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Results: 1 - 15 of 59
Kate Lindsay
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Kate Lindsay
2021-05-14 13:04
Thank you, Mahima.
I will provide just one more example of a positive disruptive clean technology product gaining momentum here in Canada, and that is mass timber and tall wood buildings. In addition to the societal benefits of using wood, mass timber provides enhanced benefits of carbon storage, displacement of more emission-intensive building materials, as well as showcasing the innovative design aspects of wood.
Canada now has a number of companies that play a role in the global mass timber construction space, with facilities located in Quebec, Ontario and British Columbia currently. As an example, Quebec's Nordic Structures recently supplied the glulam beams and cross-laminated timber, or CLT, for a college being built in Houston, Texas. The wood for the prefabricated beams and CLT panels was grown in northern Quebec, manufactured in Montreal, and sent to Houston by rail to lower the transportation greenhouse gas emissions. This is just one example where Canadian innovation and manufacturing, as well as integrated supply chains, are allowing Canada to supply these excellent carbon-sequestering products to the world.
We see the recent U.S.-Canada greening government initiative as a great example of where forest products, both wood construction and the bio-based products my colleague spoke of, can contribute to positive changes through the value chain.
Other areas where the government can show support to advance these opportunities include, first, recognizing that Canada's forest products sector is a key contributor to a global low-carbon economy, with great potential to further develop the bioeconomy and export market. Second, the federal government should recognize and promote Canada's world-leading forest management practices with global customers and other governments. This would avoid any unnecessary and additional regulatory requirements that are creating confusion and a challenging investment climate. Finally, there are some key policy and programmatic areas, including modernized building codes, procurement strategies that recognize low-carbon products, ensuring that government funding programs are readily accessible across the sector, and reliable transportation and supply chain networks.
We want to thank you for the opportunity to speak with you today. We look forward to answering any questions and following up with you in the future.
Thank you.
Peter Zebedee
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Peter Zebedee
2021-05-10 11:38
Uncertainty in the regulatory regime certainly is one of them. We want to ensure that we have a competitive capital cost to construction. That's one of the barriers on which this government has helped support us within the construction of phase one pipelines, and as you know, Coastal GasLink is a single-source gas pipeline into our Kitimat facility. Hopefully it won't be a barrier for us going forward.
Looking at future growth potential, the biggest opportunities are capital cost of production, the certainty in the regulatory environment as it relates to GHG emissions, and then ensuring we have a competitive position within the global portfolios of our five joint venture partners.
Jesse Whattam
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Jesse Whattam
2021-03-08 11:25
To name some of our members, they include the Canadian Labour Congress, Unifor, Canadian Union of Public Employees, United Steelworkers, and the Climate Action Network, just to name a few.
The World Trade Organization has failed to serve Canada or create a better, fairer world for all, and the Trade Justice Network welcomes the calls for fundamental reform. For three decades, the regime of hyperglobalized trade investment and supply chains via the World Trade Organization has empowered pharmaceutical, agribusiness, financial and other corporate interests in high-income countries to dominate economies to the detriment of national and local economies, workers, farmers, indigenous peoples, our health and the environment.
In the past three decades, despite increased global economic integration, the numbers of the world poor have increased absolutely and relatively. Without a labour protection floor, we've seen repressed wage growth and increased precarious work. The climate and economic crises have been ignored or needed solutions have been constrained by trade rules. There has been a rise in inequality within and between nations as governments have been stripped of essential tools to pursue the well-being of their peoples.
This is why the WTO is facing an existential crisis. The COVID-19 pandemic has only further exposed the inequality and instability of the current WTO regime. It's time for change.
I'm going to focus my comments on the inequity of power at the WTO, regulatory practices and the dispute settlement mechanisms.
The reality is that while the WTO is supposed to be governed by its 164 members, it's actually managed by its most powerful members. The EU and the U.S., along with most western OECD countries, have remained dominant and set the global rules of importance to multinational capital that have never been mutually beneficial for developing countries. This especially played out when rich countries sidelined the Doha development round priorities while pursuing an explosion of bilateral agreements and plurilateralism at the WTO, which was then foisted on developing countries. The interests of developing countries and the poorest communities and low-wage workers everywhere have been marginalized in many of these new negotiations.
In the realm of domestic regulation, corporate interests have lobbied successfully for deregulation through the current trade regime. Further, dispute settlement mechanisms and other explicit constraints in the WTO and free trade agreements prohibit high standards of public and environmental protection. While claiming that domestic regulation maintains the ability of member countries to regulate in the public interest and facilitate increased trade, in reality there's an inherent tension between the domestic regulatory space and trade liberalization.
While the language in the General Agreement on Trade in Services recognizes the sovereign right to regulate, it does not preclude a challenge against a state on the grounds that it administered a regulation that did not fulfill its standards and the criteria set under international instruments, such as the WTO law. In effect, such questioning of domestic regulations via the WTO dispute settlement mechanisms and based on international disciplines and standards challenges the boundaries of the state's regulatory space and the role of its regulatory authorities.
Since the founding of the WTO, regulatory barriers to trade have been at the top of the priority list for multinational corporations. Developed countries, on behalf of their largest industries and exporters, began to complain more loudly that the food and product safety standards, public health measures and environmental protections were creating market inefficiency. Under this pretense of market inefficiency, it has facilitated a deregulation affecting labour rights, consumer products and environmental protections.
Further, international business lobbies have increased their advocacy of so-called regulatory coherence and co-operation, including a right to intervene in the regulatory process as early and as often as possible, hoping to derail or weaken pro-consumer or pro-environment policies and regulations before they're even implemented, avoiding the need to later challenge them.
Right through the pandemic, this has been clear. Negotiations have continued on limiting domestic regulation of the service sector, even as the concentration of service firms is posing a major impediment to timely and cost-effective procurement and distribution of essential goods. Negotiations to limit regulation and vetting of foreign investors continue, despite a clear need for the production of personal protective equipment and medicines to be diversified.
A fundamental transformation should mean that no country should seek or be required to incorporate the so-called good regulatory practice into binding international treaties, as they've been designed to benefit corporate interests and multinational capital while putting democratic decision-making in a stranglehold.
My next point is on the dispute settlement mechanism within the current form of the WTO and trade regime. One of the biggest shifts of the WTO is that countries that try to restrict foreign trade can be more easily sanctioned, most notoriously by giving foreign investors the ability to sue states under the opaque arbitration process. Previous witnesses have spoken about how this current dispute mechanism has hurt Canadian industries.
Just last week, pharmaceutical companies were asking that countries such as Colombia, Chile and others be punished for seeking to ramp up their production of COVID-19 vaccines and therapeutics without express permission from pharmaceutical companies. Sanctions are being urged by the drug industries, citing alleged threats posed by any effort to challenge basic intellectual property rights. Canada and other high-income nations have refused to sign on to the proposal of the WTO or have delayed approving it. Even in the middle of a global pandemic, the rules of the WTO are prioritizing the profit of multinational corporations over people, especially in the global south.
When it comes to the climate, it is paramount that the WTO and trade rules protect climate policy. WTO trade rules that conflict with climate action should be eliminated to allow communities and governments to advance bold climate protections without the fear of being challenged in trade tribunals. We should not be beholden to agreements, such as the government procurement agreement, that can prohibit, say, renewable power purchasing. A fundamental transformation would align trade policies with climate objectives and enforce commitments to implement international climate accords and to make climate-protecting policy changes.
In conclusion, the WTO has functioned to establish rules for the world economy that mainly benefit large transnational corporations at the expense of national and local economies, workers, farmers, indigenous peoples, our health and the environment. Recently the Trade Justice Network signed on to a global call for WTO reform, which was signed by hundreds of civil society organizations across the world. This call cited the Geneva principles for the global green new deal, where economists, policy-makers, experts and civil society organizations aimed to lay down the foundations of a new multilateralism that builds the rules of the economy towards goals of coordinated stability, shared prosperity, and environmental sustainability while respecting national policy sovereignty.
It's these goals that should shape the WTO reform: people and the planet before profit.
Thank you for having me.
Claude Vaillancourt
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Claude Vaillancourt
2021-03-08 11:33
Good morning. I would first like to thank the Standing Committee on International Trade for this invitation.
The Réseau québécois sur l'intégration continentale, or RQIC, is a multi-sectoral organization of Quebec social organizations from the labour, grassroots and international development communities. The network focuses on free trade issues. RQIC's member organizations represent more than one million people.
I would like to begin with a necessary reminder. The World Trade Organization, the WTO, has a long history. This organization has been for many years, and rightly so, a major target of social movements around the world. The WTO has been the subject of major opposition. Think, for instance, of the WTO Seattle Ministerial Conference, which is associated with the birth of the anti-globalization movement, or those in Cancun and Hong Kong, among others.
The WTO has been criticized on many accounts, such as its lack of transparency, negotiations in favour of very large companies only, negotiations under strong constraints for the countries of the southern hemisphere, a lack of interest in social inequalities and environmental issues, an objective of privatization of services provided for in the General Agreement on Trade in Services, the very negative effects of WTO policies on small-scale farming, and so on.
Reforming the WTO is therefore a project that requires great ambition. Since the failure of the Doha Round, the WTO has operated in slow motion and has not proposed anything of real importance. Yet there has been no collapse or chaos in international trade, contrary to what was predicted.
Many have asked this question: is the WTO really useful if the path of multilateralism does not allow for a better hearing of the concerns of many southern countries and civil society organizations around the world?
One thing is certain; in order to reform, the WTO has a long way to go and a steep hill to climb. In this sense, Canada's proposals in the Ottawa Group seem to us insufficient to effectively reform the WTO. Indeed, strengthening the dispute settlement mechanism, revitalizing the negotiating function, and strengthening the deliberative function of the WTO will not bring about the much more fundamental reforms we expect of the WTO.
The WTO's problems are not about the functioning of its internal mechanisms and will not be solved by what we see as somewhat superficial changes. The Ottawa Group's plan unfortunately looks like a headlong rush and a refusal to listen to the many criticisms levelled at the WTO since its founding. What we are suggesting are changes, not to the form, but to the substance of the WTO's role.
The reformed WTO must completely overhaul intellectual property protection. By delaying the entry of generic medicines into the market, the WTO has reduced access to essential medicines for a large part of the population, especially in the south.
COVID-19 makes it more necessary than ever to remove WTO intellectual property constraints, as called for by, among others, Doctors without Borders, India, South Africa and many experts from around the world. Canada must support this demand, rather than oppose it as it has done. The lifting of these constraints should be allowed in any other emergency situation as well.
The reformed WTO must abandon its desire to systematically address non-tariff barriers. Rather than seeking to attack regulations, specifically environmental regulations, and often viewing them as protectionism, they should be encouraged. It is impossible to address a problem as grave as global warming by advocating unconstrained open markets and unrestricted movement of goods.
COVID-19 also made us realize how important it is to develop an economy focused on short circuits and to manufacture essential products locally.
More stringent regulation must also be developed in certain vital sectors, such as finance, to avoid, for example, a crisis like the one we experienced in 2007-08. This regulation must also apply to the Web giants and e-commerce.
The reformed WTO must exclude certain sectors from trade negotiations from the start. Canada has signed the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, recognizing that the protection of culture is incompatible with the liberalization of international trade.
Other sectors should also enjoy similar protection and be removed from the WTO negotiations, including agriculture, health and education.
The reformed WTO must address tax competition among states. Although the OECD already addresses this issue at the international level, we believe it is necessary that this issue also be addressed by an organization dealing with international trade. International competition clearly distorts trade competition and has the effect of attracting investment to the most tax-friendly countries, thereby increasing social inequalities and penalizing countries with the best social policies. The WTO should, among other things, defend a minimum tax rate for all member countries.
The task of reforming the WTO is thus considerable. It is clear that its original mandate to make international trade as free as possible no longer holds today and is leading to disaster. In the 26 years since its creation, social inequality has exploded and global warming has become one of the greatest threats we face.
COVID-19 revealed how neglecting the environment and weakening public services, direct consequences of WTO-backed liberalizations, have contributed to the spread of the pandemic. It is also clear to us that if the Doha Round had been completed according to the will of the WTO, we would be living in an even worse situation than we are now. We therefore hope that the Government of Canada will have the courage to propose real changes to the WTO and challenge an original mandate that cannot stand today.
In closing, I would like to point out that the time frame we were given to prepare this brief was quite short and our working conditions were quite difficult. We would like to have a longer time frame in the future.
Thank you very much for your attention.
View Mary Ng Profile
Lib. (ON)
Thank you very much, Madam Chair and honourable members, for the invitation to appear before the House Standing Committee on International Trade to provide an update on the Canada-U.K. trade dialogue, based on the Canada-EU Comprehensive Economic and Trade Agreement, or CETA.
Our government remains committed to supporting Canadian businesses through economic recovery and beyond.
That is why I was happy to announce on November 21, alongside the Prime Minister and our British counterparts, that we have successfully concluded negotiations on the Canada-U.K. Trade Continuity Agreement.
The U.K. is our fifth-largest trading partner globally. In 2019, two-way merchandise trade with the U.K. amounted to $29 billion. This meant opportunities for our businesses and thousands of good jobs for people in both countries.
This agreement ensures Canada and the U.K. can sustain—and build upon—that relationship by preserving the main benefits of CETA.
More importantly, as it is based on CETA, an agreement Canadians are already familiar with, it provides continuity, predictability and stability for Canadian businesses, exporters, workers and consumers, which is more important than ever as we grapple with COVID-19.
Once the agreement is fully implemented, it will preserve CETA's tariff elimination on 98% of Canadian products exported to the U.K.;
fully protect Canadian producers of all supply-managed products;
maintain priority access for Canadian service suppliers, including access to the U.K. government's procurement market, which is estimated to be worth approximately $118 billion annually; continue to balance investor protections with Canada's right to regulate in the public interest; and finally uphold and preserve CETA's high-standard provisions on issues like women, small businesses, the environment and labour.
Canadian businesses have told us that what they want most at this time is stability, and this agreement would provide that.
Of course, we look forward to working towards a new comprehensive bilateral free trade agreement with the U.K. that best serves Canada's interests over the long term, including through strong provisions on women, the environment, small businesses and the importance of digital trade.
And we will continue to seek Canadians' views to ensure that post-Brexit negotiations and agreements with the U.K. continue to reflect Canada's interests.
Before I go any further, allow me to elaborate on how this continuity agreement between Canada and U.K. came to be and why preserving preferential access to the U.K. is a key priority for our government.
When the U.K. decided to leave the EU single market, customs union and free trade area, that decision drastically affected the U.K.'s trade and economic relations with its largest trading partner, the EU, as well as with Canada, of course.
I need not remind you that once the Brexit transition period ends on December 31, the country will no longer be party to CETA.
While we continue to closely monitor developments in the Brexit process to see how Canadian interests might be affected, we also realize that it is in Canada's best interests to conclude a stable, mutually beneficial continuity agreement with the U.K. that serves to mitigate Brexit uncertainty.
That is why we have been working on a smooth transition and a path to follow for the future between our two countries.
I know that many of you are wondering why we did not conclude this agreement earlier. Allow me to explain how we got here.
When Prime Minister Trudeau and then-U.K. Prime Minister May met in September 2017 to discuss ways to strengthen our bilateral relations following the U.K.’s decision to leave the EU, both pledged to make the transition as seamless as possible and sought to preserve CETA’s preferential trade agreements. Although the U.K. was still a party to CETA and therefore not able to undertake new international trade negotiations, preliminary discussions began regarding converting the terms of CETA to a bilateral agreement.
If members recall, at that time there was still much uncertainty surrounding whether the U.K. and the EU would reach an agreement on the U.K.’s departure, or whether the U.K. Parliament might reverse the course of Brexit. At times we were close to arriving at a deal, but the ever-changing circumstances of the U.K.'s exit from the EU made it virtually impossible to conclude a deal that would be in the best interests of Canada. Canada even had to pause negotiations when the U.K. abruptly announced a new tariff rate schedule that would have wiped out any benefit Canada would gain from a trade deal with the U.K.
Then in June of this year the U.K. announced its decision not to seek an extension to the Brexit transition period.
It was in this spirit that Secretary Truss and I reopened negotiations and committed to concluding a trade continuity agreement to provide certainty for our businesses.
As we approach the end of the U.K.'s participation in CETA, the successful conclusion of this agreement goes a long way to minimizing disruptions for Canadian businesses at this critical time.
That is why negotiators are working diligently to finalize the legal texts in both official languages.
It’s also why preparations are under way to seek the government’s approval for signature of the trade continuity agreement on an expedited basis so that Parliament may consider the bill.
Lastly, it is why we are also preparing for all scenarios, including mitigating measures that would ensure business flows are not temporarily disrupted under any circumstances in the event that Parliament is not in a position to pass implementing legislation before the end of 2020.
Throughout this process, Canada has continued and will continue to support Canadian companies doing business with and in the U.K. and the EU through what I call the team Canada approach to trade.
This is critical to Canada's economic recovery and future prosperity.
That is the message I will carry with me later this week as I begin a series of events to mark CETA's third anniversary and engage with Canadian businesses to learn more about their concerns, interests and priorities, as well as opportunities for growth.
Madam Chair, let me conclude by saying that the trade continuity agreement with the U.K. is good for Canadians and for the people of the U.K.
It is good for the strong, mutually beneficial relationship that our nations have built over more than 150 years. While CETA will continue to govern Canada-EU trade, this continuity agreement will continue to provide the predictability and remove uncertainty for Canadian businesses doing business with and in the U.K.
I would note that I was happy to speak with my critics from each party this past week on this important topic. I look forward to working with them and with my colleagues on all sides of the House to ensure a smooth transition in the Canada-U.K. trade relations in the coming weeks and a better outcome for Canadians in the months and years to come.
Thank you, everyone.
I look forward to your questions and our discussion.
Thank you, Madam Chair.
Mark Agnew
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Mark Agnew
2020-11-16 11:14
Thank you, Madam Chair and honourable members, for the invitation to speak as part of the committee's U.K. study. It's a pleasure to be back here and to see you all again virtually.
As the committee's members will appreciate, the U.K. is a significant trading partner for Canada. It's our third-largest goods export market and second-largest destination for foreign direct investment abroad. As Trevor alluded to a moment ago, it's quite important, particularly in the EU-28 context, with 40% of our merchandise exports and 36% of our service exports from the EU-28 going to the U.K.
Despite the impressive overall rankings, it still is an overall small proportion of our global trade share, behind the United States. The relationship, we feel, has the potential to grow, and certainly Britain is an ideal market for Canadian companies seeking to diversify, given our shared language and ways of doing business.
With the EU separation question firmly decided in the U.K., we need to look ahead to dealing with the world as it is. The reality means that, once the U.K.'s transition period with the EU ends on December 31, the U.K. will no longer be treated as if it were a party to CETA by the Government of Canada. Given how important the U.K. is as part of the EU-28's export basket, the short answer is that Brexit matters for Canadian businesses.
The Canadian Chamber of Commerce has not completed our own in-house modelling, but some external work serves as a rough guide for what the potentials are. Canadian economist Dan Ciuriak conducted an analysis in 2018 as part of the British government's CETA impact assessment. The study found that by 2030 the value of the U.K.'s participation in CETA would be worth about £1.1 billion, or approximately $1.9 billion Canadian in terms of Canadian exports to the U.K.
Although this is definitely not a precise measurement, given that we don't know the final architecture of the U.K.'s trade arrangements with the EU and Canada and that we don't know what the U.K.'s final picture will be in 2030, given that the study was done with a 10-year time horizon, and that we also have divergences in the U.K. and EU's MFN tariff rates, it nonetheless provides at least a decent rough signpost on the potential for what a U.K.-Canada trade deal means to the Canadian economy.
I'd like to just be a bit more specific now on some of the immediate implications of not having a transition agreement in place by December 31.
The first is tariffs. Canadian businesses will lose preferential access to the U.K. market, making our products less competitive. Some examples of where we would face tariffs under the U.K.'s global tariff regime include lobster products, with tariffs of up to 10%; plastics under HS 3908, with tariffs of up to 6%; vehicles under HS 8703, with tariffs of up to 10%; and beef products under HS 0201 with an ad valorem tariff of up to 12%, plus specific tariff units per kilogram.
I should add here a note that Canadian beef products have a TRQ under CETA and certainly any TRQs that are transposed into a U.K.-Canada context need to be commercially viable for Canadian companies to take advantage of them.
The second, which we will not have without a transition agreement in place, are the discussions around regulatory co-operation. CETA provides a framework for critical regulatory dialogue to occur on agriculture non-tariff barriers and through the conformity assessment protocol. Regulatory co-operation is not glamorous; it's the nuts and bolts of trade and absolutely critical. Our trade agreements have an important role in shining a spotlight on the work that regulators do to make sure that issues are advancing in a timely manner for businesses. Certainly agriculture non-tariff barriers have been quite problematic in the EU context, and we hope that the U.K. will eventually take a different approach.
The last is service exports. CETA's temporary entry chapter provides provisions on intra-company transferees, and this means that Canadian companies can bring in specialized talent to work in Canadian operations. CETA's contractual service suppliers' provisions mean that specialized skills can be brought in to fill supply chain gaps for Canadian businesses. CETA provisions on these entry categories reduce business burdens and, without them in a U.K. context, companies will need to use other routes that are more cumbersome.
Simply put, if CETA matters, then transitioning it into a bilateral agreement also matters. We have been working closely with our U.K. counterparts at the Confederation of British Industry to advance this and will continue to do so until the deal is done.
Certainly we hope this committee will be able to facilitate an expeditious passage of the implementing legislation once the agreement is finalized.
As members of the committee will appreciate, everything you do in trade builds on what came before it. CETA was the gold standard when it was negotiated, but the Canada-U.K. transitioning agreement should be seen as a starting point for going further.
I'd like to quickly highlight five areas where we think we can do this.
Number one is digital trade. Since CETA's negotiation, global trade discussions on digital trade rules have taken on a much bigger focus. This includes the WTO as well as our digital trade chapters in CPTPP and CUSMA. Discussions with the U.K. on digital trade should support better data flows by Canadian companies.
Number two is regulatory co-operation. The future gains on merchandise trade will ultimately be determined by reducing non-tariff barriers given how low tariff rates are for most products. This is particularly important for Canadian agriculture exporters, as I alluded to a moment ago, where it's been a tough slog in the EU. There's also forward-looking work that we can do in areas like health sciences procurement as well as cybersecurity.
Number three is critical minerals. The global supply of rare earth minerals that enable the production of many high-tech products remains dangerously concentrated. Future discussions between the U.K. and Canada should facilitate greater private sector production and movement of these rare earth extractive products.
Number four is trade facilitation. The pandemic has emphasized the value of the efficient movement of goods globally. Canada and the U.K. should explore ways to introduce additional measures that would modernize customs processing in CETA, and build on the free trade agreement from the WTO.
Number five is labour mobility. Enhancing the ability of companies to attract talent and access service contracts abroad is critical to diversifying what you're exporting, not just to where. Activities like after-sales servicing can actually be more lucrative for companies than the original export itself, so we should try to be ambitious in how we approach this business activity.
Without a bilateral agreement in place, certainly these five areas, and work on other areas like sustainability, will be difficult to go further on.
Thank you for your consideration, and we look forward to the discussion.
Hassan Yussuff
View Hassan Yussuff Profile
Hassan Yussuff
2020-11-16 11:21
Good morning, Madam Chair and committee members. Thank you for having us. My colleague Chris Roberts will join me if there are any questions.
Thank you for the opportunity to appear before you today. It's a pleasure for us to be here.
The Canadian Labour Congress is Canada's largest central labour body. The CLC brings together some 50 national and international unions across Canada. As well, it gathers together 12 provincial and territorial federations of labour and 100 labour councils across the country. The CLC speaks on issues of national importance for three million unionized men and women. These individuals work in the public and private sectors, and in both trade-exposed and trade-sheltered industries.
The CLC perspective on international trade is that Canada has always been a trading nation. It is a small, open economy relying on exports. The CLC has always advocated for fair trade as opposed to free trade. In our view, international trade and investment rules should foster inclusive, equitable and sustainable economic growth. Trade rules should boost employment and real incomes, not destroy jobs and raise the cost of living. They should, of course, lift incomes and improve working conditions, not drive them down.
They should reduce inequality, not worsen it. They should encourage and reinforce the capacity of governments to pursue full employment and regulate in the public interest, not erode or curtail these powers. They should be designed transparently and with public involvement and debate, and not behind closed doors with multinational investors calling the shots.
In other words, international trade agreements should first and foremost serve the interests of working people and ordinary residents of Canada. Trade agreements should be an opportunity to strengthen labour and environment protections, toughen safeguards for women and migrant workers, and lift food safety and public health standards.
For far too long, trade agreements have been negotiated hidden from civil society and responding mainly to corporations and investors. The terms of the trade agreements have been about shackling the ability of governments to regulate, invest and spend in the public interest.
I will speak to a trade agreement with the United Kingdom. The Government of Canada has signalled its commitment to negotiate progressive trade agreements with trading partners. In our view, the Comprehensive Economic and Trade Agreement with the European Union, CETA, should not be the standard for negotiating a bilateral trade agreement with the United Kingdom.
In several important respects CETA has been surpassed by the provisions of the Canada-United States-Mexico Agreement, CUSMA. On the investor-state dispute settlement, ISDS, the CUSMA eliminated this dispute settlement mechanism in chapter 11 of NAFTA. In our view, ISDS provisions must be omitted from Canada's future trade agreements. There is no reason that our principle trading partners, particularly rich, industrialized countries with well-developed domestic court systems, need these mechanisms. These arrangements are nothing more than a means for large corporations and investors to curtail and dissuade government regulation for private gain.
Under NAFTA, Canada was sued some 40 times and forced to pay over $300 million in penalties and fees. The majority of these trade disputes involved Canada's environmental laws. This is simply unacceptable.
In our view, there is no need for a CETA-style investment court system allowing foreign transnationals to sue governments outside of the U.K. or Canadian court systems.
On labour rights, from the CLC's perspective, any new agreement with the United Kingdom must include robust and fully enforceable provisions for labour rights. CETA's provisions are not fully enforceable. Instead, they are subject to a non-binding compliance mechanism relying on co-operation and dialogue through a process of consultations and advice from an expert panel.
CUSMA brings labour provisions into the main agreement as a stand-alone labour chapter. As a result, labour rights in CUSMA are fully subjected to the state-to-state dispute settlement process in the agreement. It also commits each country to implement policies that protect workers against sexual harassment and wage and employment discrimination on the basis of sex. This includes discrimination on the basis of pregnancy, sexual orientation, gender identity and caregiving responsibilities. CUSMA includes new provisions committing signatories to take steps to prohibit the importation of goods produced by forced labour, address violence against workers exercising their labour rights, and ensure that migrant workers are protected under the labour laws.
CUSMA also includes a new facility-specific rapid-response mechanism. This mechanism provides for enhanced provisions to ensure effective implementation of labour obligations at covered facilities.
In our view, these labour provisions in CUSMA should be a starting point for Canada's future trade agreements. Future trade agreements should also require signatories to uphold fundamental labour rights in the International Labour Organization's core conventions. These commitments should be fully enforceable.
On pharmaceutical drugs, Canada's spending on pharmaceutical and patent drug prices is among the highest in the world. Canadians already pay far more for prescription drugs and face higher drug prices than their counterparts in most OECD countries. Both agreements, CETA and CUSMA, will contribute further to driving up drug costs by delaying the entry of generic medicines. Any future trade agreements with the United Kingdom cannot aggravate the problem. Pharmaceutical companies must not receive protection at the expense of Canadians.
On climate change, CETA's chapters on “Trade and Sustainable Development” and “Trade and Environment” contain positive commitments on the environment. However, the commitments are not binding, and there are no effective enforcement mechanisms for CETA environmental commitments. For its part, CUSMA is silent on environmental change. Future trade and investment commitments must contain binding commitments to combat climate change. They must avoid ISDS clauses that will directly undermine the ability of governments to live up to their climate change commitments.
On public services, in 2016, European opposition to perceived threats to public services in CETA nearly upended the signing of the agreement. In order to get the deal done, the parties had to craft a joint interpretive instrument containing assurances about the autonomy of governments to provide, regulate, create and expand public services. However, the text of CETA itself does not fully and effectively exclude public services. To correct this, any new trade and investment agreement should include a clear and fully effective exclusion for public service. Such a provision should ensure that all levels of government can create new public services, expand existing ones and reverse privatization, without risking sanctions or compensation claims under trade and investment agreements.
On regulatory co-operation, CETA's “Regulatory Cooperation” chapter and its Regulatory Cooperation Forum aim at limiting regulatory differences between Canada and the EU. These initiatives will target regulations pertaining to food safety and biotechnology, chemicals and consumer and environmental protections.
These regulations are often characterized as impending market access and hindering trade; however, these regulations are often the result of popular and consumer demands for food safety and health and environmental protections.
CETA's regulatory reform discussions also occur in forums that lack transparency and democratic accountability and tend to be dominated by industry and commercial interests. This sort of approach to regulatory co-operation will not inspire public confidence. Canada can and should ensure far greater transparency and democratic accountability in the regulatory chapters of future trade agreements.
In conclusion, our trade relationship with United Kingdom is vitally important. In order to achieve a truly progressive trade agreement governing Canada-U.K. trade, we must have rules that benefit the many, rather than the few. Trade rules must instill confidence in governments' ability to regulate on behalf of working people, and the interests and voices of working people must be included in the development of any agreement.
Recent experience in North America and western Europe has made one lesson perfectly clear. Trade and investment agreements that bring benefits to a small elite, and job losses and declining prospects for working people, will stoke popular resentment and opposition.
Thank you so much. I look forward to any questions the committee members may have.
Thank you, Madam Chair.
View Rachel Bendayan Profile
Lib. (QC)
I'm going to pick up on the fact that you raised CUSMA, because I noted that a few witnesses are expressing some reservations regarding our ability to move quickly if an agreement is reached between the two countries.
I think CUSMA is a great example, particularly since it was this committee that was able to move quickly—holding meetings night and day—in order to ensure that was passed. I believe it was passed hours before the House rose for the pandemic. I think it is a nice thing to remember when comforting our business community that we can move very quickly as a government.
Mr. Agnew, I did want to raise something that was mentioned earlier on in committee and that is your July letter, “Strengthening Canadian Supply Chain Resiliency”. You mentioned a number of recommendations and ideas that I found very interesting. One of the areas of focus was really regulatory co-operation, and I think you put it best when you said that it is perhaps the least sexy part of trade, but also one of the most important.
I am certainly seized of the non-tariff barriers that are affecting our agriculture industry, as is the Minister of International Trade. In your analysis of the current agreement with CETA and how we might be able to go further, as you put it, what changes would you make to the regulatory co-operation? Or do you feel that the regulatory co-operation provisions that we have should be rolled over as is?
Mark Agnew
View Mark Agnew Profile
Mark Agnew
2020-11-16 12:34
I think the regulatory co-operation provision should be rolled over to get the process started on day one. In terms of what we'd like to see going forward there's ensuring greater transparency amongst regulators for the decisions they make. I think the experience of some of our members, particularly in the agriculture sector, is that the EU has arrived at decisions, but how they've arrived at them, I think, has been overly politicized. Shining a greater spotlight on that and enforcing a science basis to these would be quite helpful.
View Daniel Blaikie Profile
NDP (MB)
In your opening remarks you talked about a number of committees that are doing work for the modernization of the WTO. You mentioned a committee on domestic regulation for services.
I'm wondering what is being discussed at those tables that would differ from the status quo. What would be the purpose of new rules and what would they be trying to achieve?
Darren Smith
View Darren Smith Profile
Darren Smith
2020-03-11 16:04
Thank you very much for the question.
Quickly, I guess it's basically us trying to establish minimum standards with respect to domestic regulations in the sense of transparency and process-oriented matters. These are all the types of rules that would provide the kinds of standards we have in Canada with respect to, again, transparency and process-oriented matters for companies—
View Daniel Blaikie Profile
NDP (MB)
Would those rules foresee enshrining the precautionary principle or is Canada arguing for the approach that was taken in CUSMA?
Darren Smith
View Darren Smith Profile
Darren Smith
2020-03-11 16:04
Yes, this is much more basic. This is more about looking at licensing and certification matters and trying to ensure that the regimes for the members of the WTO provide a minimum standard of treatment with respect to these types of procedures.
For instance, if you are in a professionally regulated sector and looking to export your services to another jurisdiction, and you have to apply for a licence in order to provide that service, there are certain rules in place—which, hopefully, we're going to achieve through this agreement—that will allow that service supplier a higher degree of confidence that their application is being processed and regarded in a manner that is similar to what you have in Canada.
It's basically an outcome that we hope will raise the standards in other jurisdictions, because in Canada we already have a very high standard in terms of openness in this regard. It's a matter of putting our service suppliers, in this case, on a much more competitive footing with a wider range of WTO members.
This is also a plurilateral initiative. It involves about 60 WTO members. It's not, obviously, as.... The ideal situation would have this be a fully multilateral arrangement, but we're certainly moving the bar forward in this instance.
Charles Milliard
View Charles Milliard Profile
Charles Milliard
2020-02-25 9:13
Allow me to introduce myself. My name is Charles Milliard, and I am the president and CEO of the Fédération des chambres de commerce du Québec, or the FCCQ for short. Joining me is Kathy Megyery, vice-president of strategy and economic affairs.
I'd like to thank the committee for having us despite a few technical problems. We had a bit of trouble with the connection for our appearance this morning, so I thank you for your patience.
The Fédération des chambres de commerce du Québec represents 132 chambers of commerce across Quebec and 1,100 member businesses. The federation's members are active in every sector of the economy throughout the entire province. As Quebec's largest network of business people and businesses, the federation also serves as a provincial chamber of commerce, advocating for public policies on behalf of its members.
I want to start by saying that the federation welcomes the signing of the trade agreement between Canada, the U.S. and Mexico, which, as we know, puts an end to more than a year of business uncertainty. The prevailing uncertainty prior to the conclusion of the agreement was quite detrimental to business and investment in Canada. While the federation fully recognizes the importance of the new agreement, it has serious concerns about certain aspects that warrant rigorous federal oversight.
The federation recognizes that the agreement was unfortunately concluded to the detriment of our supply management system and Quebec's dairy farmers, who were to some extent sacrificed. That is true of the negotiations leading to all three of the major trade deals recently signed, the Canada–European Union Comprehensive Economic and Trade Agreement, or CETA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, and CUSMA.
In addition, despite the very clear calls of Quebec's aluminum sector regarding regional content rules, it will not see its fate improve under the agreement. Conversely, the steel sector, 53% of which is based in Ontario, obtained the protections it had been calling for. Going forward, interprovincial equity should be the guiding principle for any concessions the federal government makes in negotiating international agreements.
What's more, this agreement causes a third breach in supply management, thereby undermining the system's viability and long-term sustainability, especially for the smallest farms. Government announcements regarding compensation for CETA and the CPTPP were long in coming, and the payments have taken even longer, unfortunately. To date, dairy processors and poultry and egg farmers continue to wait for their compensation payments. Nothing has yet been announced in connection with CUSMA.
The FCCQ is calling on the government to swiftly establish the terms of the compensation program for dairy farmers and producers further to CUSMA. The federation also submits that Quebec farmers should receive compensation commensurate to the share of Quebec's agri-food sector in the Canadian economy as a whole.
As for the aluminum sector, the government must remain vigilant. Initially, CUSMA contained a provision requiring that 70% of steel and aluminum originate in North America. Accordingly, Mexico was supposed to purchase 70% of its supply from North America. However, a grey area in the definition would likely have allowed Mexico to continue buying cheap metal from China, as it has been for months now.
The flaw was corrected in the new version of CUSMA, but only for steel, not for aluminum. This new dynamic will impact Quebec's market share. American companies supplied by Quebec have already begun relocating operations to Mexico so they can pay less for metal. Consequently, we will probably lose more and more of the U.S. market as we watch metal processing capacity move to Mexico. The FCCQ is therefore calling on the federal government to ensure the industry maintains its competitiveness in a market that has just undergone a significant change, by engaging the Americans through all diplomatic channels necessary to force Mexico to play by the rules.
Under the provisions of CUSMA, Canada agreed to an increase in the duty collection threshold, the de minimis threshold, which went from $20 to $150 for duties. A longtime demand of online retailers in the U.S., the increase could lead to a spike in cross-border shopping, which would have obvious consequences for Quebec retailers and their employees. The higher threshold could prompt U.S. online retailers to start offering customers free shipping to Canada, something many already offer their customers in the U.S. The FCCQ is therefore calling on the federal government to pay close attention to the retail sector overall to ensure it can remain competitive with foreign companies.
Furthermore, the federation's members, especially small and medium-size businesses, share a common concern, one we want to convey to the government today: information on the benefits of these trade agreements is lacking. They feel the government should be doing a better job when it comes to the trade deals and after-sales service.
Although a number of mechanisms are in place, the information doesn't always seem to flow as effectively as our business network in Quebec would like. The government should be more proactive when it comes to educating companies about the benefits of leveraging trade agreements and conquering foreign markets.
Accordingly, it is necessary, in our view, to provide businesses with support as they enter the export market for the first time. It would also be a good idea to provide smaller businesses with more online support and high-potential companies with tailored support.
The FCCQ has always advocated the importance of diversifying export markets and leverages its network of well-established local chambers of commerce across the province to help Quebec companies discover the benefits of export markets and seize new business opportunities.
Against the current backdrop of American protectionism, it's important for Quebec companies to focus on other high-potential markets and increase their proportion of non-U.S. exports. As you know, 70% of Quebec exports last year were destined for the U.S.
Diversifying our trade partners is even more important considering the uncertainty caused by American surtaxes, which has taken its toll on our economy in recent years.
Finally, I want to highlight the fact that numerous products that are not compliant with current regulations seem to be making their way across the border, because the Canadian Food Inspection Agency is short on resources. With added restrictions, it's essential to increase the level of screening and analysis to make sure imported products adhere to the same requirements our products do.
Clearly, the purpose of Canada's regulatory framework is to foster better consumer health, but to do that, companies subject to the regulations must incur the associated costs. Harmonization is thus vital to the competitiveness of Quebec's agri-food industry. The FCCQ is recommending that the government increase controls and inspections by the agency to ensure imported products meet the same standards and rules as Canadian products.
Thank you. We would be pleased to answer any questions you have.
View Daniel Blaikie Profile
NDP (MB)
With respect to chapter 28, the NDP salutes the removal of investor-state dispute settlement clauses from NAFTA, but there's some concern that chapter 28 is quite prejudicial against public interest regulation.
I'm wondering if there might be some remedial work that Canada could do on its own, including a more wide-ranging definition of who an interested party, or an interested person would be, so that it's not narrowly defined as someone with a business interest in the regulation, but also recognize the interests that citizens might have. It is with respect to the environment or indigenous people worrying about any infringement of their rights, or workers who are concerned about the effect that a regulation, or lack of regulation, of a particular sector might have for them.
Could you offer some remarks to that effect in terms of how we might try to mitigate some of the potential negative impacts of chapter 28?
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