this, and they're beginning a study on Sudan with witnesses coming before them as you are here today. There is also a planned parliamentary visit to Sudan.

These are items that are on the table, plus the NEPAD process, which is the plan of African leaders for Africa, and what is going to happen at the G-8. Those are items also. So your recommendations are in keeping and really very good ones, and we're sure the members of the committee will have questions for you. I just wanted members to put that in context as you frame your questions.

We'll now move on to.... Who speaks on behalf of the Mobilization for Global Justice, all of you or one person? Sean.

Á (1100)

Mr. Sean Reany (Member, St. John's Mobilization for Global Justice): I'd like to thank you for this opportunity to express some concerns we have about what's going on.

I'm just going to begin with a brief concern I have with the G-8 itself and its actual structure. The G-8 is taking on a global role for itself, and one of the first questions this committee has asked us to look at is how. The official agenda of priority of the G-8 should be to strengthen global economic growth. I think that decision-making within a global economic system should include all those affected by the decisions in order to be called democratic. We have a global economic system, so to have the G-8 making these decisions in undemocratic.

We're going to look now at some of the other things you're talking about. You're talking about this concept of global economic growth. A completely different understanding of what is desirable for the global economy is necessary. We're going to challenge the assumption implicit in the first question, which deals with global economic growth. We're going to demonstrate how adherence to current ideas of what constitutes economic and social progress and well-being instead foster a climate of poverty and desperation. This breeds violence and results in a climate of insecurity for all involved, as dramatically manifested in the events of September 2001 and since then. We'll explain why these are some of the routes of terrorism alluded to in section 3, key question 4. If these routes are addressed, the compromise between security and civil liberty--which was section 3, key question 3--will become irrelevant because it will be unnecessary.

True security can best be achieved by basing economic policy on measures of true economic and social progress; that's section 1, key question 4. This has the potential to break the patterns of the current economic order, which breeds and itself profits from militarism. We're going to begin by addressing the issue of global economic growth, and this model overwhelmingly favours the wealthy nations of the world to the detriment of poor countries.

The Chair: Thank you.

Ms. Lori Heath (Member, St. John's Mobilization for Global Justice): I'll continue by briefly discussing the GDP and the traditional indicators of economic health, primarily economic growth as determined by GDP.

In the official documents pertaining to this series of consultations, it is given that the official agenda priority of the G-8 is to strengthen global economic growth. Governments and international trade bodies routinely use economic growth as measured by GDP as the primary indicator of social well-being, and their policies are overwhelmingly based on this underlying assumption. If the economy is growing, it is assumed that society is doing well. This is a fundamentally flawed assumption. We refer the committee to the work of former New Zealand MP Marilyn Waring, who points out that the GDP is totally unrelated to social well-being, since GDP does not register whether the nature of an economic transaction has a positive or negative effect on people or the environment.

GDP does not acknowledge activities that contribute significantly to social well-being or that do not generate cash. If it cannot be measured with money, it simply does not exist. Subsistence agriculture, as one example, does not generate monetary wealth and therefore is considered of no value in a country's economy.

On the other hand, many highly destructive activities that generate enormous wealth for a small number of people contribute significantly to GDP. The arms industry, for example, the most lucrative of all businesses, fosters insecurity and conflict by proliferating weapons of mass destruction and by transferring resources that could otherwise be used for the provision of basic needs to the vast majority of the world's population. Yet while it generates enormous wealth for an elite few, it contributes to the GDP. GDP does not take into account how wealth is distributed within a society. It does not indicate who benefits from economic policies and who suffers because of their implementation.

The Chair: Thank you.

Mr. Cook.

Á (1105)

Mr. Matthew Cook (Member, St. John's Mobilization for Global Justice): From that angle, we go on to one of the other issues of the G-8--terrorism.

Current global economic policies are deeply rooted in hundreds of years of colonialism and exploitation of third world resources for the benefit of the world's richest and most powerful nations. Underlying economic principles of our current system continue this trend and foster the insecurity that is ultimately the root cause of terrorism. As Noam Chomsky states, these economic policies form a system “which is a highly specific form of socioeconomic planning and international integration geared to the interests of unaccountable private power--tyrannies, in fact, called 'corporations'. The interests of others are, at best, incidental.”

The inevitable consequences of such an economic system are massive inequality and insecurity. Joseph Stiglitz, former chief economist for the World Bank and former chairman of the U.S. President's Council of Economic Advisors under the Clinton administration, concludes from direct experience that these economic policies directly contribute to predictable social unrest and violent conflict.

Such conditions of conflict and unrest pose a threat to investors in a particular economy by fostering conditions that promote “local uprisings, movements by the third world government to nationalize foreign investments, or conflicts between states.” That's Steve Staples, chair of the International Network on Disarmament and Globalization.

This approach consequently factors the military and police capacity to quell unrest into economic planning. Murray Dobbin has noted that:

“Military spending is the government's safety net for corporations. It is instructive that governments are quite able to find billions of dollars for increased spending on the military that they claim they cannot find for medicare or education”.

The grim logic of this cycle is completed by noting, as above, that military production and exports are included as healthy economic activity in industrialized nations, some of which are heavily reliant upon them. Thus their economies actually depend upon insecurity and conflict and place no value on the prevention of unrest over its suppression.

This approach inflicts suffering on innocent civilians, encourages anti-western sentiment and the desire for retaliation, and perpetuates the cycle of violence, which is manifested in acts of terrorism.

We note that recent responses to terrorism have been wholly inappropriate. It is estimated that the number of civilians in Afghanistan killed in the U.S.-led bombings has already exceeded the number of those killed in the attacks of September 11, not including those expected to be killed or maimed from unexploded cluster bombs.

Furthermore, only prompt intervention by the United Nations World Food Programme and international NGOs prevented these actions from resulting in a further one million deaths from starvation.

The transgression of international law represented by these largely unilateral actions sets a dangerous precedent. It sends a message to the world that some are above the law and can act outside of international bodies such as the United Nations. We cannot accept a double standard that offers and encourages violence by one party and condemns it for others.

Responses to acts of international violence and terrorism, regardless of whether it be perpetrated by rogue individuals or powerful and supposedly respectable nation states, must be in accordance with UN and international law.

Means exist to bring perpetrators to justice. The International Criminal Court, a permanent court for trying individuals accused of committing genocide, war crimes, and crimes against humanity, will be formally established after 60 countries have ratified the Rome Statute.

Currently, the Rome Statute of the ICC has 139 signatories and 47 ratifications. It's Canada's responsibility to push for ratification by other G-8 members. However, the more fundamental response to terrorism and violence, and insecurity in general, is to ensure that basic needs and rights are provided for in all areas of the world.

First, this requires an assessment of social and economic progress that does not place military production on equal or even superior footing with other forms of economic activity. If we wish to create true security, then we must redirect funds from military action toward global provision of basic needs and rights. In what follows, we suggest possible means to accomplish this, and that we value genuine social and economic well-being in the measurement of global economic health and ensure that institutions involved in these measurements are genuinely representative of and accountable to the world's people.

Á (1110)

Mr. Edward Hudson (St. John's Mobilization for Global Justice): The committee will appreciate that we have raised a great variety of interconnected global phenomena here. The measures we suggest are by no means total and all-encompassing in addressing some of these issues. They are just a sampling of some that have been proposed, and in some cases tested, in certain areas that would not only move us toward more equitable development on a global scale as the global economy integrates, but also would allow us to use genuine indicators of progress and equitable development, as opposed to mere economic activity.

We've broken these down as follows. We note several measures on the level of G-7 and G-8 coordination dealing with macro-economic financial and monetary issues. These measures are aimed at addressing some of the deficiencies we've just outlined in current global economic organization.

Firstly, genuine indications of human progress should form the core of G-8 economic planning. Tested indicators include the human development index and human poverty index, both of which are already in use by the United Nations Development Programme. We would refer the committee, for example, to the 2001 human development report recently released by the United Nations Development Programme, which demonstrates these indices in action.

Other indices, one of which has been developed in Canada, include the index of economic well-being developed by Dr. Osberg from Dalhousie University here in Atlantic Canada and Andrew Sharpe in Ottawa, and the genuine progress index, which is an index that was developed in California and recently adapted for Atlantic Canadian use by the GPI initiative in Halifax. These allow the distinction between economic activity that is genuinely socially beneficial and activity that, for example, is socially and environmentally destructive.

Our second point concerns the so-called Tobin tax proposed by Nobel economics laureate James Tobin of Yale University, which proposes a very small--for example, 0.1%--tax on any short-term international currency transaction. This would be a big step to acknowledging that these largely artificial transactions based on small currency fluctuations do not represent genuine, socially relevant economic activity, yet they have the potential to almost arbitrarily ruin national economies, with great social cost.

In order to be effective, such a tax at least needs to be implemented simultaneously by a number of powerful nation-states and adopted multilaterally. Thus, the G-8 is well placed to exercise leadership here.

I would note that Finance Minister Martin has shown himself in the past to be receptive to the ideas proposed by Dr. Tobin. This was a big issue raised the last time Canada hosted the at-the-time G-7 conference in Halifax, yet it did not appear on the agenda at the Genoa G-8 meeting. We propose that this idea's time has come again.

Next, one of the continuing hindrances, as alluded to by our colleague from The Lantern, to the development of poorer countries is the giant debt they are forced into in order to provide for their citizens.

Adrian Lovett, director of Drop the Debt organization, puts it well. He has stated:

“For forthcoming summits the G8 should be looking not at maps of remote islands or the arctic circle, but at a map of Africa. On the way to Canada leaders should visit the continent and recognise the scale of its needs in the form of concrete action on deeper debt relief, trade reform and more aid. African leaders, and those who support them, were the voices of sanity in Genoa.”

That was alluded to by the chair earlier, in referring to the new program for Africa's development.

Leadership on debt relief should therefore advocate genuine debt relief, without preconditions based on economic models that advocate growth and export-oriented economies, regardless of whether they bring true social benefits.

On our last roughly defined fiscal criterion, it's often argued that there are no viable alternatives to the current global system of economic integration, or global capitalism, as we have called it here. But this is not necessarily so. There's been significant research, debate, and implementation, on a smaller scale, of at least one such alternative--the participatory economics model devised by Michael Albert and economist Robin Hahnel. This is a vision of an economic system that incorporates not only non-hierarchical decision-making, but equitable resource allocation and a definition of efficiency that takes into account the well-being of individuals and communities. Again, I would refer the committee to both references we have provided by Dr. Albert and Dr. Hahnel, in which they outline this program further. They are the second two references in our reading list.

We make one final recommendation on the issue of global governance. We note that if the G-8 is genuinely concerned with equitable global development, it will seek to empower true multilateral institutions, such as the United Nations and the aforementioned International Criminal Court, which are potentially far more credible representatives of most of the world's population.

Let me close our presentation by explaining, in 30 seconds or less, the perspective MobGlob brings to this. We are essentially a collection of citizens--a more disparate collection you could not find--who have taken the responsibility to educate ourselves on some of these admittedly extremely complex global, social, and economic issues.

You see before you a ski instructor, somebody with a background in the arts and theatre, a student, and a chemist, united only by our concern for the direction world development appears to be taking. This is why we bring you some of these concerns here today.

[Translation]

Mr. Rocheleau, please forgive us for not having had this presentation translated. I hove we have provided you with all the necessary information in our oral presentation.

[English]

Thank you for your time.

Á (1115)

[Translation]

The Chair: Thank you very much.

[English]

We are encouraged by your participation.

[Translation]

Mr. Rocheleau, please.

Mr. Yves Rocheleau: Thank you, Madam Chair.

I would first like to thank and congratulate the two groups on their presentations and their awareness of these issues. The more we hear, the more concerned we get.

Let me give you some food for thought. I have just returned from Africa, where I attended a symposium of West African countries. I was given a new idea which is consistent with the questions you raised concerning human rights, homelessness, drinking water, education, health, freedom of expression, the Tobin tax and the indebtedness of some countries. Someone suggested an idea that I had never heard and I will submit it to you.

There are a number of multinational businesses who are active in Africa, as well as in Latin America, whose position is so dominant that it would not be accepted if the company were in the United States. For example, some firms are completely dominant in the areas of mineral products, cocoa, coffee, bananas, etc. Such a situation would be unacceptable in the United States because of the antitrust legislation. It is a known fact that in the United States, a company cannot hold more than a certain share of the market. Competition must be generated to maintain the spirit of the wonderful system known as capitalism.

I would like to know what you think of that. The idea surprised me. Yet it is a topic with which I am relatively familiar. I was also surprised to hear someone say very bluntly that if we demanded that the basic rules of capitalism be enforced, namely in Africa, in terms of competition and antimonopoly legislation, that might significantly change the bleak picture there. I would like to hear your reaction.

[English]

The Chair: Okay, do we have takers?

Matthew, do you want to start us off?

Mr. Matthew Cook: I would like to mention that the dominance of companies in Africa you're referring to reminds me of the parallel of Enron in Argentina. When Enron collapsed, because it had such a dominant position in Argentina, the Agentinian economy, also because it was affected by the U.S. dollar, fell with Enron. One of the cries of protesters during the World Economic Forum in New York was “We are Argentina, they are Enron”. So I believe there are definite parallels between the African countries you mentioned and the situation in Argentina.

I will also mention that the illusion of the free trade market is that they strive for monopolies like Enron attained in Argentina, and which these companies in Africa are striving for.

Á (1120)

The Chair: Emma.

Ms. Emma Rooney: I have to agree that companies do get away with things in other countries that they certainly wouldn't get away with in their own country, and I think being in Atlantic Canada we also see that there are companies that try to take over just about everything there is to take over. So I certainly believe that, yes, companies probably get just too much clout, and they finally take over the government as well as the other companies and resources that are there.

So that's the part that I would certainly dispute: maybe their development has to be limited.

I am not sure if that's answering your question.

The Chair: And Mr. Hudson.

Mr. Edward Hudson: Monsieur Rocheleau makes an excellent point, which is that if a true free market system were actually to exist, such monopolies as he speaks of would not actually be able to occur. If, as he notes, law in Canada and the United States does not allow such monopolies, why then should companies that are based in Canada or the United States be allowed to exercise such monopolies in other economies?

It seems to me that a system of global trade that permits this is not one that actually espouses the principles on which it claims to be based--that rather than promoting true free market principles and the true equal playing field for companies, wherever they may come from, and for citizens, wherever they themselves may live, it simply concentrates power in the hands of those best able to exercise it and to maintain such monopolies in relatively weaker economies.

The Chair: Thank you.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you, Madam Chair.

I must say I was fascinated by the presentation. I just want to put on the record the efforts of one of our colleagues from the Liberal Party, David Pratt, and his efforts in regard to the diamond trade in Sierra Leone and how that relates to the arms buildup. I'm not sure if you have directly corresponded with Mr. Pratt, but I would suggest that you do. He's a wonderful valuable resource in this regard.

I also want to mention that I found it interesting when you talked about the changing of the GDP, the recognition of that. You're so right. Professor Tony Charles just did his report on how we count fish, for example, on the east coast in relation to the GDP of that. It's interesting.

David Suzuki said years ago that a marshland in your community will filter the water for free, but you can't record that in a GDP or economic value, yet if you had a factory that added chlorine and did that, then you could count that as an economic benefactor. Also, a good old fashioned oil spill will add to the economy, or if you have a heart attack right now that creates GDP growth, but if you're healthy and if the plants and other species we share the planet with do everything according to the laws of nature, you can't record that on an economic lever. I just wanted your comments on that.

The reality is that what I'm afraid of with the G-8 in Kananaskis when they come to talk of Africa is that these governments, which are becoming so entrenched now with the so-called market solutions, won't try to find a political solution to the problems of the third world but they'll try to find a market solution to the problems of the third world, especially one that relates to Africa.

Madam Chair, I was in Windhoek at an IPU conference in 1988, where I was able to speak on behalf of the country in regard to the crisis of AIDS there, and overwhelmingly you got the feeling that it wasn't a political decision that was needed to deal with it; it would be up to the large international pharmaceuticals to solve the problems of AIDS in Africa. I was just completely astounded by that type of conversation and the pamphlets that were out there.

I would like your comments, but before that I wanted to say that your presentations were fabulous.

Thank you.

Ms. Emma Rooney: I agree with you that we're looking for market situations or solutions, and that's very unfortunate, but I am a person of great optimism that there is a way to get under it. Just take, for example, how fast we changed just about every law in Canada, including our privacy laws, for terrorism. There was no time that it could be proven that Canada was the target of a planned attack or that we ever will be. We put millions into that and we've changed just about everything. So I believe we can build basic human rights across our world. I just believe that.

Here at my left, the energy of the youth wants that and nothing else. That gives me great hope. I believe we're going to go into G-8 as we go into other conferences and the market.

September 11 showed us what? It showed us that those gods of monetary policy and icons can fall like that. What remains is our basic human connection around our world. That's the only thing worth living for, isn't it?

Á (1125)

Ms. Fay Edmonds: I would hope too that the Canadian perspective at the G-8 would really be there to push for political solutions that take into account people's basic human needs that have to be there so they can survive, knowing that you do need business. We're not saying you don't need business, you don't need corporations. They need them, but I think they have to be in a perspective that puts people first instead of profit.

Mr. Peter Stoffer: Madam Chair, before they comment, I'd like to throw in an additional comment. The previous presenter said we're becoming more like the U.S., and I couldn't help but agree with him. I don't know if you're aware of this, but over 80% of elected U.S. officials do not have a passport. They don't. They obviously base foreign policy on some sort of objective.

With everything we do, it's “What is the U.S. going to think?” Well, as far as I'm concerned, they don't have an outlook on the world vision. They say no to Kyoto and no to the international court, yet Canada says yes to both of those, which I'm quite proud of. We'll encourage the government to do that.

So I'd just like your comments. I like the gang of four over here.

Some hon. members: Oh, oh!

Mr. Sean Reany: Actually, I'd like to address the comment you made earlier about the situation in Sierra Leone. You said market solutions won't do it; we need political solutions. The basis of our argument is that market solutions will do fine, because the problems we have.... Well, they're political as well, but market solutions is basically where it's at.

Global capitalism, which is what we're dealing with here, concentrates wealth in the hands of an elite. This is not conspiracy theory; this is basically how the system works. It's about accumulation. So if we have that, if it's being accumulated by people, it means other people aren't getting it.

If you look globally, the majority of people live in poverty, the majority of people live in hunger, and their basic human rights or their basic needs aren't satisfied. If we restructured the market in such a way that it wasn't about accumulation and it wasn't about greed, which is basically what we're dealing with, and if we had a system that was based on equitable and sustainable ideals, then we could be doing something. How come we're not talking about changing the economy? How come there's no talk of that?

Mr. Peter Stoffer: That brings up a good point. We all saw that show, Mary Poppins, where the two little kids wanted to keep their tuppence and give it to the woman to feed the birds and their father was encouraging them to invest in the bank so we can improve the railway systems of Africa. I'll never forget that.

The Chair: When did you see that?

Mr. Peter Stoffer: Just recently.

Some hon. members: Oh, oh!

Mr. Sean Reany: That was a great story, but I ask it again. How come we're not dealing with changing the market system, when it's fundamentally proven to concentrate wealth and keep the majority of the population in dire poverty? People are starving. People are being blown up over this. Wars are all about poverty and suppression of dissent. How come we're not doing that?

The Chair: Good question.

Lori.

Ms. Lori Heath: I would like to elaborate on some of the points we made with regard to GDP--what GDP measures and what it doesn't measure and therefore what it acknowledges and what it ignores. Specifically I'm referring to the work of women throughout the world.

An hon. member: Hear, hear!

Ms. Lori Heath: Again, I'm referring to Marilyn Waring's work. We've referred to a book here called Counting For Nothing.

She also has a fabulous film that you should see, from the National Film Board of Canada. It's called, Who's Counting? Marilyn Waring on Sex, Lies, and Global Economics. In the film she demonstrates how when she was an MP in New Zealand and was touring around the world meeting with other economic ministers she would always go to talk to the women. She would ask them how they would spend their day. So she'd ask, what are you doing in the morning? What are you doing in the afternoon? When the sun is high in the sky, what are you doing? And she developed something called “time surveys” in order to determine the needs of that particular community.

As I mentioned, from her time surveys it was clearly indicated that women, particularly in the developing world, do most of the work in society and in providing for the basic needs of their family, yet they own no property and have no say in the affairs of their community. Their work does not register in GDP and therefore it is considered of no value within their society. And this lack of recognition of their work really has a fundamental effect on how a community's needs are determined.

For example, through the time use surveys, you observe that women spend four hours walking to collect water or they might have to spend several hours collecting firewood because the stoves they use are very inefficient. So by observing these time surveys, we see how to best provide for basic needs. What we really need, based on these time surveys, is closer wells, access to water; what we really need are more energy-efficient stoves, things of that nature.

Á (1130)

Ms. Aileen Carroll: Thank you.

The Chair: Thank you.

Mr. Baker.

Mr. George Baker: I want to congratulate the witnesses on their presentations.

The entire transcript here today of course is to be published and will be read by not just the people organizing the G-8 for June, but by members of Parliament, and in libraries, and everywhere else. That's why Mr. Stoffer likes to get in his philosophical beliefs quite often.

I'd like to pursue just for a second with Lori Heath the question of GDP. Of course the GDP has been described by each one of the witnesses--Matthew Cook, Mr. Reany, and Mr. Hudson--as a measurement of economic growth. Of course your point is that it certainly does not measure the social well-being of a society or a group of people.

Which one is the student, by the way? You said one is a student. It's Sean.

The GDP is of course by definition the total value of goods and services exchanged in a society or in a geographic area so defined by the GDP. Economists divide it up into adding up the total amount of money that is expended by individuals and by government. And then there's a formula in there that says that exports minus imports, in brackets, as a set group equals your GDP. In listening to you talk about the GDP, I think you're absolutely correct, and perhaps it doesn't even measure economic well-being. Wouldn't you agree you could have a huge GDP, say, in Newfoundland from offshore oil, huge sums of money, billions of dollars exchanged, and yet the rest of the society could be very poor?

Wouldn't you also agree that it wouldn't even measure the economic contribution that Newfoundland makes or Nova Scotia makes or Quebec makes--rural Quebec? If you took a place like Long Island or the Change Islands in Newfoundland, only the fishery, the total value of goods and services exchanged in that society--there are no taxi cabs, there's no barber, nobody pays anybody to paint the house, nobody hires a carpenter--would be very small, but it would be exports to foreign nations, which would be what keeps the economy of Canada going. So wouldn't you agree that GDP perhaps shouldn't even be used as an economic measure, let alone a social measure?

Á (1135)

Ms. Lori Heath: Absolutely. You've said it very well.

If two millionaires from outside of Newfoundland came to Newfoundland and sold off every tree and every drop of water in the province for however many trillions of dollars, while the entire population died from starvation and disease, our GDP would seem to have grown astronomically. It's such a bias toward using that as a measurement of social well-being, and we hear it all the time lately. Newfoundland has had one of the highest rates of economic growth, and this is constantly touted to the province as being a really good thing. Meanwhile--

Mr. George Baker: Out-migration.

Ms. Lori Heath: Yes, out-migration, the fishery is completely destroyed, mechanical harvesters are replacing foresters in the forestry, unemployment is massive.

Since Newfoundlanders are by and large poor and desperate, now we see that Newfoundlanders make up 25% of the forces now in Afghanistan, because they can get a job and an education. They're cannon fodder in the armed forces, and it's really disturbing to me.

I think you've made some really good points. The oil industry, for example, doesn't acknowledge how the wealth is distributed. By and large, the benefits of these large-scale industries--the oil industry, the mineral industry, forestry--go to those who control those industries. It fosters a lot of desperation for the people at the bottom of that economic ladder.

Mr. Sean Reany: May I respond to one other thing you mentioned? You mentioned that it shouldn't even be considered a good economic indicator, besides the social indicator status. Shouldn't economic indicators take into account social indicators? Shouldn't economics take into account, in its definition of efficiency, human well-being and ecological things? To have an economics that doesn't take those things into account.... Actually someone quoted David Suzuki before, and I'll quote him again. He said that modern economics, because it doesn't include those things, is comparable to a form of brain damage. It doesn't make any sense.

Mr. Edward Hudson: To expand on Sean's comment, “economics” as the term was originally used, and as we would argue it should still be used, meant what human societies do to best fulfill their needs. The linking of economics purely with financial activity is a corruption of the term as was it was originally intended. That's why in terms such as “participatory economics”, the system developed by Dr. Albert and--I forget the name of his colleague all the time--Dr. Hahnel, their use of the term there is appropriate because it restores economics to that understanding of what communities do for themselves, as you alluded to in many of your examples, Mr. Baker.

I'd like to point you again to some of these alternatives we've pointed out as ways of measuring economic progress. There are a couple of interesting points that come out of that. When you look at how the United Nations Development Programme makes up the human development index and the human poverty index, GDP is a component of that, but for the human development index, for example, GDP is but one component. Other components.... It's essentially weighted, with one part for GDP, another part for essentially access to information, which looks at average levels of literacy and also average access to education among the young--in other words, to what extent are people actually able to participate fairly in the economy that supposedly provides for them. The last thing it looks at is an indicator of life expectancy scale, with a presumed low of 20 and a presumed high of 80.

Another interesting point, which came out of some of Osberg and Sharp's work we cite, is the index of economic well-being, which finds that past a certain minimal increase, the correlation between GDP and people's perception of their own economic security actually starts to break down.

In a society such as Canada, it turns out that when you ask people about economic well-being, the GDP is relatively poorly correlated with how well they feel they're doing. Other factors start to play in it, such as insecurity about their own access to the benefits of that economy. This is something we see in Newfoundland. While there's much optimism about the oil industry, you also hear, quite rightly, certain insecurities about who will benefit. This is heard much more in the mining industry as well. Mr. Collins, the very first witness of the day, referred to this as well.

This is why we advocate the broad use of some of these other indicators as measures of social well-being. They incorporate many of the things that you yourself brought up.

Á (1140)

The Chair: I think Mr. Baker has used up his time.

Ms. Carroll.

Ms. Aileen Carroll: I'm not sure I can add much to the discussion, only to thank you, as my colleague has, for excellent presentations. In particular I thank those from The Lantern for focusing very much on the African initiative. That's not in any way to denigrate the work the young people have done, and I will come to that. But that's the initiative Canada is taking to the G-8. Therefore, the work you have done and the insights you have shared will assist the committee very much as we make recommendations in response to the Prime Minister's request that we do so. So I thank you for that.

I think you've underlined the Sudan situation well. The dilemma is acute. I think it's very true, too, as has been said by other members and Senator Lois Wilson, that it's a conundrum. You've avoided oversimplification, and I thank you for that, because we don't have the luxury to oversimplify or to try to propose resolutions that are oversimplified in their essence. So I do thank you for that

To throw one more idea into the GDP as an indicator, I would like to draw your attention to the National Roundtable on the Environment and the Economy, which was initiated by Paul Martin not long ago. The recommendations will be forthcoming, I think, in two years, maybe less now. I attended an interim meeting held in Toronto, which was a large gathering. Mr. Martin addressed them. They're attempting to bring forward a whole new set of indicators. Its basic premise is that we have moved beyond the GDP as appropriate sustainable development in its full meaning of the term. It's a term that frequently gets relegated to a very narrow environmental definition, when of course sustainable development encompasses all of what we've talked about. That is their goal as the basis for a new indicator. Some of the work they've done might benefit you as well.

Finally, I've looked carefully at your reading list, if I'm allowed to do that, and I would suggest The Lexus and the Olive Tree by Thomas Friedman. You may find he is more “this is what we have and how are we going to deal with it”, rather than “this is what we ought to have”. If I have perhaps come down a little on that side, it's because I think those who present alternatives might best be looked at through the lens of how they can contribute to the dynamics at play. I think the belief--and I'm cognizant of being on the record--that we can put up a barricade and grind globalization to a halt is naive. It is my--

Some hon. members: Oh, oh!

Ms. Aileen Carroll: MPs get to conclude their sentences, even those on the Liberal side.

I have read some of these, although not all of them, let me be very frank. But I did have the opportunity to address--or rather I was thrown into the job--a group called Science for Peace at the University of Toronto on the terrorist issue. It was quite an interesting experience on my part. Mr. Manley was not able to attend. Then our former chair, Bill Graham, was asked to attend, but he couldn't, as he is now the Minister of Foreign Affairs. So I went as parliamentary secretary.

It was a very active morning of workshops. I was one of the three speakers at the plenary, and obviously I wore “government” on my T-shirt. The terrorist legislation was foremost in the minds of those there. In many cases I was booed before I began to speak or to respond, but finally there were voices that said “Wait a minute; we asked her to come”. That was very good.

I laid on them what they were laying on me. That was an onus that they must seek information outside the sources that reinforce the premises from which they proceed. That was the onus being laid on me: “You come with only information provided by government departments.” I decried that and I proved it an inappropriate conclusion. But I said if the onus on me as a public legislator is to access and seek information from all sources, likewise that onus is on you.

I would only share those thoughts before you. I do want to conclude. I know I won't get back in. I know what a tough chair we have.

The Chair: All right, there you--

Ms. Aileen Carroll: But what you bring is excellent, because you are doing just what I said: you are bringing those views that are vital to our process. Thank you.

Á (1145)

The Chair: And you only have about three minutes for your--

Mr. Sean Reany: I'll talk really fast.

Mr. Aileen Carroll: Talk fast. I learned that lesson.

Mr. Sean Reany: First of all, you made some really insulting comments there. You've presupposed that we are talking about grinding globalization to a halt, which is making us stereotypical of the anti-globalization--

Ms. Aileen Carroll: No, I'm reading this in your reading list and your brief.

Mr. Sean Reany: Yes, you're reading our reading list. You've already acknowledged that you've read some of them. I'd be interested.... I see you have two circled out of 15 or so, and these things are not all coming from one point of view. There are very diverse opinions within all these readings. We do read other books than these. These are ones we happened to use for this.

We are also quite aware of other opinions, because we're force-fed them through our mainstream media; we're taught them in schools; our politicians often give us those in the form of public addresses--or we get them from what we actually live in. I think by dismissing this as some obscure “stop the world”, Luddite, primitivist, or whatever you're referring to there.... That's not what we're about. We're about globalization. Sure, if it's going to go that way, let's do it, but let's do it differently, and let's do it in a way that doesn't kill people and keep people starving to death.

Ms. Aileen Carroll: My comments weren't dismissive. You didn't listen.

Mr. Sean Reany: I think that was dismissive in itself.

Mr. Edward Hudson: This is interesting. It illustrates, in a sense, the process you see even before you now in a largely consensus-based group that has to make decisions on the fly.

If I may offer a slightly more conciliatory perspective, I myself, for example, would not dismiss globalization out of hand. As you can probably tell by my speech, were it not for globalization, I would not be here. I am proud to be able to claim citizenship of three different countries, including Canada.

What many people such as ourselves oppose is not so much the integration of the world in a social and economic sense. Mr. Stoffer gave an excellent example there of the halting of the flow of diamond money to rebel groups in Sierra Leone. That was an initiative of global civil society. The work of many other human rights groups, such as Amnesty International, depends on there being a global civil society.

What we are advocating is not so much that all global integration be halted and that we return to essentially isolationist economics, but rather that civil society drive globalization and that civil society decide what those priorities would be.

That was my major point. I guess one thing about getting so passionate about a major point is that I forget everything else, so over to Lori.

The Chair: Lori Heath.

Ms. Lori Heath: I guess I just want to reiterate that same point, that we're not against globalization; we're for a different kind of globalization. What we see happening now through these international trade bodies is the imposition of global rules determined by transnational corporations that are not elected by anyone. They are making decisions in secret without the participation of civil society and they're imposing these rules globally for their own benefit. What we would like to see is the globalization of basic human rights and the provision of basic human needs.

My final comment was with regard to the economy. The word “economy” means to look after the house. I've heard it said so many times that looking after the economy is like looking after the business. If that's the case, then the primary purpose of running society is to generate wealth for a few CEOs and shareholders. But no, the word “economy” is from the Greek. It means “look after the house”, which is much more focused on providing for basic needs and basic rights.

Thank you very much.

Á (1150)

The Chair: Thank you.

Is there any comment from either Ms. Edmonds or Ms. Rooney on that issue? If not, we'll....

Ms. Fay Edmonds: I just appreciate the reinforcement of the idea that we're not anti-globalization. We need to be living in the global community, but it's how we live there, the values we bring, and the values Canada pushes on the global scene that are really important. We really need to get the message across.

Canadians have values, and Canadians believe that everybody is entitled to life and to a quality of life that's adequate, appropriate, and so on rather than accept a situation where a few people live very poshly and others have nothing.

Mr. Peter Stoffer: While all of us on both sides of the House hear the words “Canadian values”, I have yet to hear anyone define what Canadian values are. My question is, are we losing your perception of what a Canadian value is as we interlink our economy with the United States, for example?

Ms. Fay Edmonds: My thinking is yes. I think, plain and simple, that we are getting caught up in who can be on top of the heap rather than worrying about my neighbours on the corner who may be struggling to feed their children and so on.

We're losing something. We're so caught up in the momentum of bigger is better and that out-there power is where we need to go, and I don't believe that's true. We need to go with the power of the ordinary folk and what they need, and we need to find a process to do that. I don't think we've done it, but I think we can. If we have the will, we can find the way.

Ms. Aileen Carroll: You might also want to consider coming up with a definition of “globalization”. I think that word itself has taken on legs, and when one person uses it and another person uses it, we may not be talking the same set of dynamics. That might also be a good exercise for us.

Mr. Peter Stoffer: By Canadian values, does it mean I have more money in the bank account, or does it mean helping your neighbour prepare a salad, for example?

Ms. Emma Rooney: I'd like to respond to what Peter has said.

We are definitely losing Canadian values. In this document you sent us about presenting, it was strongly stated that the Prime Minister wanted the Canadian people to have a chance to speak in order to get a Canadian perspective. That's sort of in your text, and I think this is the opportunity to do it.

We've lost a lot. We've lost a lot since September 11 as to what our values are. The whole morning session referred to it with regard to trade disputes or whatever. Our voice as a nation--we were known as peacemaking people--is gone with this present war. We could bring in our whole stance of capturing prisoners of war and handing them over to the Americans, where the Geneva Convention doesn't count. We could list things on and on of where we're losing, and it's hurting us.

The people I work and live with are very saddened by the present situation. Fighting terrorism.... Isn't fighting child poverty a form of security? Yes. It's just too disappointing to say in a few minutes, but I think we're losing a lot.

The Chair: I think it's important, what you've just said, because it is in response to the Prime Minister's urging that we hear from you.

Mr. Sean Reany: I just have one question. I think this is great. On behalf of everybody I'd like to thank you for this.

If we're going to talk about a Canadian perspective and a Canadian desire to be any way we want and not be influenced by other things, I think you're going to have to start talking more to the people of Canada. Government seems to have lost touch with what people actually want. Things like this are important, but some form of direct democracy should seem to....

The Chair: Thank you very much for a very thoughtful interaction with us.

We will continue to pursue the thoughts you've given us on paper. The committee's report is going to be done by the end of April, as I said in my opening statement, and if you have anything further to add to the rest of our discussion up to the end of June, we'll be happy to have the input.

Mr. Baker.

Á (1155)

Mr. George Baker: I don't know if this is the proper place to do it, but I wonder if the committee could consider, when this is printed up.... I know it's available on the Internet, when the transcript of everything that is said in this committee today is put in place, edited, and finally done. But how would you suggest the witnesses go about it if they wish to have a copy of the entire transcript of today, or any other transcripts? Do we do it in the printed form any more, to be sent out, or is it all done on the Internet?

The Chair: Most of it is. I think what we hope is that what we've heard today is going to go into what will come out at the other end as output--a report with recommendations, in which we might possibly cite some individual passages or some references to--

Mr. George Baker: I know that, Madam Chair. But what I'm wondering about, just for the purposes--

The Chair: Do you mean this specific meeting?

Mr. George Baker: I'm talking about this specific meeting, everything that is said here. This will be available on the Internet. Is that correct?

The Chair: Stephen, where would that be?

The Clerk of the Committee: Madam Chair, it will be available on the Internet, and it would have to be printed.

Mr. George Baker: And what would be the timing for that? In a month's time?

The Clerk: No. It would be in about two weeks, when the two versions, English and French, would be available on the Internet. And then they would just have to--

Mr. George Baker: After translation.

The Clerk: Yes.

Mr. George Baker: The witnesses could get a copy of everything that is said here themselves?

The Clerk: Absolutely. And of course the report will be tabled and it will look something like this.

Mr. George Baker: Yes.

I'm asking just for the purposes of the people who are appearing before the committee.

Mr. Edward Hudson: Thanks very much, Mr. Baker. You anticipated my question.

The Chair: Ms. Carroll.

Ms. Aileen Carroll: I would think that the witnesses here today will be most anxious to hear what other witnesses say in Halifax and Saint John. They've had the benefit of being together this morning and listening to one another, but it will also be good for them to hear what comes out of the others. This is not narcissism.

The Chair: Well, thank you very much for joining us.

Thank you.

· (1325)

The Chair: Order.

Continuing our discussion, we have witnesses before us from the Newfoundland and Labrador Federation of Labour: Ms. Elaine Price, president, and Ms. Mary Shortell.

You may begin your presentation.

· (1330)

Ms. Elaine Price (President, Newfoundland and Labrador Federation of Labour): Thank you.

I'm president of the Newfoundland and Labrador Federation of Labour. Mary is accompanying me to this presentation as the Canadian Labour Congress regional representative for Newfoundland and Labrador.

The Newfoundland and Labrador Federation of Labour represents approximately 50,000 workers and 25 affiliated unions across the province.

The adverse effects of trade liberalization on wages and labour standards, the erosion of social and environmental standards in the wake of market liberalization, and the diminishing capacity of governments to enact industrial and social polices for the welfare of their citizens is of deep concern to the Federation of Labour.

We commend the Canadian government for initiating this consultation process, and we would like to thank the Standing Committee on Foreign Affairs and International Trade for the opportunity to share our concerns.

The Federation of Labour has long held that protecting and advancing our members' interests requires us to work for political, social, and industrial democracy, for civil and democratic rights, and for the elimination of poverty. To further these goals, G-8 leaders need to balance macroeconomic management with sound social, structural, and human rights policies. Rather than merely focusing on strengthening global economic growth, they need to ensure that trade agreements affirm a basic precept: core human and labour rights have to be recognized as a way of increasing democratic participation in the global economy.

More specifically, the Federation of Labour emphasizes the need for international trade agreements to protect the capacity of national, provincial, and local governments to encourage and support domestic economic development strategies and pursue public policy goals; to ensure that trade agreements accord full respect to labour and other human rights by incorporating a mandatory clause on core labour standards; to demand a greater social responsibility on the part of multinational corporations, as outlined in the OECD guidelines on multinational enterprises; and to build a partnership with Africa's peoples, based on a shared vision and mutual respect, that will help sustain principles of good governance and strengthen civil society.

In the era of free trade, Canada's economic and social landscape has changed dramatically. Since the Canada-U.S. Free Trade Agreement went into effect in 1989, trade with the United States has expanded significantly. Overall, exports to the U.S. now account for over 40% of Canada's gross domestic product.

The 1990s also marked a decade in which Canada became a noticeably more equal society. Real incomes declined for the large majority of Canadians and increased only for the top fifth. Employment became more insecure and the social safety net frayed. While productivity has grown, wages have not. Public sector spending has declined sharply. Publicly owned enterprises in strategic sectors such as energy and transportation have been transferred to the private sector. The government's war on the deficit has provided the rationale for social cuts that resulted in a widening of income inequality.

More disconcerting, perhaps, is the fact that the level of unemployment in the 1990s was higher than in any other decade since the 1930s. It averaged 9%, compared to the U.S. rate of 5.8%. Contrary to conventional wisdom that the FTA and its successor, NAFTA, helped create jobs, free trade did in fact result in a major net destruction of jobs. A study commissioned by Industry Canada found that imports are displacing relatively more jobs than exports are adding. The study, by Dungan and Murphy, found that Canada's trade boom has resulted in a net loss of 276,000 jobs.

It is, of course, impossible to view the effects of free trade agreements in isolation from the pro-deregulation policy agenda that has, for the past two decades, transformed national economies. Still, what Bruce Campbell, with the Canadian Centre for Policy Alternatives, has dubbed the “well-known neo-liberal family of policies--privatization, deregulation, investment and trade liberalization” has had an adverse impact on the wages and well-being of Canadian workers. It has led to the increased use of part-time, temporary, and contract workers, and the outsourcing to non-union firms in low-wage jurisdictions. It has also limited the ability of state-owned enterprises to operate in ways deemed inconsistent with commercial practice.

· (1335)

In pointing to the adverse effects of trade liberalization on wages and living conditions, the Federation of Labour does not question whether or not Canada should engage in international trade. Of course we should. But in concert with the Canadian Labour Congress, we take exception to the single-minded focus on the liberalization of trade and investment as the answer to economic and social development.

Respect for core labour rights has to be linked with sustainable economic growth. Traditional public policy areas, notably health care and education, have to be shielded from greater private penetration, and the capacity of government to pursue public policy goals and to regulate corporate activity has to be protected.

In the era of trade liberalization the ability of governments to protect national regulatory frameworks and make use of important public policy tools has been steadily eroding. The General Agreement on Trade in Services covers not just cross-border trade but every possible means of supplying a service, including the right to set up a commercial presence in the export market. It applies to any government measure, regardless of the policy objectives, that alters the conditions of competition.

Its implications are severe. If applied to the public sector, GATS provisions could effectively undermine public services such as health care, education, labour standards, consumer protection, social services, postal services, and public broadcasting. Canada's current regulatory framework that ensures that we have a clean and safe environment, safe workplaces, and minimum employment standards could be classified as an unfair barrier to trade.

Already the list of Canadian public policies that have fallen victim to international trade disputes includes fisheries conservation regulations, programs to support Canadian publishers, toxic fuel additive standards, and research and development for Canada's high-tech industry.

It is difficult to overstate the impact of this transformation on the social fabric of our country and the living condition of Canadian workers. The GATS threatens the capacity of nation-states to regulate and tax corporations, to protect workers or the environment, to preserve dignity, both cultural and economic, and to support basic infrastructure and services.

Laws designed to foster economic justice, democratic participation, worker health and safety, minimum wages, social security, and sustainable use of natural resources can be targeted as barriers to trade and investment.

Policies that aim to assist in the economic development of regions through use of local hiring policies and purchasing can be struck down. Governments can be prevented from using public subsidies to stimulate local industries unless the same advantages are provided to foreign-based companies.

In order to ensure that the global economy works in the interests of ordinary people rather than in the interests of multinational corporations, the Federation of Labour reiterates the need for Canada to emphasize the positive role of the public sector and domestic sources of employment growth, place greater emphasis on employment creation and real wage growth, even if economic strategies should depart from models of trade liberalization, protect important public policy tools, such as funding for research and development, education and job training, tax relief, subsidies for regional economic development and sustainable forms of economic development, and ensure that governments can continue to take political, environmental, social justice, and other non-economic issues into account when purchasing goods and services.

To compete in the era of trade liberalization, governments often feel compelled to abandon minimum-wage protection, environmental standards, and even corporate taxes to support basic services and infrastructure. Nowhere are these problems more exacerbated than in the so-called export processing zone. The export processing zones are in essence industrial zones that provide special incentives to local and foreign investors whose products are intended for export. In order to attract investors to export processing zones, governments have willingly forfeited labour standards.

· (1340)

In countries such as Bangladesh, Pakistan, Panama, and Zimbabwe, the existence of trade unions is openly banned. Colombia, Peru, and Venezuela have restricted labour legislation in export zones. In Malaysia, national unions are forbidden from organizing in the country's export-oriented electronics industry. Equally problematic is the non-enforcement of labour laws. In Mexico, for example, wages in EPZs are lower than the national minimum wage.

To ensure that the benefits of economic growth flow to the workers whose labour produces goods and services, the Federation of Labour urges G-8 leaders to broaden their understanding of poverty. Poverty cannot be measured in income and living standards alone. Poverty, as Heather Gibb pointed out, also means a lack of access to services, a lack of personal security, low social status, and a lack of control over labour and working conditions.

The recognition of core labour and human rights is a necessary condition for translating economic growth into poverty reduction. Core labour rights, as defined by the ILO, include freedom of association, the right to collective bargaining, the elimination of all forms of forced or compulsory labour, the effective abolition of child labour, and the elimination of discrimination regarding employment and occupation. In the past, these rights have been often dismissed as either a protectionist measure or an attempt to undermine the comparative advantage of developing countries.

It does bear repeating that core labour standards are human rights. Core labour standards do not seek to equalize compensation or legislation across nations, for it is not for the developed countries to dictate to the developing world what levels of wages should be. It is, however, legitimate to insist that the peoples of all trading nations have the right to form trade unions that can then negotiate a fair distribution of productivity gains. Far from curtailing productivity, a recognition of core labour rights has been found to enhance it.

According to a study by the ILO, collective bargaining and tripartite dialogue are necessary elements for creating an environment that fosters innovation and higher productivity, attracts foreign direct investment, and enables the society and economy to adjust to external shocks.

Child labour is detrimental to development, since it means the next generation of workers will be unskilled and less well-educated. Discrimination faced by women and minority groups is an important obstacle to economic efficiency and social development.

Although a consensus now exists around the definition of core labour rights, the enforcement of core labour standards is by no means guaranteed. The Federation of Labour recommends that all core labour standards be subject to the same dispute resolution mechanisms and remedies that govern other potential violations of trade agreements. It is not enough that the WTO and the International Monetary Fund integrate labour standards into their policies and programs. Rather, they have to make them conditional on trading nations enforcing such standards.

Only a mandatory social clause will ensure a global commitment to the observation of basic workers' rights. A mandatory social clause will help to equalize conditions among developing countries, raise incomes, and improve working conditions. A mandatory social clause is needed to globalize social justice.

The Federation of Labour urges G-8 leaders to hold multinational enterprises to their social responsibility. We do not believe managers of corporate enterprises are solely responsible for enhancing profits and producing greater returns on the investment of shareholders. It is one of their roles, but it is not restricted to that. We maintain that while corporate executives are responsible first and foremost to their investors, they also bear responsibility toward workers, consumers, suppliers, and the general public who are directly affected by the corporation's actions.

· (1345)

This is in fact a view endorsed by the overwhelming majority of Canadians. This was brought out in a recent study by the Canadian Democracy and Corporate Accountability Commission. From the perspective of corporations, this means the need to balance their own interests with the interests of workers and communities in trading nations. It is unacceptable that in response to the recent financial crises many companies have moved production outside of the factory. Not only are piece-rate wages considerably lower than daily minimum wages, home-based workers also lose all social benefits they had as factory workers. They must take on costs of electricity, water, and sometimes even tools of the trade. Their occupational health and safety is in danger. Former factory workers in the Thai shoemaking industry, for instance, had to move dangerous equipment and toxic chemicals into their homes.

From the perspective of governments, it is difficult to create a strong international regulatory framework to control the abuse of power by multinational companies. The guidelines of the OECD regarding the social responsibility of multinational enterprises must be stringently enforced. Governments also face the challenge to extend the rights and principles enshrined in the ILO core labour standards to workers in the informal sector.

Globally, decentralization and the increasing use of subcontractors have contributed to a rapid expansion of the informal sector. Most at risk are women workers in the EPZs, who account for an average of 80% of the labour force. Their wages tend to be lower than men's in similar occupations and the hours of work longer. Women workers are vulnerable to sexual harassment or abuse. Frequently, they have to endure forced pregnancy tests. The protection of the world's poorest workers through the enforcement of core labour rights is a responsibility neither multinational enterprises nor trading countries can eschew.

Like the CLC, we hold that a true partnership with Africa's people is a political responsibility, not a bureaucratic funding mechanism. It's a relationship based on a shared vision and mutual respect and must not be a vehicle for maintaining inequality. We're heartened by the decision of the G-8 leaders to offer a forum to the new partnership for Africa's development at their 2002 summit.

Just as concepts for poverty have broadened in the era of trade liberalization, so too have concepts of partnerships. A true understanding of partnerships cannot be limited to the relationship between African governments and the G-8 nations, nor can it be limited to the relationship between African governments and foreign investors. Vitally important is the need to establish partnerships between the African governments and their peoples, who often, in the face of hostility and oppression, have built organs of civil society, including trade unions.

The Federation of Labour believes that the G-8 summit should commit to help institutionalize ongoing discussions between African governments and civil society. Civil society must be enabled, challenged, and equipped to play strong roles in the search for peace and social security. The G-8 summit has a responsibility to impress this necessity on African leaders and to provide the resources to make it a reality. In turn, African governments have to embrace and sustain principles and practices of good governance.

Often overlooked in this agenda is the commitment to support private enterprise, both micro-enterprises in the informal sector and small and medium enterprises in the manufacturing sector, which are principal engines of growth and development. Indeed, without job creation there will be no tax base for African peoples to influence their development goals rather than merely implement the prescription of others.

· (1350)

We believe it is in all our interests to ensure that Africa's people are being freed from dependency as quickly as possible. In so doing, both African leaders and G-8 nations must commit to job creation that is sustainable economically, socially, and morally.

As the Canadian Labour Congress's October 30 declaration of peace and solidarity points out, there is a pressing need for Canada and other member countries of the WTO to address the issue of international development programs, increase economic aid to the developing countries, accelerate programs to address debt relief and poverty reduction, and incorporate into trading agreements the ILO's four labour standards enshrined in the Declaration on Fundamental Principles and Rights at Work--which they have endorsed--and environmental protection and respect for national sovereignty.

Only a strategy of global justice predicated on democracy and respect for human rights can begin to overcome the scourge of poverty and inequality so that true security can be established for working people in every nation. The Federation of Labour urges Canada to work to make social justice a guiding principle in all negotiations for international development and trade agreements.

· (1355)

The Chair: Thank you very much.

I've let you complete this because I can see that a good deal of thought has gone into the paper you presented. Therefore, rather than the usual ten minutes that's allowed to presenters, we allowed you to complete the document. I will hold the members, though, to very brief questions. If you can, between the question and the answer, take no more than five minutes.

Monsieur Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Madam Chair.

First of all, I would like to congratulate you for the quality of your brief. It is quite comprehensive. I would say, in all honesty, that it is the best one I have read of late.

I would like you to deal with two points. You describe measures that have been taken, here and elsewhere, to diminish the social rights of individuals or social structures, and I would like to hear what you have to say about the evolution of Canada's unemployment insurance program. We know that what we had in the 1980s and 1990s, when 85% of those who lost their jobs were eligible for unemployment insurance, is now available to only 40% of those who find themselves unemployed. `

I would also like to know if your federation has an opinion on the possible implementation of the Tobin tax.

[English]

Ms. Elaine Price: Okay.

The Chair: Since you have just about three minutes or so to answer, if you can, spend the time on the Tobin tax.

It's more appropriate, Mr. Rocheleau, for the discussion and for the task that's before us. I know we can go on with the EI, but the task and the question that's before us comes with parameters around it.

Ms. Elaine Price: Actually, I can touch on both rather briefly.

First of all, the Federation of Labour supports a Tobin tax, as does the Canadian Labour Congress. We think it's essential in a global economy; it's essential for nation-states.

I know we share your views on EI. What's happened to our unemployment insurance program is indicative of the attack that has occurred in the nineties against working people in this country.

The Chair: Thank you.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you very much, Madam Chair.

Elaine and Mary, thanks for the presentation. I think you've touched on an awful lot of points that need to be reiterated one more time.

Just to briefly mention a few concerns, you talk about governments losing the ability to make decisions or pass legislation if it doesn't meet either the GATS or the WTO type of standard, and how that affects workers. A good example arose here in Newfoundland and Labrador just recently where a one-time publicly traded company, FPI, is involved with Clearwater.

It's a public resource they're talking about, the fisheries, which should be managed by the government for the benefit of all communities, and now the only answer is to lay more people off and to concentrate a public resource into fewer corporate hands. You see this not only here, but around the globe.

You talk about how the G-8 needs to address certain issues of labour standards and more or less keep corporations in check. But equally, and just as importantly, wouldn't an organization like the United Nations be the preferred agency to maintain international standards throughout the entire world, instead of just the select few of the Group of Eight?

¸ (1400)

Ms. Elaine Price: Probably. Peter, I think there's a need for us to examine the international institutions we have established. It's obvious that they were established for the right reasons, and it's obvious that there is a need to have international institutions that are responsible for ensuring we act in an appropriate manner in a global community.

The United Nations, or an organization with a similar mandate and a lot more enforcement strength, is desperately needed. There also has to be respect and support for such an organization from all countries in our global economy. They need to have enforcement provisions to ensure that nation-states abide by this global code of ethics, because that's what we're talking about.

The Chair: Thank you.

Ms. Carroll.

Ms. Aileen Carroll: I have just two questions really. It's an excellent brief. Thank you for all the time and research that went into its production.

I wonder if you would comment on Doha and whether you felt there had been some progress made there with regard to labour standards and their inculcation into the global framework.

Secondly, on page 6 of your presentation you make reference to the need to have a political relationship rather than a bureaucratic funding mechanism within the partnership with Africa. I'm not clear on what the bureaucratic funding mechanism is.

If you would address those two questions, I would be most grateful.

Ms. Elaine Price: The first question was whether we had actually made progress in terms of global labour standards.

Ms. Aileen Carroll: At Doha, at the last meeting of the WTO. From my perspective--sorry, perhaps I should have introduced it that way--I had a sense that there was progress, or certainly that groups throughout the country felt there had been. We had moved forward on a number of fronts: the environmental front, the labour front. You represent, of course, the Newfoundland and Labrador Federation of Labour. Is it viewed that way here too? Was it seen as a positive movement?

Ms. Elaine Price: I think there's probably cautious optimism. But we have a saying: the proof is in the pudding. I guess we'll have to see exactly what it means for working people globally.

In terms of the relationship with Africa, when we look at the relationships we've had with most developing countries, or the relationships we've supported, most of the funding and most of the assistance is transferred through organizations like the World Bank. I think we have to examine some of the restrictions and some of the conditions that are attached to international aid through organizations and institutions like the World Bank. I would argue that many of the conditions that have been attached to international aid have actually forced deregulation, have actually eroded civil liberties, and have actually been detrimental to the citizens in those societies.

I think when we talk about Africa, we have to make sure that doesn't happen. It's a relationship and support that's based on respect, respect for African people and respect for their rights. That hasn't always been present in the past.

The Chair: Thank you.

Mr. Baker, did you have a question?

¸ (1405)

Mr. George Baker: Just a comment, Madam Chair.

This is a very comprehensive brief, as you pointed out. I would just want to add that because the transcript of this proceeding will be circulated widely and read by many people across the country, I want to put on the record the great contribution that Elaine Price and Mary Shortell have made in the area of labour and workers' rights, not only in this province but right across the country.

Thank you.

The Chair: Thank you, Mr. Baker.

Elaine, you should be pleased with that endorsement or that endorsation from Mr. Baker, who's a reputable and honourable member.

A voice: No argument here.

The Chair: No argument from anyone.

Ms. Elaine Price: Actually, we sort of think he's as close to a New Democrat as we have in the House in Newfoundland right now.

The Chair: Okay. Don't go too far.

Thank you very much for your presentation. If there is anything further that you can add to our work, we have some timelines at the end of April for the G-8 and the North American integration issues, the end of June, so we would be pleased to hear from you further. After having reflected on today, if there is anything further you want to send to us, we would be happy to receive it.

Ms. Elaine Price: Thank you.

Actually we're doing some work as well in terms of what trade agreements actually mean for the Newfoundland and Labrador economy, our social and economic well-being, how it's impacting on people. We will be submitting that in written form to the committee.

The Chair: Thank you very much.

Members, we'll spend the next half hour with Mr. Youé, who was on the schedule this morning. Mr. Youé is accompanied by Linda Ross, the Canadian program coordinator for Oxfam Canada.

Professor Youé, it's good to see you--and Oxfam Canada, Linda.

Professor Youé, please.

Mr. Christopher Youé (President, Canadian Association of African Studies): Thank you.

I have a brief here. This brief is a result of my polling members of my executive, the Canadian Association of African Studies. I shall read from the brief and embellish as I go along. I think everyone has a copy.

My name is Chris Youé. I'm a professor of history at Memorial University of Newfoundland. I'm president of the Canadian Association of African Studies, which is mainly a scholarly organization. It was formed, actually, as a spin-off from its North American counterpart. There's a U.S. African Studies Association, but 30 years ago we formed our own national organization, when I was a boy. Its aim is to promote the study of Africa in Canada, improve Canadian knowledge and awareness of Africa, and facilitate scholarly and scientific exchange, as well as to strengthen the linkages between the Canadian and African scholarly and scientific communities. It publishes three issues a year of the Canadian Journal of African Studies, which mainly deals with topics that could be classified among the disciplines of politics, sociology, history, and anthropology.

Each year our association, which I will henceforth call CAAS, hosts an annual conference at the Congress of the Social Sciences and the Humanities. The 2002 conference in Toronto will be devoted to several themes of relevance to African development. In fact, they are: health and society--we have a number of people coming over from South Africa; the politics of reconstruction--we also have some experts from the Truth and Reconciliation Commission coming; migration ethnicity--migration across borders and migration into the diaspora; food and development; and popular culture. These are the five themes of the conference. It is also a cultural event where we show African film and have African theatre.

CIDA is sponsoring one day of panels. More than 350 applications to present papers have been received. About 70 applications have been received from Africa, mainly Nigeria and South Africa. In all probability, about 20 of those will be able to make it from May 29 to June 1, 2002 in Toronto, at Innes College and New College.

The brief I have is divided into two sections. The first focuses on recommendations of immediate significance to us as a scholarly organization, and the second section deals with broader issues of policy. On some questions I will defer to Linda Ross, who is the Canadian program coordinator for Oxfam Canada.

Our recommendations are as follows:

(1) That in order to promote scholarly exchange, the federal government shall eliminate differential fees for Africans already pursuing graduate studies at Canadian universities and for Africans who have been accepted into these graduate programs. About five or seven years ago I had an MA student here, a Nigerian, Godwin Ugochukwu Nwokegi, who was successful in getting into the PhD program at the University of Toronto and was very happy to have received a scholarship of $9,000 per annum, but not too happy when he discovered the fees were $12,000 per annum.

(2) That African expertise may be made accessible to the public, development agencies, CAAS, the Canadian government, and NGOs; and Canadian expertise made available to African universities, governments, etc., by the sponsoring of a scholarly exchange program. By this I mean wouldn't it be wonderful for African professors to have the opportunity of teaching--becoming visiting professors--at Canadian universities and for Canadian professors who are African specialists to go to Africa without financial penalty?

(3) Under the same principle as number (2), African--this is very selfish--that participation at the annual CAAS conference be facilitated with travel and accommodation grants for African experts in development. I applied for a SSHRC conference grant this year, my first year as president of the association, and was quite shocked to realize that the maximum grant from SSHRC for an annual conference is $10,000. It was very difficult for us, of course, as an organization to be able to sponsor too many Africans. We figure that we can probably take one African from west Africa and two South Africans on a cost-share or half-share basis. South African universities tend to be a bit richer than the rest of the continent in terms of having access to travel funds.

(4) That in order to facilitate dialogue among NGOs, CAAS, CIDA, IDRC, and DFAIT on African development issues, CIDA create a special coordinator. This coordinator should be responsible for workshops, conferences, and other intellectual activities designed to address African issues. I understand from someone at CIDA that plans are already afoot on this particular question.

The second part of the brief is in response to the questions that are on page 9 of the document I received from Stephen Knowles on behalf of the standing committee, which divides up the questions into G-8--including the African development partnership--and North America.

¸ (1410)

What should the goals of the G-8 action plan for Africa be? Are some goals more important than others? Should compromise be made to the action plan to ensure consensus among G-8 members? If so, what compromises would be acceptable? I understand that the eight special representatives who were appointed to develop the action plan have not yet spoken, and the first recommendation is that we should adhere as closely as possible to what might be termed “indigenous knowledge” as far as the action plan is concerned.

The second question is, should the G-8 action plan for Africa address declining aid to Africa? Apart from aid, what other measures should Canada and the G-8 take to help Africa? I've taken two quotes here. One is from a British government official and one from the head of the IMF. Both are recent quotes suggesting that tariff reform should be a major priority and that African goods, especially textiles and foodstuffs, should be allowed into Canada tariff-free. I understand that Africa's portion of world trade has become less globalized in the last 30 years since independence, from a high of about about 3% to, I believe, somewhere around 1% now.

The second suggestion here is that aid to all developing countries should move towards the UN goal of 1970 of 0.7% of GNP, that it should be increased to 0.35% within the next three years, and should rise to 0.7% by the year 2015, which is still well behind schedule but seems a practical way of achieving this.

Question three is, should the G-8 try to improve conditions across the continent, or concentrate its support on well-managed African countries? Should it take a long-term or short-term approach? Should it focus on particular sectors? I think it might be a good idea to point out that many local projects are successful, although perhaps they don't have the kinds of spectacular benefits conducive to media coverage and so on. Our suggestion is that the G-8 should target funding for particular NGOs that have an established record of success in Africa, for local projects may be well-managed even if countries are not.

The fourth question is, how could the G-8 ensure that its action plan for Africa has the desired impact? How could they encourage African countries to make their promised reforms? And this, I believe, is actually...no, I can't say that. I've received advice from someone in CIDA that there is a move towards not punishing governments for perceived failures precisely because the so-called transgressors are not the ones who are punished in the end when aid doesn't flow.

Question five is, should the G-8 countries coordinate their African aid policies? Should Canada coordinate its aid policies with other countries? How should Canada's recently announced African development fund be used to implement the action plan for Africa?

We believe that the $500 million earmarked for the Africa trust fund this year should be viewed as start-up funding, that long-term planning is required, and that selecting priorities for this money is of little use if the projects selected are not sustained.

Number six is, to what extent is popular support necessary for the success of the action plan for Africa? How could Canadians contribute to its success? What role should non-governmental organizations play? What role should CIDA play, and how should the action plan be communicated to Canadians?

I firmly believe that CIDA and IDRC have a special role to play in this. IDRC has for the last three years, I think, been promoting a new computer technology access for Africa. CIDA, of course, has focused on particular issues over the last two or three years. I think that their efforts should be applauded and should continue to be supported.

¸ (1415)

I don't believe--I never received any feedback from my executive on this question--that popular support or endorsement is necessary. The Canadian policy should be geared to the findings of the action plan. Those findings should take priority over the recommendations 2 to 5 above, as I said before, because of the primacy of indigenous knowledge. There should be coordinated efforts among CIDA, IDRC, and NGOs. What we find at the moment is that dialogue among NGOs and CIDA and us is very patchy. Occasionally there are a couple of panels at the annual conference--there's actually a whole day of panels at this year's annual conference. Occasionally there is a workshop in Ottawa. There could be a lot more.

I shall finish there.

¸ (1420)

The Chair: Thank you, Dr. Youé.

We'll now go to questioning from the members. We'll keep aware of the time and also the fact that we have a plane to catch.

Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you for your presentation, Mr. Youé. I have a question that might be somewhat philosophical; in any case, I don't think there is an easy answer.

According to Mr. Chrétien's proposal, a large amount of money will be handed out. You mentioned a figure of $150 billion in paragraph 2. How can we ensure that money coming from the western hemisphere will be properly used? We know that there are terrible shortcomings in the way certain countries are governed, countries that openly admit that generalized, systematic and endemic corruption is a way of life.

Moreover, if we do give them money, then how do we respect the principle by which it is better to teach someone how to fish than to simply give that person the fish?

[English]

Did you understand me?

Mr. Christopher Youé: I heard some of it, and I understand some of it was devoted to the amount of money, or the direction of the money and to making sure it goes into the right hands. Is there a second part of that?

[Translation]

Mr. Yves Rocheleau: On the one hand, we must truly respond to the need but, on the other hand, we must remain faithful to the old principle that recommends that we teach people how to fend for themselves rather than simply giving them what they need, without giving way to paternalism and while respecting the sovereignty of the country. These are indeed sovereign nations; they have their pride, their way of doing things and their own culture.

It is all well and good to give them money, but we must not go barging in with our western way of doing things. And we know whose ways are most instrusive. How can we protect ourselves from the type of behaviour that would not be in keeping with their needs, something that would have to be perennially funded, for lack of having really improved the situation?

[English]

Mr. Christopher Youé: Part of my suggestion was to channel money through NGOs, or channel money through people who were able to promote development projects. I didn't really see any reason why money should go through governments.

I think that if particular projects supporting grassroots organizations, local women's organizations, and local irrigation or social projects organizations, such as those existing in places like Uganda right now and in other parts of the continent.... If the money goes to the government.... You must realize that many of these governments are not just the result of one person who happens to be corrupt or whatever but that the combination of African culture and the struggle for resources within Africa is something that makes this type of accessibility to government funds something that can and should be avoided. I don't believe that the funding should necessarily go through government.

¸ (1425)

The Chair: Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: I would like to ask you about something that I find most intriguing. In the francophone countries of Africa particularly, I had an opportunity to meet a certain number of government representatives who, for the most part, were very cultured, had been schooled in Paris, sometimes Montreal, but usually Paris, people of a very high calibre. In spite of that, there still seemed to be a certain level of corruption in their respective countries.

One might have hoped that, at the very least, as is the case here, these people would have become distanced from that type of behaviour, would have become more involved in promoting public interest rather than their own personal and private concerns.

How can we explain that, in spite of education and the high calibre of a large number of men and women, this corruption continues to thrive?

[English]

Mr. Christopher Youé: I know many Africans who would think western society is corrupt because particular lobby organizations are allowed access to the inner chambers of decision-making; they'd think that their form of corruption is much more up front.

Obviously I'm not going to defend many African leaders, because I think they are appalling, but there are lots of very good African leaders too. It just seems that the entire world is made up of particular states where their leadership could be seen as being very strong, stable, and good--without wishing to put too much of a moralistic turn on it--and there are other governments that aren't. I think it's a bit unfortunate that you penalize a particular country just because the government happens to be more corrupt than others. One of the problems with this is that the people who live under those types of governments are usually the type of people who need more support than others.

One of the points the honourable gentleman made about cultured Africans, Africans who were more Frenchified than others, was that these cultured Africans.... And of course they're the ones I come into contact more with because many of them become students in this country. One of the problems, of course, is that our countries are so attractive to them. I know of many Africans who have come here, have taken degrees in Canada, and have then gone to teach at universities in the United States. At a university in the United States they can get a starting salary of $40,000 U.S., but at universities in Africa they can get a starting salary of $3,000 if they're lucky, and will have to work on top of that.

It will be a wonderful thing if it comes to a point in 20 or 30 years' time where Africans who come over here want to go back to their own country to earn a $40,000 starting salary because they'll have had the resources and the support from the west, real support to fight against poverty and so on.

The Chair: Thank you.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you very much, Madam Chair.

Mr. Youé, thank you for your presentation.

I just wanted to say that one of the greatest crises facing humankind on earth--and you're fully aware of this--is the AIDS crisis in Africa. Now, we can spend all the money we want on development, but if the people are dying left, right, and centre because of this terrible disease, we're spending money after something that will never be achieved, because there'll be nobody left.

I'm wondering, given your expertise in African studies, and with the G-8 conference coming up in Kananaskis, if you were presenting there and you were going to discuss the AIDS situation in Africa and how best to deal with it.... The only question I'm going to ask you is this one, so you can take your time on the answer: How best can the world deal with the issue of AIDS in Africa?

¸ (1430)

Ms. Linda Ross (Canadian Program Coordinator, Oxfam Canada): Chris has asked that I answer this question.

You're right, certainly HIV/AIDS is the biggest single issue facing Africa today. I think we've seen some steps taken forward, very small steps, in terms of what happened in Doha around access to essential medicine.

I think one of the things we have to bear in mind is that HIV/AIDS is a disease of poverty, that in actual fact, if we look at the spread of it--although there are other circumstances as well--it's very much related to the poverty that people have been vanquished to in that country. So, clearly, one of the initiatives is looking at pulling people out of poverty and affording them opportunities--for example, opportunities for women so that, first of all, their partners don't have to leave where they live to find employment, and they're not forced into the sex trade in order to survive and feed their families.

I think the other issue is of course education, which still needs to be done, and in line with that is the access, in that the countries themselves have to be able to manufacture generics and they have to be accessible in terms of cost and not be prohibitively expensive.

So I think you're looking at three things: first is education, and you're looking at access to medicine, but you're also looking at the overriding issue of improving lifestyles and pulling people out of poverty.

The Chair: Peter, are you done? Thank you very much.

Ms. Aileen Carroll: Are we short on time?

The Chair: Yes, we are, but go ahead.

Ms. Aileen Carroll: I want to thank you for coming and sharing these excellent insights.

I have a couple of questions, and overall I come back to one point. In your point number 6 you say that popular support or endorsement is not necessary. I have to say that as politicians this is a rather key ingredient for us, and I'm not sure how we could support large increases in aid without such support.

We had a very interesting discussion on this earlier, as we just began our hearings, with Robert Fowler, who is the former ambassador to the UN and is now the chap the PM has assigned the task of this whole African initiative. We had discussions with him, and his thesis at the time was that governments cut aid because they were reflecting popular support or a decrease in that popular support. Some of us questioned that, because we thought what had come out of Doha, and which Mr. Pettigrew had reflected, was the opposite of this, that there was a real high support in Canada for increasing aid.

Nevertheless, to bring you along on our conundrum, I would query how we could move forward without popular support. It's not evident.

Mr. Christopher Youé: It's actually because I misunderstood the question. I thought there was some sort of implication of some poll here--

Ms. Aileen Carroll: No.

Mr. Christopher Youé: --some sort of referendum, which seems to have been in the air over the last few years. I thought you were going to have a referendum to decide whether this particular policy was going to be good for Africa, and that you would get popular support for it that way. Sorry, I just....

Ms. Aileen Carroll: We're not big on referendums.

Ms. Linda Ross: Perhaps I could just speak to that.

Ms. Aileen Carroll: Sure.

Ms. Linda Ross: I think that things are changing. First of all, I think civil society, not just in Canada but around the world because of globalization, is starting to rapidly recognize that what happens in Africa does in fact have an effect on themselves, as individuals. I think that although it is slow--and I do hear what you're saying around the support for aid--there is a growing understanding that this has become crucial.

I think perhaps the single strongest issue is HIV, and whether people look at it from a charity perspective people feel, the public feels, a sense and a need to do what they can to make a difference. As I said, I think the globalization issue is allowing people to realize that issues have to be dealt with on a global scale, not just in our own backyard.

Ms. Aileen Carroll: But I'm still not hearing the answer. You're stating, Professor, that popular support or endorsement is not necessary. How so?

Mr. Christopher Youé I thought I'd explained that. I thought that what you suggested was that you were aiming to have some sort of poll of Canadians--if they didn't agree with it.

¸ (1435)

Ms. Aileen Carroll: I'm going to ask just one other, if I can.

You mentioned the problem of students coming from Africa and getting educated to a level where they can enter universities as teachers, but they face $3,000 salaries at home and a $40,000 salary in the United States. I'm sure t you would agree that's not a new phenomenon. In the past, even when I worked with CIDA in the 1960s, we lost a number of well-educated people after bringing them here for that education, and we were accused of causing a brain drain from those countries.

What I always had difficulty with was that a lot of young men and women came over from Africa to be educated here. They were no different from us. By that I mean that we were young and we didn't know what we wanted to do when we grew up, and all of a sudden we'd finished a certain level in university and we wanted to move forward in a direction that didn't take us back to the place from whence we had come.

What I criticized then and what I still criticize is an assumption that because a person comes from Africa, they automatically have to be a social worker and they automatically have to feel a need to dedicate their lives to the resolution of the components of poverty. They don't. That is to say, all Canadians are not driven to be leaders in the cause of social justice, and I don't think it's fair to assume that because you're from Africa you should uniformly be so driven.

Mr. Christopher Youé: But I think there are a lot of Africans who come over here and become professors who would really like to be professors in their own country or another part of Africa rather than have to stay in the United States. I think they would like to go back, and they would go back if there were more incentive for them to go back. Of course, we all have our different goals in life and so on. It's just that the salaries are so low that it's more or less impossible to sustain a livelihood on them.

The Chair: I have one question that was circulating in my own head as you spoke, Professor.

NEPAD is a plan by Africans for Africans, and they're asking for support from the G-8 leaders and the G-8 countries. When you say that money should not go to governments but to NGOs, it seems to me that what we're doing at the G-8 is really negotiating how those countries will assist Africa, using those initiatives these leaders have more or less put on the table. If we are to assist and if we are to follow the action plan, as it were--I'm not too sure what the action plan says or will be saying at this point in time, but the action plan does suggest that we assist the African countries--it seems that we'll be in a difficult situation if we take the position that money should go not to governments but to NGOs.

That was just circulating around in my head as you were talking, because it seems to me that we can have some ideas as to how we want to approach this as Canada or as Canadians involved in the whole issue of aid. But if we are to be part of the implementation of a plan that comes out of the G-8, then it seems to me we might be led down a path where we might have to work in accordance with what is agreed upon.

Ms. Linda Ross: I agree with you. That is what's proposed to come forward.

With regard to what Mr. Rocheleau mentioned earlier around government and the level of corruption, I think one of the things that can't be overemphasized is the strong role civil society organizations need to play in terms of holding governments accountable and in terms of being supportive themselves. If in fact we are to see money we hope will go into the development of Africa--I think all of us agree on that--we want it to go so it's going to benefit those who are most in need. In fact, that can happen on two fronts, with northern governments being supportive of African countries to develop good governance models.

I certainly think corruption is a very strong issue no matter where you go, and the onus is on us to try to build good government.

I think the other thing is the need to continuously support civil society organizations. We've seen some of that around what's happened in the history of South Africa and the ability of organizations to actually take strong leadership roles at various levels within their own country. I see a tandem of supporting governments on the one hand and, as Dr. Youé said, supporting NGOs on the other hand, NGOs who for the most part are the ones working with civil society organizations. One would hope that in the long term we would see good strong development coming out of that.

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The Chair: Thank you very much for your presentations and for your concise responses to the questions we posed.

If there is anything further you want to communicate to us, Dr. Youé, after getting back with your board or with anyone within your department, please feel free to do so.

And Linda, I want to tell you about the great work Rieky Stuart and other people do at head office, as it were, in Ottawa. We meet with them very frequently. We commend the work of Oxfam, and we know the challenges there are out there. They were before our human rights subcommittee last week to speak on the situation in Zimbabwe and about their concern over what might happen, whether the government wins and whether the election is lost. Oxfam is organizing to make sure they're part of the solution if there is such a solution.

So thank you.

Mr. Peter Stoffer: I just want to say hello from Evelyn Riggs, who's my executive assistant in Halifax and who did a lot of work with Oxfam when she was in Africa as well. I just wanted to say hi to you, Linda, from her.

The Chair: Thank you very much. It's been a pleasure to have you.

Our final presenter for the afternoon is Mr. Sean McCarthy, vice-president of the Newfoundland and Labrador branch of the Canadian Manufacturers and Exporters. Thank you very much for waiting and for accommodating us.

Mr. McCarthy, please.

Mr. Sean McCarthy (Vice-president, Canadian Manufacturers and Exporters--Newfoundland and Labrador Branch): Thank you. First of all, Madam Chair and honourable members, thank you for the opportunity to present and thanks for coming to Newfoundland to do so. It's a privilege.

What I'm going to present today is basically on the economic impact of enhanced integration, mostly with the U.S. and the North American economy. It's a reiteration of some points made to you previously by Dr. Jayson Myers as well as what's in my own comments and flavours to it. Dr. Myers is our chief economist with the Canadian Manufacturers and Exporters out of Ottawa.

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I want to discuss basically five topics: who we are in the Canadian Manufacturers and Exporters, and what is our relevancy to this issue; what the provincial sector looks like here in terms of manufacturing; what is the context of the existing situation; what are some of the concerns I have with existing integration; and what I would propose as some of the topics to focus on managing that integration. As well, knowing that you guys have a plane to catch, I'll keep my comments brief and I'll speak very fast.

The Canadian Manufacturers and Exporters were founded in 1871 to actually fight free trade, so we've come a long way. We grew to become a strong supporter of NAFTA, free trade with the U.S., and enhanced economic integration, and we continue to do so. In 1996 we amalgamated with the Exporters' Association given our common interest--promoting enhanced trade within Canada and with other nations.

In our province, where does the sector stand? There are 825 companies in the province, with about 16,000 employees involved in manufacturing goods. About half of those companies are not resource-based, taking a significant amount of product in from elsewhere and doing value-added activities here in the province and exporting them. Approximately 70% of the companies are reliant on external marketplaces for their sales.

A lot of people have a view of the Newfoundland economy that's different from what I've described. Since 1999 there has been a 55% increase in shipments for manufactured goods in the province. I think some of this can be tied to the enhanced trade relationships with the U.S. and other economies. Just as a note, that's non-fishery related, because we had to adjust for the impact of fishery quotas and stuff like that.

With regard to integration, Canada and Newfoundland and Labrador are already significantly linked to the U.S. and to the North American marketplace. Approximately 83% of all Canadian exports are sold to the U.S.; 38% of Canada's GDP is dependent on the U.S.; 63% of all industrial output is U.S.-destined; and from Newfoundland's perspective, 70% of our exports are U.S.-destined, increasing from 55% in 1991. Again, that's a reflection of the changes in free trade arrangements.

We're already quite dependent on the North American marketplace for our own GDP. These are facts you've heard many times before. The concern here is that the U.S. is by no means dependent on the Canadian economy. We represent probably 2% to 3% of their GDP. That's a factor of their large domestic marketplace as much as it is their other trade relationships with other countries.

In terms of exports, Canada is one of the leading nations in terms of the percentage of goods exported, but in terms of the domestic market we're quite small.

What has been the impact of integration to date? First of all, I think the economic growth and new market opportunities represented over the last 10 years are a reflection of our greater integration in the North American marketplace. As well, it has encouraged companies to become more focused on increasing value-added activities. It has changed the minds of companies from perhaps a merchant attitude to more of a value-added attitude. In order to compete internationally they had to become more in tune with getting as much out of resources as they could. So it has changed their focus and helped improve those companies.

It has enhanced our export orientation. As I stated before, if you polled Canadians on who are the leading export nations, people would say U.S., Japan, or other nations, whereas in fact it's Canada. This fact is not known by a lot of individuals. That export orientation bodes well for us in the future, I guess, because we're not afraid to go out and export.

Now, what are some of the concerns? As a result of the last 10 years there has been increased consolidation and amalgamation of companies. The decision-making power has been reduced. We're controlled by fewer individuals. Whether that's a reflection of the greater integration or just the manner of the times, I'm not sure, but this has happened in the manufacturing sector, in the retail sector, and in the service sector.

There has been greater economic, social, and cultural integration. September 11 clued us into that all at once, I guess, in terms of its impact on us emotionally as well as economically. It showed the strong linkages between us and other nations.

We have enhanced dependence on one nation. Our relationship with the U.S. can be as much a risk as a reward, because of the large number of exports going to one country. What I was going to get into a little bit earlier is that decisions impacting Canadian business are now made in other countries. So over the last ten years, there have been a lot of positives, but there have been a few concerns as well, as a result of integration. My comment here is that integration has actually already occurred for our economies.

In view of the discussion here, should we be going forward? How do we manage further integration and ensure that Canada is the beneficiary? That is important to us--to our companies and to our province.

What are some of the concerns in doing that? Right now all that exists is a skewed relationship. We're heavily reliant on the U.S. The U.S. is minimally reliant on us. Further integration more than likely will happen on their terms, unless we manage it properly.

The relationship is at the economic, social, and cultural level, yet a lot of policies aren't linked--immigration policies, border issues, and other kinds of foreign-policy concerns. We have a declining standard of living compared to the United States. I'm not certain if we're keeping pace with other nations, but the United States is well exceeding our ability in terms of enhancing their own standard of living. Once that happens, we become the poor cousin in terms of trying to attract business, attract human resources, attract good-quality companies. When you look at the two nations, you'll invest in the one that has the better standard of living and can generate a better return on investment.

Coinciding with that, the U.S. has a better business environment--perceptually or in reality--than Canada does in terms of regulations, taxes--the ability to get a return on their investment. Once again, some of that is perception; some of it is reality. But it's the way people look at the two nations.

There's a generally declining Canadian competitiveness. Last August we came out with a report called The Business Case for Innovation, which you have in your packages. It cites how Canada has dropped in comparison to the other G-7 countries over the past ten to fifteen years in terms of their ability to compete as a nation, economy to economy. A lot of that is linked to our ability to innovate, to make investments in machinery and equipment, to train and maintain proper human resources here. A lot of these are policy decisions, as much as business decisions, that impact on those things.

Then there's the Canadian dollar, which basically reflects all the other things. It's not the cause of problems; it's a reflection of our comparative inability to innovate compared to the United States, or our environment and all these types of things. Once again, it's part of the perception, because I don't think our dollar should be at 62¢. I think if you ask most economists, it should be around 75¢ to 78¢. But part of this issue is perception as much as anything else.

So in terms of managing integration, what would I talk about?

First of all, I think there has to be shared policy objectives between us and the United States. As to how we would go about that, I'm not really the expert here. In terms of immigration policy, fiscal policy, and foreign relations, I think we have to have integration along those lines if we're going to have economic integration, because we do link back and forth.

Borders and security are a hot topic right now, and you can't do economic integration if there are issues over border security between the two nations. We came out recently with a 30-point plan on how to actually accomplish that, and I'd point you in that direction as well. I think those are two key issues we need to look at in order to go forward.

There's a need for an improved Canadian business environment to attract investment from the U.S. and Mexico. While they are our partners, they're also our competitors in terms of attracting investment. Perceptually, the business environment in those areas and jurisdictions looks better. If I have a dollar, I'm going to invest it in those jurisdictions.

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That's really what we need to do in terms of further enhancing Canada's standard of living and its economic role and generation capabilities to ensure that people choose to put their dollar here rather than elsewhere.

For the free flow of goods, services, and people, internally and externally, there needs to be some more work on internal interprovincial trade barriers. There needs to be some work on how we flow people back and forth across the borders in terms of allowing people to work in the U.S., allowing U.S. workers to work here, and allowing immigrants greater access to the Canadian marketplace to come here and work. I think those are all key. Human resources are key to this. We need different people in here to generate and drive more economic activity.

Finally, focusing on business investment and productivity, Canada has done some work on it recently with HRDC and Industry Canada coming with proposals on innovation strategy, but I think there are further things that can be done towards a more comprehensive, collaborative approach to enhancing innovation here in Canada.

This is not to say all this is the Government of Canada's role. It's a partnership between business, the private sector, government, academia, and other agencies to promote innovation and business investment here in Canada whose end result would be the enhancement of productivity, because if we enhance productivity, we enhance our standard of living, and that's what we have to do to be able to keep up.

Our economies are already linked. Further economic linkages are inevitable and beneficial. What's happened over the last ten years has proved the benefits associated with that. But in order to take advantage of it, we will require improvements to our business environment and company capability to ensure that Canada benefits from its ties to the U.S. more than it has over the last number of years, and to allow it to continue doing so. Canada can and should be economically integrated and remain independent. There is a role for both.

In conclusion, our public policy goals as a nation are impacted by our ability to support them, along with the influence we possess among nations. In order to have a strong public policy front internationally, we have to have a strong fiscal and economic front to support those goals. I think those two things are linked together.

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The Chair: Thank you very much.

I also want to bring to the attention of the members that this report, Towards a Secure and Trade-Efficient Border, was done by your subcommittee.

Both your president, Mr. Beatty, and Mr. Bescec, your vice-president, presented on the border issue to the subcommittee. This is a really good document. If it's not in your hands, we will make sure we send it to you.

Committee members, this would be worth a second look, because I know most of you have seen it before.

Let's go to questioning.

Monsieur Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Madam Chair. Thank you, Mr. McCarthy, for your presentation. I have a simple question that might also be rather complicated.

I would like you to tell us the pros and cons of having a Canadian dollar that is worth 60, 61, 62 or 63 ¢. If the dollar were to remain at that level or perhaps drop even lower, would we not then have to begin thinking about integrating economies that might become even closer, that is to say, at the very least, to have a common currency with Canada and the United States and perhaps even a third country, if we include Mexico?

[English]

Mr. Sean McCarthy: I think the advantages are self-evident. It's much easier doing business in a nation where you have a 62¢ dollar, and when you go down to the States, for every dollar they have it comes out to $1.60-something Canadian. I think it allows our companies to compete quite well on price, and that's the main advantage.

There are two disadvantages as a result that remain. First of all, it gets our companies dependent on price rather than on quality, customer success, delivery, innovativeness, and productivity in terms of delivering good, quality products. In the end it might be weakening our companies by having that, because they're not competing on the same front the U.S. is, and it's kind of focusing their efforts differently.

The second thing is that as our economies are so integrated now, a lot of our companies are purchasing materials, goods, labour, and machinery from American suppliers in American dollars. They're paying in U.S. dollars. They're paying at the $1.62 level and are just not receiving the $1.62 or $1.65 level. Both those points mean that this is weakening our companies financially as much as it is philosophically, and those are two real shortcomings.

In terms of whether we should sign off and say that the dollar will continue going down, I'd have to say no, because my two-point fear is that first of all the 62¢ dollar is a matter of perception. It's not fully reflective of what our nation is able to generate. So what value would you peg it at if we're going to...? If we could go to the States now and ask if we could do an economic integration at par, sure, I think we'd all go for it. If for every dollar Canadian we could go for a dollar U.S., I think we'd probably all jump at it. But I don't think 62¢ is reflective of what we are as nation. I don't think anyone knows what the true value, somewhere in between, really is. It would take longer to negotiate than it would achieve some of the benefits.

I also think that if we did the right public policy and priorities, we could change our ability to be innovative and to enhance the productivity of the nation to actually push that dollar back up to where it should be. Then we would remove that discussion from the agenda. I don't think we should be getting rid of the dollar unless, as I said, it impacts on our ability to be fiscally relevant and it impacts on our ability to do things for our economy that we couldn't do if we didn't have our own monetary policy.

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The Chair: Thank you.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you, Madam Chair.

Mr. McCarthy, you made a couple of comments that weren't in your presentation, your written one. I just want to review that with you.

On page 4 you say under “Concerns” that the “Relationship is at the economic, social, and cultural level--policy is not linked”. But you told us two additional things: foreign and immigration. So is it your view and is it the view of the Canadian Manufacturers and Exporters association that foreign policy and immigration policy should be linked with those of the United States?

Mr. Sean McCarthy: No. Personally, I don't think so, and--

Mr. Peter Stoffer: If I may interject, you said that we should link our foreign policies together. You also said our immigration policies should be together.

Mr. Sean McCarthy: No. There's just a slight misunderstanding. My statement said it isn't linked. I don't think you could do proper integration unless all of it is linked.

Mr. Peter Stoffer: With that, are you saying then that we should have a foreign policy that is similar to that of the United States?

Mr. Sean McCarthy: No.

Mr. Peter Stoffer: Are you saying we should have an immigration policy similar to that of the United States?

Mr. Sean McCarthy: No. What I'm saying is that if we go--

Mr. Peter Stoffer: Madam Chair, his presentation was that way: we should be looking at our foreign policy in terms of linking it with that of the United States. I'm questioning why a manufacturing and export association would even say that, because an independent nation decides its own foreign policy regardless of any economic value it may perceive down the road. Correct?

Mr. Sean McCarthy: No. My statement is that right now our foreign policy and our economic policy aren't linked with those of the U.S. If we want to go to full integration, that needs to happen in order to...but I'm not supporting that.

Mr. Peter Stoffer: Okay, good. I just wanted to get that on the record.

Also, sir, many companies now publish their annual reports in U.S. dollars. First of all, why do they do that? I think I know the reason, but I'd like to know your view of it. Why? Would the CME support integration with the U.S. currency?

Mr. Sean McCarthy: On the second point, the answer is no, we wouldn't. On the first question, the reason is that most investors do their analyses based on U.S. dollars. Basically, a financial report is a way of attracting investors, and you want to talk in the same language they're speaking in.

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Mr. Peter Stoffer: I have so many more questions, but obviously I don't have time for them all.

You mentioned productivity enhancements. We hear this also from the Alliance Party in question period--productivity is so bad and so low, our dollar is so weak, and it reflects productivity. But when I speak to labour groups and social groups across the country, they very clearly say that their people are working harder, working longer, with less benefits and less salary. And yet I hear that productivity is at an all-time low in this country, and that this is a reflection of our current dollar.

What do you mean by “enhancing” productivity? For the record, what exactly does that mean?

Mr. Sean McCarthy: Labour is making that statement because in comparison with the United States, our productivity is decreasing.

Mr. Peter Stoffer: But how do you define it? When you say that as compared with the United States our productivity is going down, what does that mean--to do more with less?

Mr. Sean McCarthy: To increase your return on investment.

Mr. Peter Stoffer: Monetary.

Mr. Sean McCarthy: Monetary, yes.

Canada's labour productivity is higher than in the U.S., I think, but their company productivity is lower. The United States invested more in plants, equipment, machinery, and new technologies. Canadian companies invested more in new hires, in human resources.

If you look at productivity, you can't look at only one or two components. You have to look at how Canada competes with the United States in terms of R and D spending, commercialization, investments in human resources, investments in plant and equipment, increases in labour productivity, and increases in overall productivity. All of these things factor into our ability to be innovative as a country.

Mr. Peter Stoffer: But the reality is, if I were to explain this to the layperson on the street, enhanced productivity just means more return on investment for shareholders.

Mr. Sean McCarthy: Yes.

Mr. Peter Stoffer: Okay.

Thank you, Madam Chair.

The Chair: You have your answers? Perhaps you can write him a letter at some point.

Mr. Peter Stoffer: No, I'm glad to hear him say that the Canadian Manufacturers and Exporters Association does not support an integration of foreign policy or immigration policy and/or linkage of the currency.

An awful lot of people in your association have been saying that we're going to have to go to adoption of the U.S. currency, and I'm glad to hear you say that's not the way to go.

Thank you.

The Chair: Ms. Carroll.

Ms. Aileen Carroll: Thank you.

Maybe this is a segue--or maybe not--but am I correct in understanding you to say that you do not see a growth or increase in integration as representing a corresponding decrease in our sovereignty, given Mr. Stoffer's remarks, and your confirmation of them, that you do not propose an integration of foreign policy, immigration, or moving to the American dollar? Given that, do you then have a comfort level with the amount of integration you are proposing, and that you're seeing occur, as not negatively impacting on sovereignty?

I hope you don't think that's unfair, but I'm interested to hear what you say.

Mr. Sean McCarthy: Right now I have a comfort level. If it's managed properly, I think that comfort level can be maintained. I think it really comes down to the fact that we have to manage the integration from a federal policy point of view as well as a business policy point of view. I think it can be maintained and probably even enhanced over the next few years.

Ms. Aileen Carroll: Good. I thought it was an excellent presentation, but with that answer, I think it's a gold star presentation.

An hon. member: Hear, hear!

Ms. Aileen Carroll: That must be because we agree with each other.

I also wanted just quickly to ask your view on this. You mentioned that triangle of the U.S., Mexico, and Canada. Recently Mr. Castañeda was in Ottawa. He's the foreign policy minister of Mexico. He and Mr. Graham, our minister, in a press conference were talking about discussions they had that reflected a good deal of Canada-Mexico potential, partly realized, in a non-competitive manner. I think he was very wise. He said it's difficult to be working together and at the same time competing for investment and so on.

To give you my bias before you are compelled to respond, I see potential there too. It's not a competitive gesture with the Americans; it's just that two countries sleeping with an elephant may have more in common than we've explored before. What do you think?

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Mr. Sean McCarthy: I guess maybe there would be potential for increased partnership between us and Mexico.

Ms. Aileen Carroll: And in Mexico, what could happen there, between import and export?

Mr. Sean McCarthy: I'm not certain. I'd have to do more analysis into whether or not there's actually a product mix.

Ms. Aileen Carroll: Okay, so on the Canadian end?

Mr. Sean McCarthy: I think on the Canadian-Mexican front, there might be some areas for partnership. I think when you're looking at this, the U.S. is the major economy. Canada would be second in that case. How we treat Mexico, and whatever incentives or approaches we take to give Mexico a fair chance in this marketplace, will have an impact on how that partnership is going to develop.

Ms. Aileen Carroll: You mentioned the recent initiative from HRDC and Industry Canada on the innovation dossier. While we're out here doing public consultation, I noted with a little bit of glee that the Globe and Mail, in reference to the announcement from those two ministers, quoted the Nike ad and said, “Just do it.” What do you think of that?

Mr. Sean McCarthy: I think that's probably a good anthem for it, but I still think that to ensure good initiatives it has to be more comprehensive--to gel more--to encourage innovation in Canada. I think there are some good initiatives within the projects, but I think it has to be more comprehensive. It has to be tied back to other initiatives in government, with the Department of Finance.

Ms. Aileen Carroll: I'm sorry, you turned on my mike, and as a result I don't hear the end of his comment. You can leave it on for a second but then I'd like it turned off, to hear better what Mr. McCarthy is saying.

So what you're saying is you think it's good, but unlike the Globe and Mail's “Just do it”, you think it can go further, from your perspective as a business person?

Mr. Sean McCarthy: Yes. I think there have to be other initiatives tied to other departments' policies, especially the Department of Finance's. These would be more in terms of human resources, more in taking existing employees and enhancing their skill levels in those areas. So yes, I think it can go further.

Ms. Aileen Carroll: [Inaudible—Editor] ...as I understand, lead to that competitive edge, that productivity that you say we've got to... [Inaudible—Editor]

Mr. Sean McCarthy: Yes it does, yes.

The Chair: Thank you very much, Mr. McCarthy, for your presentation. It will add greatly to the work we're doing as we complete the Atlantic provinces. There is one group in Quebec right now, and then we go to Ontario and the west. I'm sure we'll be meeting with other people from your organization that we continue to dialogue with.

Thank you so much for coming.

Members, we've reached the end of our session here in St. John's. The music is saying to us, “That's it.” They're playing us out.

Thank you very much. The meeting is adjourned.