Good morning everyone. This is the Standing Committee on International Trade. We're a very active committee that has had a lot on our plate since the opening of Parliament. We have softwood lumber issues and the finalization of the trade agreement with Europe. Right now we're embarking on a very ambitious consultation process with Canadians on the TPP. We've visited western provinces. We visited Ontario and Quebec. We have also been having witnesses come forward here from different organizations and as individuals. We're also receiving many emails from Canadians. This is the last month that we'll be receiving them. They'll be compiled for our report. Also, members of Parliament will probably host town hall meetings, and we'll receive from them what they hear. We still have to visit the Atlantic provinces and the territories.
We have a very ambitious agenda, and quite a distinguished panel here with us today. Not everybody is here at the table; some are joining us by video conference.
With us today we have the Canadian Cancer Society, the Canadian Pork Council, Doctors Without Borders, the International Union of Operating Engineers, the Council of Canadians, and Scotiabank. This month instead of breaking everyone into two sections, we will hear from all the witnesses first, so we can definitely hear everybody's presentations. I say this because June can be a little unpredictable here on the Hill. We'll give each presenter five minutes, and then we'll open it up to the floor for dialogue with MPs.
We're going to start with Rob Cunningham of the Canadian Cancer Society.
Go ahead, sir, for five minutes.
Mr. Chair, members of the committee, thank you for the opportunity to be here with you today.
My name is Rob Cunningham. I'm a lawyer and senior policy analyst with the Canadian Cancer Society.
My testimony is going to focus on what has been distributed to you—article 29.5—which contains an exception for tobacco products in the investment chapter. We support this provision. We're very pleased that it's in the TPP. It was there in part because of Australia's experience with respect to plain packaging. In the Canadian context, plain packaging is part of the Prime Minister's mandate letter to the Minister of Health. Last week, on May 31, the health minister announced consultations for implementing it in Canada.
What is plain packaging? What has Australia done? I have an example here of the iconic Marlboro pack before and after plain packaging. After plain packaging, you no longer have the package as an advertisement. You no longer have the brand colours, logos, and graphics. On a cigarette pack, you have a health warning, and the brand name appears on a drab brown background. You can perhaps see if better if I show you three different packages here. On these three different packs, you have the health warning and then the company names: Dunhill, Marlboro, and Benson & Hedges. In all three cases, you have drab brown for the base colour of the pack, and the brand name is on the background in white.
The Australian government did research into what was the least attractive colour. They came up with olive brown. They referred to it that way. But the olive industry got upset.
Voices: Oh, oh!
Mr. Rob Cunningham: They didn't want to be associated with the tobacco industry.
This is what's been done. It's been implemented as of May 20 in the United Kingdom and France. Ireland is on the verge of a commencement date. Norway has a bill to be introduced in its parliament in early June. New Zealand has regulations that they announced for consultation last week.
Why is this important in the TPP? The tobacco industry has a history of abuse, seeking to use international trade and investment agreements to overturn bona fide public health tobacco control measures that apply equally to domestic and foreign companies. In the 1980s, they tried to invalidate Thailand, a developing country, with their ban on tobacco advertising, which was similar to a measure that Canada subsequently implemented. The highest court in Australia has upheld plain packaging. It was found not to be contrary Australia's constitution.
After the Australian government announced their intent to go with plain packaging, Phillip Morris moved its parent company. They had a shell company in Hong Kong and they took advantage of a Hong Kong-Australia bilateral investment agreement to say that Australia couldn't do this without paying compensation. Australia, on a preliminary basis, said it was abuse. In this case, the panel agreed. They can't do jurisdictional shopping.
Philip Morris International brought a claim under a Switzerland-Uruguay bilateral investment agreement saying that Uruguay's health warning of 85% size—Canada's is 75%—was an expropriation. There's an arbitration panel. We may see a decision in 2016. Uruguay also has a provision that says that you can only have one brand variation per pack. That's an abuse. If we have this provision, you can't even have the possibility of government's delaying their measures, because of intimidation by the tobacco industry. They have to deal with these legal proceedings, because you have this simple carve-out.
One of the benefits of plain packaging is that you would not have these slim packs that are targeted at women, attractive to young girls, associating smoking with weight loss and glamour and sophistication. Some of these packs are very sophisticated, glamourous, with a satin overwrap.
This is the type of public health measure being proposed for consultation in Canada. We support it. There are other examples of legal claims being brought by the tobacco industry in the United Kingdom. One of these has been dismissed, but it's under appeal.
Members of the committee, this is a very important issue from a public health perspective. I believe it has all-party support.
Thank you very much for the opportunity to give our views today.
I'm John Ross and I'm the executive director of the Canadian Pork Council. I'm pleased to speak on behalf of Canada's pork producers and the 31,000 jobs that are generated on our farms.
I would like to thank the committee for the invitation to discuss the Trans-Pacific Partnership agreement. The Canadian Pork Council has been a staunch supporter of Canada's participation in the negotiations. We are pleased to take this opportunity to indicate our strong support for Canada's ratification of the agreement.
We are a trade dependent sector. More than two-thirds of the hogs we produce in Canada are exported either as live hogs or as pork. Over the past five years, Canadian pork has been exported to more than 125 countries. In 2015 these exports were valued at $3.4 billion.
The Canadian Pork Council sees significant benefits for our industry from the TPP. According to an analysis conducted for the council, the Canadian pork industry would increase its exports by some $300 million and would generate 4,000 new jobs once TPP is fully implemented.
This growth is the result of Canada's having improved access into other TPP countries relative to our non-TPP pork competitors. This is particularly important in high value and high growth markets such as Japan and Vietnam.
The TPP also ensures that Canada maintains its access to Japan, a $950 million market for Canadian pork, on terms that are equal to other TPP pork exporters. The Japanese market for Canadian pork will be lost and the damage to our industry will be extreme if Canada is excluded.
As part of its global strategy, the Canadian pork sector relies on the Government of Canada to be as successful in securing equal access to global markets as the governments of our competitors.
Every time Canada falls behind other countries, it becomes more difficult to justify the raising and processing of livestock in Canada, and to maintain the associated jobs and economic activity.
Canada's experience with South Korea provides a concrete example. We were disappointed when the Canada-Korea trade negotiations appeared to stall in 2007. Our worries over the lack of a free trade agreement with Korea became very acute in 2011 when virtually all of our competitors started benefiting from their own FTAs with Korea. In the food business, with tariffs of well over 20%, Canadian pork exporters quickly found themselves unable to compete as others acquired huge tariff advantage.
In 2011, the year before the U.S.-Korea free trade agreement came into place, Canada was one of South Korea's most important suppliers. Within two years, our pork exports to that market fell by three-quarters from almost a quarter billion dollars to just $76 million.
We are pleased that Canada was able to complete its own bilateral deal with South Korea three years later, but we will continue to be at a disadvantage to U.S., European, and Chilean exporters.
In considering the TPP, we must avoid a repeat of the South Korean experience. Canada needs to take a leadership position in helping advance the ratification of the TPP. It would be risky for Canada to simply await the outcome of discussions in the U.S. and Japan. While we wait, some of the benefits of the TPP could erode should other non-TPP countries negotiate their own preferential agreements.
If it appears that the implementation of the TPP will be unduly delayed, we strongly recommend the Government of Canada undertake a vigorous strategy of bilateral or regional trade negotiations in high priority markets such as Japan and Vietnam.
Certainly, hog producers and processors benefit from improved market access. However, so do Canadians. Recent polling has showed that the top concerns of Canadian consumers are the rising cost of food and keeping healthy food affordable. A globally competitive Canadian hog and pork industry will ensure Canadians have access to locally produced, high quality, competitively priced, pork and pork products. However, we can't meet this obligation if we are locked into the domestic market.
In conclusion, we believe it's in Canada's best interest as one of the founding members of the trans-Pacific partnership to ratify the agreement as soon as possible.
Thank you very much for your attention.
Thank you for the opportunity to address the committee on this important issue.
I'm a humanitarian affairs advisor with Doctors Without Borders/Médecins Sans Frontières. I'm here to present our perspectives regarding the negative impact that the Trans-Pacific Partnership agreement, or the TPP, will have on access to affordable medicines.
I'm joined by my colleague in New York, Judit Rius Sanjuan, who has followed the TPP negotiations closely for several years.
MSF is an international humanitarian organization that provides impartial medical assistance to people in nearly 70 countries. For more than 40 years, we have been providing medical assistance to people affected by armed conflicts, natural disasters, disease epidemics, malnutrition crises, and other emergencies. In 2014, alone, we performed more than 8 million outpatient consultations, vaccinated more than 1.5 million people during measles outbreaks, and responded to other medical emergencies ranging from Ebola outbreaks in West Africa to the refugee crisis in Europe, and many others.
As a medical treatment provider that needs both affordable access to and innovation for medical technologies, MSF is able to speak about the relationship between trade, intellectual property, and health, and about the role competition has played in enabling access to medical care for millions.
Drug prices need to be affordable so our patients, and millions of others still waiting for treatment, can get the medicines they need. In our experience, generic competition in the production and distribution of health technologies saves lives by reducing prices and increasing access. Countries, and medical treatment providers like MSF rely on affordable, quality, generic medicines to treat many life-threatening diseases, including tuberculosis, malaria, HIV/AIDS, and other infections that afflict the poorest and most vulnerable populations.
Our analysis of the text of the TPP has identified that this agreement represents a major concern for public health. We will submit a brief with more information on our analysis, but some of our concerns relate to the following provisions.
First, the TPP requires countries to grant additional 20-year patents for modifications of existing medicines for new uses, methods of use, or new processes of a known product. This lowers the standards of patentability and creates new monopolies for existing medicines.
Second, the TPP requires countries to protect clinical trials data with additional periods of exclusivity. These data exclusivity obligations will restrict access to medicines, even when patents no longer apply or never existed, giving companies another way to keep prices high for longer, and further delaying competition. This includes a specially extended period of data exclusivity for a certain class of drugs known as “biologics”, which includes, for example, many new cancer treatments, vaccines, and potential Ebola treatments.
Third, the TPP requires countries to grant patent term extensions beyond the initial 20-year patent term if companies argue that there have been delays in the regulatory or patent-granting process.
The effect of these provisions will be to keep medicine prices high for longer by further delaying price-lowering competition. There are additional provisions that fail to balance commercial and public health interests, and further restrict the ability of governments to address high health care costs and to regulate medicine prices.
If enacted in its current form, the TPP will go down in history as the worst-ever trade agreement for access to medicines for developing countries. This is of vital importance to Canada, because Canada has made many important contributions to global health, for example, as one of the largest donors to Gavi, the vaccine alliance, where Canada has contributed more than $1 billion to improve access to affordable vaccines in developing countries and, most recently, by committing $785 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Provisions such as those included in the TPP undermine these investments and reduce the efficiency of the dollars pledged by unnecessarily driving up the price of medicines, meaning that instead of being used to procure needed medical services, dollars end up in the pockets of already-profitable pharmaceutical companies.
Instead of using trade deals like the TPP to extend monopolies for pharmaceutical companies, Canada should seek to establish improved global norms to fix the broken research and development system.
The sole reliance on high medicine prices backed by exclusivities and monopolies is a flawed paradigm for funding innovation. This leads to unaffordable prices while failing to stimulate innovation for diseases where patients have limited purchasing power, like neglected tropical diseases or where medicines like antibiotics have to be used sparsely.
It is not too late to prevent the further restrictions on access to affordable medicines that would be created through the TPP. MSF urges Canada to protect the right to health of millions of people who will be negatively impacted if the TPP is implemented in its current form.
The TPP should be modified or rejected. Rather than implementing measures that will lock in high prices, Canada should champion efforts to improve the world's research and development system to ensure that biomedical innovations address pertinent public health needs and are accessible and affordable to all who need them.
Judit and I would be pleased to answer any questions that members of the committee may have for MSF.
On behalf of the International Union of Operating Engineers, I would like to thank the committee for allowing me to raise our concerns around the TPP, in particular chapter 12, temporary foreign entry of business persons, and the possible negative impact it could have on Canada's construction sector, a sector that consistently makes up nearly 10% of our total GDP and represents approximately $256 billion worth of work in Canada.
In our sector, safety is paramount. Our members are highly trained and well skilled. Our members operate the cranes and heavy machinery. We are mechanics and surveyors on construction sites. We work for the heavy civil and industrial contractors, and we are involved in various aspects of Canada's natural resource sector. We work in every corner of our country, and we construct and shape the skylines of Canada. We know construction quite well.
Unlike other sectors in Canada, construction is unique. It faces numerous challenges. Every year, every day, there are people working illegally in our sector. There is an underground economy that impacts us greatly. Companies continue to abuse and misuse temporary foreign worker programs in place now. Unless Canadian regulations and enforcement procedures are drastically changed to specifically address these issues, abuses and misuses will continue and will likely expand exponentially under the TPP.
As mentioned by the previous witness, the TPP will be the first time Canadian construction workers were ever included in a national trade agreement. Unfortunately, we were not given an opportunity to consult prior to the inclusion of construction workers. If we had, some of our concerns, like enforcement, might have been addressed at the time.
We believe chapter 12 as drafted does not provide any real benefit to Canada. In fact, we believe the opposite. We know that Canadian construction workers will not travel abroad in any relevant numbers to any of the other TPP countries. Besides language issues, most of these countries have much lower safety and work standards, and the pay is significantly less than construction workers receive in Canada. Why, then, would our workers want to travel to these countries for work? Workers from less developed countries, however, will come to Canada. They will seek better opportunities, better employment, better pay, even if that pay is below the Canadian working standard.
The TPP does not have a Canada-first provision, so we're concerned that companies based in, for example, Mexico will come to Canada with foreign workers from a region where there's high economic unemployment. A construction project could be built by a foreign company with foreign workers, and there would be nothing that Canadians or the federal government could do to stop it. Foreign workers and foreign companies can directly benefit from Canada's infrastructure jobs, while our workers and our economy suffer. All of the benefits that were offered to Canada's working middle class by the Liberals' $240-billion infrastructure pledge could be at risk.
As you are aware, the United States has exempted itself from chapter 12. Under this chapter, TPP countries sign individual side agreements with each other. Canada has seven side agreements, while the U.S. has signed none. If our largest trading partner refuses to sign chapter 12, why are we a signatory?
If would have made more sense if Canada and the U.S. had pursued worker mobility in the construction sector under the TPP. Our training, our background, our experience are generally interchangeable. Instead, though, less-skilled workers who do not meet many of our provincial standards will now be allowed to enter Canada. Under chapter 12, the credentials of foreign workers will be verified only by officials sitting at a desk via computer. They will view these resumés and take the qualifications at face value. Once workers come to Canada, there's no way to track them, no way to guarantee they meet our standards for safety or trade certification, and no way to ensure that they do only the work they have been assigned to do. These abuses already occur under TFW.
We are also concerned about the categorization of professionals under chapter 12—in our case, contractors for crews of heavy equipment operators. We've reviewed the national occupational code, which guides chapter 12, for the definition of occupations. We are concerned that the categorization is too big. We believe a contractor could be allowed to perform heavy equipment work, which means we could potentially have poorly trained, under-qualified crane operators working in our country. Would you feel safe walking by the West Block, where we have cranes right now, if you knew the crane operator might not have the ability to operate that crane safely? Then, again, how would you ever know if that person was qualified? For example, in Ontario to be a licensed operator, you must have a minimum of 3,000 hours to be considered a journey person.
On another matter of safety, under TPP there are no requirements forcing a potential construction worker to speak English or French. Imagine a construction site where the workers are unable to communicate and understand each other while moving and operating heavy, large pieces of equipment and heavy loads. A language problem currently exists under TFW, and it has led to serious injuries, and even fatalities, on job sites.
Currently, as written, we believe chapter 12 has many grey zones, which we believe can and will be exploited by construction companies abroad, and even domestically, at the expense of Canadian workers and our economy.
We have been working and continue to work with officials from Global Affairs to address our concerns, and we will push for some form of a demonstration of skills test before entry. We believe that's the only way to ensure we can get qualified workers into Canada. As it stands now, if we can't get some of these changes, we cannot support TPP.
I will be happy to expand on any of these comments and any questions you may have.
I'm Jean-François Perrault, chief economist and senior vice-president at Scotiabank.
Good morning. It's a pleasure to be here to discuss the Trans-Pacific Partnership.
As Canada's international bank, we have operations in 9 of the 12 TPP countries and operations in 46 other countries. We are strongly supportive of the TPP.
In Scotiabank's view, free and open trade is critical to Canada's economic well-being. We are a trading nation. Our economic prospects depend critically on the economic health of our major trading partners but also on our access to their markets. At the moment, roughly 75% of our exports go to the United States. This, of course, reflects the deep integration of the North American economy, but exporting being so heavily concentrated in a single country necessarily entails some risks and limits economic opportunity.
In our view the TPP represents a meaningful expansion of trading opportunities for Canadian firms. It provides our companies with preferential access to markets representing 800 million people. If implemented, the TPP and the comprehensive economic and trade agreement, CETA, would make Canada an advanced economy with the largest preferential access to markets. While this is impressive by virtue of the trading opportunity it provides to our firms, it is also a powerful magnet for foreign investment.
I was in Korea a few weeks ago talking to Korean investors, and they were all impressed when I explained these advantages to them. Setting up shop in Canada would provide them and firms from other countries with preferential access to North American, Asian, and European markets if both the CETA and the TPP were implemented.
When combined with our highly qualified labour force and the ease of doing business in Canada relative to our main competitors, these trade deals help make Canada that much more appealing to foreign investors who want to start and grow businesses here.
Implementing free trade agreements also help diversify our export markets. As I indicated, our exports are heavily concentrated into the U.S. This is normal, given our shared land border, cultural similarities, and the North American Free Trade Agreement. Excessive reliance on a single partner, however, is a bit risky. We are, to some extent, hostage to developments in the U.S. While this is true for most countries, given the importance of the U.S. to the global economy, it's even more so for Canada.
Thus there is a compelling case to diversify our export markets to reduce our reliance on any single country but also to ensure that we have access to countries that are growing faster than the U.S., which is the case for virtually all of the emerging market members and countries in the TPP.
Finally—and this is an element of free trade that some take issues with—it increases the competitive pressure on our Canadian firms. This is fundamentally a good thing. Canadian firms have adapted to competitive pressure in the past and continue to do so. It's in our DNA as a trading nation.
The World Economic Forum considers us to be one of the most competitive economies in the world. A recent study by KPMG finds that Canada has the lowest labour costs of all the G-7 economies. We have the highest quality of education in the G-7 and the soundest financial system in the world, again, according to the World Economic Forum. All of this suggests that Canadian firms are well suited to meet the competitive pressures and, more importantly, to gain market share in new markets as TPP and CETA come into effect.
Of course, with greater competitive pressure comes more innovation and higher productivity. These are two elements that are critical to the long-term health of our economy and to the rising standard of living for Canadians.
From Scotiabank's perspective, the agreement levels the financial services playing field in TPP countries. This means that Canadian banks will have the same access as other foreign banks in TPP countries. This is important to us, as it would allow us to help our Canadian and international clients to take full advantage of the opportunities presented by the TPP.
Let me emphasize that what drives our support for the TPP is not narrow self-interest. The ability to meet our clients' needs is, of course, important to us, but more important are the economic interests of our country. The TPP and CETA represent meaningful increases in market access for Canadian firms and make us a more attractive investment destination. This will pay off over the long term, even though there are likely to be some segments of our economy that will struggle to adapt to increased competitive pressure. There are estimates of the impact of the TPP on our economy. They tend to be small. We don't have models at Scotiabank that help to calculate these effects, but they seem relatively reasonable.
Importantly, however, there are costs to not participating in the deal. Again, these are small, but taken with gains from participation, there's a solid case for signing on to the TPP. Moreover, there are expectations that the TPP will, in time, expand to include other countries. This would, of course, increase the beneficial aspects of the deal, should it pass.
Importantly, estimates of the impact of the TPP do not account for the possibility that firms will want to use Canada as a production base, given our geographic location and preferential market access. We do not have an estimate of what this could be, but it stands to reason that the impact should not be negligible. Model-based estimates of the impact of TPP also do not account for the potential impacts of increased competition on productivity growth in Canada. This, too, is something that has the potential to increase our standard of living over a longer period of time.
Thank you. I'd be happy to take your questions at a later point.
Good morning and thank you, Mr. Chair.
I'm Sujata Dey, trade campaigner, national, Council of Canadians.
I will be speaking to you in English.
I am here with Steven Shrybman, one of our board members, who practises international trade and public interest law. He's a partner at Goldblatt Partners LLP.
The Council of Canadians is the largest independent citizen group in Canada, with over 100,000 members. Our group has been on the forefront of a citizens' approach to trade agreements since 1985, with the Canada-United States Free Trade Agreement.
We have many concerns about the TPP. We feel that it's not a trade pact, but a pact that helps set the rules for investors and actually has less to do with trade. We have not had a serious independent economic analysis of both the TPP and CETA. We have been asking, along with the Trade Justice Network, that the parliamentary budget officer analyze both agreements independently. Evidence from several economists right now says that despite a flurry of trade agreements, our actual trade deficit has increased. Our trade remains very concentrated in the United States, amounting to 75% of our trade.
Recently, the manufacturers' association said that, in their view, despite a flurry of trade agreements, the only trade agreement we've actually benefited from was the NAFTA. Obviously, we think differently. In fact, research done by Jim Stanford indicates that we have actually had more growth in exports with countries that we don't have free trade agreements with.
Much of the actual TPP agreement—24 of the 30 chapters—has nothing to do with traditional trade barriers. They are rules, and those that were not decided by our democracies. They came through a process that parliamentarians that did not have access to, but to which 600 U.S. lobbyists did. In particular, we also worry about how the TPP endangers the robustness of our democracies and our ability to set public policy.
ISDS mechanisms would make us vulnerable to suits from additional countries in the TPP. We are already the most-sued developed country in the world. We've lost $200 million in suits. This does put a public chill on your ability as legislators to set policy. In fact, the UN rapporteurs on human rights and indigenous peoples have come out against ISDS and the TPP.
However, it's not just the ISDS issue. It's also certification. Under the U.S. fast-track law, the U.S. gets to determine and even help write the implementing laws of other countries before their own obligations go into effect. The U.S. has done this in the past, in free trade agreements with Australia and with Peru. There are many politicians who have spoken about this, including former Japanese Prime Minister Yukio Hatoyama and other parliamentarians from TPP countries, mostly the non-U.S. TPP countries.
There's not a lot of time. We'll be presenting a brief as well, but we feel there's a need for an open debate and serious analysis, not just on the economics but on the political dimensions and the human rights and environmental aspects of this deal. We have just signed a declaration on indigenous rights. We've also signed a declaration at the Paris climate talks. Those are very important things to protect, and it's important to make sure that we can continue to protect them with the TPP. We need consultation not just on the TPP, but on CETA as well, where there seems to be no consultation.
This government is not the previous one, and it can and should act differently. Thank you.
Steven Shrybman now will present as well.
In the minute that I have, I will add a few comments to the ones you've already heard about chapter 12, and about chapter 19, the labour chapter of the TPP.
On chapter 12, just to reinforce the points you have already heard from a previous speaker, the title of the chapter, “Temporary Entry for Business Persons”, is a misnomer, to be charitable about it, because the people covered by the chapter are any nationals of any country with respect to which we have a reciprocal agreement under this chapter. It's open-ended in terms of the character of the people who may enter Canada under the rules of this chapter.
“Temporary” is also an interesting way to describe their entry into Canada, because depending on which category they fall into, they may be entitled to come here for three years, and that may period may be extended. They may be entitled to bring their spouses with them. Their spouses need have no particular qualification whatsoever to work in Canada, but they are entitled to look for work here and to work here while their partners are here.
The essential features of the chapter remove Canada's ability to regulate the number of foreign workers who enter the country, because Canada is no longer entitled to apply its labour market impact assessment process. That's a fundamental erosion of our regulatory capacity to control labour markets. It removes labour certification tests as a precondition to gaining entry to the country and receiving a permit to work here. Those are fundamentally problematic features of a regime that will now require Canadian workers, regardless of whether they're employed or not, to compete with foreign workers for jobs in this country.
The other chapter of the agreement that I want to briefly comment on is chapter 19, which deals with labour rights. At first look or at first blush, it looks like a progressive initiative to begin to build into an international trade agreement some protection for core labour standards. Under the agreement, the countries are obliged to put in place statutes and regulations that give effect to certain core labour standards as set out under the ILO declaration. These concern the right to organize, to bargain collectively, rules about child labour, rules about slave labour. That's all to the good.
The problem is that the declaration of the ILO sets out—
I'd like to dig a little bit further into chapter 19, because last week we had the IBEW, the building trades, here. They expressed to us the view that for previous trade deals, they wouldn't even have been sitting here, because this has never been part of a trade negotiation.
We know there are many abuses of the TFW program and that the program is extremely broken. As a matter of fact, there's another committee studying it in Parliament right now. By all accounts, in this chapter we're looking at the TFW program with absolutely no rules around it, with what I like to call the “roof blown off”. We know that 58,000 jobs will be lost in Canada under the TPP. That doesn't include the influx that we would have due to the labour mobility chapter.
I'd like to offer my time to Mr. Shrybman.
We received a report from you earlier this year, through the Alberta Federation of Labour, which really opened our eyes to the labour mobility chapter. So I'd like to give you some space to continue what you were saying around chapters 12 and 19, if you can elaborate on that.
I didn't finish my thought on chapter 19, so let me begin there.
I was saying that there's a modest step forward that one might take from the requirements of chapter 19, namely, that the parties put in place rules that give effect to the ILO declaration. The problem is knowing what would actually be required to give effect to those broad principles that are set out in the declaration. One has to have reference to the conventions, which actually put meat on the bones of protection for workers so they can organize and bargain collectively and they don't have to compete with child or prison labour.
The parties rejected including any reference to the convention in the text, so while the broad principles are there, one has no obligation under the TPP to give them effect by putting in place actual rules that will make them effective and enforceable.
There's also a requirement that countries adopt provisions concerning conditions of the work: minimum wage, unemployment, those matters. But there's no floor, so a country may have to have a minimum wage law, but it may not provide any meaningful standard of living, even within the frame of that particular jurisdiction.
What we have in the labour chapter is the promise of some protection for workers and for their core labour rights, so they can be guaranteed some minimum conditions of work, but there's none of the meat that you would need on those bones to make the protections enforceable and real and material. It's a step forward, but it's more of a claim to concern than it is a practical one that could actually result in meaningful enforcement.
In terms of labour mobility, I think the removal of any requirement that someone seeking to bring foreign workers into the country first establish that there aren't Canadian workers ready, willing, and able to take those jobs, is outrageous in my view. Under free trade, workers have to compete with workers in other jurisdictions that have no labour protection and aren't paid anything resembling a reasonable wage. Now they're going to have to compete with foreign workers in jobs here in Canada, subject to the same corrosive erosion of their claim to fair employment at a decent wage.
There are a couple of things.
First, I'll be clear. We're not opposed to foreign workers coming to Canada. For example, a couple of years ago, we brought in 150 crane operators from Chicago through the TFW program to work in Alberta—legitimate system follow-through. In a time of need, we'd understand there's a need for foreign workers, but for the next little while, I don't think there's going to be much need for foreign workers, as we're facing more and more unemployment on the construction side, unfortunately, with the price of oil dropping.
The one thing they need to fix is the criteria for people to come in. For example, they have a category where you need a technical degree, post-secondary education, and four years of paid work. Mexican workers—no offence to Mexican workers—don't have the qualifications to meet the standards in Canada. I don't believe a training college or university in Mexico will have the skills or whereabouts to provide enough training to make these people qualified to meet the standards of Ontario.
One thing I would like to see—and we've been talking to the officials about—is a demonstration of skills. Perhaps if a person wants to come to work in Canada on a trade, they need to show that they can operate a crane that will meet Ontario standards. We could do it in Mexico. We could do it in Ontario.
The Ontario College of Trades does it right now. They have a long list of what you need to do. You need to pass the exam. You need to show that you understand hand signals and then you must do a demonstration of skills. If a person shows that and is qualified to work in Ontario, bring that person in. The more the merrier if they meet the qualifications.
Thank you for the opportunity.
We strongly disagree with any assessment or statement made about the impact of stronger intellectual property protection on the prices of medicines. It's been amply demonstrated. We will provide written testimony where we highlight data that has been produced over the last 15 years showing how intellectual property protections that go beyond international agreements, like the TRIPS agreement, have a negative impact on the prices of medicines.
There is ample evidence of the impact of those provisions on the Canadian health system. We have more evidence from the United States health system. The U.S. system is currently paying the highest prices in the world for medicines and new technologies. This is because it provides longer periods of monopoly protection for pharmaceutical companies.
We will be happy to provide data explaining that link between intellectual property and high charges. This has also been heavily demonstrated by the World Health Organization, the World Intellectual Property Organization, and the World Trade Organization. The three organizations with a mandate on intellectual property and health have all released different studies and analyses that show that link. We will be happy to provide that information.
When you look at the impact of the TPP in Canada, it is important to consider not only the national interests of Canada from the impact of the TPP on the Canadian health system, but also across the world. We will provide data that shows that it's not in the national interest of Canada to promote a trade agreement that will do little for innovation and do more to deepen the rising crisis of high prices around the world. This is not only an issue for developing countries, but a global issue.
I'm looking for a short answer here, because I want to go to Mr. Perrault as well.
Mr. Nickerson and Ms. Sanjuan, thank you for what you're doing. It's an incredible mission that you do.
I want to lay out a suggestion. I don't want you to really elaborate on too much of an answer, but just on this position. If pharmaceuticals are allowed to make a profit, doesn't it stand to reason that they would have more money to invest, and aren't some of the discoveries...? I'm going to take something like hepatitis C, which in the past would result in a liver transplant, but in terms of finding a drug that can take away, isn't that an argument as well that if we impede too much...? I understand that you're not in the business of profit. You're in the business of service. Doesn't that possibility exist as well?
Could I have a really short answer?
Certainly, the majority of Canadian farmers at large are fully dependent on the export market and it really is what drives the business. We're a small country, but we have tremendous potential to provide really high-end products to the global marketplace.
We've seen on the pork side what happens when we lose access for whatever reason and we scramble to find our way again with the products that we have. It's one of the reasons that it's so very important for us to be involved in this agreement. If we get backed out of a market and we have no opportunity to go anywhere else, where do we go with that product? You can't store it. You can't pile it. You can't turn it off. When we shut off the infrastructure, the infrastructure is gone, it doesn't come back. For these reasons, it's super important for us.
Moreover, if we think about the rural economy and jobs in rural communities and if we do want folks to be able to live and make a living in rural Canada, this is what they're going to do it on. It's going to be on agriculture and our ability to sell into the global marketplace.
Thank you for the opportunity to further elaborate.
There's global recognition right now that the current research and development system that's on the capacity to charge high prices to recover research and development costs is failing in many different ways. I was at the World Health Assembly two weeks ago, where Canada and all the member states agreed to a variety of resolutions that tried to address these issues.
First, the current innovation system does not address many unmet medical needs. Here in New York today, we're also meeting about the failure of the current innovation system to address unmet medical needs, specifically antibiotic resistance. There's little innovation going on with regard to antibiotic resistance, because a system that promotes research and development based on monopolies and high prices also promotes overuse and consumption problems with antibiotics. Of course, there are all the challenges with affordability of new medical tools. Innovation that is unaffordable is meaningless.
To further elaborate on the hepatitis C example, I think it is a perfect example. Jeffrey Sachs estimates that the private investment on research and development on boceprevir, the first cure for hepatitis C treatment, was $300 million. That cost, or that investment on research and development, has been recovered 34 times in just the first year of sales of Sofosbuvir. That company, Gilead, has made more than $10 billion in just the first year alone in selling Sofosbuvir. The CEO of Gilead has just made, in compensation, in the first year the product was on the market, more than $600 million, so double the investment on research and development.
So the TPP in a way is a missed opportunity to address the failings of the current R and D system, and it contradicts the efforts being promoted both at the World Health Assembly and here in New York, including a UN high-level panel on access to medicine that has been launched by Secretary General Ban Ki-Moon, which has currently been trying to find solutions to break that link between research and development costs and investments and high prices of medicines. We would be happy to provide further evidence.
Yes, without any question. I think you have to look at it from three different perspectives. One is the perspective of our not being in the deal and the limits on economic opportunity that would flow from that. There are different perspectives on this, but given that we think the deal is positive, not being in the deal would be a negative. It would shut us out from opportunities that we'd otherwise be able to capitalize on, either as a bank or an economy, and the financial system would participate in that, obviously.
The second is the opportunities that it provides in the short run, in the sense that we are opening markets. Canadian firms will benefit from that and, obviously, the financial industry will be banking the firms that benefit from that, so there is an advantage there.
I think the third and longer-term aspect, which is possibly even more beneficial, is competitive pressure. There's very well established literature on this, that opening markets increases competitive pressure, that competitive pressure increases productivity, and that productivity is the basis upon which the standard of living increases. Over a longer period of time, as we open markets, develop, and become more competitive, our standard of living increases. That's great for all Canadians and, obviously, it's great for the financial industry as well, because we bank Canadians.
I would look at it from those three different perspectives.
We've actually had a lot of our people—we have members all over the country—who have been quite disappointed to this point with the consultation process, particularly with the minister. Your initial consultations were meeting with stakeholders, and these were called open consultations, but we were often receiving press releases to show up at them just 24 hours before they were held.
This committee has done a better process of consultation, in the sense that we have a variety of opinions here and you are actually going across the country. We applaud you on that. However, to the same point, they are not very well advertised. Often there are people who have frustrations because they're not necessarily getting a chance to speak. Also, we think that a consultation process isn't just about releasing a 6,000-page document and saying, “Okay, here you go. Analyze it as you wish.” In other countries, for example in Australia, they have a productivity commissioner who has actually done an analysis.
When I talk about analysis, I mean independent analysis, not analysis that's going to try to promote the agreement. It's to give Canadians the pros, the cons, and to let them have the information to decide. Also, for us, it's very important that the government has made commitments to first nations people. They're often on the front lines of resources. They could also be in situations where ISDS cases would affect them. For example, Malaysia has a company called Petronas on Lelu Island. A comprehensive consultation is also breaking it down, making sure that you do not have just the economic interests considered, but also how it affects human rights, how it affects broader society, and then having the kind of consultation that people can go with.
We're stuck in a situation where we negotiated an agreement during the last federal election without even all of the parliamentarians around the table. I think there is a great opportunity to address that.