FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, March 24, 1999

• 0902

[Translation]

The Chairman (Mr. Bill Graham (Toronto-Centre—Rosedale, Lib.)): Colleagues, I propose that contrary to our habit we start on time, but before we begin, I would like to share something with you.

This morning, some of us had a breakfast meeting with representatives from the Canadian Environment Industry Association. A trade show is being held here in Montreal today and tomorrow. If you agree, I suggest that we adjourn tomorrow at around 11:30 a.m. or 11:45, that we go to see the trade show and that we come back here for the afternoon. Mr. Bachand, Ms. Folco, Mr. Patry and I are interested in going.

[English]

Mr. Obhrai, I don't know whether you're interested or not, but we went to breakfast this morning with people from the trade show. I think the trade show would be interesting, so I propose tomorrow between 11.45 a.m. and 1.30 p.m. we go down.

[Translation]

We even have passes.

It is always a privilege for us to hear from our former colleague Warren Allmand, who'll be talking this morning about the relationship between human rights and international trade.

Mr. Allmand.

[English]

Mr. Warren Allmand (President, International Centre for Human Rights and Democratic Development): Thank you very much, Mr. Chairman and members of the committee. I want to start by thanking you for the opportunity to appear on this very important matter.

I have with me this morning Diana Bronson, who is the coordinator of our globalization and human rights program. We also have Carole Samdup, who will join us. She is the assistant coordinator of that program. I also have with me Craig Forcese, who is professor of law at the University of Ottawa and was with CLIHR, Canadian Lawyers for International Human Rights. He's done a lot of work in commerce and conscience, wrote those books on commerce and conscience, and helped us with the brief. As a matter of fact, the three people with me were all instrumental in preparing this brief and have worked on these issues for some time.

• 0905

Our International Centre for Human Rights and Democratic Development was established, as you know, by an act of Parliament in 1988, following a unanimous recommendation of your committee. Our mandate is to defend and promote all those rights set out in the international bill of rights, which includes the International Covenant on Economic, Social and Cultural Rights. Consequently, our mandate is to defend economic and social rights, not just civil and political rights.

As a result of this mandate, from the very beginning our centre has opposed trade agreements and trade arrangements that have led to the suppression, marginalization or elimination of human rights. We're not opposed to global trade, but we believe global trade, like national trade, must be subject to human rights standards. For international trade, these standards are set out in the international treaties and ratified by Canada and many other countries.

Globalized trade without such restraints, as set out in the human rights treaties, will result in pressures to lower taxes and lower social and economic programs to the lowest common denominator. The result will be a widening gap between rich and poor, with the rich getting richer and the poor getting poorer, all this in the context of greater gross domestic product. As a matter of fact, in Canada and many western countries the gross domestic product has been increasing, but as a result of globalized trade, in our view, the distribution of that bigger pie is getting more inequitable.

In Canada, all laws, including trade laws, are subject to the Charter of Rights and Freedoms. The charter prevails over such federal-provincial trade laws as the Bank Act, securities law, sale of goods acts, law of contracts, the Canada Shipping Act, the Bills of Exchange Act—and I could go on. In other words, all our trade laws within this country are subject to the Charter of Rights and Freedoms. Why shouldn't, therefore, international trade treaties be subject to the UN Charter, the Universal Declaration of Human Rights, and the covenants I referred to? We say they should.

I'll briefly quote from the official policy of the Canadian government in its foreign policy statement of 1995, Canada in the World, on pages 34 and 35:

A priority field of international concern and action for Canadians has been and remains that of human rights. The Government regards respect for human rights not only as a fundamental value, but also as a crucial element in the development of stable, democratic and prosperous societies at peace with each other.

Then on the next page it says:

...we will make effective use of all of the influence that our economic, trading and development assistance relationships give us to promote respect for human rights.

That's Canada's policy, but I would submit that so far Canada has not followed through on that foreign policy statement with respect to international trade, and I believe now is the time to correct that behaviour. It's not a question of choosing between human rights and trade, rather we must encourage complementarities between the two.

Today we have distributed a very complete brief, the result of a lot of research, setting out in detail the evidence for our arguments and recommendations for putting them in force. I will not read the brief because it's a long, detailed brief and we don't have enough time, so I will only refer to some of its principal points. In a nutshell, we argue that the UN Charter and international human rights law has primacy over all international trade agreements, including the WTO, and this should be recognized in a revised WTO.

I would again like to congratulate the standing committee on holding these hearings, and in particular for including issues of civil society participation, human rights, and labour rights as part of your terms of reference.

• 0910

It was not long ago that these issues were considered completely separate from trade, to be discussed only by select representatives of the business community behind closed doors with technical experts. While human rights have yet to become front and centre in trade discussions, they are undeniably recognized today as a key part of the picture. It's therefore our responsibility and yours, as legislators, to ensure that the new rules that are put into place are compatible with existing international human rights standards.

Despite a twelvefold increase in trade since the end of World War II, the poor continue to grow poorer and the rich continue to grow richer. According to the UNDP, the United Nations Development Program, 20% of the richest population consumes 82.7% of the world's goods, and the poorest 20% gets 1.4%. It's no surprise that over a billion people worldwide live in absolute abject poverty. Whereas in 1950 the gap between the richest and poorest nations was 30 to 1, by 1980 it had grown to 60 to 1. So this is a human rights issue.

It's obvious we can produce more, consume more, trade more, invest more, and have more money whizzing around the globe than ever before, but if it is not accompanied by reduced hunger, greater dignity for workers, and a fuller enjoyment of human rights by a greater number of people, then we have mistaken the means for the end.

Unfortunately, the World Trade Organization is attractive to people interested in the social dimension of trade for one reason: it has teeth. It's an institution equipped to impose sanctions on violators of its rules. This is what's missing in the international system of human rights protection. In international human rights we don't have the appropriate remedies for victims of human rights abuses. The International Covenant on Economic, Social and Cultural Rights still does not have an optional protocol, and all too often these rights are accorded a lower priority than civil and political rights, despite the formal commitment to indivisibility of all human rights.

There is an extraordinary opportunity in this new round of discussions on the WTO to reverse the trend of the last decade, where globalization became an end in itself and its human cost was ignored. We need to clarify exactly what constitutes human rights responsible trade.

In our brief, we propose a series of recommendations that offer some initial steps to make trade law more human rights sensitive. Our starting point, set out in part one, is that human rights law has primacy over all other conventional international law regimes. We argue that the Universal Declaration of Human Rights has become what some nations wished it to be in 1948: the universally accepted interpretation and definition of the human rights left undefined by the Charter of the United Nations.

For its part, the Government of Canada agrees that the declaration is customary international law and an authoritative interpretation of the human rights obligations contained in the UN Charter. In this respect, the principal human rights provisions in the UN Charter are in article 55. By this article, the UN undertakes to promote higher standards of living, full employment, and conditions of economic and social progress and development, as well as universal respect and observance of human rights and fundamental freedoms.

Under article 56 of the UN Charter, the member states pledge themselves to take joint and separate action in cooperation with the UN to reach this objective to respect human rights. We go on to argue that the universal declaration completes and defines what is meant in the charter by that sort of respect for human rights.

There can be no doubt the UN Charter takes precedence over all other international agreements. Article 103 of the UN Charter specifies that in the event of conflict between the obligations of the members of the United Nations under the present charter and their obligations under any other international agreement, their obligations under the present charter shall prevail.

• 0915

I will just briefly refer to our recommendations without reading the rest of the brief.

The first recommendation is that where there are competing interpretations of provisions in the WTO/GATT, the Government of Canada should seek the adoption of the interpretation that recognizes the primacy of international human rights law.

Recommendation 2—and I'm summarizing here—is that the Canadian government in any future trade negotiations should recognize the primacy of the UN's Universal Declaration of Human Rights, and so on.

Recommendation 3 states that in order to ensure that voluntary corporate human rights codes encouraged by the Canadian government are not subject to WTO discipline, the government should advocate the view that such codes are not technical barriers to trade.

Recommendation 4 is that if, because of government participation in their development and implementation, these codes of conduct for businesses are standards within the meaning of the Agreement on Technical Barriers to Trade, the Canadian government should guarantee national treatment by requiring both domestic and international compliance with the code.

Recommendation 6 states that the Canadian government should support an interpretation of the agreement on government procurement that recognizes the primacy of human rights laws.

I'll skip down now to recommendation 9. The Canadian government should oppose comprehensive negotiations on investment being moved to the WTO until sufficient institutional safeguards are in place to ensure the primacy of international human rights law.

Recommendation 10 is that the Canadian government should support the establishment of a joint ILO-WTO working group on the relationship between trade and trade-related international human rights standards, similar to the WTO working groups on the relationship between trade and investment and on the interaction between trade and competition policies.

Recommendation 11 states that the Canadian government should actively promote the development of a WTO social clause.

Recommendation 12 is that, at a bare minimum, the Canadian government should ensure that the WTO grants observer status to the ILO and other specialized UN human rights agencies prior to the Seattle meeting in order that these agencies may attend the third ministerial and express their concerns and share their expertise.

Recommendation 13 states that civil society groups should be permitted the opportunity to present their views on a regular basis to the WTO committees, and the WTO should make provision to ensure that NGOs have access to proceedings and official delegates during ministerial and other high-level meetings.

The final one, recommendation 14, is that the Canadian government should advocate transparency in the dispute settlement process and should push both for open dispute settlement hearings and a mechanism allowing interested third parties to make submissions. Again, within Canada, we would never tolerate that trade hearings or those types of very important hearings for so many Canadians, so many people around the world, would take place in camera, behind closed doors.

Mr. Chairman, in conclusion, because I want to leave time for your questions, I would urge the committee members to read the full brief.

Now, we have also prepared a technical annex. It's on the question of the primacy of human rights and international law. In this technical annex we refer to a lot of authorities that have taken the positions I have enunciated here this morning, that is, with respect to the primacy of the UN Charter and the universal declaration over ordinary trade treaties and over ordinary treaties of all kinds. I would recommend very strongly that you read this.

We also cite Canadian ministers and so on who have recognized the primacy of the UN Charter and the covenants.

So we have the brief and we have the technical annex. I apologize that the technical annex was just finished yesterday. It's not in both languages. It's still being revised, and we will put it in two languages and forward it to the committee before you finish your hearings.

In conclusion, I simply want to repeat that reason and logic, and the traditions and laws of Canada, everything we do within Canada, demand that we follow up internationally and that we make sure international human rights treaties take precedence over trade treaties.

Thank you, Mr. Chairman.

• 0920

The Chairman: Thank you very much, Mr. Allmand. Thank you for your helpful brief. We will have an opportunity to read it, and of course our researchers will have it to enable them to help us prepare our report. I'm glad to see that in the technical annex people are still referring to the Barcelona Traction case, which was the first case I worked on as a young lawyer, so it shows how old I am, if not how crazy life is when these things come back at you.

Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Ref.): Thank you sir, for coming and giving us your brief. I didn't have the opportunity to read it thoroughly.

In general, I don't think anybody will argue with what you're saying. Human rights have to be upheld, and I think human rights must play a very important role in all trade negotiations. In another aspect, an economic aspect for example, child labour can be viewed as a subsidization to a degree, although it violates human rights. So I think you brought that point out very well and I concur with you on that aspect.

My question to you would be that you're asking for supremacy of human rights over trade negotiations, and you have mentioned the fact that the gap is increasing between the developed world and developing countries. Why would it not be that in order for developing countries to move ahead...? I just came from a state visit to Africa, where I saw that a tremendous amount of work needs to be done: the civil society has not been established, a lot of laws need to be established... [Editor's Note: Inaudible] ...of business does not exist, and human rights do not exist. So it is going to be a long process.

Why would it not be possible to go step by step, ensuring that basic human rights are upheld while investment flows into the country? Only when investment flows into the country can one expect the living standards of those countries to rise, especially for the poor. Africa is a prime example where, due to socialism in the past and the collapse of socialism, I have seen the devastating effect on the economy. The economies of those countries need a tremendous amount of infusion of capital. To come and say, “Here we have these human rights, and you have to abide by them”, I would probably venture to say that we are curtailing to some degree investment going into these countries until they are in a position to set that up.

I would definitely agree with you that Canada has to encourage human rights. Would that not be the way to go, to allow these countries to slowly build a civil society and the human rights thing over there, but at the same time not really have a big stick over their heads?

Mr. Warren Allmand: We submit very strongly that you can have trade and human rights at the same time. As a matter of fact, we would argue that with respect for human rights, trade will flourish even more. Within our own country, as I point out, all laws, all trade laws, whether it's the Bank Act, the sale of goods acts, lease and hire, or the Bills of Exchange Act, are subject to the charter. We in Canada can't carry on trade by abusing human rights.

Trade traditionally has flourished, if you look at Europe or any of the countries where the rule of law is respected, where human rights are respected. In other words, we're not saying to hold back trade and investment, hold back the development of these countries. We're saying that's good, you should have trade, you should have investment. But respect human rights at the same time, just as we have to in Canada.

I'll call on Craig and Diana to say a word about that. Craig, would you have anything to add to that question? Diana?

Ms. Diana Bronson (Coordinator, Globalization and Human Rights Programme, International Centre for Human Rights and Democratic Development): I think it has basically been covered, but the point is that there are international rules governing international human rights standards and there are international rules governing trade. We want those to concur rather than potentially contradict each other.

Mr. Deepak Obhrai: Mr. Chairman.

The Chairman: Yes, go ahead.

Mr. Deepak Obhrai: I agree. I'm not disagreeing with what you're saying and I think that would be a great situation. If you can really do that, it's fine, I agree with you. There is no dispute on that fact. But I'm talking about practicality. I'm talking about having witnessed these things myself. I'm talking about practicality in countries where there are no legal systems yet in place, no civil society and all these things. They need to build those things. I'm saying that's the ultimate objective, we should have what you say, but use a go-slow approach so that while these countries are building those structures they are also building their economic structure. They need the infusion of capital very badly, and it in turn will help promote human rights in the longer term.

• 0925

Mr. Warren Allmand: Again, we have no objection to the infusion of capital or investment. What we're asking for is that in the negotiations of the new agreements for the WTO there be recognition that human rights has a role and a primacy that should be recognized.

We understand that once you set international human rights standards for trade, for labour, and so on, the implementation is a bit difficult. But we think an important first step is to do what we've recommended, and that is tie it right into the agreements, either through social causes or a recognition of the primacy of human rights law. We know the implementation will be uneven. It's been uneven in our own country. We have human rights laws and we have the charter here, but violations and lack of implementation are brought to our attention from week to week.

The first step is to recognize what we believe is now the case but has never been tested. We believe there's a solid legal argument to be made right now that the charter and the universal declaration take precedence over international trade agreements, as well as other international treaties. Human rights take precedence, but that fact is not recognized directly or explicitly. We want it recognized directly and explicitly, and we realize that the implementation of that in different countries will take different periods of time. But that's no reason and no argument against the full recognition that we must act on this as soon as possible.

Mr. Deepak Obhrai: Thank you.

Mr. Craig Forcese (Legal Consultant, International Centre for Human Rights and Democratic Development): Maybe I could just add to that. I think your questioning goes to the issue of whether you need a measure of development before you can have recognition and support of human rights. I think most of the empirical evidence on that suggests that you need both development and recognition of the human rights standards simultaneously. The simple maximization of economic gain and economic growth through trade integrations does not lead naturally, necessarily and automatically to improvements in human rights. A more balanced, nuanced approach that recognizes human rights at the same time as maximizing economic growth is the one that's most sustainable in the long run.

Mr. Deepak Obhrai: Yes, so that's the question. A go-slow approach is needed because the other countries don't have the capital to go with both sides of it yet.

Mr. Craig Forcese: I think the objection we have to the trading regime as it exists right now is that it's all about maximizing economic growth, about economic liberalization. It does not have that balanced, nuanced approach that we think is necessary for sustainable growth, namely a recognition that human rights have to improve simultaneously with economic growth.

Mr. Deepak Obhrai: Thank you.

[Translation]

The Chairman: Mr. Sauvageau.

Mr. Benoît Sauvageau (Repentigny, BQ): Good morning Mr. Allmand, ladies and gentlemen.

Mr. Allmand, I have three questions for you. Should I ask them one at a time, or all at once and have you answer at the end?

Mr. Warren Allmand: One at a time.

Mr. Benoît Sauvageau: Fine.

We signed a free trade agreement with the United States, and later on, in 1993, an agreement with Mexico. The party that took power after that stated that the agreements lacked environmental and social clauses. Do you think that the parallel agreement on social issues should be the basis for negotiating other free trade agreements, as was the case with Chile and as we negotiate the Free Trade Area of the Americas? Is that enough? That is my first question.

My second question deals with your third recommendation that contains an expression that bothers me a bit. You say:

In order to ensure that voluntary corporate human rights codes...

This is a statement.

... encouraged by the Canadian Government are not subjected to WTO discipline...

We tried to submit a study on voluntary human rights codes as part of international agreements to the Standing Committee on Foreign Affairs, but it was refused. We were not even able to discuss the issue of voluntary codes. You know how parliamentary committees work. I am surprised to hear you say "encouraged by the Canadian Government." Could you clarify what you meant?

• 0930

In recommendations 10 and 11 you propose that the Canadian Government support the establishment of a Joint ILO/WTO Working Group. If I remember correctly, at the first ministerial meeting in Singapore, we attempted to include provisions on creating such a working group in the final ministerial statement. Those efforts were in vain. I seem to recall that developing countries were opposed to that idea. Should we continue to push in that direction given that the only allusion we succeeded in incorporating into the final statement was that the five basic ILO conditions must be complied with? The proposal to create a joint working group was rejected.

Those are my three questions.

Mr. Warren Allmand: I was not at the International Centre for Human Rights and Democratic Development when NAFTA was signed, but I believe that my colleague Diana Bronson was there at the time. Our centre opposed NAFTA's provisions because human rights were not well protected. We adopted the same position on international treaties dealing with investment and trade. We believe that these agreements must contain clauses on workers' rights and environmental law. I could ask Diana to provide you with more information.

Diana could undoubtedly answer your question with respect to our third recommendation on codes of conduct for the WTO. According to the information that we have, we should strongly encourage a change in the rules and ensure that voluntary human rights codes do not become technical barriers to trade or stumbling blocks in these treaties.

With respect to recommendations 10 and 11, we are working very closely with unions and social groups in other countries. We know that the international labour movement supports our recommendation no. 10. Recommendation 11 deals with the development of a WTO social clause. Although some people in Third World countries objected to such clauses, we should be able to develop clauses that will meet their needs and correspond to their ambitions.

I will now turn the floor over to Diana Bronson.

[English]

with respect to the NAFTA decisions on that.

[Translation]

Ms. Diana Bronson: I can make some brief comments on your three questions.

With respect to the parallel agreement, when the NAFTA negotiations were under way, we formulated recommendations designed to protect human rights. We considered the parallel agreement unsatisfactory for a number of reasons. Namely, the measures designed to protect freedom of association and the right to collective bargaining were very weak compared to the occupational health and safety measures included in the agreement. We thought that the agreement could have gone a lot further, although we were aware that doing so could create a precedent in other international trade treaties between developed countries and developing countries as to whether these issues should be included. That wasn't a given in 1992-93. So it was important.

There are also some important issues with respect to the procedures that will be used to implement the agreement, including transparency and the access of civil society groups. We have noted that unions in Canada, Quebec, the United States and Mexico are already starting to use the agreement, whereas four or five years ago, they were not interested in it at all.

• 0935

In regard to your second question on codes of conduct, I think you will find the answer to it in the brief we presented.

Mr. Benoît Sauvageau: On page 11?

Ms. Diana Bronson: Throughout the discussion in fact.

Mr. Benoît Sauvageau: OK.

Ms. Diana Bronson: There was a conference on codes of conduct a few weeks ago. There are more and more negotiations in Europe and the United States which include involvement by the private sector, civil society groups, unions, NGOs, and in some cases, governments. Governments are increasingly involved in initiatives like the Ethical Trading Initiative in England or the White House Task Force to eliminate Sweatshop Abuses in the United States, because it is clear that they are afraid of not complying with the WTO obligations. Some potential levers have also been eliminated, including the Export Development Corporation or CIDA in Canada, for example. They are tools available to the Canadian government to encourage businesses to be socially responsible. If we no longer have recourse to such tools because of WTO regulations, we will be deprived of means that are a bit more ethical as we move towards globalization.

Mr. Benoît Sauvageau: Do you think that the Canadian government is encouraging these voluntary codes?

Ms. Diana Bronson: Ministers Axworthy and Marchi supported the code of conduct developed by Occidental Petroleum and others last year. They are preparing to set up a working group to study the issue of sweatshops in the textile industry. Moreover, Industry Canada has published a document that aims to promote codes of conduct.

It is true that during the Singapore negotiations in 1996, the idea of creating a working group was rejected. That was the first round of negotiations where the issue was raised, and negotiations are ongoing. Indonesia, Malaysia, Singapore, India and Pakistan, to a lesser extent, expressed their opposition. There are legitimate reasons for those countries to continue opposing proposals of the same nature during the next round of negotiations. There is no absolute consensus among NGOs or unions in those countries. I think a clear-cut position will be required.

However, the Asian crisis we have just gone through and the drop in the standard of living in countries like Indonesia have put deregulation into question, and these issues are being reviewed. Moreover, union representatives in these countries support such principles.

Mr. Benoît Sauvageau: Thank you.

The Chairman: Mr. Bachand.

Mr. André Bachand (Richmond—Athabaska, PC): Unfortunately, we did not have time to read all of your brief. However, since the committee began its study of the WTO, we have heard a lot about primacy of one kind of law over another. To date, we have heard about the primacy of the State, human rights, and the environment. You will agree that that is a lot of talk about primacy before we even get around to negotiating anything.

I would like you to clarify your recommendation 9 which states that the Canadian Government should oppose comprehensive negotiations on investment as long as the primacy of human rights and the State have not been complied with.

I would also like you to give us a bit more information in response to the first question asked this morning, with respect to what Canada is currently doing at the international level. You are well aware that Canada trades with countries that do not do a good job at all of respecting human rights and the environment, among other things. Since the next round of WTO negotiations might last three to five years, what should Canada do in the meantime? Should we stop trading with these countries, or should we continue? Should we deal with them in a new way? It will take three to five years for the new WTO rules to come into force. What should we do in the meantime?

• 0940

Mr. Warren Allmand: As we told the committee a few weeks ago, we have also requested to appear on the FTAA, regarding trade in the Americas. There are a lot of other trading relationships currently in place, and we want the Canadian Government to support the development of codes of conduct, etc.. We must pursue our international trade and our investment program, but at the same time we must advance the human rights agenda in all international fora in accordance with recommendation 9.

With respect to the MAI, as you know, we recommended that the negotiations take place at the WTO as opposed to the OECD, where they have been taking place up until now. We want this matter to be raised until an agreement can be reached on a human rights scheme for international trade and especially investments. As you know, trade has existed for centuries. A year of negotiations is not a significant barrier to trade.

Mr. André Bachand: So, Mr. Allmand, you are not condemning the Canadian Government for trading with countries that don't have a good track record with respect to human rights and the environment. You are not condemning the country for doing that.

Mr. Warren Allmand: It depends.... For example, Canada now has a program to boycott Burma, to a certain extent, and other countries. We believe that we can advance both international trade and human rights. Unfortunately, in the past, there were only programs to advance trade; human rights were completely ignored.

Mr. André Bachand: Has your organization ever criticized Canada?

Mr. Warren Allmand: Yes indeed.

Mr. André Bachand: Then you have a list of countries with which Canada should stop trading or with which it should revise its trade practices.

Mr. Warren Allmand: Since I became president, we have criticized the Government of Canada for changing its policy on China and Indonesia. On the other hand, we have supported its practices with regard to Nigeria and Burma.

[English]

Diana, can you add to that?

[Translation]

Ms. Diana Bronson: I would just like to add that in many magazine articles, meetings, consultations, presentations and publications, we have suggested measures which could be taken to encourage more responsible trade practices on the part of initiatives such as Team Canada, private business, federal bodies and multilateral institutions. We are not the only ones to do so. These measures do exist. We can give you a list of 40 or 50 things which can be done in various countries. Most of these measures have not yet been used.

Mr. André Bachand: That is what I was going to say.

[English]

Mr. Warren Allmand: For example, Canada stopped sponsoring the resolution of the UN Human Rights Commission that condemned China for its human rights violations. Instead of co-sponsoring that resolution, Canada said it was going to replace it with a bilateral arrangement on human rights with China. We said we didn't object to the bilateral agreement, but Canada should not have stopped co-sponsoring the resolution at the UN until it saw progress on the bilateral agreement. Our organization still takes that position.

It's interesting to note that Denmark and a few other countries continued to co-sponsor the resolution, and their trade with China has still increased. China tried to bully countries into backing down on the resolution at the UN. We thought Canada should have continued with that resolution, but it didn't. It now has the bilateral agreement.

• 0945

Until China improves its situation, we think Canada could do both. If China doesn't like both, that's too bad, but we feel we could have a bilateral agreement on how to improve human rights, as well as a resolution condemning human rights abuses when they take place. It just took place again in China, when the government put people in prison simply for organizing a political party or a political movement.

[Translation]

Mr. André Bachand: I would like to end by making an observation. Since Team Canada went to China, Canada's exports to China have dropped off dramatically whereas China's exports to Canada have increased just as dramatically. In other words, we are buying a great many products from China since Team Canada made its visit and we are exporting far less to China. It is one of the countries where Team Canada unfortunately did not succeed as well as we had hoped.

[English]

The Chairman: Without getting too political, Mr. Allmand, just so we clear the record up on this China business, I think you will agree with me that the reason Canada removed its previous support for the resolution before the committee in the UN was not for trade purposes; it was precisely that we were negotiating a bilateral human rights agreement with China at that time and we wanted China to sign on. That might have been a misplaced policy, but at least that is what was going on and that was the reason for not opposing at that particular time. You're aware of that, aren't you?

Mr. Warren Allmand: Yes, I am—

The Chairman: Just as long as you know that.

Mr. Warren Allmand: —but we feel it would be possible—

The Chairman: You may feel it was a mistake, and lots of us discussed that.

Mr. Warren Allmand: I realize they were negotiating it at the time, but we felt it was also the wrong time to stop co-sponsoring.

The Chairman: I appreciate that.

Mr. Warren Allmand: I also point out that countries such as Denmark weren't bullied. And by the way, the United States and Britain continued to support the resolution while they also continued to try to engage China.

The Chairman: Yes, and we can have a long discussion. As you know, though, this is a very complicated bilateral agreement involving participation in the courts, involving a lot of Chinese participation. The government's position at the time was that we can't say we want to enter into an agreement in which they're going to give up concessions to us at the same time as we kick them in the shins. That was a policy decision the government made. We discussed it in the committee, we've had lots of discussion at other times, and we'll come back to it. It may have been a mistake, but I don't think it would be fair to say it was a trade thing, because it wasn't. It was one view of how to engage in human rights versus another, and we had a lot of other things involved.

Mr. Warren Allmand: Right.

The Chairman: Okay.

Mr. Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): Mr. Allmand, welcome to the committee. I am very pleased to meet you and your colleagues.

I am going to spend a little time on recommendation No. 10. First of all, I would mention that during the previous hearings, Mr. Marchi came and made statements to us about the role of Canada. We learned that with respect to the Free Trade Area of the Americas, Canada requested an additional working table on NGOs, the environment, labour standards and the social clause.

But at a symposium in March of 1998, the Director General of the WTO, Mr. Ruggiero, stated, and I quote:

What environmental standard, what cultural tradition, what political system represent a universal standard?

As far as recommendation No. 10 is concerned, you know very well that, in actual fact, the International Labour Organization does not have authority with respect to establishing surveillance procedures or compliance control.

You held a seminar in Ottawa last month on Commerce with Conscience: Options for Business in the Global Economy. You made some very interesting points at that time, and I would like some further information on two points.

First of all, are there any fundamental labour standards currently in existence which are based on human rights and which could be rapidly integrated into the rules of international trade? If so, how should we proceed, and if not, what steps should be taken?

Second, on the subject of recommendation No. 10, do you think it would be realistic to give more powers to the ILO, or do you think that the problem of the social clause should be dealt with at the WTO? Thank you.

Mr. Warren Allmand: As regards labour standards, we already have such well-known core labour standards as the right to association and the right to collective bargaining. They are mentioned on page 25 of—

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Ms. Diana Bronson: The standards are now on page 3.

Mr. Warren Allmand: These standards are recognized by international labour bodies, and we feel that they should be recognized. We do not think there would be any major problem in having them recognized except, perhaps, a problem of political will. They are well known.

It is true that Mr. Marchi, in the beginning of last year, has been proposing a forum for the American Free Trade Area to consult with unions and civilian society, but this has been refused thus far by countries from the Organization of American States. However, I think that we should continue with this policy.

[English]

With respect to the ILO...and by the way, I forgot there was also the declaration on human rights standards, which was agreed to just this past year, and agreed to by business, government, and labour in this place, but not recognized in the WTO forum. This is what we're talking about this morning, where we pass and ratify certain treaties, whether the ILO or economic and social and cultural rights, and we just leave them over there and forget about them and carry on with trade agreements and trade arrangements without any recognition and without giving priority to other agreements that we've also ratified.

With respect to whether the ILO is the proper forum and whether we should concentrate on social causes, I would think you should go after both. We're trying to advance this cause, and I wouldn't want to leave any one of them off.

Craig, do you want to add to this discussion of the question?

Mr. Craig Forcese: I can comment briefly on the core labour standards issue. Most of these core labour standards, first of all, are represented in the Universal Declaration of Human Rights, as well as in the ILO conventions. You will note in note 34 of the English brief, and I guess also the French brief, that the rate of ratification for these core labour standard conventions, although conventions, is quite high, approaching universal in some cases, so these are not necessarily norms or principles on which there's not a lot of agreement.

The one that's actually presenting the most difficulty is child labour, and as you know, the ILO is now discussing what we mean by “child labour” and trying to arrive at a definition of “exploitative child labour,” which would then be incorporated into the context of trade.

[Translation]

Ms. Diana Bronson: I think that there's no problem with the competence of the ILO when it comes to setting standards and monitoring them. The problem is in applying them.

The declaration adopted last June by the ILO is in a way the ILO's response to the Singapore Declaration, where labour standards issues were referred to the ILO. The ILO and its 175 members now have an obligation, and a consensus has been reached among labour, employers and the governments recognizing that this convention sets out basic labour standards. In other words, human rights must not depend on the level of economic development, but they must be universal. You may be living in a very poor country, but this does not prevent you from having free trade unions. On the other hand, you may be living in a very rich country without any system for collective bargaining or workers' rights to speak of.

As it was explained to some extent in the written presentation, the WTO has no expertise with these issues, but it has an opportunity to apply standards, and this is why both should work together.

[English]

The Chairman: Both Madam Folco and Madam Debien would like to ask a question. But I want to ask you one question beforehand and try to jump in there as well.

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Following up on Madam Bronson's observation about jurisdictional conflicts, and your observation, Mr. Allmand, the WTO is the one thing that seems to be working. It has teeth.

It seems to me that the problems we hear about are similar. I don't think there's any problem about everybody recognizing—now we're talking as lawyers—that jus cogens will have primacy over all other forms of international law. Everybody knows that. The problem, as you know, is trying to define and get a universal acceptance as to what the rules of jus cogens are, and when you have a U.S. congressman who says that abortion violates jus cogens and therefore you can't have any trade with a country that practises abortion, you are walking into a way that if you're going to dump this into the WTO, we're not going to have a WTO that works. But that is what will happen, or that is the fear.

What are we going to do about the fact that, as you know, Canada has just been condemned in the United Nations for failure to live up to the economic and social covenant to which you referred as being a primary source of human rights? Does that mean that other countries can now refuse the access of Canadian goods into their countries because Mike Harris has adopted policies in Ontario that the commission in the United Nations considered violated our obligations on human rights, and so on? Is that the road you're proposing we go down? If it isn't, who is going to sort this out?

I'm concerned. I'm in favour of the idea; I'm sympathetic to your preoccupation, but we're trying to work our way around here.

I see a WTO, the way we're going here, the way people want it, where Mrs. Robinson is going to be one of the deputy secretary generals, whoever is head of the world environment thing will be a deputy secretary general, whoever is head of the ILO will be a deputy secretary general of the WTO, and it will be literally the new world government. The trade people are resisting that because they say this will overwhelm it and in fact the benefits of world prosperity that have been generated will not be there.

That is something that I think we have to look at seriously, and I look forward to reading your paper as to how we deal with this huge, complex issue. So I'm not attacking you for not getting to them, but will the paper help us work our way through that very complex thing? That's one question.

The other thing is that I don't see anything in the paper about the free trade of the Americas and civil society. If your association has anything specific about that, we're conducting hearings on that area as well, and it would be helpful if, even by writing, you could suggest to us how we could be specifically working these concerns into our free trade of the Americas area, where at least there is a civil society envelope, with some greater opportunities, it seems to me, than even at the WTO level—hopefully, anyway.

Mr. Warren Allmand: With respect to the last question, we have already sent a request to the subcommittee asking to be heard on the FTAA, because we've spent considerable time on that and we've prepared a separate brief.

The Chairman: Okay. That's good.

Mr. Warren Allmand: With respect to your question, which is a very important one and not an easy one to answer, until now there hasn't even been a recognition in trade negotiations and agreements that human rights had a role at all.

We were not in the street at the APEC meetings in Vancouver, but we were in the parallel summit. We had a lot of discussions leading up to APEC and also other trade discussions. We had a hard time even getting the countries to recognize that human rights had anything to do with trade at all. So a good first step would be to recognize formally that there are other treaties out there that have a very high priority, and if we took the same approach as we do internally....

We have trade within Canada; it's a federal state. There's trade within the United States, and it's a federal state. There's trade within Germany, a federal state. All these countries are subject to charters of rights or bills of rights, and so on. You can't do what you wish in the United States, despite the fact that there are some violations of what would be called “civil rights”, which are not interpreted as serious enough to be violations of human rights. But they've worked that out, and it has taken a long time to work that out.

I would refer to Craig on that point.

The Chairman: But surely you would agree with me that the international law is that in the relations between states, those rules that are accepted as jus cogens do prevail in all their relations and would take primacy over trade or anything else. Jus cogens does trump everything else.

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Our problem is that your problem is that you want to include in jus cogens labour rights and a whole host of other rights, which other states won't accept. Therefore it's not a problem of accepting the principle, it seems to me. Everybody accepts as a principle that primary principles of international law in the universal declaration and others prevail over all forms of obligations. The problem is trying to get a general world consensus on what is the definition of those. And I submit to you that when China and Russia come into the WTO, which would be a good thing for the world in some ways, that process of defining those issues will become more complex because the cultural differences between us will be more difficult to resolve.

As I say, I'm not attacking your idea. We have to try to make recommendations to the government on how to deal with this hugely complex issue and we have to get to the bottom of the practicalities of it.

Mr. Warren Allmand: I'll refer to Craig first.

Mr. Craig Forcese: I agree with you that the jus cogens obviously presents a certain measure of difficulty. You'll find that in our technical annex we cite a fairly conservative view of what human rights are jus cogens, namely that in the restatement of foreign affairs law from the United States. The bought argument is that the UN declaration is in fact itself the interpretative device for the UN Charter, and that UN declaration, as I mentioned earlier, does refer to many of these core labour rights.

In terms of primacy and how primacy would operate in the WTO context, I'm not sure that we're proposing necessarily that human rights law has primacy and therefore whenever there's a conflict that trumps. But I think what we're going to see happening—and it's cropping up in the academic literature already—is that the primacy argument will be invoked in terms of article 20. The United States, for example, has recently imposed in 1997 a ban on products of bonded and indentured labour, which arguably falls well outside the scope of article 20. The proposal from a number of academic observers is that in the context of defending this point of view in article 20 that there they invoke the primacy argument.

So these issues will come up in the WTO. And what we're proposing is that, given that these issues are there and they will come up, isn't it better now to sit down and discern and define a social clause that would grapple with these rights in a a more nuanced fashion than simply battling it out in the present article 20?

The Chairman: I very much like the idea of a cultural clause or a cultural agreement that would deal with the cultural issue, which we're hearing a lot about as well.

Mr. Warren Allmand: Diana has something to add.

The Chairman: Okay.

Ms. Diana Bronson: Just a brief point on the definition of core labour standards. The ILO has some 170 conventions. Core labour standards refer to seven that have been discussed over the past decade. It's a small boiling down of the many conventions that the ILO has. It refers to freedom of association, which is found in every instrument of the international bill of rights, all three instruments. It refers to the right to collective bargaining. It refers to non-discrimination in the workplace, child labour, and forced labour. We're not talking wages. We're not talking any number of other things that really in Canada we consider fundamental rights in the workplace.

On the WTO and it taking on too much, my understanding of what the trade lawyers are saying is that this is happening anyway. It's happening in government procurement, it's happening in competition policy, it's happening in intellectual property rights. We're way beyond trade law as it is, so we're going to have to deal with labour standards and we're going to have to deal with the environment. You would be hard pressed these days to find trade lawyers saying what they would have been saying 10 years ago, that this has to be trade only, trade only. That doesn't mean the WTO immediately has the competence to deal with these issues, and that's why it needs better coordination with other multilaterals.

The Chairman: I must say I totally agree with your last statement. I think it would have been helpful if 10 years ago we'd moved and got environment and human rights into the WTO. But we are getting this concern about it being submerged. And the concern is that individual states will use these issues as a way to apply unilaterally determined sanctions and that this then will of course destroy the system. And I don't think that's what you're proposing here. I really was trying to understand.... You're not giving a stick to every country to say we're going to shut out your goods because we don't like the way you do this, we don't like the way you do that, regardless of what the WTO rules are. I think that's what we're trying to come to an understanding of.

Thank you very much.

[Translation]

Ms. Debien.

Ms. Maud Debien (Laval-Est, BQ): Good day, ladies and gentlemen. I would like to refer to recommendation 11 and to the inclusion of the social clause. As you just mentioned, most governments of developing countries are fiercely against including the social clause in the WTO agreements and negotiations, for all kinds of reasons. You alluded to this just now when you said that we had to be very careful with this issue and take a certain number of precautions.

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I would like to know what we should do to overcome the opposition of developing countries to including this social clause. What should we recommend to the Canadian Government in our report?

My second question also deals with recommendation 13 regarding the participation of civilian society. In this recommendation, you state that the WTO must take measures. What do these measures concretely mean? Let's take, for instance, the Geneva Human Rights Commission, where the NGOs have a really official forum, where civilian society and NGOs can express their views. Do you suggest some similar mechanism? Should a new authority be set up within the WTO to allow civilian society to present its views?

Third, what do you think of setting up an assembly of parliamentarians in the WTO? Take for instance the Council of Europe, which has an assembly of parliamentarians. Often, in large multilateral institutions, there are assemblies of parliamentarians. I would like to know your opinion on that. Could an assembly of parliamentarians fill the famous democracy deficit that the WTO is currently accused of?

Mr. Warren Allmand: Regarding the attitude of developing countries to the social clause, if we could consult the civilian society in those countries, it would perhaps express a viewpoint different from that of the governments. In many such countries, civilian society is not—

Ms. Maud Debien: Does not exist.

Mr. Warren Allmand: It does exist, but it often has an opinion that is divergent from the government's. Governments are often very harsh with civilian society.

Regarding the other question, you know that in a few weeks,

[English]

I'm going to the UN Commission on Human Rights. At the UN Commission on Human Rights there is a place every day for NGOs and civil society to express themselves; in UNESCO there is, and in other UN agencies there is. There's a provision for civil society to express itself through NGOs, churches, trade unions and so on. So we don't see any reason why it couldn't be done now, but on the details I would refer to Diana.

[Translation]

Ms. Diana Bronson: To overcome the opposition of developing countries, we should see what their concerns are regarding the world trade system and what part they play in it. For instance, things can certainly be done in the field of agricultural negotiations in order to make the system more friendly. There are also issues of technical assistance.

I was told an anecdote when I went to the WTO, in 1996. I was told that in Geneva, during free trade negotiations, Americans and Europeans arrive with hundreds of well-trained negotiators, computers and every imaginable kind of technology, whereas 15 or 20 African countries get together to send one person to defend their interests. Obviously, when things like labour standards are put on the table, they do not want to hear of it. This is not necessarily because they are opposed to free trade unions, but they cannot afford to get involved with them. So we must seriously consider some technical assistance.

I think that these points were stressed in the documents presented by the North-South Institute as well as by the Canadian Council for International Cooperation.

Regarding the participation of civilian society in

[English]

the dispute resolution mechanism, I think maybe Craig could address that better.

Mr. Craig Forcese: But the dispute resolution system, as you know, is in camera. It's behind closed doors. Submissions made to the dispute resolution body are not necessarily made public unless the government chooses to make them public.

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It's a very secretive process. Even if there are no conflicts of interest, even if there are no wrongdoings, the perception created is one of a star chamber, one of a process that lacks credibility. It seems to me that if we're talking about a globalization backlash, nothing would be better to fend off that backlash than an opening of the process, thus making it more accountable and credible as a consequence.

I think there's also a problem with submissions made by third parties. A number of non-governmental organizations in the past have made submissions through their country representatives. However, the country representatives are free to pick and choose which representations are made. It seems to me that we should have a better standard, one that evaluates the merits of the representation not on the basis of whether the country chooses to include them but in terms of how helpful they are to the dispute resolution body, what expertise they provide, what insight. That can only help the process. It can only add to the expertise and competence of the bodies that decide these very important trade disputes.

The Chairman: Yes or no, on a parliamentary association. We're very keen on this one. I want to know your position.

Mr. Warren Allmand: Yes, as a former parliamentarian, I would support it.

The Chairman: Okay, this is good.

[Translation]

Ms. Maud Debien: For instance, there is an assembly of parliamentarians in the Council of Europe.

Mr. Warren Allmand: Yes, certainly, and in other associations.

The Chairman: In the OSCE.

Mr. Warren Allmand: Yes, certainly.

The Chairman: Ms. Folco.

Ms. Raymonde Folco (Laval West, Lib.): My question will be very quick because it comes right behind the response that you gave to Ms. Debien's question. First of all, I would like to welcome you and tell you how pleased I am to meet you this morning. As some of you know, I made a very quick visit to your centre as a member of the board of directors. So I am very pleased to be with you today.

The Chairman: This is a conflict of interest.

Ms. Raymonde Folco: I would also like to talk about civilian society. I'll go over all this very quickly because I know that time is running short.

The Canadian Government, especially through Mr. Axworthy, the Minister of Foreign Affairs, and also through Mr. Marchi, has made strong statements in favour of the participation of civilian society, not only in discussion forums, but also when it comes to making decisions. We know that there are several ministers in the government working towards that goal and they consider NGOs as an essential tool and even as partners of governments and elected representatives.

When dealing with countries that have no experience with NGOs such as we have in the West, with countries where civilian society is poorly organized, where civilian society is even against the objectives and methods of the government, how can we bring in these groups to participate without giving the impression that the Western countries are always centre stage and the only ones to be heard? We are running the risk of hearing only the civilian societies and NGOs of the Western countries and of neglecting to hear the viewpoints of developing countries as well as of wealthy countries whose civilian societies are insufficiently developed.

There may some imbalance here and I would like you to explain to me how it might work.

Mr. Warren Allmand: We are working in South America, in Africa, in Asia, and we are constantly working with NGOs and civilian society. I was surprised to see how active NGOs in those countries were, but civilian society includes more than just NGOs. It also includes universities, churches,...

Ms. Raymonde Folco: The trade unions.

Mr. Warren Allmand: —the free press and many other associations. Carole Samdup, who worked in Asia and who attended APEC, could give you a description of NGOs in the Philippines, Asia and several other countries.

[English]

Carole, you've worked with some of those. You could say how strong or how weak they are.

Ms. Carole Samdup (Assistant Coordinator, Globalization and Human Rights Programme, International Centre for Human Rights and Democratic Development): The NGOs in these countries definitely work and definitely organize, but often they organize in conflict with their governments. Around the APEC leaders' meeting in Malaysia in November, for instance, the NGOs were trying very hard to organize a parallel event so that they could have a voice in the discussions that were taking place. In some ways the organizers were threatened by their own government. There were a lot a obstacles put in their road in organizing the conference. But the Government of Canada, in this case, stepped in and gave them not only moral and political support but also financial support to carry out that event.

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Ms. Raymonde Folco: Well, that's a short answer. Thank you very much.

The Chairman: We had the same experience. Mr. Sauvageau isn't here, but we were at the Singapore conference. In fact the delegates from many of the developing countries took positions that render everything you're trying to talk about here before the table, particularly core labour standards, environment, etc.... They're the ones who don't want these in the WTO. But if you talk to the NGOs in their countries, of course they want them. So this is a complicated business of trying to work it out.

Thank you very much for your participation this morning. We certainly always listen to what the centre has to say with a great deal of attention. The brief is very helpful. I know the committee will be very pleased to receive your observations on the FTAA as well, because, as you know, there is that civil society discussion there. There is a forum for it, so I think we can really advance Canadian values quite well in that area.

Thank you very much for coming this morning.

Mr. Warren Allmand: Thank you for hearing us. We hope the brief and the technical paper will be included in your considerations.

The Chairman: We'll certainly make sure our researchers read them thoroughly, Mr. Allmand.

Mr. Allmand: Good.

The Chairman: Thank you.

Now we have Association québécoise de l'industrie du disque, du spectacle et de la vidéo.

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[Translation]

The Chairman: During this round table, I would like to suggest that we first hear Mr. Valiquette, from the Society of Composers, Authors and Music Publishers of Canada, followed by Mr. Pilon, from the ADISQ, and then we will have a question period with all the participants. Agreed?

Mr. Valiquette.

Mr. Gilles Valiquette (President, Society of Composers, Authors and Music Publishers of Canada): Good morning. Honourable members, my name is Gilles Valiquette. I am a music composer and author and I am the President of the Society of Composers, Authors and Music Publishers of Canada, better known as SOCAN.

Today, I am here with SOCAN's general council, Mr. Paul Spurgeon.

If you don't mind, Mr. Chairman, I would like to mention that we have tabled our brief in English and that the French version will be sent to you soon. We apologize for the delay.

Before we discuss the upcoming WTO negotiations, I would like to give you some background information on SOCAN. SOCAN is a not- for-profit Canadian organization that represents composers, lyricists, songwriters and publishers of musical works from across Canada and around the world.

On behalf of our over 18,000 active Canadian members, and members of affiliated societies around the world, we administer performing rights in music and lyrics.

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The performing right is that part of copyright that gives owners of musical works the sole right to perform in public or broadcast their works, or to authorize others to do so in return for royalty payments. In other words, it is the creator's salary.

In practice, performing right royalties flow only to those individuals whose music broadcasters choose to use. If they play more Canadian music, more royalties will remain in Canada. On the other hand, if broadcasters and other users choose to play more foreign music, then more royalties will be paid to foreign sources.

It is for this reason that SOCAN is particularly interested in Canadian content rules which promote the use of Canadian music in Canada.

We urge you to read our preliminary submission because it focusses on one of the key issues in the upcoming negotiations—the need to better promote cultural diversity in international trade treaties.

In the brief time we have together today, Paul and I would like to highlight the following four points: first of all, the importance of strengthening Canadian content rules; secondly, the fact that Canada's cultural sovereignty is not safeguarded under current international trade treaty rules; third, the cultural industry's sectoral advisory group on international trade proposal for a new international instrument that would specifically address cultural diversity; and finally, the need for action now.

I will discuss the first and last points, and Paul will deal with the second and third points.

First, to illustrate how successful Canadian content rules have been to SOCAN's members, it is important to remember that in 1970, the year before Canadian content rules were introduced, Canadian composers, lyricists and songwriters received from their managing company royalties in the amount of $252,000.

Twenty-seven years later, in 1997, SOCAN distributed almost 200 times this amount to its Canadian creators and Canadian-based publishers, some $48.8 million. Over $20 million of this amount was from foreign markets. These figures demonstrate that Canadian content rules have helped to develop a world class music industry infrastructure in Canada that has also served as a springboard into foreign markets.

Notwithstanding the current success of Canadian music creators, SOCAN believes that Canadian content rules should continue to be strengthened.

We are also concerned that Canada's ability to continue to strengthen our Canadian content rules could be threatened by the new global trading order unless something is done immediately.

For example, the WTO's negotiations on services will begin next year. A recently declassified WTO background note on audiovisual services focussed on the CRTC's Canadian content policies. By the way, Mr. Chairman, we will forward that document to you at the same time as the French version of our submission.

Furthermore, as the committee's notice pointed out, other key sectors could become the subject of negotiations following the third WTO ministerial conference in November—including information technology, electronic commerce, intellectual property, and investment policy. All of these negotiations could have a major impact on Canada's cultural sovereignty.

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Mr. Chairman, time is of the essence. We urge you to recommend that the Government of Canada take concrete steps to safeguard our cultural sovereignty, before it's too late.

Paul Spurgeon will now discuss the fact that Canada's cultural sovereignty is exposed under the status quo, and will recommend what needs to be done to solve this problem.

Thank you very much, Mr. Chairman.

[English]

Mr. Paul Spurgeon (Society of Composers, Authors and Music Publishers of Canada): Good morning, honourable members.

As Gilles mentioned, SOCAN is concerned that the status quo did not safeguard Canada's cultural sovereignty. You will see that on pages 13 to 20 of our preliminary submission, where we discuss some recent trade disputes and demonstrate that Canadian cultural policies are exposed under both of Canada's major trade agreements, the NAFTA and the WTO.

For quite some time it's been clear that Canada's current strategy is not working in this regard. For example, over two years ago the Toronto Star reported that Canada's former Minister for International Trade had summed things up as follows:

Eggleton said Tuesday that the North American Free Trade (NAFTA) and the World Trade Organization accord offer no protection to the country's cultural industries.

He suggested the deal should be reopened to negotiate specific protections for culture:

Eggleton said it is a “myth” that a much-touted cultural exemption under NAFTA actually offers protection to Canadian cultural producers. “We don't have any cultural protections under NAFTA”, Eggleton told reporters. “That's a myth. We never did.”

More recently, a WTO panel decision and an appellate body decision on Canadian magazine policies both demonstrated that Canada's cultural industries are vulnerable. At the present time, the outcome of Canada's legislative response to the adverse WTO rule finding is unclear.

Regardless of the outcome, however, this case demonstrates that the WTO has failed to develop a distinct and comprehensive regime that recognizes the key fact that cultural industries are an essential element of a country's national identity, and therefore they cannot be treated like other industrial commodities or commercial services. I would add that will probably become even more important in the next century.

It's also important to recognize that the United States is not the only country that is attacking Canada's cultural policies. For example, last year the European Union requested WTO consultations on Canada's measures affecting film distribution services, including Canada's 1987 policy on film distribution and its application to European companies like Polygram. The EU contended that these measures violate the most favoured nation provision of the General Agreement on Trade in Services.

Canada can no longer pretend that our cultural industries are protected under international trade treaties, when a rising tide of disputes clearly demonstrates they are not. We therefore submit that this committee should make specific recommendations to the Government of Canada on how to resolve this problem in upcoming WTO negotiations. In particular, we submit that your report should request that the Government of Canada adopt the recent proposal of the cultural industries SAGIT regarding a new international instrument on cultural diversity.

When the Minister for International Trade appeared before the committee last month, he commented on one of the most important elements of the SAGIT's proposed international instrument on cultural diversity: the need to set out rules on the kind of domestic regulatory and other measures countries can and cannot use to enhance their cultural and linguistic diversity. For example—and this is key—we believe the Canadian content rules should be included in any list of permissible cultural measures because they respect international trade principles of transparency and national treatment.

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We also believe time is of the essence here. SOCAN therefore submits that your report should recommend that the Government of Canada decide to pursue an effective international instrument on cultural diversity before the summer to ensure it is fully prepared for the WTO ministerial conference in November and the negotiations that are scheduled to begin next year.

SOCAN thanks you for this opportunity to present our views. We would now be pleased to respond to your questions.

The Chairman: Before we do that, we'll ask Mr. Pilon to speak, and then we may be able to get questions to both of you at once. We have until 12 o'clock, so we should have enough time to get everybody around a couple of times.

[Translation]

Mr. Robert Pilon (Vice-President of Public Affairs, Association québécoise de l'industrie du disque, du spectacle et de la vidéo): Thank you, Mr. Chairman. My name is Robert Pilon. I am the Vice-President of Public Affairs for ADISQ, an association representing independent record producers and other people working in the Quebec entertainment industry. I would like to thank the committee for asking us to appear before it this morning.

The committee's agenda includes a number of extremely fundamental issues, mainly the objectives that Canada should choose for the upcoming round of WTO negotiations, which are to begin this fall.

We could speak about particular cases in greater depth during questions, but first of all, I would like to quickly discuss the essential elements of Canadian cultural policy.

With the exception of national institutions such at the CBC, which play a fundamental role in Canadian culture, there are three major categories of cultural tools or policy in Canada. We have set up a number of programs, federally or provincially, particularly in Quebec, to support the various sectors of the cultural industry, such as film, television, the recording industry and publishing. These assistance or financial support programs are intended to support the production of films, books and records, and they are very important. Subsidies take a number of forms, depending on the sector. For example, support for publishing is provided at the federal level both by the Department and by the Canada Council, which runs a program that targets writers more directly. Programs that provide support for film production or television programming are run by Telefilm at the federal level, while in the case of Quebec, SODEQ provides such assistance. Other provincial governments have also set up assistance programs.

There is a somewhat special system in the recording industry. In 1986, the federal government established the Sound Recording Development Program (SRDP), which provides grants through two private foundations: the Musicaction Fund in Quebec, and FACTOR in English Canada. In 1983, the Government of Quebec also established a major program to provide support to the recording industry, the PADISQ, which is run through SODEQ. Other provincial governments have established similar programs, although they are more modest.

Grants and other forms of support from government are an extremely important aspect of the industry.

Secondly, I would like to discuss the Canadian content rules, which mostly prevail in broadcasting, which is a federal area of responsibility that comes under the CRTC. These rules are basically quotas for Canadian content, and they apply to radio and television stations.

According to the rules, conventional television programming must have 60% Canadian content, while in the case of specialty programming, this percentage varies, depending on the programming. As for radio, one year ago, the Canadian content rule was increased to 35%. French-language stations must broadcast 65% of their programming in French.

These rules were established in the early 1970s, and were amended from time to time. They go back many years, and they have played a fundamental role. Generally speaking, the Quebec music, composing and song-writing industry could not have grown to the size it has in Quebec if the CRTC had not set French-language content quotas for francophone stations in 1973, when the CRTC was chaired by Pierre Juneau. Of course, an entire array of other factors contributed to the industry's development, including government programs such as the PADISQ, which the Government of Quebec established in 1983 and the SRDP, which was created in 1986, along with the creativity that our artists have shown and the energy of our entrepreneurs, first and foremost. All these factors would not have been enough if the government had not said that the radio industry had to provide air play to French songs, and more generally speaking, Canadian songs. These factors would not have been enough if the Canadian content quotas had not been set at 30%, a quota that was recently raised to 35%.

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As for television, let's not kid ourselves. Our television stations here in Canada can buy American television programs at prices that an objective observer would call dumped prices, markedly lower prices. Without Canadian content rules, 90% of Canadian programming, except for news and sports, would come from the United States, particularly programming offered in English Canada. So as you can see, our rules play a fundamental role.

Third, and I won't spend a great deal of time on this issue, but I would just like to say that Canadian policy includes rules having to do with Canadian ownership. Let me give you the example of the broadcasting industry, where these rules have a clear, specific and direct impact. In 1968, the Canadian Broadcasting Act was amended, and since that time, no foreign company, no matter who, is allowed to control a company that operates a broadcasting licence, be it a licence for a radio station or a television station. This is a rather strong rule.

Let me take 30 seconds to explain just how much structure these rules have, particularly relating to broadcasting, a structure that makes sense. The Canadian content rule and the Canadian ownership rule go hand in hand. In 1968, members of Parliament realized this. You cannot place stringent requirements for Canadian content, francophone content or financial contributions to a production fund upon Canadian companies, which usually are much smaller than American companies, with far fewer resources—I haven't talked about production funds yet—without giving them a trade-off, that is, some kind of guarantee that they will not have to compete, in Canada, with companies that are 10, 20 or 40 times bigger than them. These two rules stand together. This is a fundamental aspect of broadcasting policy that we can return to later, during questions.

These two rules go hand in hand, and that explains something. I have a rather striking example of this, the specialty music channels. A number of years ago, an English-language music channel was set up called MuchMusic, and its French counterpart is Musique Plus. A few years ago, a second channel was added, MusiMax and MuchMoreMusic. These specialty channels are somewhat out of the ordinary, because in many other countries such as Italy or Spain, instead of having a domestic music video channel, all there is is a local subsidiary of MTV, that huge American multinational owned by Viacom Inc.

There weren't any music video channels yet in 1968, but at the time, legislators were able to set certain rules that were applied to companies that run such channels. We decided that we would do things differently here in Canada, and we allowed Canadian entrepreneurs to have the privilege of being the only operators of such channels, while at the same time imposing a number of requirements. In this manner, MuchMusic has the privilege of not facing direct competition in Canada from an MTV subsidiary that might set up shop in Toronto or Montreal. However, this channel does have an obligation to produce Canadian content, that is to say, to provide financial assistance for the production of music videos by Canadian artists and to broadcast 30 or 35%—the exact percentage slips my mind—Canadian music videos.

The structure of this system is relatively balanced. You really must give it a great deal of thought. As my colleagues from SOCAN were saying a few moments ago, Canadian content is a fundamental issue, but we must be careful, because if we did not have the Canadian content rules and if no restrictions on foreign ownership were imposed, MTV and Viacom certainly could decide to break into the Canadian market and establish a music video channel, promising 40% Canadian content, come to this country with a great deal of money behind them, and then after five years, MuchMusic would be bankrupt and Musique Plus would close shop. After that, how would you be able to impose Canadian content or francophone content rules on these Americans, who would have the whole market to themselves? That is why we have to be extremely careful. In my opinion, these are the fundamental issues.

• 1045

Even though we live next door to the United States and I have to admit that our market is very heavily dominated by American cultural products, be it film, television and to some extent records, which often represent 60, 80 and 85% of our market, the development of these three major policies relating to financial support, Canadian content and foreign ownership restrictions has allowed us to maintain a minimum amount of room on the market, despite everything. We must maintain these policies that Canada adopted in the late 1960s and early 1970s, which many countries throughout the world have imitated. For example, France, Italy and a host of other nations have combined foreign ownership restrictions and domestic content requirements for their television industries. Some countries have applied the same rules to radio, albeit to a lesser extent. The most recent example of a country imitating policies that work well here in Canada is Israel, which adopted a local music quota for its radio stations over the Christmas holidays. As our colleagues were saying earlier, our artists would not be getting the exposure they are getting today if these rules had not been put in place.

Is it difficult to maintain these gains? Obviously, the answer is yes. The pressure is immense. I have no hesitation in saying that if I were an American, I would do exactly what the Americans are doing. We must realize that last year, the cultural and communications industries became their number one export sector, although we still tend to say that it is still the second. This industry includes film, publishing, recordings and so on. Obviously they would like to have MTV subsidiaries throughout the entire world and promote the records of American artists so that they can sell as many as possible. When Warner produces a Madonna record, right from the very start they design it as an international product; first they will sell it on a market of 264 million people, but they also want to sell it on a market composed of two or three billion people. Warner has subsidiaries or affiliates in approximately 100 countries. MTV transmits these images to somewhere between 42 and 48 countries throughout the world. It's a purely business strategy. We have to anticipate the cultural consequences. To date, we have been able to maintain our market to a certain extent and to maintain a window for our artists' work.

Other nations have imitated us, and with globalization increasing every day, countries throughout the world want to maintain some room for their artists' productions. The Brazilians are trying to do that in Brazil, the Portuguese in Portugal, the Greeks in Greece and the French in France. Consequently, we must stick to the same course. When other countries start to imitate us, it's not the time to take a step backwards.

If you like, we could go back to more specific matters, particularly the SAGIT report, which I signed off on, during the time for questions. Thank you.

The Chairman: Thank you, Mr. Pilon.

Mr. Obhrai.

[English]

Mr. Deepak Obhrai: Thank you very much. All three of you gentlemen presented your case very well. However, my party has a different policy and philosophy from my colleagues over here, and that's the way it is.

We have looked at your brief and your five points. I agree Canadian music has demonstrated well. The problem we have is what is Canadian culture? In the diversity that exists today in Canada, you have the Anglo culture, the French culture, the multicultural culture, and the aboriginal culture.

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What is happening, in our view, is that the protection you're demanding of the state has probably swung too far. You have stated that three-quarters of all television is American television. Our position is it is the Canadian people who will decide what they want to watch, and you as Canadian artists have done extremely well on the international stage as well. I do not think that Canadian artists are inferior to anybody. Given the opportunity, given the market, they're doing remarkably well. You agree with that, and we are pretty proud of that. We feel you should be competing in the open market, because we feel you will be doing extremely well.

We also feel that imposition on Canadians by asking for Canadian content going up to 35% or 40% is far too much on the Canadian public. It's the Canadian public that will drive it. As somebody from the artistic community, I can understand why you want to do that, but we feel that's not the way to go.

This bill on magazines, Bill C-55, which tries to protect Canadian culture, in our view is flawed legislation, which we disagree with, because it has an impact. The advertising people have come along, and your industry is impacting on other industries. This is minus the fact that the Americans will come back with tariffs on steel and plastic. I'm not even talking about that. I'm only talking about the Canadian advertising industry, really. You're affecting them as well.

So it's difficult for us to see why there should be such a high level of protection, although you made your case. As a matter of fact, with globalization taking place, now the Chinese magazines have come out complaining about Bill C-55, because it's impacting them as well, this Canadian content. Even the private broadcasters are coming along and saying that the Canadian content is too high and that they will lose revenue.

So we are of the view that you would best be served in a more competitive market. You will do well as artists in a more competitive market compared to a protected market. That's the view of my party. And I've read your submission. I think that's the view my party holds. You have presented your case, but I think we both have a different view on how to achieve the same objective; that is, excellence in Canadian culture.

[Translation]

The Chairman: Mr. Pilon, followed by Mr. Spurgeon.

[English]

Mr. Robert Pilon: Monsieur Obhrai, that won't be the first time that ADISQ disagrees with the Reform Party. We did disagree with a representative of your party pretty strongly in the context of the hearing on Bill C-32, the copyright bill.

Let me try again to convince you.

Mr. Bernard Patry: Good luck.

Mr. Deepak Obhrai: You can buy me coffee.

Mr. Robert Pilon: Your party, if I recall, has always been pretty strong on small enterprise and the need to support small enterprise in the face of the giant, big enterprises.

If you look at what happened in most of the cultural industry sectors—book publishing, record production, film production—most of the enterprises there are still pretty small. Talk of enterprises usually gets the support of your party.

Let me take the example of record production in Quebec. The largest enterprise here, I would guess, has no more than $5 million of annual revenues. That's the largest one. Its direct competition are giant foreign multinationals like Warner or BMG or Sony, with an annual revenue of $5 billion.

• 1055

I'm an economist by trade and obviously want to go back to Adam Smith and pure and perfect competition again, as I said two weeks ago in the parliamentary committee on heritage. But if we were living in a world of pure and perfect competition, and if the guy I represent were a giant multinational, Canadian-owned, maybe I wouldn't have the same concern.

We're not living in a world of fair competition. We're living in a world where most of the enterprises in our sector—and I know there are exceptions—are very, very small outfits, who have to live in the context of unfair competition and price-dumping and unfair trade practices by very, very large foreign multinationals who want to dominate the world.

I think the reason we need those policies is to help just a little bit in terms of helping to correct—should I use that word?—a little bit the unfairness of the market. And that's important. Otherwise, when you're talking about free choice of the Canadian consumer, at a certain level I would totally agree with you. But when you enter a supermarket for your weekend shopping, the only things you can buy are the things that are on display. If, because we don't have the industrial infrastructure and we have a market that is dominated by unfair competition, the products or the works of the Canadian artists are not on the shelves, how can the Canadian public buy them? So you see my point here.

Mr. Deepak Obhrai: I just want to respond to him.

The Chairman: Well, if you're going to end up in a debate rather than—

Mr. Deepak Obhrai: No, no.

The Chairman: You've got two minutes left in your period.

Mr. Deepak Obhrai: Just a small point.

You talk about unfair competition, and I think that's what the WTO is supposed to do: remove unfair competition. I think Canadian artists would be well served to remove these barriers at the WTO and go into the international market.

Mr. Paul Spurgeon: Mr. Obhrai, I would respond to a couple of things you mentioned that weren't spoken to by Monsieur Pilon.

First of all, you had a query about what constitutes Canadian culture. I think we already have some clear definitions out there. Some of it is referred to in our brief with respect to musical works and recordings, and certainly there are definitions in the Broadcasting Act regulations concerning Canadian programming. I don't believe that is in dispute at all.

I think the key here is something you said. You said that given the opportunity, Canadians can show their stuff and be as good as anybody in the world. That's true, they can; but they have to be given the opportunity.

If you start with the premise—and this premise was noted in the SAGIT report—that you've got to acknowledge from the beginning that cultural goods and services, or culture, are significantly different from other products and services, how do they get to the marketplace? Is it the same as if you have the best widgets in the world? It should be same, but it isn't.

Let me give you an example: play lists that radio stations have. Every day they have a bunch of songs they play. Would you be surprised if I told you that many stations use the services of American—for want of a better word—play list preparers in Texas or wherever to make up the songs?

The path of least resistance for anybody is to ask, what's the easiest way to get songs? Well, go to the United States market; they've got them. It's just a question, as Mr. Pilon says, of...perhaps “dumping” is too strong a word, but just the sheer numbers of thousands of recordings that are released weekly in the United States could just drown out.... It doesn't matter how good it is; if it doesn't get a chance, as Mr. Pilon says, it doesn't get shelf space, Canadians are never going to know what's out there. It's as simple as that. It's easier for programmers to say, “Ah, this is a hit in the States. We know it's going to be a hit. They've done all the work. The big multinationals have already promoted it. Let's just play it; it's probably going to be successful.” And that's not fair.

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In our view, Canadians have to be given access to hear and to enjoy the expressions of their fellow Canadians. Without these kinds of measures, like Canadian content, and the other measures Mr. Pilon referred to are important.... There were perhaps a couple of others he didn't mention—tax measures and other things. All these cultural policy tools are important.

We happen to believe that Canadian content or programming, writ large, is critical to ensuring that Canadians have that access. It goes right through radio, television, cable, all the way to satellites—that Canadians at least have an opportunity to hear and to see the expressions of their fellow Canadians. If they don't, forget it.

We are not attempting to exclude foreign product. The Canadian government has never done that. Canadians wouldn't stand for it. We have access to American, to French, to British culture products. We simply want to give Canadians a chance to hear the expressions of their fellow Canadians. They can reject it if they want, fine.

Thank you.

[Translation]

The Chairman: Mr. Valiquette.

Mr. Gilles Valiquette: Thank you, Mr. Chairman.

[English]

I will try to do this in English, because I would like to say something from—

Mr. Deepak Obhrai: I have the translation.

Mr. Gilles Valiquette: Yes. Well, it's a good exercise for me, too.

As a composer, I'd like to make sure we understand something very important; that is, to create music is a job in itself. It's a life, which is different from performing music, which is another life. We have very well-known performers in Canada—Céline Dion and Anne Murray are names that come to mind—but they perform creations written by other people. We don't know these creators. Who is Yves Décary? Who is Danièle Faubert? Who is Jim Vallance? Those are the people whose creations we hear every day, but if we passed them on the street we would never know who they are.

What I am trying to say here is that we, SOCAN, represent what we call in French la matière première, the raw material on which all the industry is based. We say we're basically the content of this industry, in the sense that we bring culture. We say that culture is the mirror of the society we live in. So it is very important that this mirror reflects our reality, not the reality of others. We truly believe that where there is no culture, there is no country. We've got to make sure this is there. If there's no Canada, there will be no Reform.

Mr. Deepak Obhrai: May I ask a question that will take one small minute?

The Chairman: I think we're well over the time. Maybe you'll get another crack at it. Maybe you can come back in some other political guise.

[Translation]

Mr. Benoît Sauvageau: No, no, no.

Mr. Valiquette, your conclusion about the Reform Party was very interesting. By the way, we don't share the same opinions. If you are trying to convince them, maybe you should see them more often and make efforts for other things that may be more achievable.

My question is to both groups, and it has to do with the new international instrument to protect and promote cultural diversity.

First of all, do we have any allies on this front? I think that it's a Canadian position. I haven't heard much about it at the international level.

Secondly, are we respecting the time frame for bringing it before the WTO next November? Ivan Bernier told us Monday morning, in Quebec City, that we could consider submitting it to UNESCO, which could be an interesting forum. So, I would like to hear your opinion about these three matters: our allies, the timeframe and UNESCO. Thank you.

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Mr. Robert Pilon: As you certainly noticed, I am one of the people who signed that report. However, I have no hesitation in saying that I'm not convinced that it is the best of the various reports that have come out on these issues. The other day, my friend Paul Spurgeon was having fun picking out the sentences that contradicted each other from one page to another within that report. Indeed, there were some contradictions. That reflects the diversity of the people who sat on the committee, which sat for more than two years to produce that report. There are some good things in it, but I think that the report is somewhat—

Mr. Benoît Sauvageau: It tries to have it both ways.

Mr. Robert Pilon: Exactly. I was going to say wishy-washy.

The Chairman: Pardon me. Are you talking about the SAGIT report?

Mr. Robert Pilon: Yes, the SAGIT report. I think it reflects the debate going on in Canada about the best way of maintaining our cultural policy. Some Canadians—we just heard from one, a representative of the Reform Party—think that there is too much protection, while others think that there isn't enough. It's a choice that society has to make. Tomorrow morning, we could decide to drop all of that. Society has to decide. It's not any more complicated than that. In any environment characterized by an uneven playing field, we must decide whether or not we still want to hear records by Canadian artists, watch films from Canadian producers and so on and so forth. It's just a matter of society making a decision. This debate is also going on in other parts of the world.

This brings me to your question about allies. It's a fundamental issue. If you're asking me for my personal opinion, I would say that it's the most important thing. The SAGIT report makes note of that, not as much as I would have liked it to have, but since 18 different people signed off on the report, there had to be some compromises. I think that's the fundamental issue.

We saw this in 1993 during the Uruguay Round of negotiations. At the very end, in December of that year, the Americans tried to get a few things through, but were unsuccessful. Why? Basically because two countries joined together to block them. These two countries were France and Canada, with a little bit of help from Italy, Spain, and so on. An informal coalition developed over the years. Is it strong enough today? The answer is no. It is not strong enough. This debate is continuing in many countries.

We saw that the MAI basically flopped because of this informal coalition and grassroots movements that are starting to develop. We saw this in France, at the end of the MAI negotiations, particularly the famous public gathering at the Théâtre de l'Odéon where celebrities such as Jeanne Moreau, Charles Aznavour and others said, "watch out, this thing is dangerous." It is a threat to the diversity of cultural expression both in France and throughout the entire world.

Yes, we will have to keep on developing these alliances throughout the world, because we are not the only ones affected by this issue. It may affect us more because we live next door to the United States, but nowadays, with globalization, it also affects the Portuguese, the Koreans and all peoples throughout the world. So, we will have to develop these alliances.

As for the instrument to preserve and promote cultural diversity, I think that's an interesting option. Similarly, we could consider the things that were done around the Kyoto summit or the land mine treaty. It's an interesting option that I supported as a signatory to the report. However, everything will depend on what's in that agreement. Everything is there. If the agreement becomes something that keeps nations from being able to set coherent cultural policy, that's not a good thing. If such an agreement clearly sets out the rules and allows the various states throughout the world to have their own policy, consistent policy that is enough to preserve cultural diversity throughout the world, it will be a good agreement. How much time could it take? Probably several years. Will it be ready this fall, in time for the negotiations? I certainly don't think so.

That means that in the negotiations coming up this fall, Canada will have to maintain its traditional position, namely a cultural exemption, taking culture off the bargaining table. I think it's unrealistic to believe that an agreement will be signed in the space of a few months. It's completely unrealistic. So I think that we should maintain our traditional positions.

• 1110

I am not an expert in international trade, but I'm trying to remember how much time the Uruguay Round negotiations took. Seven, eight, ten years? So the negotiations that are scheduled to begin this fall could also last quite a long time. If these negotiations starting this fall last for five years, we may have an agreement five years from now. So we'll have to be working on these things while the negotiations are underway. Until we have an agreement, Canada will have to maintain its traditional position, as it did in 1993. That's very important.

[English]

Mr. Paul Spurgeon: If I could add a little bit to that, in the SAGIT report referred to by Monsieur Pilon, there is a recommendation that we seek allies, obviously. My understanding is that there are some nations that think the idea of a cultural diversity treaty is a good idea. That's my understanding.

If Canada were to take a leadership role in this area, obviously that would be key. In other words, Canada could come out in front and put out the notion that we have to right away set out—and this is stated in our brief and also in the SAGIT report—the rules and get them clear, because they're not clear; there are a lot of ideas out there, but it's not really clear. Set out the rules on the kind of domestic regulatory measures that Canada and other countries can and maybe cannot use, because there are some that might be what we call “red light” rules that we can't use to enhance our cultural and linguistic diversity, and I think that's important. If you look at the document we'll be sending you, the WTO discussion paper on the audiovisual services, which I should say isn't just film but everything—music, TV, broadcasting—it's a very wide definition.

Look around the world. Every country has these, as Robert Pilon says. Every country has measures that in some way go to help their indigenous culture. Europe does; they have rules dealing with not just, say, French programming on French TV but with European programming on French TV. India has rules on film production. Ireland has content rules for radio. It goes on and on. So there are a lot of allies out there who, I'm sure, when we sit down and prioritize and clearly define what we think should be these rules that we can etch in stone and put into a treaty of this nature.... I think it's doable. Perhaps Canada should take a leadership role in this regard.

[Translation]

The Chairman: Ms. Debien, you have two minutes.

Ms. Maud Debien: Mr. Pilon, you touched on this indirectly before, when answering Mr. Sauvageau, when you spoke of a new instrument and the whole issue of cultural exemption. So far, we have heard a number of witnesses who told us about the creation of a new instrument in relation with the document that you are all familiar with, as well as the cultural exemption. Most of the people told us that Canada absolutely had to opt for a cultural exemption and maintain its current position, first of all because of the time frame, because we certainly won't have the time to negotiate a new international instrument. In the meantime, what will happen if we negotiate a new international instrument and the WTO turns it down? So we have to have a backup position, which is to maintain the cultural exemption.

I heard Mr. Spurgeon talk about precise rules or regulatory content regarding this new instrument. Last week one witness told us that Canada was not currently ready to define a new international instrument because there was no clear definition of what it is intended to protect. In other words, there is no clear definition of Canadian culture. So, before regulatory measures are put into place, we have to specify exactly what we want to protect. Bill C-55 was mentioned as an example of this. Bill C-55 is not intended to protect content, but rather to handle ownership. There is a very big difference between protecting content and protecting business ownership. When it comes to the definition of culture, Canada does not seem to be ready to make its bed.

• 1115

The Chairman: Mr. Robert Pilon.

Mr. Robert Pilon: I'm just about in agreement with everything you've just said, Ms. Debien. There's work to be done. What's interesting with that proposal is that it's going to get a debate going and it's about time that debate happened.

We noticed that the so-called exemption protections or cultural exceptions set out in the NAFTA or in the WTO haven't withstood the ravages of time. The rain is coming through the roof. It's clear that it's not enough. Something else has to be found.

The definition of specific rules in the treaty is an interesting avenue that should be explored. Is it going to take time? Yes, it's going to take time. In the meantime, should we have something else? Yes, in the meantime, we need something else. I quite agree that this is fundamental.

I'd like to make a swift comment on the matter of Bill C-55. I'm not sure I share all of your opinion on this subject entirely. In my opinion, the matter of C-55 and magazines is indirectly a matter of content. As I was saying before for radio broadcasting, in my opinion, Canadian property and Canadian content are very closely linked.

I hope the Canadian government will maintain its positions and won't cave in to American pressure on this matter. It's not enough to have a regulation on content. If you have a regulation on content for Canadian magazines and say that as long as 60% of the content is Canadian and you let Sports Illustrated come in, then there's a danger. What's the next thing they'll be up to? Is MTV going to say it's ready to offer 40% Canadian content if it's given a radio broadcasting licence in Canada? You're sticking your finger in the wringer. That matter is very dangerous. So you always have to maintain a balance between Canadian property and Canadian content because one doesn't go without the other.

Ms. Maud Debien: Thank you.

The Chairman: Mr. Spurgeon.

[English]

Mr. Paul Spurgeon: I don't think we should necessarily abandon what are identified as the so-called five tools—I think Robert Pilon isolated three of them—financial and program incentives, Canadian programming requirements or regulatory support, tax measures, foreign investment ownership, and finally, intellectual property.

I think we shouldn't confuse cultural industries necessarily with culture; we should look at them as kind of working together. Cultural industries.... If you look at what the WTO has defined as audiovisual, it includes a radio station, for example, or a TV station. We're all in this together. Canadian radio stations want to survive and so do the people who give the content to those stations to allow Canadians access.

For example, I think we have a clear definition of what Canadian culture is in the music industry. I think we have that pretty well clear, and I believe we have it covered in television. I'm not so sure whether we have it in other areas. I'm not so sure, for example, about book publishing, but I guess it's pretty self-evident. Perhaps in some cases, if you have a book written by a Canadian, it's Canadian content.

If we look at the industry and the culture as working together and at all the mechanisms and the industries that allow Canadians to access that, we see that it's kind of an organic business. It all has to receive some kind of support or incentive or measure that ensures, getting back to content, that Canadians can access—not to exclude anything, but to at least ensure that Canadians have access to that culture, that cultural industry, that “whatever it is” that allows them to hear Canadians.

[Translation]

The Chairman: Mr. Bachand.

Mr. André Bachand: It's about a question from Mr. Sauvageau. Mr. Sauvageau and myself are not members of the same party, but I share a lot more interests with him and Ms. Debien than with our Reform colleagues. Mr. Sauvageau had a question about looking for allies. I think that, this morning, you've seen the demonstration that you don't have to look very far for your enemies. There are enemies inside Parliament itself, within this very committee.

• 1120

When I talk about enemies, it's not necessarily pejorative. We should perhaps rather talk about adversaries in the matter of culture. You do understand that, given that sort of situation, it's very difficult to develop a solid position. Those very people, this morning, helped a foreign government get the Bombardier company into hot water. You can see the kind of shambles we wind up in sometimes. It might be interesting and important to maximize your allies' credibility.

Ms. Maud Debien: You're playing politics.

Mr. André Bachand: I'm not playing politics. I'm just saying things as they are. If we do everything we can to convince foreign countries to support us on the cultural exemption thing, which is the minimum we could get, while at the same time we're being stabbed in the back at home, we're going to have serious problems and we have to be aware of it. That's what I'm saying.

The exemption measure isn't a protectionist measure. It's the minimum we can get.

You can count on all parliamentarians minus the Official Opposition, which will still be the Official Opposition for a while yet, unfortunately, as far as the cultural matter is concerned. You can be sure there are a lot of people sharing your interests and your concerns.

Let's go to something more specific. There are a lot of agreements on intellectual property and culture. There are conventions, signed or not, implemented or not: Bern, Paris, the January 1995 convention on intellectual property. We have free trade agreements in which cultural exemptions are mentioned. However, there remains a problem with the definition of a cultural good and service. That continually pops up. There is also the fact that even the January 1995 agreement on intellectual property involves the WTO if there are any differences to be settled.

So, one thing is clear, everything that's already been signed, whether free trade agreements, bilateral, trilateral or multilateral international conventions and even including UNESCO, runs the risk of being sorely tested at the WTO.

I'd like to hear you on the other agreements that exist on intellectual property and culture. I'd also like you to tell me how far you'd be willing to go to assuage the concerns of certain people in the matter of the cultural element.

Mr. Robert Pilon: I missed the end of your question.

Mr. André Bachand: The Americans are negotiating and will more than likely come up with proposals that will shake the system, in other words the five points you were talking about, as well as direct and indirect aid to the cultural industry as a whole.

Which one of those five rules would you be ready to soften or change so that we could get to an international agreement which not only would not exclude culture, but protect it?

The Acting Chairman (Mr. Bernard Patry): Thank you, Mr. Bachand.

Mr. Pilon.

Mr. Robert Pilon: About this matter of intellectual property, I'll let my colleagues from SOCAN answer because they're more competent than we are in this matter. I'll simply make a little comment.

Bill C-32, passed in 1997, provides for an equitable remuneration plan for public execution, especially for radio broadcasting, but also a plan for private copying. No later than last week, our friend Ms. Barshefsky was saying that they'd be questioning that and that they wanted the benefit of these fees on private copying. That's unacceptable. The Americans have no such regime in the U.S., except for digital support, and that's still very minuscule. When Canadian artists' records are copied in the U.S.A., neither the author nor the producer, nor the interpreter receive anything in the way of rights.

I don't see why we would be stupid enough to send significant amounts of money to the U.S.A. while, on the other hand, we're not treated the same way when our works or records are pirated in the U.S.A.. That's all I had to say on that.

• 1125

As for the matter of compromise, I'll simply repeat that life is life and that politics are politics, and maybe all that will wind up in a compromise. I hope that the compromise, if there is one on Bill C-55, will stick to the essential principles which are that Canadian property and Canadian content are inseparable. I'm weighing my words well. You'll never get me to think that simply settling on a rule for Canadian content is enough.

In the short term, you could accept the publication of a Sports Illustrated with 60% of Canadian content. Excellent, but let's weigh the consequences of something like that globally for all our cultural policies. Especially for radio broadcasting, the impact of something like that would be considerable. I don't think we should engage in that kind of compromise.

If you don't mind, Mr. Chairman, I'd like to take a few seconds to talk about the coming together of some 50 associations representing the arts, culture and communications sectors all the way from l'Union des artistes to the Canadian Broadcasters Association, the Regroupement des artistes en arts visuels, the ADISQ, SOCAN, SPACQ, the book editors and film producers that held a press conference in Toronto last Monday, March 15, to emphasize their support for Bill C-55. I have here the documents published for that event as well as the list of associations. If you don't mind, I'd like to table them with the committee.

As we were talking about international alliances, I'd like to point out that one should start building them in one's own country. Here, in Quebec, last summer we set up a rather interesting thing at the initiative, more particularly, of the Association des réalisateurs et réalisatrices de films du Québec and the Union des artistes. A coalition was set up that now counts some 15 or so associations, ADISQ being one of them, called the Coalition pour la diversité culturelle. This coalition published a declaration where you have the major principles that should be respected in the matter of culture in international trade agreements. I won't go into the details, but these major principles were set out. I'm acting as the messenger of those people that I met with this morning and, in actual fact, would also like to appear before your committee as witnesses. I have with me a sufficient number of brochures for all of you to be able to have a look at them. Thank you.

The Acting Chairman (Mr. Bernard Patry): Mr. Valiquette.

Mr. Gilles Valiquette: Thank you very much.

Of course the situation is far from simple. It's far from simple to get at the substance of it. The question you've put to us is heartbreaking. At SOCAN, we didn't start from ground zero. People came up with the famous report where five points were raised. I'm aware of the discussions that had to take place in order for them to come up with a practical conclusion.

SOCAN undeniably supports those five points, but it's difficult to choose one over the other. We get the impression that once this report is done, the Department will have to act. We get the impression—and that is what we want to emphasize today—that both Canadian content and intellectual property must be included. It's not the one against the other, but rather the fact that all those elements are essential if we are to survive. We will have to treasure them.

We don't know where all of this is going to end. We'll have to move on this matter. As Mr. Pilon was saying, today's message has to do with preserving this aspect of Canadian content. We sometimes blow it, but other times we do things really well. I think we should congratulate ourselves for this one. In a way, as Mr. Pilon was explaining, we were proactive. We didn't wait for someone to get a ball rolling and then just keep on rolling it.

Canada will come out of this as a winner when it's found a solution. It won't be ideal, but it will be a solution that will serve our purpose. Let's put our own emphasis on Canadian content and forge ahead. Let's be proactive and we'll wind up with more in hand than if we'd simply waited for things to happen.

• 1130

[English]

The Acting Chairman (Mr. Bernard Patry): Mr. Spurgeon, do you have a comment?

Mr. Paul Spurgeon: With respect to your question regarding intellectual property as a measure, as one of the tools in a trade treaty to help culture, I think generally you can assume that all nations agree with that proposition. We all want to ensure that there are effective, say, copyright laws in order to ensure that copyright owners get paid. It's almost motherhood and apple pie to say that. The Americans, the French, the British and we Canadians—we all want to ensure that those laws are strong and that they protect, that they ensure that creators and publishers get paid for the use of their works.

That being said, you'd think, then, that this is the end of it and that it's not really in dispute, but as Monsieur Pilon indicated, because of the particular way the last provision of the Copyright Act was done, by not giving rights on what we call a national treatment basis.... In other words, Americans on home taping are treated the same as Canadians or whatever, and the same thing would apply to the new droits voisins, that neighbouring right that was created in the last provision of copyright.

This causes some trade irritation with the United States, but in theory, good strong intellectual property—if you extend rights and protection to the owners of copyright on a national treatment basis—should not offend anyone. The only people who aren't in favour of that are countries that obviously are pirate countries, that permit the selling of tapes that have been pre-recorded without authorization.

As for your question about having a carve-out or a cultural exemption, I think you will agree if you look into the problem created with the cultural carve-out for cultural industries in the NAFTA agreement that, as Monsieur Pilon says, there's a leak in the roof. It's probably worse than a leak; there's probably no roof at all.

The fact of the matter is that if you look at that section, the United States can take “measures of equivalent effect”. If they feel that we're doing something they don't like on the cultural side, they can retaliate in any way they want, not just in cultural matters but in any goods or services. It could really be unfair. They could retaliate in some way that has nothing to do with culture.

As a result, that section—perhaps it doesn't go to the definition of content but goes to the section itself—is really is not an effective mechanism, or as effective as we originally hoped it would be when we drafted it. That's why we have to look at it. That's a tool we've used and it's not particularly effective. We have to look at other tools. A new approach now is this treaty on cultural diversity.

[Translation]

Mr. André Bachand: Thank you.

The Chairman: Ms. Folco.

Ms. Raymonde Folco: I've listened to the people on the other side of the table and I feel a very deep need to tell you that as far as I'm concerned, personally, and as well as a member of the Liberal Party of Canada, I have the deep conviction that if we have any kind of Canadian culture today, in the year 2000, it's because in the 1950s, 60s, 70s and so on, the Government of Canada, Radio- Canada, the CBC and the CRTC acted to protect our creative people, our writers and our dramatic authors.

I remember the contests held by Radio-Canada and especially the CBC at the time. I even remember CBC Wednesday Night. All our writers and creative people were being promoted from coast to coast. At the time, there was no third coast.

If, today, the McGarrigle family can travel all around Canada and the world and if Pierre and Marie-Christine Séguin can do the same thing, it's because they had help and protection. Let's say it straight out: that's called protection. I quite agree with that policy which means that today, we have somewhat more on the positive side, and I'm weighing my words well when I say somewhat. I know that our culture is in danger. Culture is a delicate creature and Canadian culture is even more delicate still.

• 1135

To my mind, this Canadian culture covers all the diversities, whether linguistic, ethnic and so on. It's an important aspect I really wanted to emphasize. I was a member of the Union des écrivains et écrivaines québécois and I know what kind of moral support I got from that association. Once again, personally speaking, I quite agree.

Even though I don't have any questions, I'd like to make another comment and throw out a few zingers for the people on the other side of the table just to say how pleased I am, as a federalist, to see that members of the Bloc Québécois recognize the importance of the help that the Quebec Government can provide in a matter that is so dear to their heart, in other words culture, Quebec culture within Canadian culture. I'm very happy and quite comfortable hearing those comments and seeing how important it is for the Canadian Government to continue to provide that support despite the criticism thrown its way. I have no questions, as I said, but I did want to make those comments. Thank you.

The Chairman: I'd like to point something out, if I may, Ms. Folco. You said "help the Quebec Government can afford them".

Ms. Raymonde Folco: Oh, I'm sorry, I meant the Quebec and Canada governments although, as far as I'm concerned, I mainly meant the Canadian Government. I thank you for pointing this out.

The Chairman: You just forget a small qualifier.

Ms. Raymonde Folco: Yes, absolutely.

The Chairman: A freudian slip, so to speak.

Ms. Raymonde Folco: As I come from Quebec, it is clear that I was alluding to a partnership, Mr. Chairman.

The Chairman: Fine. That's better.

Mr. Patry.

Mr. Bernard Patry: I thank our witnesses for coming before us and making a presentation.

I'm quite happy to see that the SAGIT report seems to have gathered some unanimity within your industry, especially concerning what exists or doesn't exist at the present time relative to our cultural sovereignty as well as to what's to be done.

Some people who came before our committee told us we should really be proactive in that area, otherwise we risked running into serious problems in the future.

I'd like to put a question to you concerning page 22 of your brief,

[English]

when you're talking about the need for action now. You just say:

SOCAN is concerned that the preparations for the WTO services negotiations are already well underway and decisions could soon be taken which would foreclose on the option of pursuing an effective international instrument on cultural diversity.

[Translation]

We're talking about the future, this morning. There are things that are working today and I'd like to know what they are. Mr. Valiquette or Mr. Spurgeon, I'd appreciate your telling us about services in the context of the WTO. I'd like to know what is happening today because the present situation could have an influence on the very future of negotiations concerning cultural problems.

[English]

Mr. Paul Spurgeon: With respect to the notion of what a service is and what a good is—obviously forget about finding Canadian—this is a problem as well, and we saw that with the magazine issue. Our concern is that since these talks and since these—they've already released a document to study it—matters are being looked at, we, Canada, as soon as possible.... When I say as soon as possible, I mean the timeframe probably between now and early summer. We have to come up with something that is concrete enough to ensure that we have a focus on those approaches we need to take, perhaps not that detailed but in terms of how we see audiovisual services.

That's what we're talking about: how we see those as being things that we have to put our stake in the ground on. I guess that's what we're getting at here. We have to make sure we're clear on what a good is and what a service is in this area, because perhaps there are some overlapping issues.

The Chairman: Mr. Pilon.

[Translation]

Mr. Robert Pilon: I won't deal with very technical questions, but I would point out that the negotiations will begin in November, that the people in our community don't know exactly where those negotiations will lead us and that we are concerned.

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We accept the fact that within the framework of international negotiations, there's always some confidentiality involved. However, we would hope that the process would be as transparent as possible. I suppose that you, parliamentarians, would also wish to follow the evolution of these negotiations. By taking the initiative to organize these hearings, you've shown a very positive attitude in this respect.

It is clear that our American friends will exercise enormous pressure. We shouldn't delude ourselves,

[English]

it's going to be a rough road ahead,

[Translation]

as we've already seen with their reaction to Bill C-55. They've used absolutely odious blackmail tactics and, pure coincidence, of course, threats of reprisal were made against the steel industry thus attacking the riding of the Minister who sponsored the bill. It's a totally odious tactic; these are biker tactics. Can we expect more of the same? Yes, you can be sure of it.

Will the temptation to give in eventually become too strong, if there is a threat of job loss in another sector? I would like to warn the government and parliamentarians against this. Will they be forced to make calculations and decide according to the number of jobs lost, preferring to make concessions in the magazine, radio, or recording sector, rather than lose 2,000 more jobs in another sector? That is not how you create policy. There will be tests of strength and trying times. Parliamentarians will have difficult choices to make. It would be wrong to think that these matters will be settled easily and that in six months or in a year, the Americans will say that it's okay and let things lie. No, they will not let this lie because it represents their main export sector. Here, in Canada, and in other countries such as Portugal and France, we must ask ourselves what kind of world we want to live in in the future.

Let's go back to the example of the land mines treaty that was rejected by the Americans and that, to my knowledge, they have yet to sign. Their refusal did not prevent a large number of other countries from signing. This treaty was an extremely positive initiative on Canada's part and it bodes well for the future of humanity.

We must approach this problem in the same way. The challenges that await us over the coming years with respect to this question of cultural diversity are very similar to the challenges relating to the environment, that we want to protect for future generations. If we care about protecting our physical environment, life, animal and plant species, etc., over the coming years for future generations, the least we can do, is to make similar efforts for human beings and their culture and language. It will be difficult, and we might have to make sacrifices in other sectors. It is a societal choice that we will have to make.

We must not forget that one thing is encouraging. As your colleague indicated, too many people say that this is the Internet age, that borders are being abolished, that international trade has become liberalized and that we are facing globalization, that this is a global village and that the measures that we are considering are old and outdated. My answer to that would be both yes and no. Even though these measures may seem outdated, we have noted that in the area of music, over the past five or six years, at a time when we are moving towards globalization and where Madonna and other American artists are becoming more and more present on our planet, the opposite phenomenon seems to be happening: in many countries of the world, particularly Germany, Korea, Japan, Italy and Spain, the market share for local artists is not dropping, but is rising. It probably due to a seesaw effect. Even though people might be interested in knowing more about the American culture, which is in itself interesting and which we are not criticizing, countries such as Spain, Portugal, or Korea have realized that Madonna isn't the only one who makes records. People from those countries are interested in hearing their own artists or artists from countries other than the United States, which then creates a window, which will allow them to live and to express themselves. That is what is meant by the fight for cultural diversity. It is as simple as that. It isn't a protectionist battle in the negative sense of the word, but rather an extremely positive struggle. They are not protecting the rearguard, they are very much upfront.

Mr. Bernard Patry: Thank you.

The Chairman: I would like to make a brief intervention on that; I'd like to point out that the three countries to which you referred are all countries that have the advantage of speaking a language other than English. That is the problem for Canadians of English origin, on the anglophone side of this country.

• 1145

Look at what is happening in Quebec. There you have a successful film industry. Why? Because you have your own films, whereas we have American films, etc. Therefore, it is with that in mind that I say we must find our allies, as you say, in the battle that will be waged. I believe that the problem is much greater in societies and countries where English is spoken, because it is easier for Americans to penetrate those societies.

Having said that, I would like to ask you a question, Mr. Pilon. You began by saying that you were in favour of the SAGIT report, but your opinion was somewhat tempered when you said that you did not subscribe to it wholeheartedly. What I find attractive in the SAGIT report, is that the people who presented it the other day said that we needed something new, that it was no longer possible to resort solely to past measures, especially because the new technology has made it mandatory to use new rules, not only in the area of culture, but in all areas. The rules have been upset.

I am a lawyer by profession, and I see that most bills that have been adopted are already outdated as soon as they become law because technology is advancing so quickly. Therefore, with respect to technology, in your area of culture, especially with international communications as they are today, we must think about the kinds of measures that can be applied and that will work in this field.

We would like your sector to give us some new ideas to protect us. We accept the principle that you have put forward, but what processes and procedures would best apply and would have the greatest chance of succeeding in this new environment?

Mr. Robert Pilon: First of all, if I may, Mr. Chairman, I would like to make a comment on what you have said about English- speaking countries. From the point of view of English Canada, you may find allies in Australia, among others, which is a country that has the tradition of creating a space for its artists, where rules have been established in terms of limiting foreign ownership in the area of broadcasting, for example. You will also find allies in Ireland and in England. In 1993, at the end of the Uruguay Round, the British government held a position that was relatively close to that of the American government. That isn't the case for all British artists, especially in the film industry, for example. Producers and film makers have joined their French and American counterparts to say: Careful, don't touch that.

There is also a willingness among artists, among creators, and among a large number of producers in Anglo-Saxon countries. They are saying: Be careful, there is not one single world culture; there will be a number of them.

The Chairman: Even in the United States.

Mr. Robert Pilon: Even in the United States.

The Chairman: Culture is good for everybody.

Mr. Robert Pilon: Exactly. The independent film production sector is quite large in the United States.

The Chairman: Only Mr. Valenti—

Mr. Robert Pilon: With respect to the SAGIT report, I would like to explain what I said. I agree wholeheartedly with the main recommendation. I believe that the protection that exists in the treaties at this time... Mr. Spurgeon said that there was no roof. I say that the roof is leaking, that there is a big hole in it. We have to find something else. I think that the idea of a treaty is interesting and should be explored, but we have to be realistic. It will take some time for that to happen. That is why in the meantime, we mustn't abandon all our other avenues. It's important.

With respect to analyzing the content of the report, when there are 18 people drafting a report, it is bound to include some compromise and a few contradictory statements.

With request to new technologies, you will find paragraphs in the report that read as follows: Today, in the era of new technologies, in the Internet age, regulations can no longer apply. In other places the opposite is stated: This is always possible technologically, and it is probably important to continue to do so. We must be careful.

• 1150

In today's media, especially in the context where the neoliberal ideology is very strong, when we speak about the new realities in international trade, technologies, or globalization, there is a tendency to use cliches, without digging very deeply. For example, there is a widespread conception that the Internet cannot be controlled. Well, that's not true. Ask any engineer. Technically speaking, it is infinitely easier to control something that is digital than something that isn't. Socially, we are beginning to realize—

The Chairman: I would side with those who say that it can't be controlled. I don't think an individual country can control it. We need a coalition of countries in order to control it. We talk about the Tobin tax and that type of thing. Such things can be done, as long as there is a wide enough consensus in the international community to apply them. Canada could not do it alone.

Mr. Robert Pilon: I will deal with other matters that are more controversial today. Take for example the whole question of child pornography on the Internet. I think that people are starting to realize, not only in Canada but in many other countries, that the reality is much more complex than the proponents of the Far West would have us believe with respect to the freedom to create, the freedom to do what we want on the Internet. This freedom and the Far West are all well and good, but when freedom and the Far West allow child pornography to develop on the Internet, we start to say that maybe it should be controlled. And when we say that it has to be controlled, then we feel that it must be technically possible to do so. The engineers say that it's possible. Maybe in five years, we won't have the same simplistic vision that has been put forward too often with respect to new realities, as if, two years ago, the world had suddenly changed overnight. It isn't as simple as that.

When radio began, in the 1920s, some people said: It's over, American radio will invade us, and we will be powerless. However, we were able to do something. Technical solutions were found. The CBC was created, then came the CRTC, and the Broadcasting Act. There's always a way, when there is a social and political will to preserve the diversity of cultural expression and access to this diversity for the Canadian people. With respect to the political will, it is possible to find legal, legislative, and technical means to accomplish this.

The Chairman: Thank you. Ms. Debien, could you be brief?

Ms. Maud Debien: Yes, Mr. Chairman.

The Chairman: We have in our audience a Mr. Di Iorio who has a few observations to make. We will give him five minutes and then we will adjourn for lunch.

Ms. Maud Debien: Agreed. I would like to tell the witnesses that last week, a witness dropped a bombshell. He said that Canada was actually under a cultural siege. On page 5 of the report from the Sectorial Consultations Group, there are a certain number of statistics that describe the frightening situation that we are experiencing. This brings me to my first question concerning the cultural exemption and the new instrument that is proposed in this report.

Mr. Pilon, you were right to say that we must begin a debate on the creation of a new instrument. I completely agree with you, but given the amount of time that these negotiations could take, I want to hear you tell the Canadian Government once again—because our report will be for the Canadian Government—that between then and now, the cultural exemption must absolutely be maintained during the upcoming negotiations. It has to be clear to us. You have to give us that message, if that's the message that you would like to get across to the Canadian Government for the upcoming round of negotiations. I hope that we can agree on that. It's the minimum I'm expecting from you. It's also the minimum that we must pass on in our report to the Canadian Government: they must defend that position during the upcoming negotiations. I wouldn't say that's the fall-back position, but it is the position that we currently have to maintain. I would like to hear a very clear statement from you on that issue.

• 1155

Mr. Robert Pilon: Ms. Debien, as far as our association is concerned, the issue is very, very clear: culture must not be on the bargaining table until we have an agreement that determines what can be done and what can't be done.

Ms. Maud Debien: Thank you.

The Chairman: Mr. Spurgeon.

[English]

Mr. Paul Spurgeon: [Inaudible—Editor] ...for SOCAN, and I guess we have to be clear that there are other tools, as I say, in that tool box, and they're highlighted quite well in the SAGIT report. If it wasn't clear from our submissions, we do endorse, along the same lines as Mr. Pilon does, the SAGIT report. We think it's an excellent report. True, there are some inconsistencies in it, but generally the thrust of that report, I think, is sound.

Regarding those lists that you indicated, when you look at those statistics, it is shocking. Those statistics have been around for some time now. We've seen them. That's why it's so important to ensure that we have the content rules and other tools to ensure there's no erosion of the existing access we have now.

Thank you.

[Translation]

The Chairman: I would like to thank all of you.

Mr. Di Iorio would like to share a few comments with us. If you would like to stay for a few minutes, we can continue and then end the hearing.

[English]

Mr. Di Iorio.

Mr. Joseph A. Di Iorio (Individual Presentation): Yes, I'd like to thank the chairman and this committee for this impromptu decision on their part. Quite honestly, I wasn't sure you would accept the proposal I made.

The Chairman: We'd like to hear what Canadians have to say about this issue, so we're happy to hear you. Unfortunately, there's a time limit on everything we do and we all have other things to do. So I'm going to try to keep it to about five or six minutes.

I won't allow questions, because otherwise politicians will talk more than we should allow them to.

Mr. Joseph Di Iorio: I see. If there is any insistence on a question, I'd be more than pleased to answer, whether it's in French or in English.

I was just looking at the heading involved with the actual mandate, and it's regarding Canada's trade objectives with respect to the World Trade Organization. Obviously the whole debate here deals with a very particular component of Canadian industry. I think what is really important, and it's been underlined substantially, is the integrity of the Canadian system from, one would call it, the cultural umbrella standpoint.

The only difficulty with that is that a lot of times, based on the commentaries that have been made and the submissions that have been made by Mr. Pilon, Mr. Valiquette, and Mr. Spurgeon, the difficulty that seems to also surface in an implied way is that there is no recognition as to the exact volume of what can be produced in Canada.

A serious question seems to have been prevalent for years about exactly what is a Canadian identity with respect to this type of industry. From Mr. Pilon's standpoint, obviously it's a little easier for him to define, because culturally speaking there is a different language and there is a different ambience that comes with the understanding that he seems to put forth.

For the rest of Canada, there is also that query as to exactly where one should define Canadian culture, what Canadian culture is. I think fundamentally speaking the problem arises from the simple fact that, first and foremost, Canadian culture can only be defined from the amount of Canadian production of Canadian goods and Canadian services that are actually marketed.

If there is no support for that particular volume of information, information from an intellectual properties standpoint and definition—I mean information in that regard—if there's no volume, if there is nothing that can be looked upon or marketed, then the whole orientation for further free trade agreement instruments becomes self-defeating, because the infrastructure is not there to continuously replenish the alleged need for cultural identity and cultural messages, cultural history, and so forth.

• 1200

What I find difficult is trying to understand how in most committee meetings sometimes people don't seem to understand that the American society has an incredible infrastructure. I'm particularly referring to this particular tangent of the industry. Mass production is there. It's been refined much more because of the networking that is present right now. But the mass production aspect, the concept of mass production and volume, existed in its early phases.

Just take the example of the early 1950s, when we had all these hip hop individuals coming out of nowhere, making songs that still right now are being re-marketed, for example. There was a semblance of that from Quebec's perspective, and there was never really anything that emerged from the rest of the Canadian perspective. There was nothing there initially, for that example in particular, to establish an identity, a Canadian identity. It continues to exist today.

The new bill and legislation involving Canadian film productions, and the insistence on increasing the budget allocated to film productions, is fine. It's commendable. But the problem with that is there seems to be no real understanding that it is not so much the existing entrepreneurs who have currently made themselves present in today's society as being record producers or, from Mr. Valiquette's standpoint in his business, who have anchored themselves to date with respect to their vision. It's the idea of allowing a mass of entrepreneurs into the industry so they can at least-kick start their own dreams and ideas, and at that point have those dreams and ideas launched into a particular market—so they can at least be visible, heard, tangible, with the support mechanisms that will probably either help launch their particular careers or ideas further into the industry stream, or eventually curb them because of the degree of interest that particular product has or doesn't have.

It's unfortunate that the Canadian infrastructure doesn't allow for that very simple understanding. It seems to cater to pre-existing, somewhat “established” companies. It's odd because, as an example, there are a number of groups out there, and a number of production houses and a number of artists out there, who don't seem to be in a position to remotely make readily available or visible to the public in general ideas that have been germinating for years. That is something the American infrastructure has always been more flexible with, has always been more open to, and in many ways has allowed to blossom.

Globalization factors in very well with that concept. Globalization is an increasingly important concept and principle that needs to be anchored into this premise I'm elaborating on. How can you possibly market in a global market a cultural view that has not been able to flourish to begin with? What are you protecting? You're protecting something that people have queries on right now.

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The most obvious example that comes to mind is that every time one watches the Academy Awards, for instance, which is pretty clear to many people, the only corporate entity that I can recall in the recent timeframe that is entitled or gets nominated or receives an award is the National Film Board. The National Film Board is one of the oldest institutions that has somehow managed to make headway in that particular market. But that is not Canadian culture per se; that is an instrument in assisting Canadians to understand their backgrounds and history. It has nothing to do with the kind of future developments that Canada requires in order to be integrally independent, culturally speaking, from other countries.

The reason I emphasize that is that we have a commonality with our friendly neighbour. We speak pretty much the same language. It is not easy to distinguish when you speak to a person from south of the border and someone from north of the border. We can communicate quite readily and very easily. In and of itself it is an incredible benefit, but in and of itself it becomes a significant shortcoming, because how do you distinguish your integral definition as a Canadian from another individual's concept of his particular cultural reality when there is nothing there and has never been since probably 1975, when the Canadian film industry actually started to kick off its reality and operation, which goes back 20 years? Apart from that, we're looking again, as I said, to the National Film Board.

The Chairman: Well, now, Mr. Di Iorio, a constituent of mine, Atom Egoyan, was at the Oscars last year.

Mr. Joseph Di Iorio: Yes, but he—

The Chairman: I'm terribly sorry, we did have an agreement that you'd get five minutes, but it's well over that, so I'm going to have to shut you off because everybody has other things to do. But I appreciate your taking the time to share your views with us, and we'll certainly take them into account. I know the committee members are anxious to hear from everybody, so we'll have a look at that.

If you have any specific view about what to do about the the World Trade Organization particularly, what Canadian policy should be on that, drop us a line and we'll make sure the researchers deal with it.

[Translation]

Mr. Benoît Sauvageau: He can send us a brief.

The Chairman: Yes.

[English]

If in fact you'd like to send a short brief.... As you all appreciate, what we're trying to do here is determine—

[Translation]

Ms. Maud Debien: You have a very original, very fresh point of view. This is the first time we've heard Mr. Di Iorio's point of view, and I would like it to be recorded in writing. I would like him to send us a brief, because he has a very different point of view. This is the first time we've heard that opinion, and I think that it sheds new light on the situation.

If Mr. Di Iorio could put some of his thoughts about the WTO in writing, that would be useful to us as additional material for our work. As for the NFB, I have to tell Mr. Di Iorio that the NFB is gradually disappearing.

[English]

Mr. Joseph Di Iorio: Well, that's another issue altogether, Madame.

[Translation]

The Chairman: Exactly.

[English]

Mr. Joseph Di Iorio: But from the standpoint of the World Trade Organization, I think the only link I can make—and I'll end with this point—is that if the infrastructure is not there, it doesn't matter how many committee submissions we'll be addressing; the visible volume of goods, services, and productions will become less and less meaningful for the Canadian identity. It doesn't matter whether it goes through the Internet, by e-commerce, or whether it will go because of pre-established contacts and networking that has developed in the last 34 years; it will diminish, because gradually WTO will want to bring some sort of commercial balance, domestically speaking, within the various countries. That will create some form of commercial homogeneity. Unfortunately that in itself, that medium itself, will bring a lot more pressure to individuals and to those industries in the various countries that are signatories of the WTO.

• 1210

That's all I need to say.

The Chairman: I'd like to thank very much all our witnesses. I think probably Messrs. Spurgeon, Pilon, and Valiquette were here to tell us how we can ensure that there will be a Canadian infrastructure of culture when we get out of the next round, so we appreciate very much your observations and we will take them into account.

[Translation]

They will be included in our report. Thank you very much for appearing. The hearing is adjourned until 1:30 p.m..

• 1211

• 1347

The Chairman: Please excuse us for being somewhat late, but we will extend the meeting so that we can get the most out of your being here.

We will now hear from the Conseil du patronat du Québec, the Fédération des travailleurs et travailleuses du Québec, the Confédération des syndicats nationaux and the Quebec Chamber of Commerce.

I would like to ask Mr. Garon to begin.

Mr. Jacques Garon (Director of Research and Economist, Conseil du patronat du Québec): Thank you, Mr. Chairman.

In preparation for the next phase of the WTO's multilateral negotiations, there are a number of important sectors which could be addressed, including access to markets, e-commerce and many others. In the short amount of time available to us, we would like to draw the committee's attention to one sector which we feel is important: investment policy.

There were a number of factors behind the failure of the Multilateral Investment Agreement under the auspices of the OECD, including the perception that negotiations had been carried out in secret by the most heavily industrialized countries, and the fact that, in general, the aspect of loss of sovereignty implied by such an agreement was raised without discussing the excessively broad scope of "investment", which included cultural matters.

In our opinion, certain countries wish to see the defunct MIA reappear, but this time within the framework of the general WTO negotiations.

Why is this so important for Canada? First of all, because rules such as those negotiated in Paris may work in favour of a certain stability and increase security for investors and investments, whether these are originating in other countries, or going there, not to mention that a multilateral investment agreement would be consistent with current Canadian legislation on investment.

Second, because at the present time the international community is faced with some 1,300 multilateral agreements on investment. Each country wants a specific agreement. There is no consistency, no norm for these bilateral agreements, and international investment is subject to barriers that run contrary to Canadian interests.

In this environment, Canada itself has negotiated, or is negotiating, some 50 agreement protocols. For most countries, however, the overall picture is like a kind of patchwork quilt and is, ultimately, ineffective.

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The objective is to establish a set of clear rules for foreign investors, or in other words, equal protection and treatment for all countries. Whether trade exchanges or investment are concerned, Canada has always benefited from a transparent system based on rules. Adoption of a general agreement on investment would allow Canada to preserve, and enhance, its attractiveness to investors. If the majority of other WTO States subscribed to such an agreement, Canadian businesses would not have to fear discriminatory treatment for their foreign subsidiaries.

Furthermore, direct foreign investment has always been a key factor in the economic history of Canada. One in ten jobs, or some 1.3 million, are currently linked to direct foreign investment. According to cautious estimates by the federal government, a $1 billion increase in direct foreign investment would create at least 45,000 jobs in Canada. In addition, direct foreign investment speeds up technology transfer to the target country and encourages the development of trade, job creation, and increased productivity. According to the federal Minister of International Trade, Canada has managed to attract $180 million in direct foreign investments since 1986. Canadians have themselves invested $171 billion abroad over that same period, a 164% increase.

Although some critics claim that production of foreign subsidiaries replaces domestic production for export—the job export argument—the impact of direct foreign investment on employment and revenues is either neutral or, in some cases, slightly favourable. What is more, where businesses operating within a more or less global economy are concerned, their capacity to invest abroad is often a determining factor in their ability to compete, both nationally and internationally.

The federal Minister of International Trade has also pointed out that Canadian sovereignty will not be adversely affected by an agreement on investments. Canada will retain its ability to agree to major business mergers or acquisitions which involve Canadian companies, and to continue to set limits on foreign control when businesses under government control are privatized. There will be no repercussions on Canadian social programs. As well, as in the past, foreign investments with a potential to benefit from tax incentives will have to prove that they are creating jobs within Canada.

Moreover, Canada's commitment to such an agreement merely requires us to treat foreign investors in Canada the same as our own investors. Foreign investors would therefore be subject to the same laws and regulations in all areas, including the environment, health, labour and culture.

Here are a number of key parameters of an agreement on investments.

The agreement must include a general cultural exception. In this connection, Canada (like France) had already indicated its intention not to sign the former MAI if such an exception could not be obtained.

The agreement must also respect provincial jurisdictions.

It must respect the environment, health and social programs, of course.

It must not define "treatment of investments" too broadly, as was the case with the former MAI.

Finally, the agreement must not commit Canada for a minimum of 20 years once it is signed. NAFTA calls for six months advance notice if one of the three signatories withdraws from the agreement.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Garon.

I would like to ask one little question. Subsection (d) of your brief is talking about the definition of expropriations, isn't it?

Mr. Jacques Garon: Yes.

The Chairman: Thank you.

We will now hear from Mr. Massé and Ms. Côté, from the Fédération des travailleurs et travailleuses du Québec. Mr. Massé.

Mr. Henri Massé (President, Fédération des travailleurs et travailleuses du Québec): The FTQ has never been opposed to increased international trade. International trade goes all the way back to antiquity. What we are opposed to is the strong tendency of powerful players to set new rules of the game to establish a single global economy, an economy where the multinationals have nearly all the rights, setting themselves above sovereign States, an economy where sovereign States primarily retain responsibility for policing and defence. You can understand why.

With free trade, there has not been as much dislocation and as many job losses in Canada as we initially claimed at the very beginning. The statistics are not very clear, but one can argue that there even was some job creation in some cases. However, we see that the quality of jobs has decreased as well as the quality of our social programs.

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We are willing to continue the debate, but we would like to see more transparency. We would like to see a truly democratic debate on these issues. Today you are listening to us, and we are pleased about that, but in our opinion, there has to be some kind of ongoing consultations so that unions, community groups, in short, civil society, can make their views known on these issues on an ongoing basis.

For example, there is a forum within the framework of the FTAA that allows the business community to exchange views on all these issues, but there is no parallel mechanism for other groups within society, including unions and community groups.

We also strongly believe that this process must include a workers' rights clause so that the process of integration does not result in more and more inequity. We have always said that it would be all right for us inhabitants of the countries of the North to grow poorer as long as the people of the South got somewhat richer, the people living in the poorer States. However, we are currently in contact with South-American and African unions, as well as other unions throughout the world, as well as with the International Confederation of Free Trade Unions, the ICFTU, and we see that people in the North have grown poorer as have people in the South. We have allowed competition to accelerate. The competition has been even stronger in the countries of the South with cheap labour and cheap products. We have even had to deal with such competition here in Canada with our own good products.

Consequently, we need different rules so that wealth can be better allocated.

In our opinion, the debate at the ILO, the International Labour Organization, must be a great deal tighter. The contributions of the ILO should be put to good use within all the debates at the WTO. People should make far greater use of the ILO, first of all because it is a tripartite body with representation from unions, the business community and government. They are used to dealing with issues together. The ILO also offers a great deal of expertise relating to labour matters. The ILO is able to monitor and discuss complaints from various countries, and can also apply international conventions. What the ILO doesn't have is the power to enforce its decisions. In our own jargon, we say that it lacks teeth.

Consequently, we ask that Canada insist upon continuing discussions during the upcoming round of negotiations with a view to defining true co-operation between the ILO and the WTO. We must recognize that the ILO has exclusive authority and jurisdiction to deal with labour issues; support the creation of a joint WTO-ILO working group that would define the best mechanisms and structures to be introduced; determine what mechanisms should be implemented to enforce workers' rights; request that a social clause be added to the WTO; and finally, fight for observer status for the ILO in all WTO structures so as to create strong ties between fundamental workers' rights and trade in all WTO efforts, particularly when the WTO reviews the trade policies of member countries. If we can attain such transparency, and ensure that unions and other groups are present, we will not repeat the mistakes made with the MAI.

The Chairman: Ms. Claudette Carbonneau.

Ms. Claudette Carbonneau (First Vice-President, Confederation of National Trade Unions): Thank you, Mr. Chairman.

The Confederation of National Trade Unions represents 250,000 workers in almost all sectors of activity in Quebec. Because of this presence, the CNTU has closely followed all the international trade negotiations of the past few years, including the GATT, the WTO, the Canada-US Free Trade Agreement, NAFTA and, more recently, the MAI.

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Our organization's interest in the trade negotiations has focussed on three main areas of concern. First, there is the issue of what impact opening up the economy will have on employment levels and working conditions among our members; the second concern is the impact of these trade agreements on the distribution of wealth around the world; and the third issue is the need to reflect the social dimension of liberalization in these treaties.

In dealing with international trade negotiations, one quickly realizes that the issues have repercussions for many areas and affect interests both here in Canada and in other countries. For that reason, the CNTU has been working over the past few years to develop alliances with other organizations in Quebec and in Canada, as well as abroad.

On the question of the Free Trade Area of the Americas, the CNTU is working actively with the Réseau québécois sur l'intégration commerciale, the RQIC, which was founded in 1991 to represent the three main labour federations in Quebec, international co-operation organizations and social and environmental organizations. The RQIC has built a cooperative relationship with its equivalent in English Canada and similar networks in a number of other countries in the Americas.

Moreover, the CNTU affiliated last November with the InterAmerican Regional Organization of Workers, the IAROW, which represents 32 other national central labour bodies in the Americas. One of its main focusses has been the social dimension of continental integration.

In preparation for the next round of World Trade Organization negotiations, the CNTU is working with 212 other national labour confederations that are based in 143 countries and affiliated with the International Confederation of Free Trade Unions. The ICFTU presented detailed proposals at the WTO ministerial conference in Geneva in May 1998 and again to the WTO General Council last December.

We will use most of our time to explain the need to include a clause on workers' rights in the new trade agreements both in the new WTO agreement and in the one expected to lead to the creation of the FTAA in 2005.

This proposal provides for the inclusion in the trade agreements of the obligation to comply with seven fundamental conventions of the ILO, a UN organization that has adopted 182 conventions since it was founded in 1919. Since the proposed clause involves only seven ILO conventions, it clearly deals with only a very small number, but I should add that the universal and fundamental nature of these conventions has been recognized by the international community in the Declaration on Fundamental Principles and Rights at Work adopted by the most recent ILO conference held in June 1998.

I would like to highlight the efforts of Canada's representatives from government, unions and employers, at that conference in helping to ensure that the declaration was adopted without any opposing votes.

The seven conventions included in the proposed clause on workers' rights are as follows: the conventions on the right to organize and bargain collectively; those prohibiting discrimination in the labour force; the minimum age convention; and the two conventions on the abolition of forced labour. I want to emphasize the fact that these seven conventions do not deal at all with quantitative standards, such as minimum wage and hours of work; instead, they focus on fundamental rights with a universal application. The proposal to include them in trade agreements is supported by the ICFTU and the IAROW, two international organizations that represent workers in both developing and industrialized countries. The proposal has received strong support from President Nelson Mandela of South Africa, who has recognized the universal character of the rights covered by the convention. His endorsement in 1995 was reiterated in 1998 by the South African Foreign Trade Minister.

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The clause on workers' rights is not about imposing rules that come from industrialized countries. The aim is to help prevent the most extreme forms of exploitation to which women and children are especially subjected.

Including this clause in international trade agreements would help to improve the situation of women, who make up most of the labour force in the duty-free zones of Mexico and Central America and who are subject to humiliating treatments such as periodic pregnancy tests. Needless to say, the women are let go if they are found to be pregnant. Women in these zones are also fired immediately if they try to organize a union, which is a right that would be protected by the clause on workers' rights.

The ICFTU estimates that about 15 million children are working in export industries around the world, a practice that the clause would help eliminate. There are also well-documented cases of forced labour in Burma and networks of labour camps in China supporting factories belonging to the Chinese army to produce goods for export. Those are a few example of extreme exploitation that the clause on workers' rights would contribute to abolishing.

If the clause were included in the trade agreements, all the binding mechanisms, including trade sanctions as a last resort, would be available to ensure compliance with it. The fact that the clause would be binding is the main innovative feature of this proposal. It should be emphasized, however, that penalties would be applied only where flagrant and persistent abuses were reported and where technical assistance, advice, and proposals from the ILO aimed at correcting the situation yielded no results, even after considerably long periods.

We would encourage the Standing Committee on Foreign Affairs and International Trade to consider our proposal and recognize its full significance. If the government were to reject the idea that we are proposing of taking into account a very important aspect of the social impact of economic liberalization, it might aggravate the protectionist sentiments that are surfacing in various regions of the world. These sentiments may become stronger over the next few years, with the sudden and successive devaluations that have been taking place in a number of countries following the economic and financial crisis that began in Asia in 1997. The public in some countries may refuse to ratify the treaties out of fear that increasing liberalization would lead to job losses and greater inequality. The example of the failed negotiations on the Multilateral Agreement on Investment show that citizens in today's world are following the international trade negotiations with concern and interest. It also shows that popular support for that type of agreement will be possible only if the negotiating process is transparent, open and supported by regular consultation of the civil society, and if the social dimension of international trade is taken into account in the agreements.

Because we are appearing here as delegates of a central labour body, we have focussed on our strong desire to see a clause on workers' rights included in future trade agreements, but our proposals deal with other areas as well. We have mentioned the CNTU's work within the RQIC and, through that network, with its counterpart in English Canada and a number of other countries in the Americas. Among other things, the RQIC, along with four other networks on continental integration in Canada, Chile, the United States and Mexico, has developed and made public a detailed platform of analyses and proposals for the negotiation among the 34 countries of the Americas. This document, called Alternatives for the Americas, was written between April and October 1998 and made public in various countries beginning in October. It is available in the four most widely used languages of the Americas and contains 12 thematic chapters on issues such as human rights, the environment, labour, investment, intellectual property, agriculture and dispute settlement.

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In the approach developed with our partners in the Americas, we follow two guidelines: first, international trade agreements must protect those areas of sovereignty necessary to implement national development projects; international regulations must be developed in social and environmental matters with a view to establishing certain common rules of the game in the area of international trade and also with a view to setting boundaries for the international flow of capital and preventing the damage to national economies it can cause.

This approach is an attempt to go beyond the criticism of existing models of integration like the NAFTA and come up with alternative projects suggesting another model of integration for the Americas. We're lacking time to describe the different aspects of this model. However, as an example, we'll simply mention that in the chapter on work, we suggest that in the continental agreement a clause on workers' rights, as described, be included, and the implementation of adjustment mechanisms, together with adequate funding, for those sectors where there will be loss of jobs because of continental integration.

Of course, it will be possible for an organization like ours to contribute to the continental integration process only inasmuch as, in Canada as well as for the rest of the continent, there exists a transparent negotiation process together with a regular consultation process.

Last February, the IAROW, to whom the CSN is affiliated, came up with a specific proposal for the FTAA committee on the participation of civil society set up after the commitment made, in April 1998 in Santiago, by the 34 heads of State and governments to consult the populations of the Americas on the stakes represented by continental integration. It should be said that our proposals to obtain, for the popular and union world, representation equivalent to that granted the Private Enterprise Forum during each FTAA ministerial conference have not been answered to date. Now, Canada is in a particularly good position to set up a regular consultation process on the stakes of the FTAA which could become a model for the other countries on this continent because, on one hand, it heads up the committee on the consultation of civil society and, on the other hand, it will be the host for the next ministerial conference which is set for Toronto in November, 1999.

As Canada has shown so well in the matter of antipersonnel land mines, it can play a leadership role at the international level in the new areas of concern for the international community. However, to do so, Canada will first have to show it can count on the support of all sectors of Canadian society which are concerned with all aspects, economical as well as social, of globalization.

The Chairman: Thank you very much, Ms. Carbonneau.

I will now give the floor to Mr. Audet, president of the Quebec Chamber of Commerce.

Mr. Michel Audet (President, Quebec Chamber of Commerce): Mr. Chairman, thank you for this opportunity to express ourselves this soon during the process and perhaps maybe a bit too soon during the process because we still don't have very many documents which would allow us to take a position in the matter of the stakes for Canada.

Now, for the good news...

The Chairman: If the process lasts as long as the other processes, I'm sure that... [Editor's Note: Inaudible]

Mr. Michel Audet: You're absolutely right.

The good news is that we can't presume that Canada has already made its bed. So we can discuss things a bit more freely.

Having been very close to the previous negotiation, more precisely concerning the Free Trade Agreement with the USA—at the time, I was Deputy Minister of Industry and Commerce and I coordinated the Quebec side of the work—I remember the very great concern that existed at the time, especially in the ranks of our union colleagues as to the impact it could have on delocalisation and jobs in Canada. Let's say I was happy to hear Mr. Massé tell us that these fears were exaggerated. In any case, I'm firmly convinced that, at the present time, thanks to the Free Trade Agreement with the United States and the NAFTA, Canada can still maintain and increase its growth. The basis of our economy is exports and we shouldn't be afraid to say so. There is 550 billion dollars worth of trade occurring between Canada and the USA. So it's a considerable market for us. One of the points we must remember during this whole negotiation is that a bird in the hand is worth two in the bush.

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I know that the negotiations will be broadened to include the Zone of the Americas, but the heart of the matter for Canada is access to the American market and the protection and even the improvement of this access we obtained through our previous agreements. That's a point we should not neglect. It must be said that this negotiation is going to happen in a very different context because since the previous negotiation, we've witnessed a huge change in how things are traditionally done in the area of trade, especially with the appearance of electronic trade and information technology. This will change how things are done, the role of the State and the control of the State over certain legislation and regulations. That will certainly be a major stake. It changes the deal from the first hand on.

In my opinion, these stakes should include a certain number of factors; a few of them were brought up. Emphasis should be put and will certainly be put on fair trade. After free trade, emphasis will have to be put on fair trade, in other words, the rules of trade between Canada and the USA and even in North America that will make non-tariff barriers disappear.

From that point of view, it is clear that Canada will be concerned. It recently was in the agricultural question, but in that area everyone has their own protection measures. In this negotiation, it is important, at the outset, to set up guidelines as was done with the USA. The Canada must say how far it is ready to go in certain areas.

Once again, I think the agricultural sector will be the target of a negotiation. That will have to be clarified at the outset. If we want to have access to the other markets, we're going to have to look at the impact of reciprocity. I'd like to take this opportunity to say that we shouldn't forget that negotiations always involve more than one party and I think that the people around the table are quite aware of that. We can't ask others for more open access if we're not ready to grant them a greater access. That's a basic rule. We can't just say: I want you to be more open for cultural products. We have to expect the others to continue to close some doors if we protect that sector. That's part of the rules of the game and Canada is going to have to adopt a position on that. It is clear that, in Canada, the cultural question will remain important, like agriculture.

The public contract market is a sector that is going to concern governments in a major way. The last time, that sector was slightly neglected. This negotiation will lead us to questions about opening up the market for public sector contracts: how far are we ready to go in this area? I'd like to take this opportunity to point out that this negotiation will have to include a very close concertation between provincial governments, and particularly that of Quebec, as it is a very important area. While provincial governments and their Crown corporations are presently responsible for over half of all purchases of public goods and services in Canada, during negotiations we'll have to expect that the others will want us to look at this matter. That also means that we'll have to involve them in the process. In my opinion, the provincial governments will have to be part of that consultation.

To wind up, there are three basic conditions for the success of this negotiation. On that, I quite agree with our union colleagues.

First, as we saw during the failure of the negotiation on investments, information and transparency have to be there. It's fundamental to give information to people so that they'll know what the stakes are, why the agreement is desirable, what the impact will be on them, what the benefits will be for us and, in return, what price will have to be paid for all that. During that kind of negotiation, information on this process is very important. So, you have transparency.

Secondly, we must provide for systematic co-operation with social groups, businesses and provincial governments. We will be turning to the provincial governments a great deal. Regardless of whether we are talking about the alcoholic beverage market, government procurement or Crown corporation purchasing, there will be a very strong demand, particularly from our American colleagues, to have greater access. In my opinion, we must therefore, right from the start, ensure that the provinces are on board and we must work closely with them.

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Finally, I would like to say that I completely agree with the opinion expressed by my colleague from the CPQ with regard to the investment file. We must not think that, because negotiations failed, this file has been settled. We must reexamine this issue because a country that is as open to foreign investment as Canada is cannot lose interest in a file like that.

We are certainly going to have to go through the exercise once again, but this time around we must clearly explain the stakes involved and why we are doing this, so that people don't get the impression that we are entering into an agreement that may work against them.

These are my preliminary comments, Mr. Chairman.

The Chairman: Thank you very much, Mr. Audet.

We will now go to questions.

Mr. Obhrai.

[English]

Mr. Deepak Obhrai: Thank you, Mr. Chairman.

Thank you very much for the brief. There's quite a diversity of witnesses here.

My comment is this. Everybody here who has made a comment has had some valid points here and there. One can take the picture. What I'm hearing since I left Quebec is this. Every group, everybody, wants to be in the WTO. It wants the WTO to do this, to do that. The concern coming out of this is that the WTO is going to become one heck of a huge bureaucracy. It will become such a huge bureaucracy that it will become one heck of an inefficient body.

I'm asking you this question because we've heard from a tremendous amount of people. I agree there is a need for some kind of social work there, labour rules, human rights. But what's concerning me—and I'm going to ask you—is that we do have other organizations through which you can go. Of course, the counter-argument is that you have to organize and the WTO has the teeth, so it's quite capable.

But I'm asking, are we going to make the WTO an inefficient body and forget the picture that is supposed to be the promotion of free trade? All the others add to it from other organizations. Arguments say Canada has every right. Even if a WTO member, some country, abuses human rights, we can definitely refuse to trade with that country and put pressure on that country.

What does that have to do with the WTO? The WTO is to ensure fair rules of promotion across the board. Other countries are setting their rules. That's one I will agree with. There are countries that do not have proper rules and they need to.

So this is a concern. Maybe some of you can give me an idea. Are we going to make the WTO a huge, inefficient bureaucracy or not?

[Translation]

The Chairman: Mr. Bakvis.

Mr. Peter Bakvis (Executive Assistant, Confédération des syndicats nationaux): If you're referring specifically to the main message contained in the brief just given by Ms. Carbonneau, namely, the enforcement of a clause on workers' rights, this would not at all entail adding to the existing bureaucracy. The bureaucracy exists and it is known as the International Labour Organization.

Mr. Massé also mentioned earlier that there needed to be greater linkage between the two organizations. We feel that the ILO does a very good job of monitoring enforcement of the international labour standards. All that we need to do now, as Mr. Massé said, is to give this organization some teeth. There are not many international organizations, and the WTO has the ability to do this.

Moreover, there are documents out there that describe the technical aspect in greater detail, however, our brief was already long enough and we didn't want to go into these details. There is no talk about setting up a new organization that will monitor international labour standards. This structure already exists. Rather, we want to try to ensure that there is good co-operation between the World Trade Organization and the International Labour Organization.

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If I may, I would like to make one more point. We are making these suggestions because we want to avoid the situation where the States unilaterally take action, creating an even bigger model. We have only to look at the example of our neighbour to the South, the United States, which, despite the fact that it did not itself ratify most of the seven conventions mentioned, feels free to impose, from time to time, trade sanctions on countries that do not abide by these agreements. We don't want to find ourselves in a situation where 50 or 60 countries decide, each in its own way, to come up with ways of imposing penalties.

Accordingly, we want to avoid chaos when these rights are enforced and we want to ensure that certain multilateral universal rules are there when this proposed mechanism is implemented, namely, the clause on workers' rights.

The Chairman: Do you have any other observations, Mr. Massé?

Mr. Henri Massé: We will already have overcome one obstacle if the Government of Canada listens to us, this government that is in a position to convey the essence of our positions. Right now this is not the case. We do not want a seat at the WTO. This is an organization that deals with international trade. We do feel, however, that there should be greater consultation between the WTO and the ILO when it comes to workers' rights and labour relations. We are used to working with other groups on this particular file, whether it be at the CSN or at the big international summits. There is a division for workers and community groups at the summits of the Americas. I don't think that we would be making the process more cumbersome. This is not at all what we are asking for.

The Chairman: Mr. Audet, do you have any other comments?

Mr. Michel Audet: No.

The Chairman: Mr. Sauvageau.

Mr. Benoît Sauvageau: Good afternoon, ladies and gentlemen. Welcome to the committee.

If this consultation process is as long as the other ones, we certainly will have the opportunity to see each other often. All the groups, whether they represent employers, unions, farmers or the cultural sector, are asking for information and transparency. To some extent, your own presence here is an example of that, and we do hope that you will be appearing before us fairly frequently.

My first question is for Mr. Audet. You mentioned reciprocity in the negotiations on agriculture, or in other words, give and take. Canadian farmers are going to have to give up a few things if they want to increase their share of foreign markets. However, what we've heard so far is that we've done more than our part when it comes to giving things up. The various agricultural groups that have met with us, particularly the Canadian Federation of Agriculture, the UPA and the regional and private producers, told us that we have already shown a lot of give and take in the farming sector. We opened up 4% of our market, and the other countries didn't. We eliminated export subsidies, and the others didn't. Could you tell us whether reciprocity means 50-50 or whether Canada has already done its part in that regard?

As for information and transparency within the framework of the MAI and the WTO, could all of you suggest some practical solutions to us. For example, the unions and the lobby groups have quite easy access to the Internet these days. We were asked to make Canada's position available on the Internet, not our strategy but Canada's position, and then when we asked to post WTO discussion papers on the Internet. We could have a program of exchanges regarding Canada's position. Do you have any other suggestions for us? Yes, we want to consult and we want to be transparent, but how should we go about doing that? That's one question.

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As for the social clause within the framework of the WTO and the ILO, Ms. Carbonneau, you said that you didn't necessarily want the WTO to be the organization administering that; rather, you would like the WTO to consult the ILO frequently. If my memory serves me, the Singapore Declaration of Ministers said exactly the same thing. Is that enough? I don't think so. The WTO was asked to respect the ILO's seven basic conditions. Is that enough? How could we go beyond that? If I have any time left, I'd like to add something further.

The Chairman: Mr. Audet.

Mr. Michel Audet: I am not an expert on agriculture, so I will stick to some general observations. I certainly don't think that our agriculture policy should be questioned or put on the table. However, I am saying that the previous agreement on agriculture allowed us, particularly in Quebec, to preserve the four pillars of our agricultural policy, as the UPA puts it: supply management, crop insurance, income stabilization insurance and farm credit. One can't say that the previous agreements did a great deal of harm to Quebec's agricultural policy.

The issue at stake, and this will be increasingly up for grabs, not just in Quebec but also in Canada and elsewhere in the world, is to what extent the public sector should fund agriculture. Whether you like it or not, no matter what you call it, when public monies are spent to fund the production of commodities, this becomes government funding. How far should we go? There certainly will be a great deal of negotiation on this issue. If we want more trade liberalization, the tradeoff will be that everyone will have to agree to reduce government support or funding for agriculture. That's the issue at stake.

It is not enough for one side to disarm. The other side has to disarm as well. Just like negotiations on disarmament, everyone is going to have to reduce their level of protection slightly. No one country will do it on its own. All countries will have to do so.

I think that Canada and Quebec do not have to do it before the other countries, but they must tell themselves that if the other countries are willing to make such and such a concession, they will have to be willing to give a little as well.

The other day, I was speaking on the airwaves with Quebec's Agriculture Minister, and I completely agreed with him about protection. However, he was saying at the same time, "I want to increase our exports by x%." You can't say that you want to increase our exports and tell the other countries that they will not be increasing their exports to our country. It's a two-way street. So the whole notion of give-and-take will come into play, and I think we must expect this to be a major issue during the negotiations. The process will have to be very clear.

We support our friends in the agriculture industry in many regards, because these workers have built assets for themselves and have managed to create an industry that operates fairly well, but we must acknowledge that if we want to increase our share and gain access to other markets, the other countries are also going to be asking for their share. That's how I saw it.

Secondly, as for the process of working together, there is no absolute, clear formula. What I had in mind was establishing a process for a joint action with the provinces. Be it agriculture, government contracts or provincial government procurement policies, there will be many issues to look at. This process was established when the FTA and NAFTA were being negotiated. I am convinced that this process will have to be put into place, and there will have to be an on-going exchange with federal negotiators on this matter. That's what I have to say about dealings with government.

As for dealings with groups, I know that the federal government had its own consultative process during the previous negotiations. Quebec also had its own process. Consequently, both will probably have their own process to involve the various stakeholders. A travelling committee is not necessary, but I do believe it would be a good idea to have some structured committees so that as the negotiations proceed, the people could be kept abreast of the major issues at stake. Obviously, one can't reveal everything that's on the table, because some things cannot be released publicly, but you could reveal the major issues and discuss them somewhat so that the people can be kept informed as the negotiations move along.

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One could say: "We have an agreement and this is what it's all about." It's always difficult for groups to accept this when they pay a price during these trade-offs, and feel that they are not necessarily compensated for this price.

The Chairman: Ms. Carbonneau.

Ms. Claudette Carbonneau: Your first question had to do with practical solutions relating to information and transparency. It's more than just a matter of making written information available, no matter how it is provided. During our presentation we stressed that it was important to provide a forum for interactions so that the issues can be understood. The lack of transparency and information makes people feel rejected, they get a chilly feeling of withdrawal, and that's not good. So we thought that a forum could be established, which we called the union social forum, a place where converging views could come together and where interactions could happen, not just a place for providing information. Given Canada's role and given the fact that the next conference will be held in Toronto, we hope that the federal government will take such an initiative.

Regarding the second question, the declarations on workers' rights, you must understand that the aim is to include a requirement to respect the seven fundamental conventions of the ILO in trade treaties. There has to be an explicit reference that is more binding than a mere declaration of intent. This also implies that mechanisms for recourse be defined within these trade treaties, in view of the support we had as mentioned earlier on this issue of recourse. We focused on the role of the ILO, for example, which provides support to certain countries. There shouldn't be an immediate penalty the first time an offence occurs, but there has to be sanctions if there are constant, flagrant violations and obvious bad faith.

So, the two essential mechanisms are the inclusion of a requirement to respect the seven conventions and the definition of a number of recourses.

The Chairman: Ms. Côté.

Ms. Lise Côté (Economist, Research Services, Fédération des travailleurs et travailleuses du Québec): I would like to answer the first question about transparency. We think that there are two levels of transparency. The federal government absolutely must establish on-going forums so that we are not always forced to respond after the fact. Rather, we would like to be closely involved in the negotiations that are coming up and we would like an opportunity to express our concerns and our demands concerning these negotiations, which will be beginning soon. So there's that aspect.

Of course, we would like to be more closely involved in the negotiations within the framework of the labour forum that has been suggested in the declaration that came out of the grassroots summit that was held at the same time as the last ministerial meeting for the FTAA negotiations.

You spoke a great deal about the Internet. All methods are good to transmit information and to tell people about all these issues. The Internet has been very effective in the case of the MAI.

Mr. Benoît Sauvageau: That's why I gave that example.

Ms. Lise Côté: That shows that secret negotiations conducted only with the ministers of a small number of countries are doomed to failure, because the transparency just isn't there. When the people know what's going on, there can be a great deal of mobilization thanks to the Internet.

• 1440

The Internet has also been very useful with the Tobin tax. At present, various groups have been quite successful in mobilizing to deal with the Tobin tax. The movement began in France and is gathering a great deal of steam.

As for the link between the WTO and the ILO, the Singapore Declaration is more of a manifestation of States' willingness to get involved, but it is worded in the following way:

Whereas the International Labour Organization (ILO) is.... the competent body to set and deal with international labour standards, and enjoys universal support and acknowledgement in promoting fundamental rights at work....

That's rather vague. We are asking for a much tighter link, a great deal more cooperation, between the WTO and the ILO. In our view, the WTO is strictly an economic organization, an organization whose objective is solely economic. There are many other international organizations that have a somewhat broader concern for development that are also working in the areas of human rights and social rights. They have developed undeniable expertise that is recognized worldwide. For example, there are the UN agencies, and the ILO is one of the most important of them.

A working group could look at the creation of closer ties between the WTO and the ILO. It could be a working group within the WTO, but the ILO would be associated with it, and could suggest a possible mechanism.

Furthermore, we suggest that the ILO have observer status at all levels of the WTO. First of all, the WTO would have to recognize that the ILO has exclusive authority and jurisdiction over labour issues.

The Chairman: Mr. Massé, could you please be brief.

Mr. Henri Massé: I would like to come back to the issue of transparency. I believe that we lack serious and precise working tools to be truly transparent. A few moments ago, I admitted that there was not as much dislocation as we thought there would be before free trade. This led Michel Audet from the Quebec City Chamber of Commerce to say that free trade was the solution to all our problems.

Exports are up, but the value of the dollar is very low. Our natural resources are selling at very low prices. I know a lot of people in agriculture and follow this area very closely. Statistics are much more transparent in Quebec and in Canada than in other countries.

I don't think we have the work tools we need. As I work for the FTQ, this concerns me greatly and I often ask for information from the research department. Every time a company closes, they say it's because of free trade. That's not necessarily so. Sometimes it has nothing to do with free trade. But they also tell us, on the other hand, that every time a job is created it's due to free trade. It's because of these statements that we need better work tools. If we want to have competent and more transparent discussions, we need better work instruments.

Mr. André Bachand: Mr. Chairman, I would like to stay with the issues raised by Mr. Massé. Mr. Audet spoke about previous agreements and said that the agriculture sector did not suffer as much as some people have claimed. We always have to make the distinction between previous agreements and recent judgments.

A law may appear to be wise until it's been interpreted by the courts. Justice is not built on legislation, but on case law. The same principle applies to international trade. Decisions taken under an agreement pave the way for the next round of negotiations and therefore for an improvement in relations. I just wanted to make that point, because agriculture is under a lot of pressure these days.

Incidentally, I find it unfortunate that people are playing down the most recent judgment by the WTO. They say it's only 5%. Some decisions merely talked of a certain percentage, including the case where butter oil and sugar are mixed. It only represents $40 million. It's only this or only that. But at a certain point, we will have to pay more attention to agriculture.

• 1445

I'm not an expert in the field, but I would still like to ask a question to all the members on the panel, and perhaps more specifically to the people representing workers. From the start of our study on the WTO, we have heard of the primacy of many things. This morning, we discussed the primacy of the State, which should be respected in future WTO negotiations. We also talked about the primacy of the environment; it was said that any agreement should put the environment first. People talked about the primacy of health and—I have a hard time understanding this—of phytosanitary and sanitary measures as well as other things. This morning, we heard about the primacy of the rights of man, whereas now we're hearing about the rights of workers.

The Chairman: You mean "human rights".

Mr. André Bachand: All right, human rights. I used the word "man" to be less wordy.

I would like you to tell me how important workers' rights are in comparison to all the other rights that people are asking for. Some people might want to include workers' rights into human rights, Mr. Chairman, or whatever.

I can't help but briefly comment on the Tobin tax. I apologize, Mrs. Côté. The Canadian Parliament is currently studying a motion on the Tobin tax. I personally have a big problem with that.

Ms. Maud Debien: It was passed yesterday.

Mr. Alain Bourbeau: I still have a big problem with it and I can't understand why we would want to tax the Bank of Canada's trade transactions, as well as bonds and RSPs. The Tobin tax is a passing trend and it will not be levied.

You've made me forget what I wanted to say next, Benoît dearest!

Mr. Benoît Sauvageau: I told you not to say that.

Mr. Alain Bourbeau: Ms. Carbonneau, we were asking: why the WTO? It's because the WTO has teeth. A few of you mentioned the ILO and how long it takes to implement its decisions. However, Ms. Carbonneau, you concluded by saying that the WTO should take into account the seven agreements which affect workers and we should make sure that these agreements are respected. But you did not mention their implementation. Must we again use the same process of implementation which, between you and me, basically does not work?

I have a final general question about countries which do not respect workers' rights and with whom Canada has trade relations. Do you believe that Canada should stop trading with these countries?

The Chairman: Mr. Massé, you seem very impatient.

Mr. Henri Massé: No, I was just lifting my pencil to look at it.

Some hon. members: Ah, ah!

Mr. Henri Massé: Your question did not deal with the sovereignty, but with—

Mr. André Bachand: Primacy.

Mr. Henri Massé: It is clear that when you sign a free trade agreement, you have to let go of a bit of independence. I can tell you from the outset that the FTQ is not afraid of competition and competitiveness. We have a solidarity fund and we must also respect the laws of the market place in our work.

But we have a problem when people base a free-trade system, or globalization, exclusively on the idea of unfettered competition, without ever talking about cooperation or solidarity. What is often not told is that there are losers in that kind of scenario. All we hear about is winners. People say that if we are competitive we will come out on top. I have the feeling people are trying to tell us that every country in the world can be a winner today. It's obvious that there will be losers and we will have to set money aside to help economies which will be at a disadvantage. But the most dramatic thing which is being said today, is that when we have discussions with workers and unions from other countries, we often hear—as I said at the beginning—that countries in the Northern hemisphere should lower their standard of living a little bit so that countries in the Southern hemisphere may gradually increase theirs. But that could take 15, 20, 25 or 30 years. That's a long time.

• 1450

However, the opposite is happening: those countries are not developing a market system which would allow them to supply their own domestic markets. They can't even buy the products they produce; they only produce them to sell them to us. Quite often, their workers, who are not as educated as ours, produce inferior quality goods which compete against the goods we produce. There's a limit to competition. I think that discussions about free trade should not be limited to trade issues. We also have to talk about a fair redistribution of wealth—I am not talking about angelism—and the fact that some mechanisms should remain in place.

The Chairman: Mr. Audet, and then Ms. Carbonneau.

Mr. Michel Audet: I would like to make a brief comment on the last question. As Henri Massé said, for Canada and the United States, a supranational tribunal was set up, which was, for United States, quite revolutionary given the traditional role of Congress with respect to trade. I think that the problem is just as prevalent on the American side as it is here, when both countries accept decisions on barriers. The same is true for the WTO.

Getting back to your question, I am not saying that these decisions do not affect agriculture. On the contrary, I think that implementing these decisions must be examined. When decisions affecting us are made, and they are not in our favour, we need to find ways of implementing them without affecting agriculture. We cannot tell the other countries that we will not follow through on these decisions, because we should accept the price to be paid for such a refusal and submit to the retaliatory measures set out in the agreement in such cases.

I fully agree with Henri's position that signing agreements mean relinquishing some of our sovereignty and diminishing our ability to act domestically. If the rules are not considered fair and the terms of the agreement are not enforced, there will inevitably be a price to pay. That is often what happens in cases like that. I am not saying that this will not hurt, but simply that we need to realize that it is part of rules of international trade.

You asked if we should continue trading with countries that do not respect workers' rights. As I said, the aim of our negotiations should be to promote development in poor countries, namely in the South, which are generally the countries that do not respect workers' rights. If we decide not to trade with countries that do not respect workers' rights, we will basically end up with the chicken and the egg problem, as is the case with the way that Canada and United States interpret trade with Cuba. Do we facilitate access to better rights by boycotting these countries, by depriving them of more jobs and trade? I don't think so.

In my opinion, that method would not be effective. If we agree to rules that apply to everyone, there must be recourse to other means to urge countries to respect democratic rights. If every international trade agreement is subject to respecting rights, the issue of where rights begin and end comes into play. It ends up being an issue that can be subjective, and each country might well end up with its own interpretation. I would not support that kind of approach.

The Chairman: Ms. Carbonneau, would you like to comment?

Ms. Claudette Carbonneau: I could raise a number of issues. If I understood your question on primacy correctly, it is clear that we are not saying that workers' rights will solve everything. As we stated at the end of our brief, we favour dealing with these problems from a broader perspective.

Nevertheless, workers' rights and human rights are closely linked, especially when looking at the nature of the seven conventions. Whether we talk about forced labour, no discrimination, protecting children or a minimum age for work, we are addressing something that is very closely linked to basic human rights. In that sense, focusing on workers' rights means giving ourselves the room we need to identify the most appropriate mechanisms in each country.

• 1455

I am thinking among other things about the reference to the right to negotiate. We must be able to count on the parties in the national governments to identify solutions that are appropriate in their respective contexts, and that will comply with all rights and represent progress for all people throughout the world.

In that regard, workers' rights clearly do not solve everything, but they are a central issue, since they are very closely linked to international trade.

Mr. Peter Bakvis: Mr. Bachand asked us if Canada should stop trading with countries that do not respect the seven fundamental conventions. We do not support that position. As you know, precedents exist. When Mr. Mulroney was in power, he decided, and Canadians were behind him, to impose trade sanctions on South Africa during apartheid, because human rights were being violated. More recently, Canada imposed sanctions on Mynamar and Nigeria because of violations.

Precedents exist. The draft clause on workers' rights aims to prevent each country from taking the law into its own hands. It is designed to implement a multilateral mechanism that will prevent countries from establishing themselves as judges and parties and determining the whos and hows of it all. There could be all kinds of vested interests at play. I refer you once again to the United States, which uses non-compliance with labour laws to impose trade sanctions. But the US does it so selectively that many groups rightly accuse it of taking action only when its own trade interests are the most affected.

Canada, in keeping with government tradition, has always been in favour of setting up a multilateral mechanism based on the international labour organization model, which dates back 80 years.

Your other question dealt with the application of this mechanism. The International Confederation of Free Trade Unions proposed that compliance with the seven fundamental conventions be an obligation that, if violated, would result in recourse to the provisions of the agreement, as was the case for intellectual property during the Uruguay Round. How can slavery be less important than intellectual property, or the obligation to pay royalties to patent holders? With intellectual property, if a country reproduces compact discs without paying royalties, it is likely to face a host of trade sanctions under the WTO. We maintain that recourse should also exist for the seven basic conventions. Ms. Carbonneau said during her presentation that it should be a last resort, and we agree. We support the ILO's approach, which has always been based on advice and technical support for countries wanting to remedy situations.

But when that does not work, as was the case with Mynamar, Canada can unilaterally decide to impose sanctions. We recommend implementing a multilateral procedure that will allow for more systematic intervention and that will not depend on various countries' individual initiatives.

The Chairman: Thank you.

Mr. Patry.

Mr. Bernard Patry: Thank you very much for appearing before us today. I would like to start by saying that I'm very happy that we have heard witnesses like Mr. Allmand, from the International Centre for Human Rights and Democratic Development, as well as the representatives from the union federations, the Quebec Chamber of Commerce and the Conseil du patronat, from whom we will hear this afternoon. It is very important for us to hear your concerns, and above all, the potential solutions you may want to put forward.

• 1500

Ms. Carbonneau, in your brief, you mention a report done by the RQIC with four networks regarding integration on a continental scale, including Canada, Chile, the United States and Mexico. If possible, I would like you to send copies of this report, in both official languages, to the Clerk. I would look forward to reading it because it must contain a comprehensive examination of that question.

You also talked to us about the seven conventions that have been ratified by the greatest numbers of countries. At the ILO home page, we learn that Convention 29, which prohibits forced labour, has been ratified by 149 countries, while Convention 138, which concerns the minimum working age, has been ratified by 66 countries. Have these ratifications led to changes in the countries in question?

Mr. Massé, you raised the subject of consultations between the ILO and the WTO. This morning, Mr. Allmand, appearing on behalf of the International Centre for Human Rights and Democratic Development, presented us with 14 recommendations, and the tenth one had to do with the WTO and the ILO. I have the impression that this tenth recommendation goes further than what you are asking for:

The Canadian Government should support the establishment of a Joint ILO/WTO Working Group on the relationship between Trade and "Trade- Related" International Human Rights Standards, similar to the WTO Working Groups on the Relationship between Trade and Investment and on the Interaction between Trade and Competition Policy.

I would like to know whether, in terms of the consultations that you are recommending, you would like to go further and support the establishment of a WTO/ILO working group.

Mr. Henri Massé: We are in agreement, although I did not raise the question.

Mr. Bernard Patry: That's fine.

The Chairman: Ms. Carbonneau.

Ms. Claudette Carbonneau: I will touch very briefly on the first question, regarding the documents that you would like to be able to consult. Let me point out that the Network's representatives will be appearing tomorrow and will very likely submit a more detailed brief to you. We will be pleased to forward these documents to you. You also raised the matter of the conventions.

Mr. Peter Bakvis: Yes, you asked us whether the ratification of the conventions had led to changes in these countries. In some cases, yes, absolutely, but not in all cases. If I may, I will once again give the example of Burma, which had ratified convention 29 regarding forced labour. In passing, Canada has still not ratified it, but I am told it's only a question of time. Even though Burma has ratified this Convention an investigation was conducted recently in this country. I obtained a copy of the 400-page, ILO report, which confirms that forced labour camps exist in that country.

The countries that have the will to do so use all the options available, in terms of advice and technical assistance provided by the ILO and its administration. A country that decides to ignore these principles can do so. That's the missing link, this lack of remedies, this lack of teeth, as Mr. Massé referred to it. That's why we maintain that, as a last resort, in extreme cases, there must be a possibility of applying trade sanctions to ensure compliance with this convention.

Mr. Bernard Patry: Thank you, Mr. Chairman.

The Chairman: May I come back to this question of sanctions? I think that Mr. Bachand had raised it. There is a growing consensus that the WTO must take into account concerns in the area of the environment, labour and, as we are now hearing, culture. However, I believe that this raises other questions. Protecting the environment and labour rights requires a regime. As Ms. Carbonneau said, the rules will be the rules and the ILO's seven principal rules will probably pave the way for a gradual broadening of the scope of application.

However, I would worry about a problem, as Mr. Audet seemed to indicate, with regard to sanctions. Mr. Sauvageau travelled with me to Singapore last year, and we did in fact hear all the developing countries say that they had the advantage of a labour force that was cheaper than ours, that we were going to create a new form of protectionism, a system that would replace dumping and countervailing duties, and that their goods would not be able to get into our system because of their labour rules, etc..

• 1505

Currently, it would be very difficult to design such a system. I believe, Mr. Bakvis, that you have put your finger on the answer. You said that we should not have a system in which nations, individually, act as judge and jury but a truly international system of sanctions, that is, a system accepted by everyone. If you propose something like dumping, it would be the American Congress and the CITT for Canadians that would propose.... You are thinking of proceedings like the ones we already have for dumping cases; there would be the same proceedings before the CITT in Canada and before the American or European authorities, which become very protectionist. If this is the kind of system you are proposing, I would find it difficult to accept. On the other hand, if you are proposing—and I think that's the way we should go—a truly international system in which international authorities make the decisions, then I agree. Is this the direction in which the system is heading? If so, we are on a very important course in terms of developing international law and the international system.

Mr. Peter Bakvis: The system that you describe is precisely the one we envisage. It is fully in keeping with the tendency in international trade negotiations: we are working toward international rules and we want an international authority—

The Chairman: International application.

Mr. Peter Bakvis: —that makes the decisions. We are doing this partly to avoid unilateral action on the part of States.

As for the fear of protectionism, it was mentioned that one of the first governments to give its endorsement was that of South Africa which, as we know, is considered a developing country. Why South Africa and Nelson Mandela? I imagine that it is because they recognize that human rights are at stake. We are not talking about setting a worldwide minimum wage, or even—

The Chairman: No, no.

Mr. Peter Bakvis: —a continent-wide minimum wage. Countries with low wages will perhaps stay that way; it will be part of their competitive advantage. However, as certain ICFTU documents make clear, the real competition is between Third World countries. Burma is stealing jobs from the Philippines which, for its part, respects certain basic rules, while Burma and Vietnam do not respect them because, in these countries, no free trade unions can be organized and child labour is permitted. We are not talking about setting up a protectionist system for the industrialized world against the Third World, and that is why there are only seven Fundamental Conventions ratified by the large majority of the world's countries.

If MPs are interested, I have copies, in both official languages, of the International Labour Organization Declaration adopted in June, 1998, and endorsed by all ILO member countries, who number about 174. The Declaration states that compliance with these conventions should not be used to justify protectionist measures. Everyone was in agreement on this point. It must also be recognized that these are fundamental, universally applicable conventions that must be respected by everyone.

The Chairman: I don't want to dwell on this point, but to date, the sanction existing in international trade law has been market access; access to markets can be blocked.

Are you, for instance, suggesting that the WTO should have some kind of tribunal that could declare that a given country does not deserve to be a member of the WTO because it does not respect basic standards, or should we rather impose sanctions on trade in certain products? As Ms. Carbonneau said, rules without sanctions mean nothing at all.

This morning, Mr. Allmand told us that the WTO was the only international body that is currently functioning because it is the only one that has real sanctions and rules that can be applied.

So, if we must have rules, what kind of sanctions will there be?

• 1510

Mr. Peter Bakvis: Sanctions could possible involve special customs tariffs, as it is done with intellectual property. This can be done in a very focused manner. If it is shown that a given product from a given country was produced by 10-year old children, special measures can be taken against the product. It can very well be targeted and with very quick results.

The Chairman: When dealing with the protection of patents, inventions, etc., does the WTO determine this or do the member countries individually decide to apply it, as in the case of dumping?

Mr. Peter Bakvis: The WTO can allow countries to apply it, but if a country does not want to, it does not apply it. There is no international police yet to oblige countries to do so, but the WTO gives countries the opportunity, in specific cases, to apply trade sanctions.

The Chairman: Before doing it, an authorization from the WTO is required. It is not exactly like dumping.

Mr. Massé, would you like to add something?

Mr. Henri Massé: I would like to note that a false debate, and quite a large one, has risen around the whole issue of workers' rights. They're talking about protectionism, etc. First, we should read the international conventions and note that there is a great deal of flexibility, not to say that there is a great deal of slack. The notwithstanding clause can be invoked at any time, at the will of national intervenors. If we read it closely, we note that there is a great deal of leeway for primacy at the national level.

When this debate includes unions, through the ICFTU, third- world countries are involved and they agree on introducing the social clause, which we now call the workers clause. Obviously there may be some problems. Regarding youth labour, North-Americans and Europeans say that children below a certain age should not work. In third-world countries, they have problems with the rigidity of our standards because they say that they do not have an education system, etc. Generally speaking, these workers, in their countries, should have the right to free negotiations to defend their working conditions, but we should stop saying that they must respect conditions similar to ours because they are light years away from us.

The Chairman: Let us consider the case of young workers. We do not want a system where, for instance, Europe could impose sanctions on Canada because our youth deliver morning newspapers, as everyone has done. Twelve to fifteen year-old youths have been doing it for years, and some country could find an opportunity to impose sanctions on Canada for this reason, and through such sanctions, it could retaliate to gain trade benefits, etc. This is what we want to avoid. We need a system that can really be applied internationally, with international standards.

This is the reason why I put this question to Mr. Bakvis. I think that we are moving in that direction and your intervention helped us to understand that.

Mr. Michel Audet: We remember President Clinton's concern, after he was elected, regarding the agreement with Mexico that had spun a kind of appendix. It is more like a best effort than a system that involves sanctions. This may be an avenue to explore for the coming round of negotiations. However, I think that this would take much more work and longer negotiations, even if I know that there is an ILO forum debating this, before this can trickle down to the level of the national laws of each country. This concern must be raised, but if we want to make of it a priority in negotiations, there is a strong chance that negotiations will not even begin. Thus, we will have to take this as a valid parameter, but it still remains on the level of trade negotiations and not on to the level of human rights negotiations.

• 1515

Mr. Henri Massé: I think that the Chamber of Commerce will understand that better-paid workers, with better-working conditions increase the flow of trade.

Mr. Michel Audet: Exactly.

The Chairman: If you think that things are complicated here, you should see the debate between the Republicans and the Democrats in the United States. Then you'll really see what this is about.

Mr. Bakvis, you have the final word.

Mr. Peter Bakvis: In response to Mr. Audet's statements, regarding the parallel agreements of NAFTA on work and environment, there is a point that he must certainly agree with, namely the recognition of the link that exists between trade on one hand, and working conditions and environmental standards on the other hand. These agreements allow for trade sanctions being used as a last resort, and I am glad to note that he agrees on this point.

The problem with these agreements, to the contrary of what was said here, is that they do not set out any common standards. The agreements say that each country must apply its own labour laws. It is already a good thing that countries are applying laws, but nowhere are the basic applicable elements being shown. That is the missing part. We should rectify this situation by promoting the idea of a clause on workers' rights.

The Chairman: Your minimum standard, are then the seven fundamental conventions just mentioned.

Mr. Peter Bakvis: That is it.

The Chairman: We have got your point.

Ms. Maud Debien: Mr. Chairman, did you forget me?

The Chairman: I could never forget you, Ms. Debien.

Ms. Maud Debien: I would like to come back to the question of the WTO and the ILO. I have understood different things. However, there are three options among others that I would like to have clarified.

Some have mentioned the ILO in the context of workers' rights as being the body that has the needed expertise with these seven fundamental conventions, to properly set down rules regarding workers' rights. For the WTO, the ILO would be a consulting organization.

Someone else took an even greater step forward by saying that the ILO could become the enforcing arm of the WTO. Isn't that what you said?

Mr. Peter Bakvis: No.

Ms. Maud Debien: Then, you mentioned creating a new instrument. What kind of formal relations do you want to establish between the WTO and the ILO?

Mr. Peter Bakvis: We could send the committee documents available in both official languages—

Ms. Maud Debien: Yes, I would like that because it is not clear.

Mr. Peter Bakvis: —describing this idea which has already been promoted, by the International Confederation of Free Trade Unions, to which the FTQ and the CSN belong.

The ILO is mentioned as having the expertise and the monitoring capability necessary to determine violations of basic rights. The WTO is adding to this a mechanism for applying sanctions as a last resort. Eventually, constraints are a possible recourse which would be added to the ILO's work which it does very well in general.

Ms. Maud Debien: All right. Thank you.

Mr. Henri Massé: This would be a protocol between the ILO and the WTO, as an added structure on top of the existing one.

Ms. Maud Debien: It would have to be very formal to be efficient. Thank you.

Mr. Michel Audet: Would you allow me to make a joke I propose that our friends, the trade unions, go and negotiate labour conditions abroad; this would make us more competitive.

The Chairman: They're certainly ready to accept that challenge.

Mr. Henri Massé: We have too much work to do here. We do not have the time. This would be a nice mandate for Gérald Larose.

The Chairman: Thank you very much. I thank you all for your presence. Now let us take a three-minute health break.

• 1520

• 1528

The Chairman: Welcome to our witnesses from the Quebec Bar, from the Ordre des comptables agréé(e)s and the Ordre des ingénieurs du Québec. Please begin, Ms. Chapados.

Mrs. Annie Chapados (Lawyer, Research and Legislation Services, Barreau du Québec): Very well.

The Chairman: We will then hear from Mr. Laliberte, then Ms. Lussier-Price.

Mrs. Annie Chapados: Mr. Chairman, ladies and gentlemen, my name is Annie Chapados and I am a lawyer with the research and legislation service of the Barreau du Québec; I deal mostly with the legislative and regulatory framework of the legal profession.

Today the Barreau du Québec is 150 years old and has a membership of 18,000 lawyers. It is a professional order according to the definition of the Code des professions du Québec. Membership is compulsory. This is what differentiates us from the Canadian Bar Association, where membership is voluntary, and to which about 4,000 Quebec members, judges, lawyers, notaries and students belong. I know from experience that people often confuse these two entities which are completely distinct.

• 1530

We were not able to table a brief before appearing here today. As we only learned about these hearings a few days ago, we did not have enough time. Nevertheless, I find myself here before you today because this issue is important to us. We may be able to table a document before the committee or the department depending upon the deadline that you have for tabling your report.

I attended the end of the hearings a little earlier and I noted that there were—not in the pejorative sense of the word—grocery lists, that is very firmly held positions with respect to certain problems: what we want, what we don't want, etc.. You will understand that since I am not tabling a brief today, my comments will be limited to certain basic elements, more particularly the question, which appeared on the committee's Web site, involving the internationalization of services and values, mainly social in our case. These social values are perfectly illustrated by the Quebec professional system, which is unique. I believe it's important that people who are called upon to table a report and those who will have to negotiate this agreement, understand the existence of the Quebec professional system and all of its elements.

The professional system in Quebec dates back to the 1970s. In 1970, the Liberal minister for social affairs, Mr. Castonguay, noted that the professions were in a slump, which prevented their dynamic evolution and could eventually keep professionals from adequately responding to their needs. A broad study was undertaken after which, in 1973, the Code des professions was adopted; this structured the entire organization relating to professional services.

Today, the Quebec professional system represents 43 professional orders, including the Bar, the Ordre des comptables agréé(e)s and the Ordre des ingénieurs. These professional orders in Quebec have as a main mission, and a legal obligation, to protect the public. You will understand the importance of this later on.

The Office des professions, which is a para-governmental organization, oversees the professional orders. It must ensure that the professional orders in accordance with their duty, protect the public. First on the list is the government, more specifically the department of justice, which is responsible for the implementation of professional laws in Quebec; it is responsible for all of the operations.

The Quebec professional system is essentially based on the individual and territory; what matters is who is practising and where. Substance as such is not important. To illustrate this, we might think of the foreign legal consultants, a concept that does not exist in Quebec professional law. We don't care whether you have come to Quebec to practice Ontario law or Quebec law. What is important to know is if the individual is a member of the Quebec Bar and if that person is practising in Quebec. We need this basic information.

I'm not saying that we subscribe to this wholeheartedly, but this is the actual state of affairs in the legal profession in Quebec in terms of professional services.

The professional orders work with a very rigid framework. We are, of course, self-regulated. Therefore, in some ways, we are independent in managing our affairs, but this independence is dependent on areas of activity. In other words, the entire regulatory and legislative framework overseeing the professions in Quebec is cumbersome when it comes to protecting the public. When a professional order wants to have a regulation passed, that involves internal management, the process is much more flexible. But in the case of a regulation that would amend the code of ethics, or any regulation directly related to the protection of the public, the process is very cumbersome.

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To illustrate the process, the regulation for the professional order is submitted to a compulsory legal process which involves giving notice to all members, with enough time to receive comments. Then the highest decision-making bodies adopt the order. All of this is sent to the Bureau, which then publishes the decision, this time in the Gazette officielle du Québec, after which a draft regulation is prepared and adopted. This is sent to the government. The government once again studies the file, drafts an order, and sends the order to Cabinet, which then adopts the regulation and once again publishes it in the Gazette officielle du Québec.

I am explaining all of this because I know from experience that in many fields, our counterparts in other provinces enjoy a much more flexible system. Many rules can be changed simply by having these rules adopted by the benchers, which would be the equivalent of our decision-making body. You must understand that the mechanisms governing the exercise of our profession are very, very different, and that is why I said that our system is rigid. We must face this. We have to find a way through this process, which can, in certain cases, cause some problems. In these matters we are out of step with other provinces or other countries.

As I was saying, the protection of the public is a legal obligation, and this protection—I spoke of regulations—means that access to the profession is closely monitored. When I speak of access to the profession, I'm thinking of our students who are in school here and who will become members of the order. That's the normal process. But there is also a process that exists at this time, and that involves recognizing lawyers who have come from outside the province. There are processes for lawyers from other Canadian provinces. And we also have limited processes for lawyers coming from other countries, or other continents.

I will deal later on with the major process, that is the recognition of equivalences. This process is also quite cumbersome. I am not saying that it isn't justified. We must not forget that in Quebec we practice civil law. Since our mission is to protect the public, we must ensure that the practitioners have the necessary qualifications in civil law so that the public will be adequately protected.

When all of this is put into perspective, on the background of cross-border mobility, we see that the experience acquired by the Barreau du Québec in terms of mobility is relative.

The Barreau du Québec signed, in 1996, amongst all of the documents for the manpower mobility agreement, a protocol on the inter-jurisdictional exercise of the legal profession. The standards set in this protocol have not yet been incorporated into our regulations. Projections have been made, and we are working jointly with other stakeholders in the system that I mentioned earlier, particularly the Office des professions, but also with the government; but we haven't finished integrating everything yet.

The same applies with respect to the agreement signed under NAFTA and some schedules, including the one that deals with foreign legal consultants, that I spoke of earlier.

That goes to show you just how cumbersome the process is. Yes, it does reflect values, because Quebec chose to provide the public with very stringent protection with respect to professional services. However, the results of this cumbersome process is that it is very difficult to follow up on certain agreements, even when, very often, our own members would like a quicker resolution.

Earlier I alluded to existing tools. The tools that we now have, and here I refer primarily to the diploma equivalence recognition process, show that the profession is opening up.

Obviously, the trends towards globalization and internationalization are having an impact, and these are already tangible for us. The number of telephone calls that I receive from members of foreign bar associations who want to know how to practice here has increased dramatically. Last year alone, the Equivalence Recognition Committee, which receives the submissions, noted that applications had doubled in only one year. This is a recent, entirely new impact, but one that is clearly growing.

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Furthermore, we are also getting pressure from our members who, observing that they are more readily accepted abroad, come back here and call their professional association to say: "Listen, I'd like to have some type of reciprocity with other law firms, but that means that some flexibility is required, flexibility that I don't have." As a result of this pressure, the Barreau du Québec has examined the question, focusing on statements of principle, of course.

In 1996, a report on the future of the profession was tabled which was further to a broad study that dealt not only with the globalization of the marketplace, but also with a whole series of factors such as new technologies, changing requirements and globalization. A wide range of aspects were considered.

In the chapter on internationalization, this report concluded that this trend was deemed to be an influential variable in the market conditions of legal services and the report went on to say that it represented a driving force of the legal service sector. It was rated the fourth most influential variable.

Following this study, the Barreau du Québec chose to look to the future. This can be viewed as a type of orientation for the Barreau, which is emphasizing the adaptability of the system with respect to new trends: competition, global thinking, foreign markets, global cooperation and interdependence. Certain general objectives set forth in the action plan challenged, in a more direct fashion, the Barreau du Québec as a professional organization, as an institution, the prime objective being to take initiatives such as the one I am taking right now, namely, trying to ensure that the legislative and regulatory system can adapt easily to this new environmental framework.

After this report was tabled, the Barreau du Québec adopted guidelines for a three-year period. With respect to internationalization, these guidelines to some extent reiterated the conclusions contained in the report on the future.

You must understand that the Quebec professional system is currently going through a change and all stakeholders are challenging the way that it operates. Indeed, in 1997, the Quebec Professions Board issued a notice to the effect that it foresaw reform. However, this reform, in our opinion, had the unfortunate result of increasing the vertical hierarchical structure, reducing flexibility, so much so that we had to put pressure on the Board. We were not alone. Other professional associations made their opinions known on this matter. The minister concerned responded by implementing a departmental advisory committee mandated to review the entire system, particularly the issue of globalization and the impact that it may have on the structural organization of the Quebec professional system.

By and large, I think that it is important to bear this in mind. It's not complicated. It is what I have just told you today. We must remember that agreements like the ones you are reviewing here call into question a whole series of things that are set by regulation in Quebec. This pertains to the determination of fields of practice and the way that they evolve, the type of competition which our members will have to face.

Moreover, internationalization has also had a clear impact on client requirements. We must not forget that, as far as our sector is concerned, it is the requirements that determine what type of legal services are to be provided.

Moreover, the rules that up until now governed how the market was to be shared are going to change. The Barreau du Québec must do more than simply ensure that it has all of the flexibility it needs in order to adapt to this change. The Barreau must do more than just simply ensure that it has the tools in order to continue up- holding its legal obligation to protect the public, because this obligation will not go away. When you talk about social values, this certainly is one. We have legal obligations to protect the public and we have to be able to fulfil these obligations, even in an international framework. We need the tools that allow us to do this, but we must also ensure that our members have the tools they need to deal with this new competition.

I will conclude by giving you two small examples that pertain to our members.

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We know that, for the most part, the jurisdictions that surround us allow their lawyers and other professionals to incorporate themselves. This practice is still prohibited in Quebec. This is a key issue for our members. How are our members, who cannot incorporate themselves, going to be able to compete with outsiders who can or who have other tools available to them?

The same thing applies to multidisciplinarity. This practice is prohibited in Quebec. How can we, as professionals, compete with foreign one-stop shopping? These are important issues, and they do not pertain to competition alone. Obviously, competition is important, because we do represent part of the market, but it is also important when you think in terms of the legal obligations that we have elsewhere as professional bodies. How are the professional associations going to be able to protect the public when these foreign one-stop shopping businesses begin competing with their members? Everything is interconnected.

In conclusion, I can only say how sorry I am that we do not have, sitting around this table, a representative from the Quebec Professions Board, which is the paragovernmental agency in Quebec that is responsible for ensuring that everything goes smoothly. This Board is absent today.

Earlier, I said that we had been given very short notice. I am not trying to reproach anyone in particular. However, this short notice does point to the fact that there is certainly a lack of communication between the various jurisdictions. The Quebec professional system comes under provincial jurisdiction. The Barreau du Québec is in favour of negotiating international agreements. At any rate, we think that this is irreversible. We are prepared and the will is there, but there are other stakeholders in our system, which is very structured and very hierarchical. Everyone has defined responsibilities, stipulated in the Professional Code and in the constituent statutes of these professional associations. I do not think that we can simply disregard all of these things. Were we to do this, we would witness a reenactment of what occurred under NAFTA and the protocol on interjurisdictional matters: even though two years have elapsed since everyone said that they were in agreement and wanted to get to work on the matter, it still has not been integrated into our legislative and regulatory statutes.

The Chairman: Thank you, Ms. Chapados.

Mr. Laliberté.

Mr. Luc Laliberté (Syndic, Ordre des ingénieurs du Québec): Good afternoon, Mr. Chairman. Good afternoon, ladies and gentlemen of the committee.

Like Ms. Chapados, I received an invitation only 2 days ago to come and represent the Ordre des ingénieurs before your committee. I must tell you, at the outset, that, according to my understanding of this issue and of your committee, Canadian professional engineering associations were represented or had been solicited previously through the Canadian Council of Professional Engineers. In February, a meeting of international organizations was held in Ottawa as part as what we refer to as GATS. The Canadian Council of Professional Engineers is a federation that represents Canadian provincial associations.

As Ms. Chapados has just pointed out, the professional system in Canada comes under provincial jurisdiction, it is the provincial legislature that establishes the laws and regulations governing professional practice.

In Quebec, we are unique in that we have the Professional Code and we are governed by a comprehensive system that was set up for all Quebec professions, which is quite different from what is done elsewhere in Canada.

Through the Canadian Council of Professional Engineers, associations provide each other with routine services, particularly in terms of recognizing training, equivalent diplomas or equivalent standards pertaining to these diplomas. The Canadian Council of Professional Engineers negotiated certain agreements to recognize training in various countries throughout the world, based on the countries' particular university system.

Under NAFTA, the Canadian Council of Professional Engineers undertook the negotiation of agreements between Canada, the United States and Mexico to facilitate the mobility of engineering professionals between the various countries of North America. As is the case with Canada, professional practice in the United States is for the most part under State jurisdiction and therefore we have not been as successful as we had hoped to be.

• 1550

The Canadian Council of Professional Engineers was our spokesperson with respect to international service. We were recently invited to appear before the committee during its Canadian tour.

I can't tell you exactly what the problems are. I would simply say that here, in Quebec, as Ms. Chapados indicated so clearly, our members are individual professionals, with the exception of the engineers. Since 1964, our legislation, the Loi sur les ingénieurs—I have brought an excerpt with me—has contained a provision enabling professionals to incorporate themselves. We are the only profession in Quebec whose members can incorporate themselves in order to provide engineering services and perform work by calling on individuals who are members of the association and over which the Ordre des ingénieurs has the authority or jurisdiction to monitor the quality of the work done and to ensure that the services provided are in keeping with the code of conduct which must be adhered to by the members. However, despite this legislative provision, the Ordre des ingénieurs has never managed to regulate incorporated professional practice or to regulate the activities of corporations. This is why the big engineering consulting firms in Quebec, such as SCN-Lavalin, Dessau, Tecsult, Monenco AGRA and AXOR do not come under our jurisdiction as corporate bodies. Consequently, these firms have been able to pursue activities in the area of engineering, construction and supply, they have been involved in turn-key operations and broadened their activities throughout the world without our participation or our involvement.

As you know, Quebec firms, particularly the big Quebec firms, are now established in Asia, in Africa and a little bit in Europe. I was told that these firms found it very difficult to do business in the United States, which led to a phenomenon that we are now seeing: there are mergers between Canadian, Quebec and, in particular, American engineering firms in order to facilitate the development of business of professional activities on either side of our border.

Without going into any specific facts, the directors of two or three big Quebec firms headquartered in Montreal have often told us that it was very difficult to do business in Europe or to obtain contracts in Europe and the United States.

Because here, in Quebec, we monitor the professional practice of individuals, our professional body has had, in the past, to deal with a rather unique situation, which has posed some economic problems. I will use the aeronautics sector as an example. You know that companies like Canadair and Pratt & Whitney have been established in Quebec for years. Bombardier has taken over the aeronautics sector in Quebec.

• 1555

In order to manufacture top quality, high technology products in the 1950s and 60s, these companies relied on foreign know-how, especially engineers from all of the Commonwealth countries who were hired to work here, in Quebec. Our legislation specifies that engineering activities, in Quebec, must be performed by members of the professional body so that we can fulfil our mandate to protect the public and thereby verify the quality of the professional services provided.

When we tried to intercede with these aeronautical companies that were importing foreign labour, we were often told: "Listen, if Quebec's professional practice legislation is too rigid, we will set up shop elsewhere. The American border is nearby, we have an international or North American market and we're going to jeopardize the Quebec economy." The same thing happened in the automobile sector.

Consequently, the Ordre des ingénieurs, not wanting to cause any unnecessary harm to the economy of a province always in need of economic development—indeed, this applies to every entity—decided not to enforce the Loi sur les ingénieurs on big industry. The same phenomenon occurred in the aluminum sector. It cannot be said that we had a lot of problems in the hydro field because this was more or less local development. Accordingly, a type of tolerance developed in this industrial sector which imported labour and grew internationally.

As you know, Bombardier has facilities in more than 25 countries throughout the world, I believe, and uses a mobile workforce according to requirements, according to the contracts it gets. Despite the Quebec legislation that is in force, this mobility is continuing without too much interference from us. These are public, not private laws. These are laws for Quebec society. Consequently, professional organizations are losing a bit of their credibility given that they are not able to ensure total enforcement of the legislation.

Furthermore, we also have members who practice abroad, who provide services to foreign countries and who sometimes cause problems there, particularly with respect to environmental issues. Because they're members of a professional organization, they have duties with respect to society and property. It is not always easy for us to ensure that these duties are fulfilled, given the different mentalities in certain Third World countries.

Since I have been the syndic at the Ordre des ingénieurs, I have had to deal with contract solicitation through perks. There are different mentalities in the world. We all know that, in some countries, it is common practice to use all kinds of methods to influence the decision makers in order to get a lucrative contract. I think that it is known throughout the world that, in the aircraft procurement sector, certain countries and people have been given preferential treatment. Accordingly, we have had some difficulties in fulfilling our duties and responsibilities.

Furthermore, even here, in Quebec, despite our desire to do the job ourselves, we have major projects that at times require foreign expertise. The best known project in recent times is the Olympic Stadium roof. We called upon experts that were Italian, German, French, who came here to do the engineering as reserved for members of the Ordre des ingénieurs. If we launch a campaign against these people and tell them that they can't practise engineering in Quebec, we would be setting up a type of obstacle at a time when we are advocating deregulation and the free movement of services.

• 1600

Today, I simply wanted to make the committee aware of how engineering stands in Quebec. Perhaps this is the case for the rest of Canada. As a country, we must show tolerance because of the consequences that this could have on our economy, especially the manufacturing and industrial sectors, major projects and the export of services throughout the world.

In closing, I would like to emphasize that there is a real problem with exporting engineering services to the United States and Europe. For about 15 years now, our engineering firms have found that it is much easier to do business in Asia and Africa. That is what I wanted to tell you. I would be pleased to answer any questions you may have.

The Chairman: Thank you, Mr. Laliberté.

Ms. Lussier-Price, please.

Ms. Ginette Lussier-Price (Director, Inspection and Professional Affairs Section, Ordre des comptables agréé(e)s du Québec): Thank you. My name is Ginette Lussier-Price, and I'm the Director of Inspections and Professional Affairs at the Ordre des comptables agréé(e)s du Québec.

Chartered accounting is an exclusive service of our association; that means that the profession can be practised only by members of the Ordre des comptables agréé(e)s du Québec here in Quebec. The same may not necessarily be true in the rest of the country. It is important to mention this point.

We have 16,000 members out of a total of some 60,000 members throughout Canada. Chartered accounting has existed as a profession in Canada since 1890. Our association may be in a privileged position, because we have standardized training and a standardized final exam in order to become a member of the profession, which is the same throughout Canada. So we have standards that are quite similar regarding the practical and theoretical training, such as the two and a half year training period our members are required to do before becoming chartered accountants. The only difference is the French-language exam, which members who wish to practise here in Quebec must take. People from British Columbia who take their standardized final examination in that province may come and practice here in Quebec provided they have taken the French- language examination.

The standards of the profession are established by the Canadian Institute and are followed throughout the country. There are also American and international standards, and there is currently an attempt to observe international standards as much as possible, as well as a code of ethics that could be international as well. At the moment, the code of ethics we have in Quebec is an old one. Quebec is the only province that has not managed to harmonize its code with the code in place in the rest of Canada, precisely for the reasons Ms. Chapados was explaining. The approval process is very lengthy, and we cannot benefit from the same time periods as the rest of Canada.

Our members practise both as individuals and in firms. They can work alone, or they can work in a firm of 200 people. We need only to remember what we used to have—the Big Eight, which are now called the Big Five. These are firms with an international reputation.

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Our profession and its members in Canada enjoy a very good reputation throughout the world. People come here to Canada to do their training and take it back with them to their countries of origin. I'm thinking of countries in Africa and even certain European countries.

At the moment, we have a number of international agreements. For example, we have agreements with the United States, England and certain European countries. We also have training equivalencies, which are for people from countries whose credentials are not recognized. They are given credit for some courses, and they may be able to become chartered accountants a little more quickly. People from countries with which we have agreements are able to join the profession after taking certain examinations. We want to ensure that they are familiar with our income tax rules, for example. It would be quite ridiculous to work in Quebec or Canada without knowing our specific income tax rules and regulations. That is the system we have in place.

We already have international clients. The companies for which we prepare the financial statements are international companies. So we consider it only normal to be able to work in harmony internationally.

However, we do have some problems. As Ms. Chapados was saying, we have a duty to protect the public. Everyone is well aware that at the moment we practise our profession in an increasingly virtual manner, almost instantaneously. We can use the Internet to communicate with people throughout the world, and it is getting difficult to determine who did the work and under which jurisdiction. It is important for us to be able to properly determine this type of thing.

Those are the main points I wanted to make. I could answer any questions you may have on other matters. Like the two other professions, we did not have an opportunity to prepare a brief, but we may submit one at some point.

The Chairman: Thank you very much. I would like to ask a question of the representative of each profession. There are some annexes in the agreement on services. Is there an annex for accountants, one for lawyers, and for engineers?

Ms. Annie Chapados: To which agreement are you referring?

The Chairman: To the General Agreement on Trade in Services, the GATS.

Ms. Annie Chapados: At the moment, accounting is the profession with the best coverage under the GATS. I haven't done any exhaustive research on this, but I have not been informed of any annex specifically on the legal profession. I cannot guarantee the accuracy of this, for the simple reason that, unfortunately, this information does not reach us. The first time I heard about negotiations under the GATS, following the Uruguay Round, it was through a lawyer in Geneva who was actively involved in the negotiations and who got in touch with the Bar.

I spoke in general terms about our role of protecting the public, but there is a host of activities carried out by certain professional associations. I won't say that this is true of the 43 professional associations, because that is not so. In our case, we have some public protection activities in the broad sense. We regularly work in developing countries to help establish an independent Bar. What could be more important, in developing a democracy, than the establishment of an independent Bar to offset the power of the State? At some point, people in Geneva heard about us and said: "You're very active in this area; why is it that we never heard about you in the GATS negotiations?" All of a sudden, we picked up a little piece of information. The next day, Mr. Dupuis called and said that he didn't understand, that they were supposed to be discussing services and that there was nothing about professional services. I told him that I did not understand either. We always glean our information in this way.

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Even though our comments to you today may seem very brief, it is important that you take note of them, to promote a better circulation of information.

The Chairman: I certainly agree.

Ms. Annie Chapados: Here again, we are not trying to blame anyone at all.

The Chairman: No. All I know is that in the case of NAFTA, for example, there is an agreement on architects. As a result, the free circulation of architects was provided for us. I did not know whether there were annexes for certain professions in the GATS, at the international or multinational level, to provide for the free circulation of your members in other countries that signed the agreement, in Europe or—

Mr. Luc Laliberté: I wouldn't be able to tell you if that was the case for the engineers, but I can tell you that in Quebec, the architects and engineers have two different professions.

The Chairman: Yes, I understand that.

Mr. Luc Laliberté: Within the framework of the NAFTA, for example, engineers negotiated things with the US and Mexico. In the US, out of 50 States, I think only one of them has accepted the agreement while in Canada, the 10 provinces accepted. Presently, there's something blocking things at that level. It may be that in the case of the architects it's been settled more easily than for the engineers. As for the GATS, I don't know if there's a specific annex for the engineers.

The Chairman: For the GATS, it would be exactly the same thing. It would be up to each province to sign on to whatever agreement comes down the road. Each province will have to become a member or not.

[English]

The Chairman: Mr. Obhrai.

Mr. Deepak Obhrai: Thank you very much for your presentation, for us to understand your profession and the challenge it's facing. I think I was dozing before you came in. You woke me up.

I'm a little confused here. All three of your professions are provincially controlled and you explained very well some of the difficulties you're facing. In light of the fact of globalization, and that you, being the service providers, are up in the forefront there, you should be taking advantage of the trade that is rapidly becoming worldwide. I've seen that happen.

What's confusing to me is this. Your challenges, your problems are provincially based and have not much to do with the WTO. They're not federally regulated. Henceforth, my question here would be that with all you're facing, do you want to open it up or close it up? I'm getting a little confused about whether you really want to open up, in lobbying others to come in, or whether you really want to close up. I don't know. I didn't pick up what you were trying to say, whether globally you want to open up and let.... You mentioned engineers coming from Paris for the roof. At the same time, you said you don't want to make noise. At the same time, you say you are facing challenges in the U.S.A.; you cannot go into the U.S.A.

So I'm a little confused as to what your own strategy is in reference to world trade, in reference to WTO. Or to put it in your own words, madame, what is your... [Inaudible—Editor] ...for WTO? I don't think any of us can worry about your provincial things. I think it is up to you and your association to put that pressure on the provincial governments.

Am I going on the right track?

The Chairman: I think you misunderstood the whole purpose of what the trade business is all about, which is to keep your own market protected when you go out to other people's. It's not this opening up of—

A voice: [Inaudible—Editor]

Mr. Deepak Obhrai: Obviously. You're the first one, if I'm not mistaken, from the service industry, and service is part of the WTO negotiations.

• 1615

Mr. Luc Laliberté: What I wanted to show you is that there are difficulties. We want to do something, and there are some things that have been done, yet there doesn't seem to be any coordination or enough information transmitted of the problem. My presence here this afternoon is just to show you that there are problems, yet the coordination or the facility of information is lacking so far, with us in particular.

Mr. Deepak Obhrai: But that's a provincial jurisdiction.

Mr. Luc Laliberté: Yes, it is.

[Translation]

Ms. Annie Chapados: We're not going to be giving any kind of law course today, but if we simply go by the jurisdictions and sharing of decision-making powers, I understand that you were saying that the problem is provincial. That said, my answer, most respectfully, is that at that level I don't quite agree with what you've said. Yes, in strict terms of jurisdiction, it is provincial but it still remains that as of the moment a federal government has negotiated an agreement, it is its duty to ensure that the agents intervening up on the front lines ensure maintenance and respect for social values.... to my knowledge, Quebec is still part of Canada. When Quebec determines that certain social values are privileged and must be defended specifically, it is up to the federal government to be aware of that and to make sure that the agents chosen by the provincial legislature to protect the public can do their work. That is a mandate we obtain from the Quebec population. You have legislation providing that Quebec professional orders will protect the public. That is a law of the legislature. You say it's a provincial problem. Of course it is and we lobby regularly on that, but it doesn't mean that the federal government must close its eyes to these problems and not take them into account.

The Chairman: You know very well that when the federal government negotiates an international agreement concerning provincial matters, a provincial representative is there. We sign only for each province. Look at the GATS. You'll see that each province, in all the annexes... That applies province-by-province.

Ms. Annie Chapados: I completely agree with you, but it is important that the message be delivered directly. We went through that with the NAFTA. As of the point in time where you have an interjurisdictional agreement, no matter what it is, the government representatives can sign, of course, but nevertheless, at the grassroots, the agents on the line of fire where the protection of the public is concerned for professional services, and that means us, remain stuck with certain concrete problems. Taking our mission to protect the public into account, I thought it was important to deliver the message to you directly, without any third party interference. There, you've got the message today.

Now I'll answer the real question: What does the Quebec Bar want? The Quebec Bar says yes to the exchanges and internationalization. I think that's important. It's a position we've taken. The report on the future of the profession that was tabled in 1996 already took that position when it was adopted by the senior officials of the Quebec Bar; it already mentioned the favourable reception. It told its members that henceforth they would have to show open-mindedness and think globalization and international competition. So the Quebec Bar's answer is yes.

Mr. Luc Laliberté: The Quebec order of engineers is giving exactly the same answer.

The Chairman: And the Quebec Institute of Chartered Accountants also?

Ms. Ginette Lussier-Price: For the chartered accountants, it's clear. Our market is international and we have absolutely no choice. All we're saying is to allow us to properly fulfil our mandate to protect the public by giving us the means to monitor the people coming to practise here, first off.

Secondly, and this is something that hasn't been mentioned to date, I'd like to take this opportunity to tell you that I wouldn't like to see the work of this committee used to lower the standards of the profession. That's one of our concerns and it is real. If we enjoy such a good reputation worldwide, it's because of our high standards and our training that has a high rating. On pretext of globalizing markets and allowing mobility worldwide, we should especially not lower our standards.

• 1620

The Chairman: Thank you.

[English]

Mr. Obhrai, is that all right?

Mr. Deepak Obhrai: Yes, I suppose so. I don't have any disagreement. I can understand. You picked the front line and you're going over there. I was just weighing the provincial and federal issues in here, and I think you answered it by saying the federal government should do that. I guess down the road it'll be our challenge to see how it can be addressed on a provincial level, but I don't know at this stage.

The Chairman: But it has been done. As I explained, it was clearly done when we signed on to the GATS the last time. If you look at the annexes in the GATS, every province has a list. Nothing was signed by the federal government that involved provincial jurisdiction that didn't have the province sign off. So when Canada signed on to various agreements under the General Agreement on Trade in Services, those agreements all said this applies to financial services in Alberta, but it doesn't in Quebec; it does such-and-such in Quebec but it doesn't in Alberta. You can see every province. I'll give you a copy if you like.

Mr. Deepak Obhrai: So where would their concern come from?

The Chairman: They want to make sure we know, as federal members, that when the federal government goes to these negotiations, every professional organization has its own standards and preoccupation. We have to make sure those standards are maintained. That's going to be different, and I think there's a certain responsibility on our part in Canada to recognize there's a difference across the country as to what those standards are, and we have to recognize that they have different responsibilities.

As a lawyer, I'm a member of the bar in both Ontario and Saskatchewan. Those bars have different responsibilities vis-à-vis the deontology, as it's called, vis-à-vis their members. It's the same in every profession. It's wildly complicated, but it's what we have to do.

When you get 138 countries in the mix, some of them federal, some of them not, as Mr. Laliberté said, with the engineering thing you're signing with 50 different states. It's not the United States you go with; it's the different states.

Mr. Deepak Obhrai: It's interesting that you say that. This is news to me. As you know, I'm a new member, so great, thank you for telling me. I would probably venture to say, interestingly, with a service organization or a professional association, would it not be a great thing for them to talk to other provinces and have a common front?

The Chairman: A common front?

Mr. Deepak Obhrai: I understood the president to say you have annexes where one province says “Yes, this is my standard” and another province says “These are the wrong standards, and I think this”. Would it not be beneficial for us in the WTO on the international scene to have only one annex?

[Translation]

Mrs. Annie Chapados: I think there is dialogue. I'll speak for the legal profession. The lady was talking about the Canadian Institute and the gentleman spoke about the Canadian Council for his profession. I can talk to you about the Federation of Law Societies of Canada, the umbrella for all the law societies which is doing something in that sense.

You were asking us yourself if we shouldn't be applying pressures somewhere else. I apply pressure everywhere including to the Standing Committee I'm sitting before today. My professional order is still wrestling with problems. It's very concrete, in the field, but there are nonetheless problems that can take on a very serious aspect. So I'm at grips with problems and I deliver my message to whomever will listen.

Taking into account the fact that there were hearings, I thought it was important for the message to be delivered to you too as it has been to the other provinces and has also been done for provincial legislatures.

[English]

The Chairman: Good. Thank you very much.

[Translation]

Mr. Sauvageau.

Mr. Luc Laliberté: I wanted to—

Mr. Benoît Sauvageau: Mr. Laliberté, you had something to add?

Mr. Luc Laliberté: I just wanted to add that Ms. Chapados has quite eloquently spelled out exactly the same answer I could have given to Mr. Obhrai.

• 1625

The Chairman: Do you want to add anything, Ms. Lussier-Price?

Mr. Benoît Sauvageau: I share your opinion, Mr. Laliberté, and that means I won't have any questions, but only some comments.

First, I think it is very useful to have all three of you here to apprise us of your concerns surrounding the next round of bargaining. That's why you were invited here. I would just like to point out, in the name of this committee, that we are sorry we only gave you a few days or hours notice. It was very brief. The negotiations will probably last quite a while. If we have the opportunity to meet again, we'll advise you in advance and you'll have time to prepare.

If you have any briefs to send us, you still have the time to do so. Our report should be tabled towards the middle of June. We'll be examining your briefs with a lot of interest. We have an Internet site on how things are evolving. You can have a look at it to see if we're talking about services and all that. I'm in communication with people from the Quebec government and I hope the information will reach you. We're making note of your concerns about the coming negotiations.

Your presence here was important and essential. If you did not have enough time, you will send us briefs. We will examine them and, as needed, we will note that in our report so that your concerns are duly heard.

Ms. Raymonde Folco: [Editor's note: Inaudible]... have direct relations with the government of Quebec.

Mr. Benoît Sauvageau: I hope all federal representatives elected in Quebec have relations with the people elected provincially because we're all part of the same family, until proven wrong, as we have said before in this committee.

The Chairman: Ms. Chapados.

Ms. Annie Chapados: The professional order is a non-political organization and I wouldn't want what I've said to be politicized.

Mr. Benoît Sauvageau: Of course not.

Ms. Annie Chapados: I did say there were many stakeholders in the professional system. The short-circuiting in the communications network can happen just about anywhere.

Mr. Benoît Sauvageau: What I'm saying is that we'll do our best to see that you get the information.

The Chairman: Any further questions?

Mr. Bernard Patry: A comment, maybe.

The Chairman: Mr. Patry.

Mr. Bernard Patry: I thank our three guests who came here this afternoon.

Somewhat in the same vein as Mr. Sauvageau, we're often blamed, and with reason, for not giving our witnesses enough time to prepare their briefs, but I can tell you that the report, as mentioned, will be tabled in June and will be accessible to all professions.

It's important for you to know that the government, then, must provide us with an answer to this report within 60 days. So you'll still have time to make further representations before the negotiations of the millennium round get underway. It's important to look at the technical details in there.

Here is my question. I'm a doctor by profession. As you know, the doctors in the other provinces don't have the right to come and practise here, in Quebec. The same goes for the Bar. You mentioned that it is prohibited in Quebec to compete through corporations. What can that prohibition lead to? Could it lead to losses for the Bar? What are the consequences of that prohibition in Quebec? It's not prohibited elsewhere.

Ms. Annie Chapados: First of all, I must say that once again this is a matter we regularly take up. Nothing concrete has happened yet, but something should happen in this area, if not in the coming months, at least during the coming year.

Once again, the main stumbling block has to do with Quebec's social values. The stakeholders had the impression that exercising a profession through a corporation simply led to lack of professional accountability. The government refused to approve what I'd call this pseudo-lack of accountability. Of course, I won't reprise all the arguments that were set out at length in a report. The official position of the Bar is accessible through the Bar's Web site where you will find the detailed arguments we set out.

The main stumbling block was that one. It was said that incorporation would lead to a lack of accountability and the government did not want to approve that. So we had to show that would not be the case.

• 1630

On the other hand, you're talking about corporations, but you could also talk about limited companies. That is a reality in our jurisdictions. Of course, maybe that would still be going a bit further in the counter-culture concerning professional accountability, but that was the big sticking point.

However, there have been talks, especially with the Department of Finance, also, because there was the whole aspect of the tax impact of that for the government and the government did show some reluctance in that matter. There were talks and that aspect of the problem was also settled, or so it would appear, at least informally. As I was saying earlier, it hasn't yet shown up in a legislative measures or in any other way, but the talks are forging ahead at this point.

Mr. Bernard Patry: Thank you, Mr. Chairman.

The Chairman: Mr. Sauvageau.

Mr. Benoît Sauvageau: I'd like to say something about the Office des professions. If you think it's relevant for them to come and meet us here in Ottawa, we will hold further similar meetings. However, we won't travel. We will stay in Ottawa. That was my first comment. No? Maybe they could send us a brief if you think that's relevant. I know there is a hierarchy that must be respected here.

Ms. Annie Chapados: Yes, that hierarchy does exist. On the other hand, I shall say that Mr. Dupuis did contact me. I was the first one to be contacted. You talked about hours. I'll be honest, That wasn't what happened in my case. He did get in touch with me a bit earlier than that, but I nevertheless had to get the Bar's authorization to come and appear before you.

I know there were contacts between Mr. Dupuis and the person in charge of the trans-border services exchange file at the Office des professions, and that's Mr. Pierre Bélisle. Unfortunately, Mr. Bélisle was not able to obtain authorization in time to be here today. He had the authorization of the Office des professions, but not necessarily that of the Department of Intergovernmental Affairs. There.

Mr. Benoît Sauvageau: Thank you.

The Chairman: Madam.

Ms. Raymonde Folco: Mr. Chairman, first I'd simply like to explain to Ms. Chapados that my comments addressed to Mr. Sauvageau were friendly. It's part of the pleasantries that help us get through some of these afternoons that can be a bit long, but not in this case, of course.

I'd like to say something. This morning, we met the Canadian Environment Industry Association. Once again, international problems concerning environmental industries were raised and the question I had for those people was this. What is happening in the environmental industries across Canada? What kinds of agreements are there? What kinds of problems are there when a company wants to do business with another company that has its headquarters in another Canadian province?

I'm simply tying in with what was presented this afternoon by the three professions. We're trying to find a general rule, a manner of doing things that will be agreeable worldwide while in Canada, as has been repeated time and time again, we don't even have that kind of agreement between provinces, not only for the professions, but in very many other areas also. That is a problem. You say that someone from the Office des professions must have the authorization from the Department of Intergovernmental Affairs to come here. Once again, we're witness to the barriers that can exist between one government and another, not only between the government of Canada and each of the provincial governments, but between one provincial government and another.

That's a comment I was making, Mr. Chairman. I know that we're facing a wall that is so thick and so high that we certainly won't be settling this problem by tomorrow morning. I simply wanted to mention it because it seems to me that, at some point, we will have to go way further in the agreements than the provinces have with one another. I'm not naive. I know there are all kinds of things that have been done and we've all hit our own walls, but it is important to carry on.

It's bizarre to see us beavering away at an international problem when we haven't even settled our own problems within our own country. There you go.

The Chairman: I hope that all our witnesses aren't going to get into that debate.

• 1635

Ms. Raymonde Folco: Heaven forbid. I simply wanted to say that.

The Chairman: Ms. Chapados.

Ms. Annie Chapados: Not to get into polemics, but it's an interesting comment. Of course, you can talk about culture, preaching for one's own parish and so on, but I don't think that's what it's about. I think there are certain problems—

Ms. Raymonde Folco: [Editor's Note: Inaudible]

Ms. Annie Chapados: No, but there are very real and justified problems. I referred quite briefly to the legal system in Quebec, which is a civil one. I'm not speaking specifically of authorizations or of the presence or absence of the Quebec Professions Board, because there is no direct connection. However, because of that one factor, in terms of a profession such as ours, one cannot say that the law is the same everywhere. It is all very well if one can establish international standards for accounting, but that would be impossible in the area of law. A surgical procedure is a surgical procedure. Wherever it is done it is a surgical procedure and the rules, no matter how sophisticated, are the same wherever it is carried out. The same cannot be said of law, and that is why I wanted to focus on your comments, not to enter into an argument, but rather to repeat what we said earlier on. There are in fact some problems that we need to deal with and they are not necessarily groundless. There are some concerns which are truly justified.

Ms. Raymonde Folco: Mr. Chairman, with your permission, I would say that rights are the same throughout Canada. It is the interpretation of those rights in a code, if I've understood correctly, which differs from one province to another.

Ms. Annie Chapados: Under our civil jurisdiction, our main source is in fact the law. We cannot get around that. Therefore, when one speaks of law within a civil jurisdiction, one refers to the law. The law is the law in Quebec, and you will not find the same laws elsewhere.

Ms. Maud Debien: Even the values within those laws are different. The most striking example is Ms. McLellan's bill on young offenders. That is the best example of values being different under Quebec's law from those under Canada's law. It's a question of values.

Ms. Raymonde Folco: Ms. Debien, allow me to continue. My point is that the values are not different but rather that the method of transcribing those into codes is different. The values are the same. People are just as attached to their children in British Columbia as they are in Quebec. That is all.

The Chairman: I think that we are entering a debate that does not concern the WTO and obstacles to the free movement of professionals throughout the world. But they are good arguments.

I would like to thank the three witnesses for having come. On behalf of the committee, I ask for your forgiveness for only having given you two days notice. It was related to problems in organizing this visit. It is always a little difficult under our system to organize a visit when we do not know in advance whether we will have the authorization of the House to travel or not. Therefore, our clerks have to organize these things at the last minute.

Therefore, I ask for your forgiveness but as Mr. Sauvageau pointed out, please send us your written comments. Personally, I will be following this more closely. I am a professional like yourselves, and I am interested from a personal point of view; I would like to know whether the international community is about to produce an agreement for the free movement of professions. In Europe, that was carried out after 50 very difficult years within the European community. You know as well as I do that this is not just a question of finding equivalencies under the various systems, but also of guaranteeing that there will be adequate qualification levels, etc. As you know, it is rather complicated.

• 1640

Thank you very much for having shared your expertise with us.

I would now ask Mr. Bourbeau, if he's here, to join us.

We are now going to take a five-minute health break.

• 1641

• 1651

The Chairman: We now have before us the representative of the Fédération des producteurs de lait du Québec. We had the opportunity to meet several of your colleagues yesterday, in Saint- Hyacinthe. Welcome to the committee.

Mr. Alain Bourbeau (Director, Economic Research, Fédération des producteurs de lait du Québec): Mr. Chairman, are you expecting other committee members? I know that Mr. Sauvageau has left.

The Chairman: I know that Mr. Sauvageau had to leave, as well as Dr. Patry, but Ms. Folco will be returning.

Mr. Alain Bourbeau: We can wait.

The Chairman: We can begin, if you like.

Mr. Alain Bourbeau: Fine.

My name is Alain Bourbeau and I am the Director of Economic Research at the Fédération des producteurs de lait du Québec. On behalf of the 10,200 dairy producers in Quebec, I have come today to tell you what our position is regarding the next round of WTO negotiations.

I will do my presentation in two stages, as I was asked. First, I will speak for approximately 10 minutes, as I was asked to do.

We brought a brief with us; I believe you have it. I will do a quick summary of the contents. It has three parts. The first relatively important part is 30 pages long, and contains a description of our industry. I would invite you to read it. It may take between 10 and 30 minutes and it will give you a good idea of our industry in fairly accessible terms. It contains an overview of the industry, market dynamics, prices, and finally, the cost of running our industry, at the farm level.

This afternoon, I will not necessarily speak of this again, given the time that we have and the fact that the main goal is to give you our position regarding the next round of negotiations, but I would strongly encourage you to read it.

I will mainly speak of the two other parts of our brief. There is a second part, that I will use as a conclusion, in which we have described our long-term goals regarding multilateral trade negotiations. The bulk of my presentation will cover the third part, which is in fact the position of Quebec dairy producers. It's important to point out that there is a consensus on this position throughout all supply managed areas in Canada. That means 30,000 producers and approximately 6 billion dollars worth of agricultural sales in Canada. Thus, this is a common position, which also reflects the position of the Canadian Federation of Agriculture.

The position that we will be describing to you today is the outcome of a considerable concerted effort by Canadian producers. We want the federal government to be aware of this position and we ask it to work with us to strengthen it and expand upon it in order to better defend it. We are not talking about arbitration between the various areas, which would be a waste of time just before these negotiations. We have come before you after working extensively together to reach positions that we believe are credible and that can be defended.

The advantage of this position is that it is also based on our experiences with previous negotiations, an experience that as you will see, has helped us in defining the main principles of our position.

With no further delay, I will begin my oral presentation, which will last approximately 15 minutes, during which I will give you the highlights of our position.

• 1655

Very briefly, given the very diverse topics that you have been covering, I'm going to give you a few highlights regarding our industry. First, dairy production accounts for 27% of farm income. That's approximately one third. That is 5% of farm income in Canada. Therefore, it is a significant production sector. In terms of supply, Quebec dairy producers meet 100% of Quebec's needs and approximately half of Canada's needs for industrial milk. Approximately 40% of Quebec's production is exported to Canada or abroad. I will come back to that later.

It is important to point out the value of gross sales from farms. It is approximately a billion and a half dollars. This is therefore a very important area of economic activity whose main asset is that it is distributed throughout Quebec. When one speaks of economic development, it is important to speak of the development of the main centres, but it is also important to point out that a country must affirm itself by developing its territory and ensuring its economic health. Agriculture is therefore the best activity to ensure the economic health of our regions and to bring income into those areas.

Another point that I wanted to make is the contribution of dairy production to employment. The dairy industry provides at least 56,000 direct and indirect jobs in all parts of Quebec. The number of farms has also changed. In 1986, there were approximately 17,000 farms in Quebec. At this point in time, there are only 10,000 left, and most likely during 1999, that number will go below 10,000. As in most of the main trading nations, the number of producers is going down constantly. The fact that the numbers are going down, but that the same volume of milk or even slightly more is being produced, shows that businesses are becoming more and more specialized. Even though the number of farms has gone down by approximately 40% over the past 12 years, the production per farm has increased by 65% over that same period of time. Businesses have become capitalized and specialized, and people have become trained and competent in dairy production.

This has happened because of significant efficiency gains. These efficiency gains have occurred because of the use of knowledge and technology. This investment was made possible because of the sector's stability and the quality of our policies.

Another characteristic of the dairy industry is the number of sellers. In Quebec, there are approximately 10,200 sellers and only four purchasers, who purchase 85% of the milk produced. This means that there is a high level of purchaser concentration. That is a reality in Quebec as well as internationally. We will come back to that.

This significant discrepancy between the number of sellers and the number of purchasers is a crucial and fundamental point to make in justifying the fact that producers are using collective marketing in order to bring about a better balance within this area, so that production conditions are fair and allow people to live decently.

Finally, in terms of international trade, Canada exports between 5 and 10% of its production. It should be pointed out that we are essentially a price taker. The main player, the one who truly sets the market prices, is the European Union, with a market share between 30 and 55%, depending on the product. As you will see later on, the European Union is also the trading bloc that intervenes the most on the markets and who contributes the most to distorting the world market. That is one of the reasons why we ask that export subsidies be completely withdrawn.

That was a very brief description of our industry highlights. As I said earlier on, I ask you to take the time to read our brief. It is easy to read, well illustrated, well documented, and dispels several prejudices that can occur when time is not taken to read all the information.

• 1700

I will now move on to our position regarding the next round of WTO negotiations. As the chairman pointed out earlier on, there are agricultural producer organizations who have already described this position, including the Dairy Producers of Canada, who appeared on the 9th of March last, I believe.

I would like to remind you that this is the outcome of a consensus of 30,000 agricultural producers in Canada and, more broadly, the 200,000 producers represented by the Canadian Federation of Agriculture. This position is spelled out in 10 main principles that we go into in more detail, but that we will speak about in the context of the main headings of these negotiations.

As you are no doubt aware, those main headings are market access, export subsidies, and domestic support. We have a position for each of those areas.

In terms of export subsidies, we would like to see Canada strongly request the complete elimination of export subsidies. In Canada, especially in the dairy sector, we have no export subsidies. When we go into these markets, it is as if we were going to war with no guns. We are not on an equal footing with the European Union, for example, that is the main player. According to the data that we have, the European Union and United States alone provide for 90 to 95% of all export subsidies.

Given that we have no export subsidies, we call upon the government to request the complete elimination of these subsidies. These export subsidies are the main cause of price distortions on world markets.

The second point, under export subsidies, is the introduction of clear rules to govern food aid programs, and credit and export promotion allowed under the WTO. For example, no new subsidies can be introduced within international trade. However, some countries have found a way of bypassing that rule by providing loans or credit margins to the buying countries, with rather flexible rules regarding the repayment of those loans.

For example, if you give a credit margin of 30 million dollars to Russia, and you're not very strict regarding the reimbursement of that loan or you even forget to request payment, that is not an export subsidy, but those are loan conditions that are so advantageous that they are equivalent to bypassing rules. United States are champions when it comes to proposing product promotion programs to get around these rules. We therefore call upon the federal government to demand, during the next round, clear and transparent rules governing this practice of bypassing established rules. Those are the two parts to a fundamental position that we hope to see Canada defend under the export subsidies.

The second main area of these negotiations is market access. In terms of market access, we call upon Canada to request four things. The first is that tariff equivalents be kept at their present levels, beyond our tariff quotas. As you know, these tariff quotas represent the share of our domestic market for which we provide easier access to other countries, an access of 3 to 5%, that is 3% at the beginning of the agreement and 5% at the end of the agreement.

We ask that tariffs that go beyond those tariff quotas, which are very high in the case of supply managed products, not be abolished as long as there will not be healthy trade rules ensuring that we are on an equal footing with our competitors. It would be suicidal to abolish these tariffs as long as we do not have the assurance on the part of our trading partners that they have cleaned up their practices. It would be equivalent to giving our markets to countries who continue to subsidize exports, without having the ability to compete with them.

• 1705

If there were only one argument to defend in these negotiations, that would be it. We must, at all costs, defend maintaining our tariffs to protect our access within the limits of our commitments.

The Chairman: By tariffs, do you mean TRQs?

Mr. Alain Bourbeau: Yes, tariff rate quotas.

The second point on market access, which is also fundamental, involves establishing clear and compulsory rules. We were disappointed during the last round of negotiations to see that the commitment to increase market access to between 3% and 5% was based on a directive. There are no standardized rules on access that apply to every country. What we see today in practice is that since countries have recourse to different interpretations for providing access, market access is not equal. Data that would enable us to establish that fact is still confidential, but based on our estimates, Canada has provided access to about 4% of its markets; the United States to about 3% of its markets; and the European Union to about 2% of its markets. For some commodities, namely poultry, Europe has provided less than 0.5% access. That is because these agreements do not contain clear, transparent and compulsory rules.

Countries cannot be accused of not honouring their commitments. They are honouring them, but in doing so they complied with rules that were not standardized. We are therefore asking Canada to contribute to putting in place clear and transparent rules to quantify market access, so that true and equal market access exists for everyone.

Our third point on market access involves eliminating country- specific market access. Doing so will basically ensure that all countries benefit from access that is granted. The fact that it is possible to provide specific access to some countries has led to blatant abuses like the ones you have already undoubtedly heard about. The United States, for example, granted specific access to Jamaica for ice cream, while it is well known that Jamaica does not produce ice cream. Practices like those are designed to circumvent certain provisions and they violate the spirit of the agreement, which was to give our trading partners access to our markets.

The fourth issue regarding market access involves eliminating tariffs on committed minimum market access under the WTO.

As I was saying earlier, minimum tariffs exist for the portion of what we call TRQs, and it is under TRQs that we have committed to providing access to our markets. In the European Union, these tariffs can be as high as 100% or 200%. Although they have given up some TRQs, there are still some tariffs that are so high that they make access unachievable or unrealistic. Therefore the portion of the market that is under TRQs should be free of 100% tariffs.

Those are our concerns with respect to market access.

Moving on to domestic support, or the different types of assistance a country can provide its farmers, our concern involves making sure that during the next round of negotiations, the ceiling concept is proposed and that it be guided using the aggregate measure of support. Under the current agreement, we have noticed that countries had made commitments to reduce all red or orange, blue and green box programs. Commitments had been made to reduce GATT amber programs. Countries complied with that, but adeptly converted this support by funnelling it into other programs, green box programs. Among others, the European Union and the United States doubled their budgets earmarked for green box programs, whereas Canada even reduced its green box obligations. Canada played by the rules of the game and complied with the spirit of the WTO agreement, but its partners did not.

• 1710

As for domestic support, we would like to be able to compete on a level playing field with the farmers in other countries, and we would like to see the domestic support that they enjoy reduced to the level that we benefit from here. To do so, total domestic support will have to be capped.

The special considerations applicable to the blue category must also be eliminated. As I'm sure you are aware, the "blue boxes", as they are called, are like a right-of-way that the European Union negotiated for itself. The programs in the blue category are interventions that cause distortions on the market, but which are tolerated in the last agreement. They are a "privilege" that the European Union was able to win, thanks to its strong position in the negotiations.

Since these programs cause market distortions, we are asking that they be abolished or that they be placed in the orange category, and that States agree to gradually phase them out.

Finally, let's talk about green programs. As you know, green programs are measures or interventions that are not supposed to have an impact on trade. They do not cause trade distortions. However, considering their proliferation in the application of the agreement, and considering the size to which they have grown, they must be domesticated, their criteria and limits must be defined so that they too respect the spirit of the GATT or the WTO agreement.

There should be a clear system to determine in advance what a program's status is. A program should not be established later on in the game. We shouldn't have to establish a panel to settle that issue.

As for domestic support, we are asking for a cap on the aggregate measure of support so that Canada can maintain its ability to manage its own agricultural programs, bearing in mind the various production contexts. You know what agriculture is like. Some years, one particular sector may be more affected than another by the weather. Consequently, it is important for Canada to retain its ability to assist in one area rather than another, bearing in mind these factors. To do so, domestic support has to be controlled by means of the aggregate measure of support.

We mentioned export subsidies, market access and domestic support. There is a set of measures that are different from the others, and some practices will have to be looked at during the upcoming negotiations. I'm talking about the establishment of sanitary and phytosanitary measures. Once again, we are asking Canada to ensure that such measures are truly based on rigorous scientific proof. Let me give you an example of abuse in this area. Australia requires imported poultry to be heated to 70 degrees celsius for 143 minutes. I don't know whether you know what poultry looks like after 143 minutes at that temperature, but it's no longer eatable. They impose a phytosanitary rule using the excuse that they were protecting their country against bacteria or viruses coming in, but this practice is unfounded. It is not based on any rigorous study or research.

We request that when a country sets a sanitary or phytosanitary measure, it be documented and based on credible, serious scientific research.

There is one issue that is not officially among the major issues. I'm speaking of the entire relationship between trade and the environment. Canada is a nation that respects its environment. We have very strict, very rigorous measures and regulations here to protect our environment and our water. Protecting our environment is a very costly proposition. If our farmers are subject to rules that are 100 times or 1,000 times stricter than our competitors', they certainly won't be able to compete. Consequently, the WTO must establish a standing committee to include environmental concerns in trade policy.

• 1715

There currently is a committee, but it should become a standing committee. Let me give you an example. In order to comply with environmental regulations, the average dairy producer must invest some $50,000 in manure storage facilities. In many other countries, that is not the case, particularly in certain American States, and this 50,000-dollar investment hardly generates any income. It allows the producer to recover some fertilizing substances. Other than that, the investment is a fixed cost. If our trade partners are not subject to the same requirement, we are not on a level playing field with them, and we won't be able to survive.

I'd like to mention another issue. Canada has always prided itself on having effective social programs, and one of the highest levels of quality of life throughout the world, something that our Prime Minister mentions from time to time. So, there's the entire matter of trade and social issues.

In our view, trade clearly is not an end in and of itself. Trade must serve to develop society, not the other way around. If trade is truly to be an important tool for development of society, we can't let free markets solve all the problems. Just as communism has been a failure and led us down a dead end, raw, unbridled capitalism has led us down the same dead end. It is important to consider social issues and how they affect trade. Consequently, we are asking the federal government to promote the establishment of a standing WTO committee that will consider social issues when developing trade policy, just as a committee should be established to consider environmental concerns.

Our request also has to do with State trading enterprises. Although this issue was not on the agenda during the last negotiations, we know that the Americans want to add it to the agenda. Today, we would like to say that we officially oppose the American definition.

In our opinion, the status and the activities of State trading enterprises should not be challenged. Instead, if these State trading enterprises create trade distortions, then individual cases should be managed. The Americans are attacking the very concept of State trading enterprises. We think this is not the right way to analyze the issue. One mustn't shoot the messenger, one should counter his message or his actions.

If a State trading enterprise disturbs the market and creates distortions, we agree that WTO rules should come into play, but when State trading enterprises do not create such disturbances, there is no reason to intervene. Often these STEs are a response to multinationals, which are not restricted by WTO agreements.

If you don't mind, I would like to make a few comments about economic theory. According to economic theory, a natural balance will be established on markets if there are enough purchases and sellers to keep either group from controlling prices. However, when two, three or four major multinationals control the resources and the production, the tens of thousands of farmers who sell their commodities to these companies clearly cannot do business and benefit from a certain amount of fairness. Consequently, we must conserve the concept of State trading enterprises, as long as their actions are subject to transparent, clear rules.

In summary, this is our basic position on the upcoming negotiations. I would like to conclude by telling you about our long-term objectives. The Dairy Producers of Canada did not tell you about them, for they limited their remarks to the upcoming negotiations.

• 1720

The Fédération des producteurs de lait du Québec would like to express its long-term concerns, for they are closely linked to our values.

The first objective that the multilateral negotiations on trade should pursue certainly is to ensure that producers will be able to market their products collectively.

As I have already mentioned on a number of occasions, economic theory can't work when you have 10,000 times more sellers than purchasers. It is impossible to have a fair power relationship under such conditions. If a monopoly is not tamed by regulations, abuses will occur.

To date, the ability of producers to band together to market their products has led to excellent results in Canada. The price of our dairy products is comparable to American and European prices, despite the presence of collective marketing agencies.

Consequently, we believe it is very important to ensure that all farmers have the ability and the right to join together and organize themselves, so as to ensure a fair power relationship between them and the big multinationals. The same also holds true for all labour organizations in our society.

Our second objective is quite ambitious, and you may even smile when you hear it, but we strongly believe in it. It could take 20, 30 or 50 years, but I think we have to start discussing it.

Globalization in itself is not a recent phenomenon. It is a reality that has existed for centuries, even millennia. As soon as the wheel was invented, as soon as we increased our ability to communicate, we entered an era of globalization. You cannot be against globalization, because it's a reality. However, you can have an influence on the conditions in which globalization occurs. We think that the most civilized way to approach this issue is to globalize the planning of farm production.

At present, natural resources are being wasted because some countries overproduce. Government money is wasted because some countries are overproducing while at the same time, people are starving to death. There is social unrest in some nations because people are going hungry.

We realize that this is a long-term project, but given the current state of government finances and the growth in the world population, which will be quite strong over the next few decades, we believe that we have to screw up our courage now and talk about planning global food production so that we can avoid wasting resources and harming our environment.

We realize that the East Bloc countries are facing a major challenge in that they must feed their people and ensure their development. These people will stop at nothing to produce their own food. I'm sure you're familiar with cases where the environment was harmed because of industrial practices. Consequently, we must have the courage to look at planning food production. We mustn't see that as a communist intervention, but rather, as a reasonable, logical economic intervention. It makes no sense to waste economic resources.

Canada can lead the way in this regard. A balanced intervention in trade increases effectiveness, as our companies' level of performance currently shows. So, it's a matter of taking balanced measures in the area of trade while at the same time planning food production so that governments do not have to intervene to provide support to people, so that producers can make a living from their market and so that our consumers enjoy a reliable food supply.

We hope that the Government of Canada will have the courage to introduce this notion during the next negotiations and promote it. You can count on us to help you demonstrate the feasibility of this concept. We are well aware that it could take 10, 15, 20 or 50 years to implement it, but we believe that this initiative is essential to the development and prosperity of our societies.

There you have our position.

The Chairman: Have you had an opportunity to discuss this idea with your American counterparts? Have you looked beyond your horizons? I understand your comments. It's a very interesting idea.

Ms. Debien.

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Ms. Maud Debien: Good afternoon, Mr. Bourbeau. Indeed, your second suggestion about planning food production at the global level is a very original, very new idea. This is the first time we've heard about it.

However, and I'm going to play the devil's advocate here somewhat, some people have told us that genetically modified seed could be the solution to overpopulation, environmental problems, desertification and the whole issue of the global food supply. What do you think?

Mr. Alain Bourbeau: I am somewhat sceptical about pinning our hopes on one single technology to deliver humanity from its food supply problems. You must realize that crop seed is one of the necessary inputs for growing food. To ensure the planet's food security, an entire economic order must be established. At present, there is enough food and drinking water for everyone on the planet; no one has to live in extreme poverty. Yet people are living in extreme poverty. There is inequity within our societies. It doesn't depend on the technology that is available, it depends on the prevailing economic rules.

Ethical rules must be established to set boundaries on technological development. The green revolution of the 1960s allowed us to make huge steps forward. Our yields increased tenfold. We are now able to feed our planet thanks to the green revolution. The biotechnology revolution will allow us to make another huge step forward, but it won't solve anything unless there is some civilized way of expanding trade. If we don't give the citizens of the planet the capacity to buy food, we won't solve anything. Food supplies will rot in storage, while people will not get enough food.

Ms. Maud Debien: Myself, I tend more towards the philosophy of sustainable development rather than the production of sterile wheat that Ms. Folco was telling us about, and which raised a tremendous number of questions in my mind. Your example impressed me greatly, and indeed, I prefer that concept of sustainable development to the genetic engineering of crop seed or some other commodity.

Mr. Alain Bourbeau: Thank you for the opportunity to express my views.

Ms. Maud Debien: It gives me one more argument, Mr. Bourbeau.

Mr. Alain Bourbeau: The frantic race to produce more and to increase productivity is compromising our environment. Producing healthful food is important. To drive down costs, farmers are using pesticides and using doses of fertilizer that kill soil flora.

You mentioned sterile wheat. I would just point out to you that you probably have been eating sterile oranges for years. The grapes that you prefer, that you eat regularly, are sterile. In our daily life, biotechnology is already being used to develop one particular kind of agriculture, in order to increase productivity and to meet consumer preferences. But trade mustn't dictate how we develop our societies in the future. We accept the World Trade Organization and globalization, because we can't oppose these developments, but we have a duty to develop transparent rules relating to social issues. Trade must serve the development and prosperity of societies, not the other way around. We are concerned about the way things are happening now. Trade is becoming the most important thing. The WTO rules have more provisions protecting animals than human beings. That is unacceptable.

The Chairman: Ms. Folco.

Ms. Raymonde Folco: If Mr. Bachand agrees, I would like to continue with Ms. Debien's argument. Thank you. Mr. Bachand, I know that you prefer the argument about phytosanitary standards.

• 1730

If you don't mind, Mr. Bourbeau, I would like to continue with Ms. Debien's argument. What I've been fearing, and what I still fear, and this is what I would like to talk to you about, is not just that biotechnology could transform all agri-food production, as it has already started, but I'm also worried that one company or organization could gain almost complete control over production. Yesterday, I gave some other groups the example of Monsanto, which produces wheat. One day, Monsanto could control the entire world's wheat production, alone or in conjunction with two or three other multinationals. Monsanto could then decide where wheat is to be grown, not necessarily in the United States but perhaps elsewhere in the world. Monsanto could decide what countries could produce wheat and what countries would not produce any at all. That too is a form of planning.

I'd like to go back somewhat to George Orwell. I see this as being a danger. It's not just the question of production. It's also about controlling long-term production. If a company with such control does not plan, it will go out of business. It has to plan. Monsanto is planning. It is not necessarily planning to provide food to everyone, rather, it's planning to sell its product. So, a kind of planning has already begun, and it may expand, and perhaps States will no longer have control over their own agri-food production, but rather, a handful of multinationals will have that control. I don't see that as a problem in terms of communism, as you were saying a few minutes ago, with a smile on your face, but I'm worried about some kind of Orwellian world in the future. Would you care to comment on that?

Mr. Alain Bourbeau: Yes, certainly. Basically, you are on the same wavelength as we are in some ways. We are asking for the power to market products collectively because when products are marketed collectively, there is some transparency. If you want to find out something about the dairy industry, you can query data banks, look at the regulations or at all kinds of other information. Agencies that work on behalf of producers are extremely transparent because they are regulated.

The multinationals are not accountable to ordinary citizens. They are accountable to their shareholders, and their shares may be found somewhere in our pension plans, so in a way they are accountable to you and to me. They are accountable to relatively few people. Of course, we are afraid that these people will impose technological choices upon us. The madness of free markets could indeed lead to.... Let's say that I am a producer and someone offers me $20 for my product, but it costs $55. To get down to $20, I have to join forces with Monsanto. Monsanto will get the farm and the farmers will work for them. They will provide them with the inputs and support them. As a responsible producer, if I can't have a company with a human face, even though I know my sister-in-law and my brother-in-law are eating my food, clearly we will lose control over the quality of our foodstuffs. Government and ordinary citizens will no longer manage the food supply, rather, the boards of directors of major corporations will be doing that.

Consequently, we are calling for transparency and rules. We believe that trade is a tool that should be used to develop society. Globalization does not mean deregulation everywhere. Globalization means a global village. It means that there practically aren't any more limits. But it doesn't mean doing away with the rules. Globalization is more about a level playing field than about doing away with the rules. Let the markets decide, but I think that in the long term, that's a very risky approach.

The Chairman: Mr. Bachand, would you like to talk about phytosanitary measures?

Mr. André Bachand: No, I won't talk about that this afternoon, Mr. Chairman. Thank you anyway. I know that you're very interested in that, but unfortunately, we don't have a lot of time. I'd be pleased to send you a brief on the topic if you like.

• 1735

What stands out the most from your presentation is the last part. This is a concept that is both old and new, something that we've been talking about for years and that is very difficult to put in place. Will food production be planned at the global level someday? Probably not.

However, if we could make some progress towards this objective, that would be a good thing. We must avoid having countries specialize. When you plan food production, you could say, for example, that Canada will produce milk and the United States will produce meat. At that point, you are specializing too much, and I think that's extremely dangerous.

You talked about the ability to buy food and so on and so forth. We also have to look at what is happening a few blocks from here. In the morning, some children are going to school hungry. We must always remain aware of the reality of what's going on here at home. I think that's important.

That having been said, you were talking about export subsidies and the WTO's recent ruling on milk. I would like to hear your comments on these issues, and then I will ask a question.

Mr. Alain Bourbeau: I'm sure you realize that at this stage of the process, since this is a public hearing, the ruling has not yet been officially released. It won't be released until April 9. Consequently, I will have to limit my remarks.

The ruling clearly does not question the domestic workings of our dairy industry. The ruling casts doubt on our practices for a certain portion of our exports.

At present, we are in process of deciding whether it is worthwhile to appeal the ruling. We have until April 29 to make that decision. It certainly would be prudent for us to take all the time we have to make this decision. Consequently, as soon as the ruling is officially released, that is, April 9, Canada will have a certain number of days to assess the situation. Basically, Canada will decide whether or not to appeal. It looks like Canada may appeal.

Mr. André Bachand: A few moments ago, you were saying that Canada should ask all countries to abolish their export subsidies. You say that the WTO ruling does not affect the domestic system, that it only affects exports. What's the problem if we don't have export subsidies and the domestic supply management system is fine?

Mr. Alain Bourbeau: In fact, we do not agree on that ruling. A certain pricing practice was deemed to be the same thing as a subsidy. In our opinion—

Mr. André Bachand: I'm trying to understand. You say that we don't have any export subsidies. That's true. The Minister of Agriculture has not announced any official federal program for the export of Canadian dairy products. However, Canada is often criticized for its domestic management of dairy products, which you want to retain at any price.

Mr. Alain Bourbeau: Yes.

Mr. André Bachand: As part of that management, some kinds of milk are taxed as though they were somewhat more expensive so that the price of certain other types of milk, intended for export, can be lower, and as a result, we can—I'm choosing my words carefully—dump it, in a way, outside of the country.

No, we don't have export subsidies, but there is a problem with the various categories of milk and the prices of these various categories. Is that what the problem is? No?

Mr. Alain Bourbeau: First of all, in the very concept of subsidy, which isn't necessarily the subject of this hearing, specific reference is made to government intervention. The price that a dairy producer receives clearly has nothing to do with government intervention in the dairy industry. The producers are the ones who assume the costs of the dairy supply management system. The federal government does not fund it.

One of the complainant's arguments was that producer organizations were like government agencies. That's debatable, to say the very least.

• 1740

Mr. André Bachand: But there's also the aspect of—

Mr. Alain Bourbeau: At the very most, it's a practice that can be corrected. Some categories of exports are subject to that. Producers do it on a global basis. Consequently, it's included in their domestic market. It's somewhat of a paradox in that when the system was introduced, it was on the advice of the Canadian government. There could have been other ways of going about it, but that approach was taken.

The problem can be solved if a recovery plan is established at that level.

Mr. André Bachand: Between you and me, the system operates very well domestically. In the final analysis, probably there will be some changes. Government subsidies are one thing, but producers are being criticized for subsidizing themselves. Then people use another word, they talk about "dumping".

Mr. Alain Bourbeau: A few moments ago, I was saying that Canada was a price-taker. With this system, if the world price were $60, our price automatically would be $60. The system takes the market price. It does not influence it. In a system based on subsidies, the whole concept of funding comes into play. That is why we are surprised at the ruling, to say the very least. We have to take it because that's the way it is, but there are some things in this ruling that are questionable, to say the very least.

The Chairman: Mr. Bourbeau, thank you for your oral presentation and for your brief, which is full of very interesting information. I skimmed through it briefly. We will read it.

Mr. Alain Bourbeau: If you're reading it this evening just before you fall asleep, and you have any questions, I'd be pleased to answer them.

The Chairman: Fine. What's your home telephone number?

Mr. Alain Bourbeau: Unfortunately, I'm staying at a hotel this evening.

The Chairman: We'll know where to find you.

Mr. Bourbeau, thank you very much for coming. I really enjoyed your presentation.

We're adjourned until tomorrow at 9 a.m..