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37th PARLIAMENT, 1st SESSION

Standing Committee on Foreign Affairs and International Trade

EVIDENCE

CONTENTS

Friday, May 10, 2002

0900

The Acting Chair (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.))

0905

0910

The Acting Chair (Mr. John Harvard)

Mr. Ash Skinner

The Acting Chair (Mr. John Harvard)

Mr. Ash Skinner

The Acting Chair (Mr. John Harvard)

0915

Mr. Ash Skinner

The Acting Chair (Mr. John Harvard)

Mr. Ash Skinner

Mr. Steve Nixon (General Manager, Farmers of North America, Inc.)

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance)

Mr. Ash Skinner

0920

Mr. Keith Martin

Mr. Ash Skinner

Mr. Steve Nixon

Mr. Ash Skinner

Mr. Steve Nixon

Mr. Ash Skinner

Mr. Steve Nixon

Mr. Ash Skinner

0925

Mr. Keith Martin

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Rocheleau

0930

Mr. Steve Nixon

0935

Mr. Ash Skinner

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

0940

Mr. Ash Skinner

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

The Acting Chair (Mr. John Harvard)

Mr. Steve Nixon

0945

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

Mr. Steve Nixon

Mr. Keith Martin

Mr. Steve Nixon

Mr. Ash Skinner

Mr. Steve Nixon

0950

The Acting Chair (Mr. John Harvard)

Mr. David Orchard (Honorary Chair, Citizens Concerned about Free Trade)

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

0955

1000

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

1005

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

1010

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

1015

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

1020

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

1025

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

Mr. David Orchard

1030

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

Mr. David Orchard

Mr. Keith Martin

1035

Mr. David Orchard

The Acting Chair (Mr. John Harvard)

Mr. Tony Haynes (Director of Social Outreach, Roman Catholic Diocese of Saskatoon)

The Acting Chair (Mr. John Harvard)

1040

1045

The Acting Chair (Mr. John Harvard)

Dr. W.R. Adamson (Representative, Multi-Faith Social Justice Circle)

1050

1055

The Acting Chair (Mr. John Harvard)

Dr. W.R. Adamson

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

1100

Mr. Tony Haynes

Mr. Keith Martin

Mr. Tony Haynes

1105

The Acting Chair (Mr. John Harvard)

Dr. W.R. Adamson

Mr. Keith Martin

Dr. W.R. Adamson

1110

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

The Acting Chair (Mr. John Harvard)

1115

Mr. Tony Haynes

1120

The Acting Chair (Mr. John Harvard)

Dr. W.R. Adamson

The Acting Chair (Mr. John Harvard)

Mr. Tony Haynes

The Acting Chair (Mr. John Harvard)

1125

Mr. Don Anderson (Executive Assistant, Saskatchewan Federation of Labour)

1130

1135

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

Mr. Don Anderson

Mr. Yves Rocheleau

Mr. Don Anderson

Mr. Yves Rocheleau

Mr. Rocheleau

1140

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

1145

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

1150

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

1155

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

The Acting Chair (Mr. John Harvard)

Mr. Don Anderson

1200

Mr. John Harvard

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed (Chair, Board of Directors, Saskatchewan Council for International Cooperation)

1335

1340

1345

1350

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

Mr. Hamid Javed

Mr. Keith Martin

1355

Mr. Hamid Javed

Mr. Keith Martin

Mr. Hamid Javed

Mr. Keith Martin

Mr. Hamid Javed

Mr. Keith Martin

Mr. Hamid Javed

Mr. Keith Martin

Mr. Hamid Javed

1400

Mr. Keith Martin

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

Mr. Hamid Javed

1405

Mr. Yves Rocheleau

Mr. Hamid Javed

Mr. Yves Rocheleau

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

1410

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

1415

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

Mr. Hamid Javed

The Acting Chair (Mr. John Harvard)

1420

Mr. William Kerr (Senior Associate, Estey Centre for Law and Economics in International Trade)

The Acting Chair (Mr. John Harvard)

Mr. William Kerr

1425

1430

The Acting Chair (Mr. John Harvard)

Mr. William Kerr

The Acting Chair (Mr. John Harvard)

Mr. William Kerr

The Acting Chair (Mr. John Harvard)

Mr. Wayne Robinson (Director, Marketing and Professional Development, Estey Centre for Law and Economics in International Trade)

The Acting Chair (Mr. John Harvard)

1435

Mr. Keith Martin

Mr. William Kerr

Mr. Keith Martin

1440

Mr. William Kerr

Mr. Keith Martin

Mr. William Kerr

Mr. Wayne Robinson

Mr. Keith Martin

Mr. William Kerr

Mr. Keith Martin

Mr. William Kerr

Mr. Keith Martin

Mr. William Kerr

Mr. Keith Martin

Mr. William Kerr

The Acting Chair (Mr. John Harvard)

Mr. Wayne Robinson

1445

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

1450

The Acting Chair (Mr. John Harvard)

Mr. William Kerr

The Acting Chair (Mr. John Harvard)

Mr. Wayne Robinson

The Acting Chair (Mr. John Harvard)

Ms. Mary L. Day (Individual Presentation)

1455

The Acting Chair (Mr. John Harvard)

Ms. Mary L. Day

1500

The Acting Chair (Mr. John Harvard)

1505

Mr. John McConnell (Individual Presentation)

1510

The Acting Chair (Mr. John Harvard)

Mr. Trevor McKenzie-Smith (Representative, Oxfam Canada)

1515

The Acting Chair (Mr. John Harvard)

Mr. Keith Martin

Mr. Trevor McKenzie-Smith

Mr. Keith Martin

Mr. Trevor McKenzie-Smith

The Acting Chair (Mr. John Harvard)

Ms. Mary L. Day

The Acting Chair (Mr. John Harvard)

Ms. Mary L. Day

The Acting Chair (Mr. John Harvard)

Mr. Yves Rocheleau

Mr. John McConnell

1520

Mr. Yves Rocheleau

Mr. John McConnell

The Acting Chair (Mr. John Harvard)

Ms. Kateri Hellman Pino (Individual Presentation)

The Acting Chair (Mr. John Harvard)

Ms. Kateri Hellman Pino

The Acting Chair (Mr. John Harvard)

Mr. John McConnell

1525

The Acting Chair (Mr. John Harvard)

Mr. McConnell

The Acting Chair (Mr. John Harvard)

Mr. Trevor McKenzie-Smith

The Acting Chair (Mr. John Harvard)

CANADA

Standing Committee on Foreign Affairs and International Trade

NUMBER 083

1st SESSION

37th PARLIAMENT

EVIDENCE

Friday, May 10, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

The Acting Chair (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.)) I'd like to bring today's meeting in Saskatoon to order. This is pursuant to Standing Order 108(2) of the House of Commons and concerns public hearings on North American integration and Canada's role in the light of new security challenges and the study of the agenda of the 2002 G-8 summit.

We are going to start this morning's proceedings with a presentation by the Farmers of North America Incorporated. With us are Steve Nixon, who's the general manager, and a gentleman by the name of Ash Skinner. We are going to have 45 minutes and no more to take your presentation. You may proceed.

Good morning, and thank you for coming.

¿ (0905)

Mr. Ash Skinner (Corporate Development, Farmers of North America Inc.): Thank you, John. I'd like to welcome the ladies and gentlemen of the standing committee and thank you for the opportunity to present this morning.

My name is Ash Skinner and this is Steve Nixon. We're here to represent the Farmers of North America and to talk about agricultural trade, primarily with the United States.

Low agricultural prices in Canada are often blamed for poor agricultural revenues. Canada at all levels spends too much time focusing on agricultural subsidies. The reality is that agricultural subsidies are not the problem, because low commodity prices are not the problem.

First, I think we need to understand a few points. Producers only represent one small component of the overall value chain. This value chain ranges from input to production and all the way through to the end consumer. In the U.S. the rest of the value chain is primarily domestically owned. In Canada the rest of the value chain is primarily foreign-owned. Therefore, U.S. subsidies primarily stay in the U.S. economy and are felt throughout the entire value chain. In Canada subsidies would have little impact on the Canadian economy because of the ownership of the value chain. In fact, a Canadian subsidy would be more greatly felt in the U.S. than in Canada.

Let's talk about the value chain. A loaf of bread costs $2. That $2 of revenue is divided among the entire value chain. Of that, farmers get two to four cents, 1% to 2% of revenue, and after expenses no net profit.

Canadian policies must be designed around how Canada can capture more of the remaining 98%. Subsidies could be doubled, the price of wheat could be halved, and the $2 loaf of bread would still be worth $2 because the price of wheat only represents 1% to 2% of the cost of the bread.

Picture this. Canada sets policy incentives to have producers retain ownership right to the end consumer. The result would be to take the majority of the revenues and profits from the entire value chain and add them to the Canadian economy. This does not mean Canada needs to own the value chain; we need to control it through the flow of commodities. We can toll-process these commodities to the consumer level, and by “toll-process” I mean process for a fee.

Let's bring it closer to home: Saskatoon and canola. We have outside Saskatoon a canola-crushing plant owned by a foreign company, Cargill. Canola growers could be, as a whole, demanding toll-processing from the Cargill plant for a reasonable fee. Canada does not need to spend billions of dollars creating new or competing infrastructure. We can use the infrastructure that currently exists, because if we control the flow of canola, the plant is worthless if we don't use it.

Canada would own canola oil to export, and not just a raw commodity. Canada could then toll-package and retail canola oil, capturing the majority of available revenue from the canola oil industry and bringing this back into the Canadian economy.

The same control needs to be exerted over the cost of production to the producer. Canadian government policies are in place protecting foreign-owned input companies, making Canada less competitive. The right Canadian government policies and incentives would cut billions of dollars off the cost of production at the producer level.

An example is the Pest Management Regulatory Agency--PMRA--and the glyphosate issue. Policy has been put in place that benefits the large foreign corporations to the detriment of Canadian competitiveness in the global marketplace. The Canadian government, through actions of the PMRA, places our exportable products at least $100 million behind those they are competing with in the global marketplace. This $100 million does not get to stay in Canada.

In closing, the rest of the value chain has done a wonderful job in fragmenting producers and keeping the focus on things like subsidies and off themselves. Government needs to step up and help producers with the organizational infrastructures required to achieve control of the agriculture industry. The only thing stopping total foreign ownership now is the fact that farming is not profitable.

Policies and incentives, like removing low-cost input roadblocks and offering tax incentives for production to consumer, will achieve this result. This holds true for farmers throughout North America. It can be more easily achieved by all North American farmers working together. We should brand ourselves “North American”.

Thank you.

¿ (0910)

The Acting Chair (Mr. John Harvard): Thank you, Mr. Skinner.

Perhaps just before I go to Dr. Martin, I could make one small observation and ask you a question.

I think you have addressed the problem of farmers being the weak link in this chain, if not the weakest link. Farmers are noted for not having a lot of marketing power.

My question has to do with one of the points in that paragraph where you say “Let's bring it closer to home: Saskatoon and canola”. You say Canada should own canola oil to export, not just a raw commodity. How would we control that? How would we do that?

Mr. Ash Skinner : They could do it if all farmers worked together and pooled their canola and controlled it all the way to the end customer, if they took their canola and said, for example, to the Cargill crushing plant that they wanted their canola crushed into oil, if they said “We're going to retain ownership. We want you to do it for a fee. Your choice is either you do it for that fee, and it will be a reasonable one, or we won't put canola through your crushing plant any more, in which case we'll either find one that will do it or we'll have to set up one that will do it.”

The Acting Chair (Mr. John Harvard): But in a free market system, if by chance the price the farmers wanted from their canola was not competitive with some competitor, be it the United States or wherever, what would you do then?

Mr. Ash Skinner: It gets into the whole picture of North America needing to brand their products North American, so if it doesn't originate in North America, it's clearly known at the retail level. They'd need to buy North American to sell in North America, as a starter.

The Acting Chair (Mr. John Harvard): In other words, you're talking about appealing to people's patriotism.

¿ (0915)

Mr. Ash Skinner: Certainly, very much so.

The Acting Chair (Mr. John Harvard): Do you think that would work?

Mr. Ash Skinner: Very much so.

The Acting Chair (Mr. John Harvard): I'm just being hypothetical here and perhaps playing devil's advocate. Let's say the canola price set by the farmers was 10% or 15% higher than some competitor's price. Do you think that if you appealed to Canadians' patriotism, they would be prepared to pay the extra levy?

Mr. Ash Skinner: In the case where it is higher, they probably wouldn't be. But in fact I believe the Canadian canola oil would be more competitive than anything else in the marketplace.

Really, what we're talking about is the farmers. Rather than looking at producing canola any more, they're looking at what the end consumable is. Their product now is the bread or the oil that sits on the store shelf, and they will toll-process their products to get them to that point. As a result, the cost that goes into it should be less than any competitor can compete with. Now no longer does the farmer care if his wheat is $3 or his canola is $6 on the global market. It's irrelevant to him. What matters to him is what the retail price of his end consumable product is.

Mr. Steve Nixon (General Manager, Farmers of North America, Inc.): Can I just add something here, John?

We're assuming that the price of the end processed product is going to rise, when in actual fact we're not talking about marketing it at a higher price or getting a premium from the consumer; we're talking about elevating the producers up the value-added chain by their actually becoming the processors, selling to the same market for the same price. Instead of gaining 1% to 2% of the value of the end product, they can elevate themselves.

The actual price to the processors or to the buyers doesn't necessarily need to change, but this would allow us to be a little bit more competitive if it did need to change and we did compete in other markets with canola oil or against other competing oils.

The Acting Chair (Mr. John Harvard): We'll go to Dr. Martin.

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Thank you, Mr. Chair.

Thank you, Mr. Nixon and Mr. Skinner, for being here today.

I'm not a farmer, so please explain this in terms for somebody from west coast British Columbia.

It's a very provocative intervention you've made, and it raises many questions. First, take your example of the Saskatoon canola. Maybe one of the complaints is that you have a foreign-owned company running the crushing plant. Why don't the farmers get together and build their own crushing plant, something you alluded to, Mr. Skinner? That's my first question.

The second question is on the example of the loaf of bread. If farmers get 2¢ to 4¢ of that loaf of bread and you raise that, doubling their profit to say 8¢, that loaf of bread now costs $2.04. That's not a whole lot more to the consumer, but it's a lot to the canola farmer. Why isn't that just raised a little, 4¢ per loaf? Wouldn't that have a dramatic effect on you?

Thirdly, could you explain what a toll process is? You say we need to control it through the flow of commodities so we can control toll processes. Could you explain that, please?

Thank you.

Mr. Ash Skinner: Certainly.

Before answering any of these three questions, I should start by mentioning that what we are talking about here isn't new to the world. It would only be new to North America. This has been done in New Zealand, as an example, where farmers have gone this step.

I'll start with your first question, about the farmers building their own crushing plant. What would happen, especially given that Canada is really the only primary canola grower, is that moving other products up to Canada for crushing the oil and then sending them back out throughout the world wouldn't really be feasible just because of transportation costs.

Now, as an example, suppose the farmers bound together and said to the Cargill crushing plant, “We want to toll-process through you--and by toll-process, I mean that we're going to pay you a fee to do nothing more than process it into oil--and we're going to retain ownership at all times; we're just going to pay you a fee to do that service for us.”

In doing so, Cargill has two choices. One is that they simply don't crush oil any more at that plant, making it worthless, and the farmers could probably buy it for ten cents on the dollar. Or they just leave it sit there as a wasted asset or they convert it into something else. However, in doing that they leave a shortage in the marketplace. This would certainly make it very viable for farmers to build their own, and have a very good business case to establish their own.

So yes, farmers could, but the overall cost to farmers trying to build a crushing plant is something that's not feasible, just on an offset, to go out and try to compete against the Cargills out there, unless they bound together as one whole to say to Cargill, “You're not getting any canola from any Canadian farmers unless you do it under our terms”.

¿ (0920)

Mr. Keith Martin: Why don't the farmers go to those options?

Mr. Ash Skinner: Certainly they should. Our feeling has been the industry has done a wonderful job of fragmenting farmers and getting farmers to believe their problems are due to world low commodity prices, telling them the reason they're not profitable at the farm level is because world prices for canola or wheat, or whatever, are simply too low and unfortunately there's nothing we can do about it; the U.S. are subsidizing theirs, Europe is subsidizing theirs, so commodity prices are too low. In reality, the retail end products have always risen with inflation, always risen in terms of price. There is more than enough profit in the industry as a whole. It's a matter of farmers not getting any of it.

You're not going to change the price of commodities as a whole, and you don't need to. You need to capture more of that value that exists throughout the entire value chain.

Mr. Steve Nixon: May I make one point on this?

With something like the canola crushing plant, the first objective is not to rebuild another crushing plant. The first objective is to have them toll-process the canola. If there is a refusal to do that because of profitability issues within that organization, then that's when farmers would need to look at perhaps building their own. There are organizations in existence where this is actually happening now, like the Saskatchewan Agrivision Corporation, which is specifically looking at how value-added processing can be performed here.

So I think you'll find that sort of activity is going on and is being looked at. But the biggest hurdle, when it comes to farmers needing to do these types of things, comes down to capital. How do they access the capital that is required to do these types of projects? It's always been a huge problem out here.

Mr. Ash Skinner: And as you spoke on the loaf of bread, you gave a very good example on that. If you were to double the price of wheat, you would now be saying 4¢ to 8¢. The overall price of bread itself has no real reason to change substantially, it's only going to go up 2¢ to 4¢ on the price of doubling wheat. It isn't the price of bread. Now, the industry itself would probably raise the price of bread substantially in order to capture more profits, simply because it can and it's out there as a profit-taker and maximizes its profits.

Mr. Steve Nixon: On that point, too, you are correct. If we doubled the amount of money that went to farmers, that is a substantial amount of money to the farming community. But if you look through the statistics from say StatsCan and CanSum, you'll see that in the last three decades it is irrelevant to what is being put onto the farm in gross revenues, because the gross revenues.... If you look at the amount of production that has increased, the technology, the management skills of farmers over the last three decades, it has been enormous. But the net return to farmers, even since 1994, I think has dropped from 24% to below 7%. So yes, we can increase the gross returns of farmers fairly easily, but the problem is that money does not stay on the farm; it is captured by the larger companies on the input side by raising input prices.

Mr. Ash Skinner: To add to that 2¢ to 4¢ for the price of bread, that's not profit to the farmers, that's the revenue off the wheat.

Mr. Steve Nixon: So raising the price of the commodity or producing a subsidy has no effect at all on the sustainability and the renewal of a farm.

Mr. Ash Skinner: This point is interesting to note, in that the large farm subsidies that go to American farmers have not made American farmers any better off; they just pay a lot more for their inputs.

¿ (0925)

Mr. Keith Martin: This is a very large topic and somewhat a revelation, shall we say, to myself--I don't know about my colleagues--but it certainly opens the door to some possibilities. You're actually changing the whole paradigm in how we are thinking about this.

If you have solutions to offer the committee on a wide variety of issues--low-input roadblocks; tax incentives; how to not fragment producers; things that protect foreign-owned input companies, making Canada less competitive... If you can articulate those, for I'm sure you have them, and give them to the committee--because we could talk about this for hours--that would be great.

A voice: Will do.

Mr. Keith Martin: That will be appreciated. Thank you.

The Acting Chair (Mr. John Harvard): I have a question just before I go to Mr. Rocheleau.

I think the heart of your presentation is seeking or proposing ways of giving farmers more market power, one way or the other, so that they can impose some of their own strengths on the chain to extract or exact the prices they need to survive. Some of that has already been done in areas outside of the grains and oils, and I'm talking now about supply management: dairy, eggs, chickens. In the current agricultural context, those farmers are doing quite well, because they have their marketing boards and they do have power. Not only can they control their production, but they can also set their prices. Are you a supporter of supply management?

Mr. Steve Nixon: Absolutely, in a lot of cases. I think if you look at the dairy industry in Canada, it just would not exist; it could not compete with overseas milk if they did not do that. That comes to a very good point. When you look at the Canadian people and ask, “Do you want a dairy industry?” I think the Canadian people say “Yes, we do”. In order to have it, we have to put some protection in there.

I think if you look at the dairy industry in Canada and at what the U.S. dairy farmers feel about it, they think it's a good thing. I think they wish they had something very similar, because they are not surviving as Canadian farmers are. If you go into a place like Wisconsin, I think at one stage they had three dairy farmers going bankrupt a day. Something is fundamentally wrong there.

If it means the Canadian people say yes, we want a specific industry, and they know they'll lose it, then yes, we would be supportive of that.

The Acting Chair (Mr. John Harvard): Unfortunately, one of the essential differences between grains and oilseeds and say dairy is that the dairy industry can rely on the domestic market to make a living, whereas grains and oilseeds can't. The same goes for red meats. Those industries have developed around exports. The grains industry, for example, exports roughly 80%. They can't rely on the domestic market alone. Of course then the question is how do you impose or how do you develop a supply management system for an industry that relies on exports?

Mr. Steve Nixon: If you look at what Canada has as an advantage, and if you look into some other crops, such as the pulse industry with peas, lentils, and chickpeas, you'll see that Canada is in a position where it could be dominating the world export market--and already does so, but does not take advantage of it.

You'll find that predominantly the companies that are acting as the marketing agents for Canadian producers are not Canadian-owned companies. The profits from those and from these unique markets where Canada could easily--basically at the stroke of a pen--control the world price on some of these commodities are being given away to large foreign-owned corporations.

What we're saying is let us put the organizational infrastructure in place for producers to see the benefit of the ownership within those systems.

The Acting Chair (Mr. John Harvard): Well, the dairy industry is big in the province of Quebec, and you're now going to hear from a gentleman from the province of Quebec.

Monsieur Rocheleau.

[Translation]

Mr. Yves Rocheleau (Trois-Rivières, BQ) Thank you, Mr. Chairman. Gentlemen, thank you for your presentation. I have three questions.

First of all, you give the example that the best management regulatory agency ensures that foreign corporations are the ones benefiting from the situation, which makes Canadian companies less competitive. I would like you to give us more details on that.

Second, does foreign ownership, in particular American ownership in the agricultural sector, have a detrimental effect on the Canadian economy and Canadian consumers?

Finally, do you feel that the various types of agricultural assistance offered by the Canadian government in the west are generally well targeted? Do you feel that the government has properly targeted its aid to you or has it missed the boat?

¿ (0930)

[English]

Mr. Steve Nixon: I would like to answer the first and third ones, and leave the second one to Ash.

On the issue I'm referring to, I believe the actions of the PMRA right now are under scrutiny by the Standing Committee on Agriculture and Agri-Food. There is presently an own-use importation program within the PMRA that allows a producer to import a chemical from another country, if it is equivalent to a chemical that is already here in Canada. The reasoning behind it is so they can actually produce something in a competitive state. So it's a stop-gap measure to help farmers access more competitive pricing in their cost of production.

We are seeing a very simple program that, through policy in the PMRA, is being ignored. They're denying access to a very common chemical in agriculture here, glyphosate, which was first introduced into Canada by Monsanto as Roundup. There are three companies that now have their own products, and there are many generics, as well.

Farmers have found a differential in the marketplace in the cost of production among say Argentinian, Brazilian, and Australian grain farmers. These farmers are accessing products from the same companies selling them in Canada, but at substantially lower prices. In fact in some cases they are well over 50% lower.

Glyphosate is a non-selective herbicide. It is easily the most common chemical in Canada. At a wholesale level, it is probably reaching close to $1 billion in revenue in Canada—just this chemical alone. We have a situation where farmers can access this chemical from overseas, have proven to the PMRA it is an equivalent product, yet it has been roadblocked and stopped, to the detriment of the farmers. We've estimated it's costing the farmers over $100 million, but the reality is that $100 million may just be in Saskatchewan alone. It may be a substantially greater figure for the rest of Canada.

The actions of the PMRA over this issue have been suspect, to say the least, and are actually under investigation by the Standing Committee on Agriculture and Agri-Food. This is an example of 40% to 50% differential in pricing and producing our grains, when we compete in the international market with these other countries. We're seeing a significant difference in the glyphosate of around $4 an acre, where our farmers are worse off than the competitors in the marketplace.

It's a simple program, and farmers should be allowed to bring this chemical into Canada. It's not a registration. It is merely a stamp to say that they can bring it through customs. The PMRA is deliberately standing in front of that, and we are saying that the only benefactors of them doing so are the major chemical companies. Glyphosate is not manufactured by anybody in Canada. It is all manufactured overseas.

On the third point, on whether the money the government is putting through is well targeted, I would say no. Our argument is that whenever we put any money into agriculture, it invariably ends up in the pockets of the large multinational corporations, which increase prices on the inputs. The Canadian producers as a whole have been held to about a $2 billion net profit over all of Canada, and that has not really changed over the last three decades, yet the industry itself has risen from about $6 billion to $33 billion in gross revenues. So those gains have not been captured at the farm level.

¿ (0935)

Mr. Ash Skinner: On your second point, in terms of foreign ownership and foreign companies and the Canadian economy, it's our opinion that foreign ownership is great. It's good for the economy. It creates jobs, and it sparks opportunities.

That doesn't mean, though, that we should ignore Canadian opportunities. We're leaving hundreds of billions of dollars in foreign markets that Canada could be capturing through its agriculture industry. We have an agriculture industry that accounts for about 5% of our exportable goods, because we're not capturing the overall retail value of the opportunity that's there. That makes up the majority of what's produced in the agriculture industry. We're allowing foreign countries to capture that profit.

Mr. Steve Nixon: I think Canada is in the same place as the farmers are. What we're saying is let's first learn how to capture more of the markets for the exports we are exporting before we increase them, or else we're going to give more away to the foreign-owned companies.

The Acting Chair (Mr. John Harvard): Thank you.

I have a couple of questions. What kind of organization is Farmers of North America Inc.?

Mr. Steve Nixon: We are a for-profit corporation. At the moment we represent about 5,000 farm families across western Canada, about 8 million acres.

The Acting Chair (Mr. John Harvard): You're a for-profit corporation.

Mr. Steve Nixon: Yes.

The Acting Chair (Mr. John Harvard): With 5,000....

Mr. Steve Nixon: Farm families.

The Acting Chair (Mr. John Harvard): Do they pay a membership fee?

Mr. Steve Nixon: Yes.

The Acting Chair (Mr. John Harvard): To what end?

Mr. Steve Nixon: We negotiate on the cost of production, and now we're getting into the negotiation on the marketing of produce as well.

The Acting Chair (Mr. John Harvard): Do you take their production from them?

Mr. Steve Nixon: We assemble volumes. I'll give you an example.

The Acting Chair (Mr. John Harvard): In other words, you're sort of a marketing arm.

Mr. Steve Nixon: We are starting to become a marketing arm. Before we got into the marketing side of it, we had to realize one thing: until we get the cost of production in check, there's not much point in capturing more from the marketplace. So right now we are starting to make a significant difference on that cost of production.

It's not a compulsory organization. You don't have to market or purchase through us.

To give you an example, we would assemble volumes of say urea, which is a nitrogen fertilizer. The average farmer, who would normally buy 90 tonnes, has very little power in the marketplace when he's purchasing. So we bring everybody together, and with a commodity such as fertilizer it is a lot easier to purchase in large volumes. So we buy in the many thousands of tonnes, rather than just in tens of tonnes. The price differential is then passed right back to the farmer. We do not act as a broker. We do not take a price off the sale of goods either way, marketing or inputs.

¿ (0940)

Mr. Ash Skinner: If I may add to that, Farmers of North America is basically a professional service provider to the farmer. It doesn't ever take ownership of the products. It's basically for a set fee going to try to make a farm as profitable as it can be. The only profit Farmers of North America can make is from its set fee, its membership. That's the extent of its profitability. The reason it was set up as a for-profit company was so it wouldn't outgrow itself, it would stay as efficient as possible. Its sole goal is adding to farm profitability, making farmers as profitable as possible. So we'll do exactly what we were talking about here--negotiate on behalf of all of our farm members so we can go in with a large bulk and get the best deal possible.

Likewise on the marketing side. We've just moved into marketing. It's a relatively new company. We realized we could market all we wanted and try to make as much money as we wanted for the farmers, but the input side would just consume it. So first we had to get inputs under control. Now we're moving into the marketing side.

The Acting Chair (Mr. John Harvard): What other bulk purchases have you made on behalf of your members, other than urea?

Mr. Steve Nixon: We have done chemicals, as well. We've done inoculants. We do ties. The list is--

A voice: Diesel.

Mr. Steve Nixon: Yes, fuels and energy. There are literally thousands of products in the system at the moment.

The Acting Chair (Mr. John Harvard): Are you centred in Saskatchewan only?

Mr. Steve Nixon: We're centred out of here. We don't have any other offices, other than one starting up in Alberta. But we do have field staff who operate throughout western Canada.

Recently we formed an alliance with the National Farmers Organization out of Ames, Iowa. There's a huge interest coming out of the U.S., wanting FNA down in the U.S. to bring the same sorts of benefits to their marketplace as well.

The Acting Chair (Mr. John Harvard): Are most of your clients or members grain farmers, as opposed to dairy farmers or red meat farmers?

Mr. Steve Nixon: If I had to put an average tag on our membership at this stage, 90% would be 2,500-acre farmers, primarily grains, oilseeds, and specialty crops, and beef.

The Acting Chair (Mr. John Harvard): Okay, I have two more questions before we wind up.

A lot of our hearings have been around North American integration, which of course includes Mexico, because Mexico is part of NAFTA. You make reference to branding ourselves North American, so my first question would be whether that would include Mexico.

Second, you mentioned organizational infrastructures required to achieve control of the agricultural industry. You're saying the government needs to help farmers with respect to these organizational infrastructures. Just elaborate on “infrastructure”.

Mr. Steve Nixon: It comes down to the level of expertise. Rather than give us money, which is just going to be channelled through to the wrong places, we need help in setting up the correct infrastructure and organization, getting the right experience in there to help the farmers do what farmers are lacking in their normal day-to-day business. This is a role we've seen in the Netherlands and in New Zealand, and it's been extremely effective.

What it is, really, is the government getting behind and saying “This is the help we can put in here. This is the access to the resources we can give.” The farmers who have the drive and the will take the lead and go with it. Rather than the government stepping in the way, like in the case of the PMRA, where they actually created barriers, they can assist or get out of the way.

The Acting Chair (Mr. John Harvard): And the North American brand, does that include Mexico?

Mr. Steve Nixon: Farmers of North America is not Farmers of North America by accident. Many years ago it was recognized that the same problem exists in the United States and in Mexico. Farmers need to get together as a collective entity if we're going to compete against the rest of the world, especially Brazil, the way Brazil's going.

¿ (0945)

The Acting Chair (Mr. John Harvard): Mr. Martin has a short question before we wrap this up.

Mr. Keith Martin: Mr. Skinner, are you doing what you're actually suggesting ought to be done? Is your organization actually accomplishing that objective?

Mr. Steve Nixon: That's correct, we are.

Mr. Keith Martin: Well, perhaps you could tell us, then, because this is sort of a federal government council, and we're actually here to try to find out how we can make your life easier and your industry more competitive in many areas.... On page 3 of your document—I'll just quote—“Canadian government policies are in place protecting foreign-owned input companies making Canada less competitive.” Perhaps you could tell us what those are and what “low-cost input roadblocks” we need to remove.

Mr. Steve Nixon: Well, both of those comments refer primarily to the glyphosate issue. We have a situation here where glyphosate isn't just a chemical any more; it has become a bit of a shining light in the eyes of farmers. I think if we really want farmers to take hold of the ball and run with it, we have to show them there is a possibility that when they set their mind to something and create the change themselves, it does happen. What's happening right now is because of the policies of the PMRA, through Health Canada.

When you look at issues such as the pSR2 documentation, which is proprietary rights to data, those deals have been negotiated by industry, not by the producers. So what happens is that at the end of the day the farmers have to absorb the full cost of those proprietary rights data situations.

Basically, on the pSR2, if you are a chemical company and you produce a chemical or an agrochemical, you are protected by a patent for a length of time that allows you to have exclusivity in the marketplace to recapture your R and D and developmental costs. After that time, the patent comes off, and generics are now allowed into the marketplace.

What's happening now with something like the pSR2 is that the chemical companies are saying “Well, we're not going to produce any more data--environmental data or product-specific data--unless we can retain ownership of it.” And the PMRA are saying “Well, we want that data; we want a continuous stream of data, because it's healthy for the environment and healthy for the protection of the Canadian people.”

What's happened here is the chemical companies have basically negotiated their way into a situation where they can own that extra data, and anybody wanting to come into the marketplace has to either purchase the data from those companies or produce data themselves that is equivalent to what they have produced. The cost of doing so can range into the tens of millions of dollars, which makes it absolutely out of place for people like producers.

Mr. Ash Skinner: But also, it's true for all the majority inputs for farmers in Canada. Canadian farmers are so fragmented that they have no purchasing power on a world or a global basis. They're forced to go to their local supplier and buy whatever their local supplier is offering at whatever price he is offering. A profiteer is going to take all the profit he can, which means he will keep a certain percentage of farmers such that the land is farmed and he can make as much money as he can.

We've got situations where major inputs like fertilizer in the world marketplace are around $70 a tonne, and in North America they're $280 a tonne. We're trying to compete with places like Argentina, where producers are accessing fertilizers at those world prices. We're trying to buy them as farmers at $280 a tonne. Likewise with glyphosate: Monsanto puts their Roundup in Canada here for close to three times the cost down in Argentina for the same products.

Mr. Steve Nixon: But one thing will solve all of this, and that's true competition. If there were true competition here, then we wouldn't have a lot of these issues. So I think we need to make our--

Mr. Keith Martin: Are these subsidies issues?

Mr. Steve Nixon: Well, not just subsidies, but...

We have a situation where we have to put more power into our competition: give them something hard that they can really fight back with, and not just soft, because some of these issues with the glyphosate, everything we're talking about here--the fertilizer, the inoculant, the agri-chemicals--has all come out of failure-to-supply issues. We went to the marketplace with large volumes of product and the companies that are operating in Canada refused to supply it, all of them.

¿ (0950)

The Acting Chair (Mr. John Harvard): Gentlemen, we're up against the clock and we've never been able to negotiate time. Thank you very much. Thank you, Mr. Nixon. Thank you, Mr. Skinner.

Now we're going to move to our next witness, who is no stranger, David Orchard, honorary chair of the Citizens Concerned about Free Trade.

Welcome, Mr. Orchard. You may proceed.

Mr. David Orchard (Honorary Chair, Citizens Concerned about Free Trade): Thank you very much, Mr. Chairman, and thank you for the invitation to appear before your committee.

[Translation]

I will give my presentation in English, but if you would like to ask questions in French, I will be pleased to answer them in French, sir. Welcome to Saskatchewan and welcome to the city of Saskatoon.

[English]

I think you've prepared a background document called “Canada and the Future of the North American Relationship”, an outline of key issues and questions for public discussion, which I understand you want public response to. So in my presentation I'll begin by looking at that document and then wind up with a few remarks and then I'm happy to take any questions or interactions you might have.

I would say right off the bat that I was stunned by the tone of the document the staff has prepared for this committee. The entire focus of this document is on deeper integration—this is the term, “deeper integration”—with the United States. Right off the bat, the document informs us that the U.S. is and will remain much more important to Canada than Canada is to it, and that Canada is less important to the United States than it was decades earlier, and one reason is a general decrease in Canada's global economic, diplomatic, and military power. But then in the question section, rather than seek ideas about how to reverse this trend and increase Canada's economic and global power, you're simply asking us if it would be useful to increase the numbers of diplomatic personnel stationed in the United States.

The next section of the document informs us that Canada's high economic vulnerability to border disruption is a given that must be taken into account in deciding the best policy response. Again, in the questions posed there's not a single question on whether Canada should or whether Canada can reduce this high economic vulnerability.

The section on the Canada and United States economic relationship says: “Given the size of the United States...it may be preferable that the determination of the nature, speed and extent of further economic integration be done pro-actively.” In other words, we have the Government of Canada putting out this document that says that given that it seems we're being assimilated into the United States, maybe we should apply to be assimilated even quicker.

The Acting Chair (Mr. John Harvard): Sorry to interrupt, but it's not correct to say that it is the Government of Canada. This is a background document prepared by the Library of Parliament.

Mr. David Orchard: I understand it's the research department for the department. It's the research section, is it not? It says the Parliamentary Research Branch for the Standing Committee on Foreign Affairs and International Trade.

The Acting Chair (Mr. John Harvard): It's still prepared by the Library of Parliament for the committee.

Mr. David Orchard: But it's a document that your committee is putting out.

The Acting Chair (Mr. John Harvard): Yes, but we're not speaking for the Government of Canada. We're a parliamentary committee.

Mr. David Orchard: Good, then I'm reacting to the document that's been put out for public discussion. So I hope you'll take this message back to Ottawa that the public doesn't like it, at least the public I represent.

The Acting Chair (Mr. John Harvard): Go ahead.

Mr. David Orchard: We're asked if Canada should move directly to focus on a strengthened and deepened North American community and what options should be pursued, a customs union, a common market, or an economic union. But there's no question about whether we should pursue greater independence for our country. It's simply not there; it's not even hinted at.

The document asks, of the four possible alternatives for the Canada-U.S. relationship—one, making improvements to the existing framework, second, a customs union, third, a common market, fourth, an economic union—which integration option do you prefer?

There is not even a question for the majority of Canadians, who don't want their country to be integrated into the United States. It simply doesn't appear.

Having waded through this document, one has the sense that it could well have come out of the U.S. State Department. The entire focus is on deeper integration into the United States. If we accept that the primary role of government is to guard a nation's sovereignty and to promote the well-being of its citizens, how do we justify a document that examines and promotes the integration of Canada into the United States?

Why is there not a chapter on how to deal with our sovereignty, how to safeguard our sovereignty, and how to reduce our weaknesses? There are numerous examples of countries around the world that have done exactly that and traded very profitably. I could mention Norway and I could mention Switzerland, both of which stayed out of the European Union but have done very well, thank you.

As for the document's praise of the so-called free trade agreement, this is a theme that runs through the document. The free trade deal and NAFTA did not deliver free trade at all. In fact, what they have done is increase American protectionism against Canada's exports. Our trade with the United States today is less free than it was before we signed these agreements. Prior to the free trade agreement the average tariff on our exports to the United States was less than 1%, and we had very good protection against American countervail and anti-dumping duties. What's happened since?

Let's look at lumber. After the founding of GATT, the General Agreement on Tariffs and Trade, in 1947, the Americans did not once, up to the free trade deal, impose a countervailing duty on our lumber. We had in essence free trade in lumber. In 1982-83, when the American lumber companies applied for a countervailing duty, the U.S. commerce department turned them down because they knew very well that the Trudeau government would invoke our GATT rights and fight it.

Furthermore, we had the federal Employment Support Act, introduced in 1971. It was brought in expressly to defend Canadian companies and Canadian interests in the case of harassment of our exports by foreign companies.

This was the situation before the free trade agreement. The Americans not once took action against our lumber, our Canadian Wheat Board, or our other key industries.

What's happened since the FTA and NAFTA? We now have a 27% duty on our lumber. We've had ten investigations of the Canadian Wheat Board in as many years, and now we have massive new American subsidies directed against the farm producers in this country. The Employment Support Act, which authorized the federal government to provide assistance to mitigate the disruptive effects of foreign duties, was of course nullified by the FTA. We have the federal government today simply standing by and watching as whole industries and Canadian jobs go down the tubes.

This fundamental fact bears repeating: the FTA and NAFTA did not reduce American protectionism. These agreements freed up American protectionism and gave it a much stronger hand against Canada while at the same time massively restricting Canada's sovereignty and our ability to react in our own self-interest.

The FTA and NAFTA exposed Canadian companies completely by writing into those documents all U.S. trade law, present and future. They replaced the GATT dispute settlement panel with a kangaroo court, a NAFTA panel, which costs Canadian companies a small fortune to appear in front of. They have small chance of winning, but if they do win, the Americans are completely free to rewrite their trade laws, exactly as they did for lumber, all with the blessing of the FTA and NAFTA.

These are the agreements this document is praising as the cornerstones of Canada-U.S. economic relations.

In winding up, I would like to pose a few questions of my own for consideration by the government members of the panel and then for the opposition members.

Our tax dollars have been spent to write a paper that essentially promotes one option, namely the dismantling of our country and its integration into the United States. I want to know how the federal government and this committee justify that.

¿ (0955)

I'd like to ask the government members: Why did former Prime Minister Pierre Elliott Trudeau call the Canada-U.S. Free Trade Agreement “a monstrous swindle”? Why did former Prime Minister John Turner call the free trade agreement the “Sale of Canada Act”, and “one of the most devastating pieces of legislation ever brought before the House of Commons...a bill that will end Canada as we know it and replace it with a Canada that will become nothing more than a colony of the United States”?

Why did the current Prime Minister, Jean Chrétien, write in his autobiography that “Those who argue that free trade is our only hope and perhaps inevitable have either given up on the idea of a unique and independent Canada or haven't thought about the consequences”?

So my question is has the Liberal Party given up on the idea of a sovereign and independent Canada, or does it regard its past leaders as having been in a fog about the consequences of free trade?

Of course the last question to the Liberals is why did the Liberal Party campaign so vigorously against free trade when it came to power in 1993, promising to renegotiate or abrogate these agreements in their red book?

To the Alliance Party, your push is essentially the same thing. Rather than provide an opportunity to defend Canada's sovereignty, you're encouraging the Liberals to go faster down the road to integration. Your new leader talks fondly about the idea of adopting the U.S. dollar as the common currency for North America, so there's no defence of our nation there. Common currency with the United States of course is the end of any kind of fiscal or economic independence.

[Translation]

Within the Bloc Québécois, you favour the assimilation of Canada by the United States. Mr. Duceppe is in favour of a common currency, that is the American dollar, for Canada as well as for Quebec. If the raison d'être of the Parti Québécois is to defend the Quebec language and culture, how can you say that you are in favour of the American dollar as a North American currency? It is impossible to be sovereign and to maintain the French language and culture while at the same time adopting the American dollar as your currency.

[English]

If I can say it in English, if the goal and the raison d'être of the Bloc Québécois is to protect the language and the French culture in Canada, how is this going to be possible once Canada is assimilated into the United States? The leader of the Bloc Québécois is openly calling for a common currency in North America. I wonder if he believes that the Americans are going to amend their constitution to provide charter guarantees for the French language in North America. It will not happen.

I believe that all of these parties have essentially betrayed those Canadians who want our country to survive as an independent country on the face of this planet. That's what I stand for, and these documents and the thrust I've seen coming out of our government is a betrayal of that.

Those are my comments. Thank you.

Voices: Hear, hear!

À (1000)

The Acting Chair (Mr. John Harvard): One of the intentions of the background papers, Mr. Orchard, was to provoke thought, and you've certainly responded in kind. We thank you for that.

We'll begin with Dr. Martin.

Mr. Keith Martin: Thank you, Mr. Chair.

Thank you, Mr. Orchard, for being here today.

For the record, this document is not put forth by the government, and it's not put forth by this committee. It's put forth by the Library of Parliament simply to ask questions. It has absolutely no bearing on government policy or indeed on the policies of any member of this committee. They are questions put forth by researchers.

Interdependence while being independent I think is the objective we have. The question I would ask you is, given that our country relies on trade in order to maintain our standard of living, what would you do to change the NAFTA? Would you scrap it altogether? Would you erect barriers to trade? Would you make this a Fortress Canada?

Mr. David Orchard: I'll start with your first comment about this document. You state that it's not something that binds your committee, or even represents your committee. The disturbing fact is that this document represents both government policy and, in a disturbing way, reflects the Alliance Party policy too, one of deepening integration of our country into the United States. So it's not by accident that this is the document that's put out on your website.

The point I'm making is--

Mr. Keith Martin: I'm sorry. Our website?

Mr. David Orchard: The website of the committee.

Mr. Keith Martin I'm sorry, on our website? It has absolutely nothing to do with the Canadian Alliance whatsoever.

À (1005)

Mr. David Orchard: I'm talking about the website of the committee, not your Alliance website.

Mr. Keith Martin: Oh, I see. Thank you for making that distinction.

Mr. David Orchard: But the connection with the Alliance is that the Alliance is going across this country promoting more Americanization of our country and toying with the idea of a monetary union. So this is the question that Wendy Dobson came out with recently, talking about a new architecture for North America. We have Thomas Courchene promoting the idea of a monetary union. These ideas are coming at us from many different directions. We see no defence of Canada as a sovereign nation in terms of increasing our sovereignty, and we haven't seen that defence from the Alliance.

As to the question you ask about what I would do with these agreements, I'm not against trade. I'm not about to build a fortress around North America. I'm a farmer. I farm here in western Canada, in Saskatchewan. We're the most trade-dependent province in the country. I'm not against trade, and maybe not even free trade, if such a thing existed. But these documents, as I pointed out, restrict our access to the U.S. economy. Our trade with the United States is less free today than before we had these agreements, because we've given up the rights that we had to defend ourselves before.

Your party is calling in the House for support for the lumber producers and their employees out in British Columbia. How long do you think that would withstand a NAFTA challenge? The government is standing up and responding to you in the House, saying we can't do that under our international trade agreements. I happen to think the government is correct. We've bound ourselves into agreements that tie our hands in terms of exercising our own self-interest.

Now, when you ask what I would do about that, the Liberals had the answer very clearly. They said they would renegotiate or abrogate. This is the position Mr Chrétien campaigned on across the country. The red book contained four major areas the Liberals promised to renegotiate. They didn't renegotiate any of them, but they understood the problems. You can't tie yourself into an agreement with the United States--which is ten times larger than us--that gives up our rights to defend our industry, which is what we've done.

Mr. Keith Martin: Mr. Orchard, all the objective evidence actually flies completely in the face of what you're saying, and I think you've heard that before.

Our objective is interdependence with the U.S. with independence for Canada. What we're trying to do is defend the sovereignty of our country, defend the rights of Canadians to work, the rights of Canadians to have a better life, better jobs, better employment, put food on the table, what you do for a living, better education, better health care, all those things, which we are all trying very hard to do.

Before NAFTA, as you know, there was no adequate dispute resolution mechanism with the U.S. You're aware that in more than two-thirds of the cases where we've had difficulties with the United States on trade within NAFTA, Canada has won. That never happened before NAFTA.

On the issue of the softwood lumber, the problem with softwood lumber, as you know, is that softwood lumber unfortunately is not under the NAFTA. If it were under the NAFTA, the Americans wouldn't be able to attempt to bully us in the manner they have.

So my question is, how would you change the dispute resolution mechanism that we have? I think that has to change, but how would you do that? And how would you compare the dispute resolution mechanisms post-NAFTA to pre-NAFTA?

Mr. David Orchard: When you say the evidence flies in the face of what I'm saying, I would suggest it's indisputable that we're much worse off today.

You come from British Columbia. We had free trade in lumber before the free trade agreement negotiations started. What is the situation today? How many thousand jobs? I'll use a quote of your party in the House, talking about over 20,000 jobs lost. That's what has happened under NAFTA, our largest export.

In wheat, in barley, in cereal grains, if you take a look at this U.S. Farm Bill, we're much worse off and we have no retaliatory rights.

Across the country we're seeing American companies buying up what's left of the Canadian economy—in British Columbia, Weyerhaeuser coming in and taking over MacMillan Bloedel; on the prairies here, ADM coming in and buying up United Grain Growers, and now Agricore control there. All across the country, the Americans are simply buying at a 63¢ dollar what's left of Canadian industry. So to say that's a good thing, I differ with you entirely.

You said that before NAFTA, under the dispute settlement system at GATT, we lost more often. That's simply not true. In my book I trace each one of those disputes, the nine disputes we had with the United States in the three decades before the free trade agreement. We won every one of them. So your facts are simply wrong.

Under the GATT, a neutral country such as Norway would adjudicate a dispute between Canada and the United States. That was a much fairer system. The legal fees for our producers were handled by the Government of Canada, so it didn't cost our industries millions of dollars to defend themselves.

Under NAFTA it is just the opposite. We're one-on-one with the Americans. Our industries have to pay lawyers to appear in front of those tribunals in Washington. That involves extremely onerous costs. There are smaller industries in Canada that give up simply because they can't cover the legal fees. The hog industry here in the prairies was targeted, and there were a number of others. I talked to Mr. Zimmerman, the former head of Noranda, about the huge legal fees the lumber industry in this country is paying to defend itself in these hearings. Under the GATT those fees were covered by the Canadian government, so our industries were much more protected.

Further than that, as I mentioned, legislation was in place so that we could defend our industries while they were being targeted. If you attempted to do that now, you would instantly run up against a NAFTA lawsuit.

À (1010)

Mr. Keith Martin: Softwood, as you know, is not under NAFTA.

Mr. David Orchard: It is.

Mr. Keith Martin: Not in NAFTA.

Mr. David Orchard: The softwood lumber memorandum is incorporated into the text of the free trade agreement.

Mr. Keith Martin: So it was a separate agreement. That's why we're five years into renegotiating--

Mr. David Orchard: That is incorporated into the text of the free trade agreement. If you were to study the text of the NAFTA, you would see that the softwood lumber memorandum is incorporated into it.

The Acting Chair (Mr. John Harvard): Thank you.

We'll now go to Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Mr. Chairman.

Good morning, Mr. Orchard, and thank you for having given a bit of your presentation in French. I can see that you're very attached to the notion of sovereignty, knowing probably that Canada is a distinct society from the United States. So you have understood that this is our goal and that we are a distinct society from Canada. That is why hundreds of thousands of Quebeckers favour Quebec's sovereignty in order to more strongly affirm their distinct character in a peaceful and harmonious way with their good neighbour, Canada. So we share this respective attachment to the idea of sovereignty.

As for using the American dollar, which is something that Mr. Duceppe favours, as you said, this idea is out there and warrants consideration. But what Mr. Duceppe is primarily calling for is the creation of a monetary institute to bring together the Americans, Canadians and Mexicans so that we can work together to find the best way to avoid the mistake made by Argentina when it reformed its currency too quickly, which may have been beneficial in the short term, but which created major headaches in the medium and long terms that are still evident there, even recently.

As for integration with the United States, I am not an expert in that area; I am just an ordinary citizen who has a little more information than most, but I wonder if Canada is not simply reacting in self-defence against the patently hegemonic American attitude. I think that it is a question of adjusting to an inevitable situation. We live next to the most powerful country in the world, perhaps the most powerful in history, and it is not part of American culture to be respectful of those around them. The example that comes to mind is the new missile defence system that Canada will be invited to join. I would like to know whether you feel Canada can afford to refuse, once that project gets underway. If we do not take part, there will no doubt be a price to pay, at least in terms of collateral damage. If mistakes are made, where will the bombs fall? They might very well fall on Saskatchewan or Quebec or Ontario, but things might be different if we participated in the initiative. That is just one example.

What I find more worrisome when people talk about globalization and integration with the United States is the whole issue of the role of government, especially in the social and cultural fields. Canada and Quebec have set up social programs that make our societies very civilized, much more civilized and much more sophisticated than the American society. But if things keep going in the direction they are right now, the Americans may be able to challenge that model or that approach, and also challenge culture, a field in which Quebec is very distinct because of its language.

We know that English Canadians are very much influenced by American culture, that they watch American television much more than Quebeckers do. Radio-Canada has very large audiences in Quebec. That is part of Quebec's cultural production; in contrast, the statistics show that the CBC has a much smaller audience and has ratings comparable to the American stations, and is often as low as third or fourth place.

So I would like to hear your comments on the missile defence system and on what integration with the United States could mean for the role of government.

À (1015)

Mr. David Orchard: As you said, it is true that Quebeckers have struggled long and hard to protect their language and culture in North America. What is the most effective way of doing that? In my opinion, it should be done within the Canadian federation. The reason is that the French language and culture still exist here. If we adopted the American dollar and became more assimilated into the United States, it seems to me that would spell the end of the long-standing French culture and French fact in North America, since it would not be possible to maintain the French language within the United States. That is the danger of Mr. Duceppe's position, in my opinion. If we have a monetary union with Mexico and the United States, the United States will be the biggest and strongest partner. Perhaps Spanish would survive because there are a great many people who speak that language in the United States and Mexico, but it would be different for French. I feel that the best way of preserving that is to maintain Canada's sovereignty with a strong Quebec as part of the federation.

In the past, an alliance among native people, francophones and anglophones has enabled Canada to resist invasion attempts by the United States. The Americans tried to invade Quebec City three times. Quebeckers were the ones who resisted. As I see it, now is not the time to say that it is all over.

On your question about the role of the state, if we have a monetary union with the United States, it would be very difficult to protect social programs and the role of the Quebec state, of course.

Mr. Yves Rocheleau: Not just Quebec, but Canada as well.

Mr. David Orchard: Yes, it is exactly the same thing.

Mr. Yves Rocheleau: We may not agree, but as for Canada—

[English]

The Acting Chair (Mr. John Harvard): It's the 21st century. Cell phones... That's all I can say.

Mr. David Orchard: I shut mine off.

The Acting Chair (Mr. John Harvard): I would like to ask one or two questions, Mr. Orchard. In the closing part of your written text you pose a series of questions. I respectfully submit that they are not part of this committee's mandate, and to that extent I think they're red herrings.

Let's talk about North American integration and the state of North American integration. I think you have indicated very strongly that you don't like the current state of affairs. You've also delineated some of the things you don't want to see done further to that integration: you don't want a customs union; you don't want a common market; you don't want dollarization. What you don't tell us, though, is what you would do, given the current state of affairs. The past is the past; we can perhaps undo it, but there is no changing history: we do have the FTA, and we do have NAFTA.

So what are some of your remedies? For example, would you withdraw from NAFTA? Would you withdraw from FTA?

À (1020)

Mr. David Orchard: Those are good questions, and I'll turn it back to you. Your party--

The Acting Chair (Mr. John Harvard): No, I'm not here to answer questions; I want you to answer the questions.

Mr. David Orchard: I'm answering your question, Mr. Harvard.

Your party answered these questions very well for us when you said you would renegotiate or abrogate. Mr. Chrétien said “If we can't renegotiate, you know we'll abrogate”.

The Acting Chair (Mr. John Harvard): Why don't we keep personalities out of it, because I can play that game as well, Mr. Orchard. I know Mr. Mulroney; I know you were a Conservative candidate; I know what Mr. Mulroney said about free trade in 1983, and I know what he said in 1988, and there was about a 180 degree move. So let's not get into that, okay? I would be more interested in what your remedies are, without rehashing the past and trying to personalize the issues.

Mr. David Orchard: I was attempting to answer your question, Mr. Harvard. I said I agreed with Mr. Chrétien's solution. I think we should renegotiate, or if not--

The Acting Chair (Mr. John Harvard): How?

Mr. David Orchard: Just a minute; I'll answer your question, if you permit me.

The free trade agreement and NAFTA you say are here with us. They both contain a clause saying Canada can withdraw by simply giving six months' notice. If we did so, the sky wouldn't fall in at all; we would simply revert back to the GATT rules that have governed our trade with the United States for the last five decades. Those rules were much better to Canada than these rules are, much more favourable to our industries.

Some people say that if we withdraw, it would be a terrible situation. It wouldn't be a terrible situation at all. Both Canada and the United States are members of the WTO and GATT. We would both be bound by those rules. If we withdrew, we would simply go back to those rules and be much better off. It's as easy as that: six months' notice.

The Acting Chair (Mr. John Harvard): Mr. Orchard, one might say the egg has been scrambled with respect to FTA and NAFTA and that it's pretty hard to put that old egg back together again.

Mr. David Orchard: One could say that, but one could also note that it would be quite simple. Our tariffs were diminishing anyway, and we don't have to go back to tariffs. But we have to go back to putting the power back in the hands of the state, as Mr. Rocheleau mentioned. The power of the state is very important for a smaller country like Canada. Under NAFTA we gave American private corporations the right to sue Canada directly for any law or regulation they don't like in this country. So we're overturning our environmental laws and other things to please American private industry. We need to get that power back.

You ask what my solution is. I visited Norway not long ago. Norway is a small country next door to the European Union, a powerful bloc. They've had two referendums on whether or not they would join the European Union. Norwegians were told: “If we don't join, we're going to be left out in the cold. It will be a terrible thing for us.” Norwegians voted against it, and where is Norway today? It has no debt, no deficit, no downsizing, and the richest social programs in the world. They trade very profitably with the European Union, but they guard the right to protect their farmers, their industry. They don't allow more than 15% of their oil patch, as I understand it, to be foreign-owned; they use that revenue to defend their social programs.

Switzerland, a little country right in the middle of the European Union, has kept its own independence and has stayed out of the European Union. No one is telling the Swiss you have to give up your franc and adopt a common currency.

These are countries that have done very well. Canada could do the same thing perched next door to the United States. We should be selling all kinds of things to the United States; we shouldn't be giving these things away.

Our oil and gas, for example, are going straight south across the border, and all that petroleum is coming out of the tar sands at a zero percent royalty. What are we getting out of this? Alberta is getting a royalty of one-quarter of what the Norwegians are getting out of their oil and gas, because we've locked ourselves into this agreement that allows the Americans to simply come and buy up our industry.

The same is true of agriculture. The people who were in front of you previously talked about where the profits from agriculture are going.

We need to put those industries back in Canadian hands. If you'll be so kind as to allow me to respond, it's not a red herring to quote Prime Minister Trudeau on this issue, because he had thought about it for a long time. When he called it a “monstrous swindle”, I think he had studied it very carefully. Before we had these agreements, we had the right in Canadian hands to defend our industries, and that's the step we have to go back to.

The Acting Chair (Mr. John Harvard): Let me ask you one question having to do with your suggestion that perhaps we abrogate NAFTA or the FTA and at least go back to where we were prior to 1988. That would be one step, I guess. If we were to go back to 1988, we would be re-erecting the tariff walls that then existed. Under FTA, as you know, those tariff walls have gone, and that has changed the business relationship quite dramatically, I would say. Right now, I think we've gone too far in our dependence on trade with the Americans. It now sits at about 87% of our entire trade. That may have to do with this analogy of the scrambled egg and how you put it together.

Just from a practical point of view, Mr. Orchard, how do you re-erect those tariff walls?

À (1025)

Mr. David Orchard: First of all, we wouldn't have to re-erect those tariff walls at all. As I pointed out to you, 80% of our trade had no tariff on it at all before the free trade agreement, and our average tariff was less than 1%. So tariffs really aren't a factor. When you study the document, as I'm sure you have, out of 20 chapters in it, only one deals with tariffs. Tariffs are not a major factor at all. If we stepped out, we could leave the tariffs at zero. As Mr. Trudeau pointed out, they were headed that way under the GATT anyway. So that's not the major—

The Acting Chair (Mr. John Harvard): What about the question of national treatment, where we really subordinate politics to the discipline of business or the marketplace? How would you deal with that?

Mr. David Orchard: I would step back from that. Preferably, I would want to see us go back to the GATT-WTO rules that gave us much more latitude to protect our fishery or our timber or our farmers.

You mentioned the Conservative Party. One of the reasons I stepped into politics was to correct what I saw as the errors Mr. Mulroney made. That's why I'm here and have put my ideas forward. I'm calling for a blue-ribbon commission to look at the impact of the free trade agreement. This is an idea I'd like to put forward to your committee as well.

Rather than jumping us right down the road to further integration, deeper integration, inevitable common linkage, and all this--we've had over ten years--let's do a commission across the country looking at the impact of free trade and NAFTA. Has it been good for us, as Mr. Martin maintains, or has it been as Orchard maintains? Let's have someone... You can take Peter Lougheed, or you can take a prominent civil servant like Mel Clark, who was one of our negotiators. Put these people in charge of that panel and take public testimony across the country.

We've had this experience with NAFTA and the FTA. Is it working for Canada? Are there places that should be changed? Should it be gotten rid of? These are the questions that I think we should look at as a nation, instead of simply adopting a kind of religious ideology that these agreements are good and therefore we're going to go into deeper integration. I think it's a fatal error, and I don't think we're going to be able to survive as a country if we integrate ourselves any further.

The Acting Chair (Mr. John Harvard): That's fair.

I think Mr. Martin has a question before we wrap this up.

Mr. Keith Martin: Just a couple, Mr. Orchard.

Just for the record, according to our information, our trade with the United States and with all NAFTA countries has increased, by about 100% with the Mexicans and over 12% with the U.S. As you appreciate, that's over $70 billion. So that's a lot of jobs.

You're a farmer, and you brought up a couple of interesting questions. You said industries are bought out by companies in the U.S., and in many cases you're quite right, which is obviously disturbing for all of us. But I would ask you how you would prevent people and private companies in the U.S. from buying up Canadian companies, since they're two independent private entities. For example, you're a farmer. If you wanted to sell your farm to somebody from the U.S., should you be prevented from doing that?

The second question I have is really along the same lines. You want to put industries in Canada back into Canadian hands. How would you do that?

Lastly, perhaps we haven't derived as much benefit as we could have from the free trade agreement because of our low dollar, which I would suggest to you is due to a lack of competitiveness and productivity related to our high taxes and rules and regulations. How would you improve our competitiveness?

Mr. David Orchard I'll start with your first question, about the sale of our industries, if I wanted to sell my farm.

Actually, here in Saskatchewan we have a farmland ownership act that prohibits a foreigner from buying farms in Saskatchewan. So under the legislation that exists today, I cannot sell my farm to an American. As a result, we have much lower farmland prices in Saskatchewan than anywhere else in the prairies, and that is actually an added incentive for people from other parts of the country to come and start farming here, or for young farmers to get going here. So I would argue that this law has served our farmers well, and there's a major debate in this province about exactly whether that act should be changed.

À (1030)

Mr. Keith Martin: So you have a law that prevented a Canadian company from basically selling itself to an American interest.

Mr. David Orchard: Many countries have these. In fact, most countries do. We once had the Foreign Investment Review Agency, which reviewed takeovers of Canadian industries to ascertain whether they were in Canada's interests, and if they weren't, that body had the power to turn them down.

No less a figure than Peter Lougheed has recently come out and said perhaps we have to re-look at having another FIRA in Canada, because we're going to turn around two or three years from now and ask, what do we have left? This is Mr. Lougheed, who was once promoting the free trade agreement; this is the conclusion he has come to.

When you talk about our trade with the United States having increased 12%, I would argue that it's largely not because of NAFTA or the FTA, but because of the low dollar and because the American economy has been in a robust position most of that time. So I would argue that it in fact has nothing to do with NAFTA.

It was interesting that your background document made precisely the same point, that this argument could be plausibly made--and I've been making it for a long time--that it's the low dollar that's encouraging sales of our exports to the United States much more than NAFTA. But when you--

Mr. Keith Martin: It also says that of that 12% increase, really 9% is due to the NAFTA--at the bottom of the page, if you have the same document as I have.

Mr. David Orchard: Yes, this is the breakdown they're attempting to make, but they're saying the argument can plausibly be made that other factors had as much, if not more, to do with it--that was the terminology they used--as NAFTA.

But you asked, what can we do? I think we should have a Canadian automobile industry. We should have a Canadian shipping industry. We're the nation with the longest coastline in the world, and we apparently can't even build ships any more. I'm a farmer, and here in western Canada I cannot even buy a major piece of farm equipment that's made by a Canadian company in Canada any more.

Mr. Keith Martin: If I may interrupt you, because it's important... That's a very good example that you use, the shipbuilding, because I'm from the west coast, and we've asked that question too.

The problem is, as you know, in Canada, in manufacturing ships, we have difficulty competing with say the Chinese who are making ships. Their employment costs are so much lower than ours that for us to build a boat, the cost of a Canadian boat would be so much more than the cost of a Chinese boat that we can't compete in that area.

Mr. David Orchard: I don't accept that we can't compete in that area, and I'll tell you why.

In 1952 Canada and Japan had the same size of economy. We outproduced the Japanese in terms of automobiles. Where are we at today? The Japanese economy is four times larger than the Canadian economy, and they outproduce the United States in terms of automobiles. They've done that through a conscious policy in Japan of building their electronics industry, their automobile industry, all these industries.

In Japan they have forced their banks to lend to Japanese industries. They've had a conscious industrial policy to build those industries. We could do exactly the same thing.

If I can take you back to the Second World War, we came out of that war with the fourth largest shipping fleet in the world, ships built right here in Canada, and the world's fourth largest air force.

Mr. Keith Martin: That was fifty years ago.

Mr. David Orchard: That's right.

Mr. Keith Martin: More than fifty years ago.

Mr. David Orchard: Yes, but some things remain the same. We were able to build those ships in Canada, put our people to work, drive our unemployment rate down from 13% to 1% during the Second World War, and build those ships.

We could do the same thing. We could build a shipping industry, if we had some conscious government policy to do it. We won't have any of these industries; in fact, we can't under the NAFTA or the FTA. If we attempted to build an automotive industry or a shipping industry, we would run straight into a trade action from the Americans, even though on the U.S. side they have their Jones Act that protects their shipping fleet. As you know, it relates that goods have to be transported in the bottoms of ships built in the United States, whereas we've exposed ourselves completely openly.

We're free traders. We'll take away all our support for farmers, all our support for the lumber industry, all our support for the shipping industry, and we'll see what happens. Well, what happens is that the Americans come in and buy it up. That's the tragedy. We need to have some kind of government policy that says there are certain industries we're going to build.

We can look at what the Norwegians and the Swedes have done.

Mr. Keith Martin: So the government is essentially putting money into paying--

À (1035)

Mr. David Orchard: No, it doesn't necessarily have to be the government putting money into it, but there needs to be a framework policy. Why don't we have a Canadian automobile? We're a huge market, and we could build one. We have the fuel cell technology out in your province to build a virtually pollution-free car. That technology is going to go to one of the giants. We should use that technology here to build one of the world's most advanced automobiles, and we should sell it across the country.

But we would have to have a framework policy in place to do that. We'd have to get over this stuff about protectionism being a dirty word. Every nation that's ever amounted to anything on the face of this planet has protected its industries, or else they haven't amounted to anything.

The Acting Chair (Mr. John Harvard): Gentlemen, I hate to interrupt, but the clock says we must move on.

Mr. Orchard, I want to thank you for your appearance. I think you would make an exciting addition to the House of Commons, and judging by your strong performance this morning, I don't think you'd be averse to answering the call.

Voices: Hear, hear!

The Acting Chair (Mr. John Harvard): Thank you, and I'm glad to note that some people agree with me.

I would now like to bring forward two witnesses. There's Tony Haynes, who is the director of social outreach of the Roman Catholic Diocese of Saskatoon; also joining him will be W.R. Adamson of the Multi-Faith Social Justice Circle.

Gentlemen, I know you're from separate organizations, but we're doing it this way to conserve some time. We have 45 minutes for the two organizations.

I would suggest that you start, Mr. Haynes. You have another person with you, and his name is...?

Mr. Tony Haynes (Director of Social Outreach, Roman Catholic Diocese of Saskatoon): His name is Brian Murphy, my research assistant, but he's not going to be speaking.

The Acting Chair (Mr. John Harvard): It might be best if each of you, you and Mr. Adamson, spoke for say ten minutes. If each organization were to spend a total of 20 minutes off the top, that would leave us roughly 25 minutes for questions.

You may begin, Mr. Haynes.

Mr. Tony Haynes: Thank you.

As you introduced me, I am the director of social outreach for the Roman Catholic Diocese of Saskatoon. Brian Murphy is my research assistant, and in essence we're both volunteers for the diocese. I'm also involved in many ecumenical organizations for social justice, and as a result of that I'm also speaking in my capacity as the volunteer chair of a group called Kairos, which is a Canadian ecumenical social justice organization.

Because of this I really want to preface my recommendations by quoting from recent statements from the Roman Catholic bishops in Colombia, a country in crisis because of the drug wars. It's the third of the principles they enunciate in “Constructing Peace”: “There is no peace if there are not clear criteria for sustainable human development, for cultural, economic, political, judicial and ecological development”.

That's consistent with the view that was expressed by Pope Paul VI in the 1970s in one of the social teachings of the church, in which he stated that development leads to peace. I must admit that among my fellow Catholics, very often they talk about peace leading to development, but for a social justice person it's the opposite. We say that development leads to peace. When people say that peace leads to development, they think in terms of prayer coming beforehand, and after that God will lead us to the things we need to see done for a better world.

About this idea of strengthening global economic growth, it's said that to master globalization is to be able to master greed. I think that's the basic problem we find in the western world. We are very often guided by the idea that greed, selfishness, and the attainment of wealth are what's going to keep our world together.

No matter what the faith of a person is, and here I speak beyond our own Christian beliefs, there is a basic call to serve our neighbour. I think that's what's important for us to understand. It's not to deny the fact that there has to be economic growth, but this is most effective for a poor person if it is done at a local level where the people avail themselves of local marketing practices.

Globalization, in terms of understanding the common good for the world, has to be in the interests of the poor, not just the rich, and it has to be in the interests of protecting our environment.

In actual fact, when we think of economic growth, economic growth for one can be a disaster for another. The success of trickle-down theories of some economists has been disproved. The real test of global economic growth goes beyond balance of payments and gross national product. It's best measured by the health of nations, not only in terms of economics. We have only to look at our own country to see the ravages made upon society by this numbing call to grow. We may think of helping other countries by economic growth, but we are really looking to improve our own country's economy when we do these things. Yet we are beset by poverty, especially of children, low-income households unable to cope with providing the basics of education, health, safe housing, and a satisfactory family life.

The other point is that, in terms of the environment, the need to strengthen international economic growth is going to continue to endanger the world environment. Ecology is a global matter, one that rarely concerns corporate business, which seldom has a horizon beyond five years.

So my point about determining economic growth is that these thoughts should invite pause. Where there is no possibility of sharing a dream, frustration leads to rebellion, and then to military action.

That leads us to consider the second area of discussion, the new partnership for Africa's development, although of course I will be referring to the idea of military action when we look at combating international terrorism.

As people of God, called upon to serve and love our neighbour, it's our belief that we're bound to do all we can to bring a decent standard of living to everyone, wherever they are living. Africa has that special appeal in view of the problems its people, mainly in the sub-Sarahan regions, have. It is, of course, the cradle of civilization; it's a group of people that DNA studies have now suggested are the people who have given birth to us as a people.

I'd like to refer to the headings under “Partnership For Africa's Development”. While recognizing the generosity of Canada recently, in contributing through our Prime Minister $500 million for its development and also offering to supply some kinds of professional help, there are problems there I'd like to divide into areas of public health, education, safe water, pharmaceuticals, the biopatenting of seeds and cash crops.

If I can speak with any kind of degree of expertise, it is the fact that for two years, from 1992-94, I was able, after retiring from high school teaching here in this city, to work for two years in Ethiopia teaching high school in a private school. I remember very well Canada's contribution there, because we were acquainted with the water projects from CIDA, which, incidentally, in 1994 were moved out of there to help eastern Europe.

The other one that I remember is the material help that was given to the school by the Canadian delegation and embassy in Addis Ababa, particularly as they saw what was happening, that the school was very interested in promoting the education of young girls.

I had the privilege of going back there last year to visit this school, and I was able to meet with some of my students, one whom was in the final stages of becoming a doctor--this is a young lady--and another one had become a lecturer in a school of nursing in psychology. So there were some definite advantages to that.

To go back and refer to the other point at the end of this section, which is the forgiveness of loans, we really have to take a very different attitude from what we've taken in the past. I can certainly expand on that in the discussion period.

À (1040)

As to the fighting of international terrorism, I just want to say that essentially developing countries, if given opportunities and aid to improve their people's standard of living, will avoid the development of international terrorism, in Africa and other places as well. It should be Canada's role to return to its traditional expertise as a peacekeeper. We should look at not fighting. We should be sure to withdraw from Afghanistan as soon as possible and restore ourselves to that eminent position we have had in the past, and that is to be a country of peace.

When we think of an alliance with the United States, I really want to emphasize that we are deluded if we think the Americans are our friends. Palmerston, the British politician in the 1800s, said this: “Nations do not have friends; they have only interests.”

We've seen this most recently with the softwood lumber dispute and the coming challenge to the Canada Wheat Board production, and of course more recently we see it in every instance where there are attempts to gain equality before the law, as at the WTO, and then we get involved with long legal procedures with our supposed friends in the States. I can quote examples where this has happened with the peasants of Mexico, where they are unable to compete with the influx of cheap American corn, and also Grenada way back, with their banana produce.

If Canada is to maintain its independence, it must look to its own interests while dealing with the United States and the European Union. Success in this area should permit us to be easier with the developing nations of Africa.

I would like to emphasize that our population is levelling off. We need to change our immigration policy to one of aggressively seeking new immigrants. No longer should we see ourselves as the bastion of a white population. We must be ready to see the face of Canada changing colour. We need to find people who are--and there are prolific sources of them--semi-skilled and skilled people, people who are needed as taxpayers and consumers. Taxes, theirs and ours, are needed to sustain the lifestyle to which we would like to become accustomed.

Finally, on a matter of social forum, just as the use of military might will not quell terrorism without solutions to the underlying causes, so isolated meetings of self-interested political and financial movers and shakers will not solve the horrendous problems under which 80% of the world's people barely survive. The wealth of strong individuals and major corporations is no solution to world poverty. Profit must be counter-balanced by globalization for basic needs and opportunities among the world's poor.

As I do all my reading, and I find I am reading current material because this is on the edge of what is happening, I find I am drawn to many articles that are both lay and religious. I picked up a newsletter from the Comboni society, the missionary society for which I worked. They begin to quote in this part Father Henriot, who says that globalization in solidarity means “ethics; less violation of human rights, not more; equity; less disparity within and between nations, not more; inclusion, less marginalization, not more” and it goes on to list human security, sustainability, development. Then when I turn over the page, he says that this is an identical quote from the United Nations Development Program of 1999.

I would just like to finish my remarks here by pointing out that there is nothing special and diverse in what the church is saying. It's saying things that are recognizable in any agency that is interested in peace and development.

Thank you.

À (1045)

The Acting Chair (Mr. John Harvard): Thank you, Mr. Haynes.

Members, we'll hear from Dr. Adamson, from the Multi-Faith Social Justice Circle, before we go to questions.

You may begin, Dr. Adamson.

Dr. W.R. Adamson (Representative, Multi-Faith Social Justice Circle): Chairperson, members of the panel, citizens assembled, I want first of all to make a preamble and to say that I protest the holding of a consultation in our city without advertisement or notification to the public. I only heard of this event from a colleague, just a few days before the deadline. The way to keep a consultation low-key and unobtrusive is to neglect to inform the people.

I'd like to address the area of resisting terrorism with regard to comments to the G-8 leaders.

First of all, what is “terrorism”? It's a blanket word with emotive connotations but few specifics. One person has defined it as “the threat or use of violence and arms by an armed group or individuals against an unarmed group or individual for political, racial, religious, social or economic reasons, including state terrorism.” Another statement says “the goal of terrorists is terror, which they hope will provoke overreaction”.

In the pre-consultation materials, the statement is made regarding “the need for the international community to address the 'root causes' of terrorism”. Such root causes include oppression, extreme poverty, and lack of justice. When there is no hope of betterment through normal reforms, people turn to violence and intimidation. Another root cause is when people have themselves been subjected to violence, oppression, and suffering, and so are driven to reprisal.

Another question in the pre-consultation material is “How can states find the balance necessary to ensure that protection against terrorism does not jeopardize civil liberties and the rule of law?”

In Canada that balance has been shot to hell with the passage of Bill C-36 and its companion pieces. The Canadian Bar Association, lawyers and faculties of law, warned of serious dangers and suggested amendments, as did several other organizations and witnesses. These testimonies were ignored and Bill C-36 was rammed through the House and Senate, using closure during the pre-Christmas flurry of activities.

Under our former laws, a citizen was regarded as innocent until proven guilty. The system was based on testing the evidence against accused persons. Moreover, an accused person was not required to give any evidence at all, except to give name and address.

With one dastardly slash, Bill C-36 cancelled out basic elements that had come to us with the Magna Carta, the English Bill of Rights, the UN Charter, the Canadian Bill of Rights, and the Charter of Rights and Freedoms.

Now citizens can be arrested on suspicion, without a warrant, by a police officer and held for 72 hours without a charge. A judge can be called to interrogate a citizen, along with the police officer, until satisfactory answers or documents are given in these secret hearings. The onus is on the individual to prove his or her innocence, in contradiction to our former law of innocence until proved guilty. A person may not even see the evidence filed against him or her. Moreover, there are no appeals or judicial reviews. In my paper here, I list the sections of the act that pertain to these statements.

It is difficult to comprehend what fear, political pressures, and bullying could stampede our legislators into such mindless behaviour in order to pass such an outrageous bill. After it is too late, the Department of Foreign Affairs and International Trade speaks of “balance” between terrorism measures and civil liberties under the rule of law.

Now, from a different perspective, what are some of the specific acts of terrorism against Canada? What are the threats of intimidation and violence against the people, or against the Government of Canada?

Measures have been taken to improve and to integrate our border policies and practices to prevent undesirables from entering our neighbour country. That is well and good, as long as we maintain our Canadian sovereignty.

What do we mean by “fighting terrorism”? In what ways has Canada been attacked or intimidated? What oppression and violence have we imposed on others that would trigger reprisals? What is the frenzy engulfing us?

Canada was not involved in the overthrow and murder of President Allende in Chile or in support of General Pinochet, his military, his concentration camps and the resultant missing persons.

À (1050)

Canada was not involved in the struggle between the Guatemalan dictatorship and the people, where 200,000 people were killed. Canada was not involved in the murder of thousands by death squads in El Salvador.

Canada was not operating a School of the Americas, a university of terrorism, like the one at Fort Benning in Georgia, whose graduates were many of the cabinet ministers, army officers, and secret police in Chile, Guatemala, El Salvador, and Argentina.

Canada did not ship 1,500 pounds of anthrax plus 39 tons of material for germ warfare to Saddam Hussein in Iraq as late as 1989. Canada has not bombed the people of Iraq on a weekly basis for the ten years since the Gulf War.

Canada was not involved in an armed incursion into Somalia in 1993 that left between 7,000 and 10,000 Somalis killed.

Canada did not contribute to the movement in 1979 to spread Islamic fundamentalism in Central Asia in order to destabilize the Soviet Union.

Recently a military expert in Calgary complained that Canada is not doing enough to fight terrorism within its borders and not investing enough in its secret agency. Yet to identify an act of terrorism, he referred to an Air India plane that left Toronto and blew up over Scotland. This is the extent of our Canadian problem?

If these are factors in our local context, what is the long view? My recommendations to the G-8 leaders in Kananaskis are:

1. Address the root causes of terrorism in the world, addressing hunger, poverty, injustice, and oppression. The increasing budget for armaments could be used to feed all the hungry people in the world. It's projected that the budget of our American neighbours next door for military in this coming year will be $379 billion. That would buy a lot of food. What is the point of hunkering down in our bunkers and fortresses in fear and paranoia, all the while increasing our arsenal of weapons to kill other humans more effectively and more devastatingly? Where is the quality of life in that?

2. Approach the challenges of international security through the existing framework of multilateral organizations like the United Nations and its subcommittees. Stop the unilateral actions and flouting of international accords and conventions. Respect the sovereignty and decision-making of each of the nations.

3. Act cooperatively, but use sober second thought before being stampeded or bullied into complex and tangled issues, initiated by others and triggering reprisals. Cease the abrogation of the rights and freedoms under law and resist temptation to close our borders by exclusionist regulations and secret hearings and by detentions.

Thank you.

Voices: Hear, hear!

À (1055)

The Acting Chair (Mr. John Harvard): Thank you, Dr. Adamson.

Before we go to questions, I just wanted to respond to your concern about a lack of notice for the meeting. This committee does not have an advertising budget. Maybe we should take steps to rectify that. We did notify the media in Saskatoon on April 22. It's unfortunate you didn't hear about it earlier, but we did do that.

Dr. W.R. Adamson: With respect, a group that's in charge of international trade needs to know how things work here in western Canada. Our local papers are owned by corporations. If news items come up that could be critical of business corporations, they have two choices: they either bury it on the back page or they omit it. So I really agree that you need to pay for advertising notices in this part of the country in order for it to get into the press.

The Acting Chair (Mr. John Harvard): Your point is well taken.

Dr. Martin, we have a good 20 minutes for questions, for both Mr. Haynes and Dr. Adamson.

Mr. Keith Martin: Thank you, Mr. Harvard.

Thank you, gentlemen, for being here today.

I wish everybody in the world had the milk of human kindness you talk about. I'm sad to say that's not the case, as you know.

I have a couple of questions for you.

Mr. Haynes, you mentioned the very disturbing and distressful situation in Colombia. I would ask you, do you not think that the conflict in Colombia is primarily driven by drug consumption here in North America? Do you not think it is the drug consumption, primarily of cocaine and to a lesser extent heroin, that is driving that bloody war in Colombia that is threatening to destabilize the whole region? Do you not think we have therefore to get our own house in order here in North America to effect change in that country?

Secondly, billions of dollars have been spent in international aid and development, arguably with little effect, and most of the money that we give to CIDA, the UN, even many aid agencies, is spent here at home and does not get to the sharp edge of helping the poorest of the poor. How would you change that?

Lastly, on people who do not share the milk of human kindness, people likeMr. Koni of the LRA in northern Uganda, Foday Sankoh of the RUF, Mr. Moi, Mr. Mugabe, the SPLA, the government of Khartoum, driven not by ideological ends but driven by money, diamonds, oil, timber, gold, how would you deal with these individuals who are committing acts of violence against innocent civilians and are beyond the comprehension of most people in this room? How would you deal with those people?

Á (1100)

Mr. Tony Haynes: As to your first question, about Colombia, I think it goes back further than the drug war. I've read to this effect that in actual fact the coffee cartels destabilized the price of coffee to such an extent that the peasants of that country had to turn to an alternative form of production and they turned to drugs. I think we have to look at that.

There's a quotation from Shakespeare, “hoist with his own petard”, and this is what has happened to the American people, that having destabilized the price of coffee, it forced the peasants to turn to other crops. In actual fact, of course, the coffee situation of the cartels.... I think only three companies control the whole coffee production.

In addition to that, there is the situation of the extraction of oil and the oil pipelines. That is a matter that is causing great grief with private companies. But also the Americans offering that kind of military help, presumably to eradicate the drug problem, is in actual fact protecting their own interests.

On the question of dictatorship, I admit it's true that there are these dictators and there are also people feeling that they made off with the money. I'd like to go back in history to talk about the surplus of money that was floating at the time of the formation of OPEC, where the money was just lying around and the banks encouraged countries to borrow the money. It is true that some of the money was used by a military dictatorship.

However, I think we have to go beyond that. I know people say this is their money. I look at it in a different way. I look at it that any money we have, any wealth we have, comes to us because we are using our talents, and our talents come to us from God. It's a rather different perspective that I have and other people have compared with the idea of what I have is mine and it's mine because of my hard work. You cannot really say that somebody like Bill Gates works hard to produce the kind of money he has, his $90 billion in wealth these days, as opposed to the hard work that other people do and the peasants do in their own country.

Mr. Keith Martin: With all due respect, sir, how would you change that? You brought out that aspect and you brought out the aspect of.... Dr. Adamson, you mentioned the U.S. spending over $400 billion on armaments. Do we go to President Bush and say “Mr. Bush, stop spending that money and take half of that and spend it on food”? What do we do?

Mr. Tony Haynes If you talk about Mr. Bush, the Americans are quite niggardly in what they've been doing to help. Only 0.1% of their gross national product is going in aid, although it was agreed long ago it should be 0.7%. I think Denmark is the one country that gives 1%, and we're somewhere at about 0.2% in our aid. Mr. Bush has just recently said something and done something he says is great, and that he's now not going to lend 0.1%, he's going to give half of it as a grant. It sounds generous, but of course he's not increasing the amount that could be given by the richest country in the world.

I would like to suggest that there are some initiatives now being taken. Particularly I'd like to refer to the fact that Oxfam and Save the Children and other agencies of repute, and of course church agencies—although not all of them, because some church agencies are very interested in proselytizing and also conversion first rather than helping, and their reputation is known in Africa.... But there are agencies that are helping. Oxfam has come up with a program that's going to deal with specifically targeting education. There's the problem of water.

Mr. Keith Martin: Do you know what the overhead of Oxfam is, Mr. Haynes?

Mr. Tony Haynes: No, I don't.

Mr. Keith Martin: I think it's around 70% or more, but I could stand to be corrected. It may be even closer to 90%, which means only 10% gets to the people who need it.

Mr. Tony Haynes: I know World Vision is pretty high up there as well.

My experience is that I know that in Ethiopia the Catholic organizations there were vested with a great deal of integrity and they were given food to hand out. You have to agree. You have to find reputable and honest organizations that will do this. And it doesn't have to be done at government level. If we could bypass this, it would be certainly to the benefit.

In that respect, I feel very much that we need to encourage, as Canada has done in the past but much more so, the idea that we should be providing professional personnel such as teachers doing summer courses to teach the people, as it is with business people. They should provide the expertise but also the integrity for this to happen so the money does not go to people like Mugabe, who is an outright criminal.

I forget what your second question was.

Á (1105)

The Acting Chair (Mr. John Harvard): You might want to share with us what you would like to whisper into President Bush's ear if you had the opportunity.

Dr. W.R. Adamson: Could I answer that question?

I think of grave concern to our nation, and we need to let him know of our concern, is the unilateral action by him and his government. They have made so many declarations and acts of war and so on without going through the United Nations channels. I think he needs to be reminded that the neighbours are not amused.

Mr. Keith Martin: With all due respect, Dr. Adamson, I'd like to make a comment on the UN.

This is disturbing for us who had a lot of faith in that organization, but it couldn't operate a pop stand effectively. I say that because when you look at the situation in Rwanda, Burundi, the southern Sudan, eastern Congo, where two million people have been killed, what is the UN doing? That's sad for all of us. Anyway, I wish it were an organization that is able to effectively do something. Right now I would suggest to you that it can't.

Dr. W.R. Adamson: Suggest what?

Mr. Keith Martin: I would suggest that the UN can't protect innocent civilians, in the face of overwhelming evidence that a large number of innocent people are going to be murdered. The UN cannot mobilize itself to protect those innocent civilians, and they've proved that time and time and time again.

Dr. W.R. Adamson: I think it's been greatly chagrined and concerned and has had many lessons and insights about what didn't happen in Rwanda and such places. But after the September 11 deal, the United Nations did step in immediately and made framework policies and started to take action. What the United Nations really needs is more support from the nations. You have a place like the United States holding them to ransom, saying they're not going to pay them money--we're holding back the money unless you do what we want. If it's not going their way, they yank it back. A lot of nations have hamstrung them. So we need to get it together.

I really have some questions about the G-8 bankers and a few presidents deciding what's going to happen in the world. We have all kinds of structures and organizations involving the people, and a few moneyed people are sitting back and deciding what's good for the world. Their track record is not so great.

To pick up on what Tony Haynes said about debt, a while ago in Vienna, thousands of people put in petitions to ask them to forgive debts of third world countries, and they grudgingly agreed. But then they developed a little technique called structural adjustment, where it makes them pay just the same. They've hardly given up any of the debt. The problem still persists. They have their thumb on the people's necks.

Á (1110)

The Acting Chair (Mr. John Harvard): Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Mr. Chairman. Gentlemen, thank you for your presentation.

I would like to begin by congratulating you on the courage you have shown. I think that you are saying out loud what many people are thinking but do not dare say in public. That is to your credit. I have a number of questions that can be dealt with quickly. Some are more general and others more specific.

On the subject of Bill C-36, I want to tell you that the Bloc Québécois strongly opposed that legislation. One of the points of great concern to me was the right of dissent. When I learned from my colleague, who is the justice critic for our party, that Warren Allmand, who is well known and a former Solicitor General of Canada, testified before the committee in his role as president of Rights and Democracy and said that, from his understanding of the bill and the spirit of the legislation, he could be considered a terrorist if the spirit of the bill was taken to its logical extreme, that really disturbed me. The right of dissent is very important in society, and it is easy to hobble it if dissidence can be labelled terrorism from now on. We will be living under the law of silence.

I wonder, in fact, if that is not what we are seeing to some extent in the United States. If you have any information on this topic, I would be interested. I find it strange that we have heard so little from what I will call the American left, from thinkers, academics and religious leaders in the U.S. Are they silent because they have no other choice, because the law of silence has been imposed, or if they speak up and state their views, are they being boycotted by the major American media?

Is not the main problem right now—and you alluded to this—that private interests, represented by big capital and the multinationals, are currently dominating the public interest, the common interest, which is represented by sovereign states? If there were a consensus to the effect that the public interest has to take precedence and if this issue was debated, would that not at least be a first step?

Since you refer to it in your document, I would like to hear from you about the role of pharmaceutical companies in African development, as well as their cooperation or lack of cooperation.

You also talk about reforming the role and mandate of the International Monetary Fund and the World Bank. I would like you to give us a quick outline of what you have in mind.

In closing, I would like to know two things. What do you think about the possibility of bringing in a Tobin tax or something similar, knowing that financial transactions amount to $1.5 billion a day, of which 95% is pure speculation?

Finally, Mr. Haynes, since you have lived in Zimbabwe, I would like you to tell us what you think about the current situation in that country, in view of the events we all know about.

[English]

The Acting Chair (Mr. John Harvard): Given all of those questions, it might be a bit of a tall order to answer them all in the seven or eight minutes we have left. So you will have to act accordingly.

Do you want to start, Dr. Adamson?

Dr. W.R. Adamson: I'll let Tony say most of it.

I think there are critics in the United States. Whether you call them the left or just critics, I think they're there, but they're not being listened to. There's a kind of frenzy and momentum that carries the day in the press, and the critical voices are not heard. They're ignored. I think it's similar in our country. With our Internet and e-mail, there are more and more statements by very perceptive, hard-hitting journalists coming out about the factors in this whole mix-up.

Secondly, one other point--I don't remember all your questions--is that I do agree with the Tobin tax. We have to get some kind of control on the speculation going on about our industry and our trade and our money. We wake up every morning and our dollar has gone down or it's gone up a little, tiny fraction. All that's in the area of speculation by other people in other countries, and that's not good enough. We need a Tobin tax that moderates that overnight exchange between the computers.

Á (1115)

Mr. Tony Haynes: I shall just preface my remarks about Zimbabwe and Ethiopia. When I travel, I always travel to see people I know, and then I let them tell me what's going on and I visit with them. In addition to that, I also keep in correspondence with these people. My experiences with Ethiopia go back to 1992 and my experiences with Zimbabwe, with distant relatives, go back to 1990. I made a brief visit to Zimbabwe twice. So I'd just like to put that in the background.

Certainly the Tobin tax is vital. When we think of over $1.5 trillion being speculated, moving in the money markets 24 hours a day, of which only 5%, people tell us, is used for business investment, that is a crime. If we would only accept the idea of a Tobin tax, it would pay for all the safe water that's required throughout the world. I think Barbara Ward, the social activist, had similar comments, way back before she died. It's essential. As you well know, it's been passed in Parliament, and yet no action has been taken on behalf of effecting the Tobin tax. People say it's something to do with other countries and we'll be able to avoid it or we'll find safe havens. More and more safe havens are being closed now. The British Parliament, I understand, has closed some safe havens in that respect.

As for the pharmaceuticals in Africa, that also is a tragedy. As you well know, they were forced to withdraw from the situation after much litigation or pretended litigation or moving out to litigation in South Africa. The actual cost of pharmaceuticals is abysmal in terms of what's being given. Certainly I'm in favour of generic drugs. I know Brazil was moving forward on that, and I understand India is now helping Nigeria in that respect.

In terms of Zimbabwe, it may be an interesting fact for you to know—this statistic came to me when I was visiting there—that 24% of the people in that country are AIDS carriers. Whereas Mugabe is thinking of his own particular group of people, the Shona people, that population is decreasing by 2% a year. That's the Shona people. Why? Because the fact is that children and others are carrying the AIDS virus.

I was visiting a family that had five children under six, and it was a debatable point how many of those would survive beyond five years of age. When we think of what's being done in terms of AIDS, there's a lot of outcry about the problem of AIDS in this country. The statistics I have on that are that 99% of our aid revenue to help combat AIDS is being spent on 1% of our population, which is in this country, whereas the obverse should be true; 1% of our aid money to combat the AIDS virus is supposed to be shared by 99% of the people in Africa. That's a disgrace.

It's not only that; there's the whole situation of other... Leprosy is still likely to resurge, to come out again, in Ethiopia, although they have an idea of what to do. They can no longer think of ever helping people with TB or malaria. There are some resistant strains of malaria coming through. I've been in hospitals, really beautiful, new hospitals in Ethiopia, which are beautiful but empty because they don't have drugs.

In actual fact, drug contributions by churches and other people were being taxed at the entry level by the government.

One other thing we need to be very sure about when we talk about pharmaceuticals is the fact that these companies could well work on a vaccine for AIDS, but if they do that, it's suggested there would be no market for the rest of their products. The Pope has recently said something about this whole problem of where we're spending our money on pharmaceuticals. A colossal amount of money is spent on marketing, a huge amount on marketing, and we're saying that's included in the cost of our medicare. It shouldn't be so.

The other one he's talking about is the fact that we are spending a lot of our money on biomedical enhancement of ourselves, unnecessary surgery, and pharmaceuticals are pushing this. You only have to look at what television commercials are doing these days. It's a whole problem that has to be addressed, and it's a question of big business being tackled.

You were asking about protection for multinationals. That's a problem. I always look with hope, and I see now that there are some.... I can't quote James Wolfensohn at this particular moment, but I was copying quotes from him. He's the president of the World Bank, and the word is they're beginning to see the light. They're moving away from this idea that it will happen just after the Second World War with IMF and World Bank, when they thought the answer to the problems in Africa and the third world was to industrialize the country. We're finding that's not the answer that's required. Dams, 50% of them, are no longer in use.

We are here to suggest that there have to be local, small market initiatives, with protection for those countries' businesses, which we had in our countries when we started.

Thank you.

Á (1120)

The Acting Chair (Mr. John Harvard): I'd like to have short answers from both of you to the following. At the G-8 summit in Kananaskis next month there will be three themes: terrorism, world economy, and a plan for Africa. The Prime Minister, naturally, will be heading the Canadian delegation. What do you think Canada's priority should be, given those themes and of course the fact that it's only a two-day conference?

Dr. W.R. Adamson: I would say that Canada needs to be moderating, leavening, and giving sober second thought comments to tone down some of the frenzy and the war hysteria kind of thing that's being pushed around the world. That's the main thing. There are not easy answers. Also, instead of taking unilateral actions, we should be reaching out and working with all kinds of democratic, participatory organizations.

The Acting Chair (Mr. John Harvard): Mr. Haynes.

Mr. Tony Haynes: I agree. Certainly we should start with strengthening global economic development in terms of small markets and those kinds of things as they've begun, as I suggested we should be doing in Africa, with the offering of our expertise. Those kinds of peaceful approaches are the ones required to solve the problem.

I certainly agree that Canada needs to speak with a strong voice and find partners that are going to be there to tone down the rhetoric of people thinking in terms of retribution or revenge.

The Acting Chair (Mr. John Harvard): I want to thank both of you. We appreciate this very much. Thank you.

Voices: Hear, hear!

The Acting Chair (Mr. John Harvard): We're now going to call for a presentation from the Saskatchewan Federation of Labour, represented by Don Anderson.

We're going to take a short break of about one minute.

Á (1118)

Á (1122)

The Acting Chair (Mr. John Harvard) Sorry to keep you waiting.

Thank you for your patience, Mr. Anderson. We'll have about 40 minutes. If you have some remarks to open up, we'll hear them, and then we'll have some questions, I'm sure.

Á (1125)

Mr. Don Anderson (Executive Assistant, Saskatchewan Federation of Labour): Fair enough. Good morning. I want to apologize first for not having a copy of my brief for you. I just found out recently that I was going to be substituting for Barb Byers, and I do apologize.

We're quite embattled in our federation of labour. We're fighting for medicare, pay equity, better unemployment insurance, workers' rights across the board. We need higher minimum wages for working people, and of course we're fighting many anti-union initiatives such as right to work, actually right to work for less, as far as we're concerned.

We have over 85,000 members in our federation from one end of the province and from side to side, and they work in a great many occupations. Here in Saskatchewan, we know we're not the centre of the universe. In fact, sometimes we find ourselves so far from everywhere. If you consider the plight of our farmers as they're ignored by the global market and victims of subsidies in other countries, there is a sense of hopelessness some days. I personally feel we are a good, caring, strong, productive, and proud people. In Saskatchewan, we do think we are our brother's keeper.

Globalism affects us at every turn. Subtle changes occur, often unnoticed or ignored in the early stages, yet we always seem to pay a price for it later. For many years, our trade union movement has spoken out against free trade, deregulation, and privatization. We are concerned that this combined ideology, if you like, will destroy and dismantle Canada. Our society, our culture, our social system, such as medicare, even our decency, could disappear. The values we have fought long and hard to promote are being eroded. We live here, we work, we volunteer, and we share in our communities. We go to work, we produce wealth, and then we go home to build our communities. Often our efforts are underappreciated, undervalued, and downgraded.

When the ice storms hit Quebec, it wasn't the CEOs of corporations making millions of dollars a year who were required. Snowplow operators, electricians, and workers in general were what it took to get that situation under control. I didn't hear anybody yelling for a stockbroker. I just didn't. When the tragedy happened on September 11, as those stockbrokers rightly ran from the building, it was firefighters, police officers, and emergency medical people who rushed in to try to save the day, doing their job.

Globalization doesn't seem to be about that. It seems to be about the accumulation of wealth in fewer and fewer hands. There seems to be little or no respect for the masses. Under our current system, only the rich matter. You get the FTA, the NAFTA, the AIT, the GATT, and the MAI, and each one seems to erode more and more our right to govern ourselves.

I'm not sure the working people in the United States or Mexico are any better off, and I'm certainly sure we're not any better off in Canada, with all these agreements. Our federal governments have paved the way for this corporate greed. It just seems it's all an effort to bid down labour, or, as Billy Bragg, the British rock and roll singer, said, “We're making the world safe for capitalism”. We're very concerned with workers' rights, labour standards, and the state of the economy, and we don't quite have trust in our governments to look after these things for us.

Quite frankly, there is little evidence the corporate world, if you like, has any concerns at all about us. We seem to be in a race to the bottom, and our political leaders are cheerleaders in that action. Again, we're giving up our right to govern our own society. We can be sued as a country if we do something these corporations don't like. That's scandalous. When we're standing up for our own people, we can be sued for taking these kinds of actions. As another singer, Iris DeMent, said, we're “living in the wasteland of the free”.

Freedom's not much if you can't feed yourself, if you can't educate yourself, or if you don't have healthy water. All of this is happening while corporate salaries have never been higher--never. I think the fellow who ran Enron walked away with something like $200 million. One man ruined the lives of many all over the world and he seems to be home free. He's got 200 million bucks in his pocket. It's scandalous.

We seem to have lots of money for war and oil but little money for food, clothing, shelter, education, or health for the world's poor. Last year I believe something like $750 billion was spent on weapons of destruction--750 billion bucks every year, just to kill people.

In the book 1984, George Orwell talked about a number of things. He talked about three world powers. They basically existed if they could keep a war going at the periphery. Of course, here we are engaged in it ourselves. I don't know whether it's a war, a police action, or a military excursion. I don't know what the proper name for it is, but we've got a war at the periphery. We worry about that. We don't seem to care much about what's going on at home, and of course in 1984 there were words like thinkspeak, big brother, the thought police. Much of this is coming home to roost as we speak.

Finally, the security situation at Kananaskis.... Recently the Supreme Court of Canada upheld workers' rights to public expression, in a decision on the right of workers to secondary picketing--which actually had to do with a bottling plant here in Regina. The Supreme Court said this right was actually more important than a business's right to restrict picketing. I paraphrased that, but it's basically what they said. It basically said the right of free speech or expression is paramount. Yet here we have a situation in which our government has hidden this G-8 summit--people who are going to make decisions that affect us every day of our life--away in some mountain valley. It will not give us very much access to any part of it, and it will limit our ability to go out and protest for the things we believe in. I think that's fundamentally wrong. It's a shame. I think the last number I heard was we're going to spend about a hundred million bucks to do it. It's just awful.

Finally, to close, we think the rich have too much. They have far, far too much. In fact, we want to know how much more they need, or how much more they can consume.

Á (1130)

At Kananaskis, the G-8 will pass laws or endorse rules that will give the very rich even more. We'll make the rich less accountable, less taxable, and more powerful. We should all be concerned. This is clearly not the Canadian way. We want to know who is standing up for Canada, who is standing up for our planet, our environment, and our people.

Thank you.

Á (1135)

The Acting Chair (Mr. John Harvard): Thank you for those remarks.

Do you want to begin, Mr. Rocheleau?

[Translation]

Mr. Yves Rocheleau: Mr. Anderson, thank you for your remarks. I will not hide the fact that they are very much in line with my own thinking. I was surprised to see, however, that you made no reference to the problem everyone is talking about right now: the war on terrorism. Do you feel that it is not a problem? How would you define a terrorist act? Where would you put that in political terms? Do you feel that there is a risk that the issues of Africa, the world order and the distribution of wealth, which are on the agenda at the Kananaskis Summit, may be superceded by the issues of security and the war on terrorism?

[English]

Mr. Don Anderson: Yes, we're concerned about terrorism. It's really tough to define. One man's terrorist is another man's patriot, in some cases. People seem to forget history. We recently had a Prime Minister of Israel--his name escapes me at this time--who I believe was a member of the Stern Gang in 1948, when I think the King David Hotel was bombed.

A voice: Menachem Begin.

Mr. Don Anderson: Menachem Begin, thank you.

It was bombed, killing 50 Brits--I forget the number, but it was simply too many. By definition today, I guess that would be called a terrorist act. So acts of terrorism were part and parcel of the founding of the state of Israel--but I won't say it was founded by them.

Without taking sides, if my family had to live in a concentration camp for 15 or 16 or 25 years and never see the light of day or the valley over the hill, I'm not sure how that would affect me as a person. I think it would affect me greatly, and I might have a different view of what a terrorist is or isn't.

Certainly with Africa, again, we may be forgetting the history of colonialism, imperialism, and corporations going in there and just laying waste to the people and land. These are all things at the root of terrorism. If we don't figure out some way to share the wealth in this world, so that everybody has an opportunity to live, be productive, and see their grandchildren.... Wasn't it Kennedy who said, “Those who make peaceful evolution impossible will make violent revolution inevitable?”

[Translation]

Mr. Yves Rocheleau: On the Kananaskis Summit, do you think that the real questions will be asked or will things be biased?

[English]

Mr. Don Anderson: I guess I don't have much faith. There's been no evidence that these large multinational corporations, which seem to run the world.... Governments don't have very much clout in dealing with them. They seem to be able to get away with anything they want. So I think it's going to be another big business agenda again, paving the way for these people to make even more and more and more money.

[Translation]

Mr. Yves Rocheleau: If you have any thoughts on the matter, I would also like to hear what you have to say about Canadian democracy, but also about democracy itself in countries that claim to be democratic. Given what you say, when we are discussing multinationals, the role of government, the calling into question of social programs and the distribution of wealth, what about democracy and the role of Parliament and parliamentarians?

What about the funding of political parties? Apart from Quebec, where there is legislation that sets out limits and where individuals and not corporations are funding them, we know how they are kept going.

If you have something to add on the subject, I would like to hear what you have to say about the democratic deficit we are discussing, that is to say the more and more important position that it seems supranational stakeholders will soon be taking. What is happening to national and sovereign governments, and what is happening to sovereignty in all of this?

Á (1140)

[English]

Mr. Don Anderson: Again, I think we've lost great portions of our sovereignty here in Canada. If I'm not mistaken, with these trade deals, if we wanted to set up a provincial medicare system here in Saskatchewan, we wouldn't have the right to do it.

We have in Saskatchewan the SGI, Saskatchewan Government Insurance. It's been operating for about fifty years, and I believe we have among the best automobile insurance rates in the country. We would never be able to set this company up again. In fact, at some point in time we may be charged because we have a monopoly on it, which under some of these trade deals we aren't going to be allowed to have. Simple things like purchasing supplies for hospitals might be under attack. We might have to cede authority or let corporations from the States come in and bid on these things when we can do it cheaper ourselves.

I don't think we have very much control over our society here, and it's the second thing about democracy—I don't have any simple ideas about democracy. I'm always disappointed that more people don't participate. I certainly take it seriously, and I consider it my ticket to bitch and complain for the four years between elections. I went out and voted, and I have a right to complain; if you don't, you don't have that right. I find it disappointing that people don't become involved.

We had a situation here in Saskatchewan not long ago where Mr. Romanow, who was sailing along quite well, managed to get a whole bunch of people mad at him and threw us into a situation where we have a minority government. But in the process, only about 62% of the people actually exercised their right to vote. In the past, back in the seventies and eighties in Saskatchewan, we had 82%, 83%, or 84% of people who went out and voted.

I think what happened is that people had hopes for Mr. Romanow and his government, who didn't live up to it, so people said that they were all the same and sat at home. Of course, when people lose hope and stay at home, that's different from when people who are mad go to the polls. In that case, people who supported the Saskatchewan Party, which is a right-wing party, went out and voted, but many good people in Saskatchewan who were disappointed stayed at home.

That unravels democracy, and if you get down to where 60% of the people vote, you have some problems. We just witnessed what happened in France. Again, this is a question about democracy. Is it first past the post, or do you have preferential ballots? Clearly, if you look around the world and you have 16 or 27 political parties running, there's something unstable in that. But I don't like a system such as the one they have in the States, where you have two political parties and no way to break that up. I'm not sure where the middle ground is in that.

Again, south of us, in the United States, you have two parties that basically represent the same class. They're interchangeable. There's basically no difference between Republicans and Democrats, and that's not a healthy situation either.

The Acting Chair (Mr. John Harvard): Thank you, Mr. Rocheleau.

The nature, though, of democracy as we know it in Canada, Mr. Anderson, is that the pendulum swings back and forth. I come from the province of Manitoba. It's not far down the road, so I know a few things that happened in my neighbouring province of Saskatchewan. I recall when you had Tommy Douglas. You had Thatcher, then you had Blakeney, then you had Devine, and then you had Romanow. It's back and forth. In democracy or in governing, governing is to choose, and if you're in power long enough, you step on enough toes to cheese off enough people that they will throw you out. Even if you are a good government, people sometimes just want a change.

Now, I'm not necessarily disagreeing with what you're saying. It's just a fact of life. The democratic pendulum swings back and forth. People are always looking for something that perhaps they never actually get.

Á (1145)

Mr. Don Anderson: Well, that's fair enough, but there are other actors in this.

The media, for example, is not benign in any way, shape, or form. It forms opinions and gives opinions. What was Izzy Asper just recently going to do? He was going to have the same editorial policy in every paper across the country. What's good for Regina is good for Montreal—and obviously good for Mr. Asper.

You mentioned Tommy Douglas. He said that the power of the press was for those who owned the presses. And that's absolutely true. They shape, in many ways...

I've taken the odd trip to B.C. over the years. When you listen to the hotline radio shows, you notice that they're crazy for him out there. We're getting a bit crazy here, too. But constantly, anti-government rhetoric is coming across those radio stations, hour after hour after hour, all the same thing. I can't believe that any government is so bad that they don't have a good day at one time or another. Yet the people who are on these hotline shows constantly go after the government. Everything was absolutely wrong.

We have a fellow here in Saskatoon who does exactly the same thing. He's a retired politician; I think the people retired him. That's a good way to get some of these people. But he has a following and he's out there sort of as the Rush Limbaugh, if you like—or whatever that fellow's name is—of Canada. And some of it is just about vile. Scratch it just a little more and you'll find hatred and a lack of tolerance behind those words.

So, yes, democracy does go back and forth, perhaps not as much as you think it does. It hasn't changed very much in Alberta. There isn't much of a difference between the Social Credit Party and the Conservatives who ruled there. Since 1944 here in Saskatchewan, with Allan Blakney, you might say there were seven long, lean, hungry years of Thatcher and nine years of Divine. The NDP have been the governing party. Similarly, I think you'd have to say that in this century or the last century, the Liberals were the natural governing party nationally.

So when you say it's a question of choosing, sometimes you don't have much to choose. Mr. Romanow's government was, in my mind, a pretty pro-business government. Someone who takes a different point of view, such as myself and many of the people in the trade union movement, who believe it's not just the rich that matter, that workers have value and workers build society, didn't have much to vote for. There were some pretty darn good people here and there.

When I first got involved with the NDP I was coming out of university. Back in those days there was a whole group of backbenchers who somehow had a social gospel ridge down their back and who believed in cooperating. They were quite interesting.

Now I find that most politicians gravitate to the power--and I'm talking about Saskatchewan here, please understand that--and the status of being elected, as opposed to what they're going to do when they get elected. It's a question of managing.

So when you're the natural governing party in Saskatchewan, as the NDP have been, it's amazing what kind of people you can attract to your ranks and who get elected and then practise power.

I don't know if you're going to ask me about the Tobin tax. I read a while back that in the money flow around the world, something like 20% of the wealth—I heard the last group say it was 5%—was actually chasing production, actually being invested to create jobs and products, and 80% chased paper. Well, we are in great, great trouble if the people with this money are just chasing paper all the time and not producing anything. And then I think this group said that you can go to work in the morning making $8 an hour, and some currency speculator does something during the day and the value of your $8 an hour, at the end of the day, might be $6 an hour. These things are happening.

As more and more money piles up, not even the stability of our Canadian currency is safe, because they can raid it. If they ever wanted to take a crack at our currency, these people have enough money piled up in piles that they could do us severe damage.

The Acting Chair (Mr. John Harvard): Let's see if we can get this thing back on track, although I'm not suggesting that the last five minutes have been off track.

You did mention protest in your opening remarks. I want to ask you about that. In your opinion, what is the state of protest in Canada? I think you may be overstating it or exaggerating it. In this country, Mr. Anderson, I think there is a full, unfettered right to protest--at least from my vantage point. What isn't available is the right to disrupt or to vandalize.

Despite all the deficiencies of the media, when we have summits--be they at Kananaskis next month, Quebec City, Halifax, or wherever--there are usually a plethora of media people around. There is plenty of opportunity for protestors to speak their minds and to get their message out.

But it's interesting, they don't seem to be interested in running to microphones and television cameras, or perhaps even seeking out interviews with newspapers. What they're interested in--at least a good many of them--is the right to disrupt. I don't see this as congruent with protest.

Á (1150)

Mr. Don Anderson: Well, certainly I'm not advocating any kind of violence, please understand this. But the mere presence of the media may incite some things in its own way. It sort of takes two....

There certainly aren't any friends of mine who are practising crowd control methods in Calgary right now. The people I know who are planning on going to Kananaskis are going there to try to put their view of the world forward.

I don't think there's any excuse for violence. In fact, I might even go so far as to say there probably shouldn't be any excuse for general rudeness.

The Acting Chair (Mr. John Harvard): I'd like to introduce something else.

At both the APEC conference--which became a cause célèbre--and the Summit of the Americas in Quebec City, the federal government provided funds for so-called parallel conferences. At these, protestors and people who had a very different point of view were able to congregate, come together, and talk among themselves about the very issues to be discussed at the summit.

Yet they made no big deal about this. They were more interested in getting onto the street, and, if at all possible, disrupting the meetings.

Mr. Don Anderson: Again, that's your opinion--although I do find it a bit ironic that it was your Prime Minister who waded into a crowd.

The Acting Chair (Mr. John Harvard): Yours, too.

Mr. Don Anderson: Well, I didn't vote for him, I'm sorry.

But it was your Prime Minister who waded into a crowd and throttled an individual. I know if I did that, I would have been charged with something.

People do follow their leaders.

The Acting Chair (Mr. John Harvard): I think they call that the Shawinigan chokehold.

All right. Let me ask you one more thing. We've heard this a number of times, Mr. Anderson, from federations of labour. By “this” I mean the support of the federations for help of one kind or another for the third world. Of course, when it comes to the G-8 summit in Kananaskis, an African plan will be discussed.

I'm just wondering how far you, as a labour movement, would go in offering some kind of assistance to the underdeveloped world. For example, perhaps what these third world countries want more than anything else is access to our own markets. If we give them access, this might impinge on your members.

Mr. Don Anderson: You've clearly impinged on them already, with all of the trade deals. For example, a plant has moved from Montreal to somewhere in the States, and now it's in Mexico. So these global markets, if you like, are hurting us already.

As a federation of labour, we don't really have very much money, okay? Just for your interest, our organization gets about 85¢ per member per month. We have 85,000 members. So we have a budget of about $650,000. That's the cash we have to run an enormous number of programs we try to do for our members.

So we don't have particular piles of money, as an organization. Although some other unions are funded on a different basis, we're a federation. Different unions have a different dues structure.

I know that the Grain Services Union here in Saskatchewan has a project in Mozambique that's been going on with federal funding assistance for about 15 or 20 years. It's for occupational health and safety for workers in that country, because the one thing we do think we know something about is occupational health and safety. We were sending people over there and bringing some people back here, trying to set up an occupational health and safety system in that country. Those are things we can do.

I think we could also advocate among our members and the wider Canadian public for the principle that we don't spend enough money on world aid. I don't know what our numbers are, but I think we're far below what's been recommended. What is it, 0.7% instead of 1.2% or whatever? We don't put enough money in there, yet that's a sore subject with a lot of people because they say we're spending too much.

It's not unlike a health care system. If we didn't have a health care system that treated everybody, if somebody got sick and a plague or something happened, that would roll back across my fence and get me. Similarly, with global problems, if some country had huge health problems and somebody jumped on a plane and came and visited us, we could have huge health problems. The world is so small that we just can't afford to ignore any people anywhere. If they're not doing well, ultimately we won't do well.

Á (1155)

The Acting Chair (Mr. John Harvard): I have another question about market access. If we were to lower some tariffs and give greater access to the products of third world countries, that would take away some jobs.

Mr. Don Anderson: They're not going to build a house for me in another country. They're not going to build my sewage system in another country. They're not going to supply me--

The Acting Chair (Mr. John Harvard): Yes, but Canadian consumers may choose to buy something you are making, and if there's less demand for your products, some of your members are going to lose jobs. I'm not advocating that; I'm just trying to point that out.

Mr. Don Anderson: But our members are losing jobs right now. With the scrapping of the Auto Pact, or with whatever happened to the Auto Pact, we've lost some jobs down there. On the other hand, we're never going to grow coffee here. Someone has to grow the coffee for us. We're not going to grow bananas here. We buy those things.

I don't see a problem with trade, but it should be fair trade. I find that all the systems that have been put together aren't really doing it for consumers or the people. They're doing it for the benefit of the corporations that make these big bucks off it.

I'm sorry to harp on it, but Bill Clinton, when he was running for President in 1992, said that in the United States there was more wealth created in the 1980s than at any other time in history and that 85% of that new wealth went to 1% of the people. This is the guy who became President of the United States. He had it figured out. Of course, once he got elected, nothing changed. I don't think it went to 10% of the people. But think about it: 85% of all the new wealth went to 1% of the people. There's something wrong there.

Between my wife and me--we're fortunate and have reasonable jobs--we make over $100,000 a year, and I understand that throws us into the top 1% of earners in the world. I'm in there with Bill Gates.

The Acting Chair (Mr. John Harvard): I wouldn't say that.

Mr. Don Anderson: I'm up there with him, but there's a hell of a gap. I feel a lot closer to those making minimum wage because I understand what's going on in their lives. But if I'm in the top 1%, one of the richest people in the world or however you want to phrase it, wow! Would you want to live in Africa? What do they get, a buck a day?

If you want peace and security in this world, people have to have jobs, hope, education, health, clean water, and all those things. Some have it in abundance and others just don't have any.

The Acting Chair (Mr. John Harvard): So you would suggest, then, that our Prime Minister speak to those things at the G-8.

Mr. Don Anderson: I think our government, with their actions, has lost credibility on the world scene by doing whatever the Americans want us to do when they get into their little escapades and wars. We did it in the Gulf War, and I think we lost currency with the world population. We're losing it again.

I remember the stories about Americans going to Europe and sewing a Canadian flag on their shoulder because they were better off being a Canadian than they were being an American. I wonder if they'd be so anxious to do that now, and that causes me concern, because we were considered an honest broker in this world up until just recently. It's pretty hard to help people if they don't trust you. I would argue that our actions and our complicity in American actions have damaged us on the world scene.

Â (1200)

The Acting Chair (Mr. John Harvard): Well, Mr. Anderson, you've spoken passionately and eloquently. We thank you very much for your appearance today.

Mr. Don Anderson: Thank you very much.

The Acting Chair (Mr. John Harvard): This meeting is suspended until 1:30 p.m.

Á (1155)

· (1330)

The Acting Chair (Mr. John Harvard): Members, we're going to kick off this afternoon session with a presentation from the Saskatchewan Council for International Cooperation. Representing the council is Hamid Javed. He is the chair of the board of directors.

I gather you don't have a prepared text, but you will have some opening remarks, sir, and then we can have some questions and answers. So please proceed, and welcome.

Mr. Hamid Javed (Chair, Board of Directors, Saskatchewan Council for International Cooperation): Thank you very much, Mr. Chairman, members of the committee, and the committee staff. Welcome to Saskatchewan.

First of all, I would like to thank the committee for this opportunity for SCIC to make a presentation. If you are familiar with the situation in Afghanistan, and the language they speak, Pashto, I will say dari. If you are familiar with some of the other situations, I will say, in Urdu, khush amideed. If you understand Persian, you'll also understand this. If you are familiar with Punjabi, I will say, khair naal aawo.

We our proud of Canada's situation and position. In such matters, the Canadian leadership is a matter of pride for us. If you look at the agenda for the Kananaskis meeting, it is good. But Canada should not let the world's rich hijack the purpose of the meeting. If you look at the agenda item on promoting the global economy, of course we agree with that. If we are looking at building new economic partnerships for Africa's development, amen. If we are looking at fighting terrorism, by all means.

But we have a few questions we would like to bring out. We need to challenge ourselves, because we have some questions about the way we are going about it. As I said, the objectives and purposes are good, but the SCIC does have some questions.

In terms of the global economy, for example, the G-8 are the countries that are most developed. They are very advanced and sophisticated. But we wonder if the model by which the western industrial developed countries, the G-8 countries, fits all. So we have a question about that.

Of course, we should all remember the development of the west. Was it because of free trade? Or was it because of the situation at the time, over the last 50 to 100 years? Was it because of colonialism? Was it because of the control the west had over the rest of the world—in terms of exploitation and policies that could be imposed on the rest of the world? So we have certain questions about it.

We have a saying here, which is very easy for us to cite: a rising tide raises all yachts. One wonders what happens if somebody doesn't have a yacht? What happens to that person? Of course, they drown.

So these are the questions we need to ask. The so-called free trade model—or IMF, World Bank, or WTO model—is something that may have worked for the developed countries. One wonders if the way we in the G-8, the west, and international financial institutions are pushing globalization is the way to go, where everybody will come to the same or a similar stage, or at least move ahead from where they are.

In globalization in the developing countries we see these structural adjustment programs, for example. These are musts. The international financial institutions demand these programs. What do these do? When you talk to people in developing countries, they'll tell you they have been hurt by this model over the last 20 or 25 years. Their social fabric has been destroyed. There have been displacements. These programs haven't even given them economic benefits. It would have been worth making some sacrifice, as long as one could have received something in return.

When you look at the rules and regulations the international financial institutions are demanding, you will see countries like the European Union, for example, claiming to be paragons of free trade yet subsidizing their agriculture. This is actually resulting in the destruction of agriculture in developing countries. The basic principle is we should produce things and we should freely exchange them, so that everybody benefits in a most efficient manner. Then look at the United States. Is the way they are dealing with the steel trade, for example, free trade? Is the softwood lumber situation free trade? Or we can look at the situation in Saskatchewan recently with the special crops such as pulses, or at wheat in the past.

· (1335)

Everything has been challenged under the Americans' rules rather than under the rules of the agreement we all signed. There are some questions about the principles that affect us, and this is a problem we need to address.

The second point about the NEPAD, the new partnership for Africa's development, is that the initiative is good. There are excellent principles involved, and it was started by African leaders. Yes, we like that. At least it has brought the issues to the fore where the international debate is now going on, whether in the G-8 or other forums, and that's a good thing. But to my mind, that's the only good thing that has come out of it in terms of being an item on the agenda.

If you look at the objectives under NEPAD, the initiatives are peace, security, democracy, and political governance--very good. The economic and corporate governance initiatives are very good, as are those for bridging the infrastructure gap, human resources development, agriculture, the environment, capital flows, and market access. Now, these are very lofty and very noble objectives, but if you look at some of them, they are not under the control of African leaders or the African people. What we need to do is recognize these as being their needs and agree with that because of their need and our desire to have them developed.

Fortunately, the G-7 or G-8 leaders agreed last year that with these initiatives and objectives they will come up with an action plan out of the Kananaskis meeting. That's great, except that for all these at the African level, even though the Africans are supposed to take up the challenge at all levels of organizational structures, of mobilization, and of action--this is what the leaders are saying--it is only lately that the Africans themselves have started discussing it. What we need to do is start with something that is people-based, Africa-driven, and Africa-controlled and -owned.

Unfortunately, the way I look at it, what has happened in technical terms is that as soon as African leaders came to the G-7 or G-8 last year in Genoa to create this partnership and ask them for help and coming together, the G-8 leaders said, yes, great, that's a perfect objective and that's a great desire on your part; now we know how to develop, so just leave it with us and we'll take care of the whole thing.

But there are some concerns. For example, NEPAD is a starting point of discussion, but it's not at the local and national strategy levels and it's not about the concerns of the poor. It may be that a few leaders got together and started pushing and that the G-8 is running with it.

NEPAD's attention at this stage, as I see it, is not on African citizens but on the northern donors themselves. The development model is now donor-led and reflects the World Bank-IMF model, which has had a deleterious effect on Africa over the last several years, particularly from the structure adjustment programs that undermined the national economies in the past as they experienced it. It created excessive rates of poverty and gutted the capacity of African states to respond to the social needs of their people.

NEPAD, because of the northern partners, pushed itself into the World Bank's comprehensive development framework, which imposes measures that not only are detrimental to the poor but also endanger the national sovereignty of some of these countries. NEPAD's goals--poverty eradication, democratization, and human rights promotion--will not be achieved through technical and administrative moves. In other words, we can't get there from here the way we are going.

For that, civil society actors should be able to monitor their own government and demand accountability, yet NEPAD is silent on civil engagement. It gives insufficient attention to a rights-based approach for African development needs. The delivery of social rights, education, health care, etc., is seen as an access to services issue rather than as a right inherent in citizenship. Because of this talk about access to services, our interest comes in pushing for privatization so that our multinationals can provide these services, whether they're for health or education, for a fee. So it encourages privatization of social infrastructure, thus endangering those who cannot afford a user fee.

· (1340)

The gender analysis fails to address the gender politics and inequalities at the root of harmonization of poverty. It does not suggest the use of strength of women's organizations in Africa. If you go to their traditions, it's a very strong movement and a very strong social structure, except that our model does not recognize that.

NEPAD suggests measures for peace and security but does not include a commitment to respect international law and protect territorial integrity, national sovereignty, and minority rights. NEPAD's present document fails to deplore the double standard that we have shown that resulted in non-intervention in African wars. It does not address the problems of exploitation and illicit trade in natural resources--diamonds and oil and all that kind of thing.

It aims to achieve African integration into the current model of economic globalization. Yet many Africans have experienced impoverishment and loss of livelihood due to premature opening of their economies because of this model. The globalization and the demands for structural adjustment from the IMF and those guys demand that they open their market to the multinationals, but it does not push the G-8 countries to open the markets for what they produce.

Another problem we see is that its promotion of an industrial model of agriculture and rural development has certainly ruined the livelihood of many developing countries and their food security.

Its environmental initiative is very weak. It does not ensure that industrialization and energy projects will not harm the environment. It blames the environmental destruction on the poor for cutting the trees because they didn't have any fuel.

It calls for a new partnership, yet it does not ask for fundamentally reforming the global trade investment regimes or ensuring effective participation, transparencies, and fairness in the governance of multilateral institutions, despite the fact that African governments have suggested major proposals at the World Trade Organization for substantive reform.

African leaders have challenged the northern donors to reform official development assistance mechanisms and to meet the UN target of 0.7% of their GNP. No country has achieved that, and some of them haven't even come close yet.

Another problem is that the G-8 have indicated that they will target aid only to a short list of winners—whoever they are. NEPAD does not go far enough with regard to debt and does not call for full cancellation of debt owed by the poorest countries, even though they have paid back several times.

It also fails to de-link debt relief with structural adjustment conditions. The old model of economic development has failed Africa and its poor. It is imperative for civil society actors to be able to participate meaningfully in this debate and influence the outcome.

Our hope is that Canada will be our champion because those people will not be there at the table. We will not be there at the table at Kananaskis. Our hope is that Canada will bring these issues to the fore and convince its cohorts, the other G-7, to do the right thing.

I would like to refer here to what Dr. Molefe Tsele, General Secretary of South African Council of Churches, said in his statement to the Ministerial Roundtable of the UN International Conference on Financing for Development in Monterrey. He called on governments to stay engaged in African development. Don't do something today and run away from the consequences when the results come in. Do not repeat the past. Market liberalization has not worked in removing poverty. Market and globalization has failed two-thirds of the world's population who are in poverty. You need a new vision, not a role model. The third point he made was that debt cancellation must be made the basis for a new start—not tinkering with it, but total debt cancellation. And the fourth point he made was that an African renewal initiative should be Africa-led, Africa-driven, Africa-owned.

· (1345)

NEPAD is premature, in his view, because it is a partnership with African leaders, not with African people. So this is something we need to pay attention to.

In the case of the G-8, the immediate and short-term self-interest never leaves us, unfortunately, even if it hurts us in the long run. If two-thirds of the world does not develop, we will lose in the future, the G-8 nations and others with them.

Our greed has no end. We want to keep our standard of living and to raise it. If everyone wanted the same standard of living, we would need five to ten more planets like this one in terms of resources. Less than 15% to 20% of the world's people—and the G-8 nations are a major group in there—are using 70% to 80% of the world's energy and resources. The poverty and exploitation of others will not allow us the peace and security we want.

We also control the language. When someone kills us, it is terrorism. When we kill them, it is bringing law and order to the situation. We use this language in our history in Canada. Our books, until very recently, had examples of things that happened because of the aboriginal people doing something to the settlers here, and then the RCMP and those guys went to straighten things out.

Our arrogance blinds us to reality. Our way is the only way, we think. Crush those who cause what we call disruption and violence. Julius Nyerere said at one time that if you are disrupting trade with me, you are violent against me. He didn't use these exact words, but ones very similar to them.

We believe that ignorance, disease, hunger, deprivation caused because of our policies and actions should not bring about consequences for us. We raise these issues, the SCIC, because Canada may be the only hope for those who will not be there at the G-8, the poor of the world who have no choices, are powerless, are poor, without education, ravaged by disease, and robbed of their resources, rights, and dignity. Canada must challenge itself, challenge the G-8, and challenge the north to bring about justice, sharing of the earth's resources, and sustainability for the future.

Thank you very much.

· (1350)

The Acting Chair (Mr. John Harvard): Thank you, Mr. Javed.

I have one short question on debt cancellation before we go to Dr. Martin.

If the western countries, or the G-8 countries, cancelled all the debts, as you suggest--cancelled them all--would you, in the wake of that cancellation, resume loans and allow them to pile up again so that five or ten years down the road the countries would have to again cancel all the debts?

Mr. Hamid Javed: Mr. Chairman, with respect, I think it is an assumption on our part that the same thing will be repeated again. We do not know what happened to the previous loans. Where did they go? We were party to this in terms of providing banks that don't disclose, in terms of being in cahoots with the leaders and selling our arms and our goods and stuff.

So if the model is changed, if we change our perspective and stance, then we can be sure that the new set of loans will not end up the same way they did before.

The Acting Chair (Mr. John Harvard): That's fair enough.

Dr. Martin.

Mr. Keith Martin: Thank you, Mr. Javed, for being here today.

You're quite right that many people in Africa, the majority of them in fact, have suffered poverty and appalling health conditions and such. I would ask you to take a look at the situation in the Congo, where two million people have been killed in the last two years. Who is responsible for that?

Mr. Hamid Javed: All of us are. I am an animal scientist. I used to work with all kinds of animals. My experience was that if you crowd a rat colony too much, one that has been living normally and in peace, with enough space and established hierarchies and dominances, you will see a change in their behaviour. I think psychologists have done those tests.

Mr. Keith Martin I'm talking about the Congo, an area the size of western Europe.

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Mr. Hamid Javed: Exactly.

I'm not talking about physical space; I'm talking about the space in terms of social structures, in terms of economics, in terms of exploitation, in terms of how people see themselves, and the desperation they come to and the hopelessness that is there. It brings about reactions that you may not have because of your situation.

You're talking about the Congo. Talk about Canada. In our own country here, in Canada, where is the crime rate more concentrated?

Mr. Keith Martin: If I may interrupt you for a second, the situation in the Congo is about a group of countries that have gone into the eastern Congo and is pillaging the resources from the eastern Congo. The people who are benefiting from that are the leaders of those countries. The people have nothing to do with it. They're the ones who are simply paying the price.

You gave a wonderful analogy of yachts. There are a few people, big men in Africa with big yachts, and the little people in Africa don't have any yachts at all. So I would ask you, what would you do to alleviate the suffering of those people when it's a small group of people, Africans with big yachts, who are pillaging the resources of these countries for their own benefit?

You mentioned about intervening in African wars. I couldn't agree with you more, but how would you get the international community and the United Nations to intervene in conflicts before they happen?

Mr. Hamid Javed: That's a very good question. We see lots of examples where we have been very successful in what we wanted to do, in which we had our political will to put pressure.

For example, we talk a whole lot that we are for democracy, that we are for transparency and all that, and yet any dictator that comes along, if he or she is of our ilk, we accept that. In some cases we simply recognize them, and we trade with them.

So just as a simple question, what would happen if the western countries and the north did not trade with such leaders that you are talking about, if we did not recognize them, if we declare that they are nothing to us, that they do not exist? Where would they get their arms? They may kill other people with machetes, but you can't do that the way you can with bombs and stuff, with sophisticated armament.

So I think it's important that we should walk our talk, and there's where the influence and change will come.

For example, looking at what happened in the case of Afghanistan, they didn't attack anybody, but we heard that they were hiding or harbouring the people who did violence to us in New York.

When it came to New York, Canada became one with the States; and when it comes to the softwood lumber thing, they're a different country. We have a big border in between, but when it comes to wheat or when it comes to pulses, for example, we are two different countries.

So it's a question of how we see things and how we sidle up to whom and why.

Mr. Keith Martin: Thank you.

Do I have any time left?

The Acting Chair (Mr. John Harvard): Yes, you can ask another one.

Mr. Keith Martin: Mr. Javed, you spoke about food security. I bring to your attention the mass famine taking place right now in Zimbabwe, which will spill over into Malawi, of course. What's the cause of that famine?

Mr. Hamid Javed: Famine can be due to several causes.

Mr. Keith Martin: What's the cause of that famine?

Mr. Hamid Javed: It could be the lack of rain--and we have experienced that here in Saskatchewan and Alberta. It could be natural reasons, or it could be man-made reasons.

Mr. Keith Martin: What's the cause there?

Mr. Hamid Javed: I think it's a combination of several things.

I was reading something two weeks ago regarding the 1953 famine in Pakistan. I lived in Pakistan at that time. I was a young fellow and I didn't know this until I learned it two weeks ago, that there was no famine at all. It was a question of who had manipulated what and how they brought about a change in government in Pakistan. It wasn't Canada, for sure, I can tell you that.

Mr. Keith Martin: Sad to say, I would suggest to you, sir, that most of the famine is primarily due to political manipulation by leaders.

Mr. Hamid Javed: I agree.

Mr. Keith Martin: Zimbabwe certainly has something to do with weather patterns—there's no question about it—but the primary reason for famine in the latter part of the twentieth century and this century is due to political manipulation by leaders who are prepared to kill their own people for their own political gains.

Mr. Hamid Javed: I agree. They have our support, too. What did we do in Zimbabwe, for example? We didn't do anything.

¸ (1400)

Mr. Keith Martin: Exactly. We should have.

Mr. Hamid Javed: Yes.

Mr. Keith Martin: Thank you.

The Acting Chair (Mr. John Harvard): Thank you, Dr. Martin.

Now we'll go to Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Mr. Chairman. Thank you for your testimony, Mr. Javed. I have a few questions for you.

The first deals with your final comments regarding Canada and the hope that the country will be aware of representing the most disadvantaged people in the world, because in your opinion, Canada is in the best position to defend these peoples' interests, out of all of the countries sitting around the table. I'm surprised to hear you say this. When most of the people we have met with criticize Canada, they do so because they say we are too close to the Americans, too cozy or too much at the Americans' mercy and that we play along with them. Therefore, I would like to hear you explain your thoughts in light of this other point of view that exists. That is my first question.

Secondly, we know that the United Nations recommends that developed countries dedicate 0.7% of their gross domestic product to international assistance. I would like to know if you agree with that. Do you believe that is enough to meet the appalling needs of African countries, particularly concerning health? I would like to know if you are satisfied with Canada's behaviour in this regard and if you agree with the fact that, even according to authorities from International Cooperation Canada, 75% of the assistance granted to developing countries comes back to the Canadian economy. I would like to know if you agree with that or not.

I'm struck by a more general point listening to you. Is there not a huge pipe dream? Are we not in a dead end, in the sense that we are far from seeing the light at the end of the tunnel, because all the current ideology, with neo-liberalism, ensures that the world and the future belong to the private sector and to private interests, and that African development, like any good rational structure, should go through these governments? How can we turn to governments when the prevailing ideology means that we have to turn to the private sector, and that furthermore, the private sector in Africa is very very weak? Other than a few exceptions, it does not exist; there are only a few governments that are often weak, if not corrupt. Therefore, in my opinion, we are far from proceeding to a rosier future for the Africans, given present ideology and given the fact that the United Nations has almost nothing to say and it does not have sufficient moral authority. Those are my questions for now.

Perhaps you could also say something about the Tobin tax, if you wish. Perhaps you could tell us if you think that would meet some needs, if you think it would suffice and if you agree with it.

[English]

Mr. Hamid Javed: Yes, I am in agreement with the Tobin tax. I think it will help us a whole lot. It may not solve all the problems, but it will take out some of the things that are hurting not only the developing countries but us as well--for example, currency speculation and those things.

In terms of the private sector being small in Africa, that is true. That is why lots of those governments are influential and control quite a bit of their economy. As for the capacity of African countries to develop, that is why we are talking about partnership and their capacity. Where they don't have the abilities--either human resources or capital, whatever--we should be providing them, rather than pushing them into the lap of the private sector. We know the private sector, wherever it has gone, especially the multinationals, has hurt the local environment, the local economy, and the local social structure. So I think it's important that we play a role.

When some people say Canada is too dependent on the United States, etc., it reminds me of the days when we had Trudeau. Pierre Trudeau showed a very independent foreign policy, and in my view it did not hurt Canada in any way.

I think it's a matter of being bold and daring and taking action in terms of doing the right thing, and the recognition comes. For example, there is competition between the European Union and the United States, and we don't think the European Union is being hurt because it is opposed to some of the actions of the United States. I don't think we should worry about it, because the United States is also dependent on us in terms of future resources that it needs, plus all the political support it gets from us. It should be a partnership of mutual benefit, rather than us thinking we are very small and almost negligible in our strength and power and that we should just simply follow the American example.

¸ (1405)

[Translation]

Mr. Yves Rocheleau What do you think of the United Nations' suggestion that 0.7% of GDP be devoted to development assistance compared to the Canadian attitude that 75% of the aid granted come back to the Canadian economy?

[English]

Mr. Hamid Javed: I think we should de-link the aid we give. Again, we call it aid even though very little of it is grants. Most of it is loans. If we put with it that they should purchase their goods and services from us, of course, 75% comes back. If we are sincere in helping developing countries develop, then we should do whatever we can to allow them some freedom to get the benefit of their actions and to meet their needs from wherever they can. For example, if we haul our food to the far-off countries in the world just because we have a surplus of it and we are aiding them, I don't think that's a fair thing. We should be looking for our markets somewhere else, rather than selling it to people who are short of food because we gave them loans in order for them to purchase from us. I don't think that is a good policy.

[Translation]

Mr. Yves Rocheleau: Last week, we welcomed seven ambassadors from African countries to Ottawa, who came to meet with the committee. One of them stated that if the developed countries bought African goods, this would more or less settle all of Africa's problems. Do you agree with that, as a person who works in the field of international cooperation?

[English]

Mr. Hamid Javed: I don't think all their problems will be solved, but the major difficulties will be removed if there is trade whereby they can sell things to us that they produce and we sell to them what we have; for example, technology and goods and services. So they may not be 100% correct. This is basically our principle. This is what we always talk about. When it comes to trade, the freer it is, the better it is for everybody to benefit. If they're asking for trade, then they are buying into the principle that we very much believe in. Trade has to involve both sides. You cannot do trade from one side. So I think they are right in that portion.

In terms of Canada's record in relation to the UN's goal of 0.7% of GNP, I think we were moving in that direction very well during the 1980s, and then in the latter part of the 1980s and in the 1990s we just went down, which is the wrong thing to do.

The Acting Chair (Mr. John Harvard): Thank you, Mr. Rocheleau.

I have a couple of questions, Mr. Javed. I would agree with you that the model that has been somewhat successful for countries such as Canada may not work that well for, say, African countries. I accept that. It has also been said that we should hesitate to tell African countries what's good for them. Whatever our aid package is, whether it be $50 billion, $100 billion, or $1 trillion, what would you say if we just said “Here's the money with no strings attached, you know what's best for you, we won't interfere, and here it is”? Would you accept that, and if not, what kinds of strings would you attach?

Mr. Hamid Javed: Mr. Chairman, I will tell you, I would not attach any strings other than our technical know-how.

Your question reminds me of an example that happened in either Guatemala or somewhere in Central America. This was a story related by one of the workers on one of our projects. He was part of the group, and of course they wanted local initiative; they wanted the villagers to get together. He came back and said, “Well, what do you want to do?” In this development worker's view, what that village needed was a school; then number two should be a hospital, and number three something else, and then something else.

Somehow those villagers--and he said he couldn't understand it in the beginning at all--wanted a small runway for an airport. He said for the world of it, he couldn't understand what the heck they would do with a runway. Of course, there were no roads in that area and stuff like that, so somehow they thought that connection or contact with the rest of the world was very important to them, even if only two people per month came to their place.

He said of his experience in that country and that place and that village after two or three years--even though he didn't understand why they had wanted it--he had found out they were right. Now, they didn't have PhDs and they didn't have all kinds of things, but they knew what they needed and what was important to them. He agreed, “Okay, we'll have a runway.” So they smoothed out a place. And he said that in three years they had all the things he thought they should have, because of the people coming in and going out and all kinds of things happening

To me, this is the nascent intelligence and wisdom of those people, or maybe wisdom of generations. They wanted that.

¸ (1410)

The Acting Chair (Mr. John Harvard): Well, you're talking about the good guys, but in some of those countries, if not all the countries, there are some bad guys—

Mr. Hamid Javed: Correct.

The Acting Chair (Mr. John Harvard): —and it's sometimes difficult to skirt the bad guys. It would take an enormous amount of trust to believe for a moment that you could get around some of those.... And I'm not trying to be disrespectful of Africans; every country has its fair share of bad apples.

Let me ask you this, though, on the debt cancellation—again maybe talking about good guys and bad guys. I hate to make suggestions that really would impact on the poorest of the poor, but if you're talking about debt cancellation, would you cancel the debts of those countries where the leadership has been just terribly irresponsible?

Mr. Hamid Javed: I think all of these things are linked, and it's important that we are aware of those links in terms of where you cancel and where you don't. I think, in theory, we do say we will take into consideration how open a society is. In theory we say that, but we don't act on it; we simply look at things from our perspective.

Again, who decides who is a good guy and who is a bad guy? We look at it and we may be perfectly honest and perfectly correct in identifying the bad guy, except that in our experience in the past our self-interest came into it, so the decision from our viewpoint may have been very honest and very up on the table, but we made mistakes because of our view of things and our perspective and views in looking at good guys and bad guys.

I think what we need to do in this case is help the people make their own decisions as much as we can and let them decide who's the good guy and who's the bad guy. I'm very sure in our history we went through the same thing. We didn't have all the good people. Slowly and gradually, over the years and decades, we got rid of our bad guys. Even now, if we come across some bad guys, the next time we take them out.

So it's a question of having a choice. The ability to do things, though, I think is where we can help them have that ability to take such action.

The Acting Chair (Mr. John Harvard): What about the measures of accountability we should have in place for ourselves and particularly as a member of G-8? The G-8 countries have fallen short with respect to some of their promises, and I suspect that in Kananaskis they're going to make more promises, be it NEPAD or anything else. What would you implement as a way of accountability to force us to live up to our words?

¸ (1415)

Mr. Hamid Javed: To me, Mr. Chairman, the accountability, or forcing us to do what we say when we make our promises, will be a realization that we are not doing it as a favour to anybody; we are also doing it for the long-term security of our own selves. If there is chaos in the world, if there is famine and if there are all kinds of wars and stuff like that, we will not be insulated from that. I think a good motivation for us should be that we are doing it for ourselves. We are all in it together.

The Acting Chair (Mr. John Harvard): You may have already answered this, but just so we're clear, with respect to the aid Canadians give to Africa and with respect to any more aid we provide, be it through or as a result of NEPAD or whatever, what do you think is the priority we should embrace to ensure that aid is as effective as possible?

Mr. Hamid Javed: I think that should not be very difficult. It will be a slow process. Again, there has to be consultation and allowing them to be partners rather than receivers or takers of whatever we decide. We have to get off our high horse of arrogance that we are developed so we know what development is. I think that is recognizing that all human beings have all the characteristics and capability that we do. We may have had a good chance in the past or in the future. I think it's important that we recognize that.

Unfortunately, as human beings, we are beings of contradiction. On one side we want to control our environment, other people, etc. At the same time, we don't want to be controlled at all. So on one side we want to do it, and on the other side we resist that. Those problems simply need the recognition that others have capabilities and skills and wisdom to make decisions. Whatever we do, we do it for ourselves. We believe a collective decision is always better than one person making a decision. That's why we don't go for dictatorship.

In our political system we don't like dictatorship. We abhor it and we get away from it, and yet in our other activities, we kind of accept it and go along with it, when it comes to this.

The Acting Chair (Mr. John Harvard): It seems to be a part of our nature to want it both ways.

Mr. Javed, this was very interesting and I thank you very much.

Mr. Hamid Javed: Thank you very much, Mr. Chairman.

The Acting Chair (Mr. John Harvard): Your coming here was most appreciated.

Mr. Hamid Javed: I just wanted to show this when we talk about... This is Heifer International. It's an organization started in 1944. They don't do big things. They don't build dams and stuff. They simply give small livestock, whether it's a goat or a cow or whatever, to individuals, families, and communities all over the world, in about 128 countries. They have had over 24 million people in 128 countries. From our point of view, from Kananaskis, they may not have done much, but they have alleviated hunger and poverty, not totally—they don't meet in rooms like this—but they have given them a minimum of things. They are not going hungry. They are making their own decisions. Another thing they have taught them is that the receivers are obligated to share the offspring of these animals with others, with the next family and the next village.

Thank you very much.

The Acting Chair (Mr. John Harvard): That's a good story. It makes life worthwhile to hear those kinds of stories. Thank you again, Mr. Javed.

Voices: Hear, hear!

The Acting Chair (Mr. John Harvard): Now I'm going to call representatives of the Estey Centre for Law and Economics in International Trade. We have two gentlemen.

You may take your seats, gentlemen. William Kerr is a senior associate, and Wayne Robinson is director of marketing and professional development.

Thank you very much. Who's going to go first? Robinson or Kerr?

¸ (1420)

Mr. William Kerr (Senior Associate, Estey Centre for Law and Economics in International Trade): I'm going to speak. Wayne and I will share the questions.

The Acting Chair (Mr. John Harvard): All right. Wonderful. Thank you. We have as much as 45 minutes. Please proceed.

Mr. William Kerr: We have a prepared statement. Should I proceed with it and then the questions?

The Acting Chair (Mr. John Harvard): Sure. Just proceed with it and then we'll go to questions.

Mr. William Kerr: Just to clarify, I should mention that I am also a Van Vliet professor at the University of Saskatchewan. It's an international trade professorship. I'm with both the Estey Centre and the University of Saskatchewan, but I'm here really for the Estey Centre because they received the invitation. I'll stick pretty close to the script, and if I'm going too fast for translation, please let me know.

The Estey Centre for Law and Economics in International Trade is located in Saskatoon, here in the heart of Canada's most successful trading province, and it has a network of associates located throughout the country, especially among the dynamic international trading community that is constituted in western Canada.

The mandate of the Estey Centre is to build trade capacity in Canada through research and education. The Estey Centre believes that only through independent analysis and the investment in human capital required to develop international expertise can informed debate take place on the complex issues surrounding international trade and other aspects of international commercial, social, and political relationships, including Canada's North American relationship. That's what we're here to talk about today.

Canada's trade relationship with the United States and Mexico is defined by both NAFTA and the WTO. While NAFTA is clearly the more important of the two, in recent years I think the WTO has exhibited an evolutionary dynamism that is largely absent from the NAFTA. This is because the WTO has built-in mechanisms that foster ongoing negotiations, while the NAFTA appears increasingly like a one-shot arrangement that will require a major political effort to extend to further deepen the commercial or social or political facets of our relationships with Mexico and the United States.

I would suggest that currently there seems little will in the U.S., or for that matter in Canada, to move trade relations toward a further deepening of economic integration, which in part may be because the full adjustment to the changes brought by NAFTA have not yet been accomplished. So we're still in considerable disequilibrium because of the NAFTA.

In addition, I think all three economies are being forced to accommodate the significant technological changes that underlie the process of globalization, which, while it brings considerable benefits, also requires painful adjustments by some sectors and individuals. That's why radical departures from the North American status quo, such as the creation of a customs union or a dollarization, are topics of debate. Improvements to the relationship in the intermediate run will probably hinge on whatever progress can be made to the WTO, the negotiations surrounding the creation of the free trade area of the Americas, or specific bilateral or trilateral negotiations on particular issues.

Any change in an international trade regime creates winners and losers. Typically, winners are consumers, widely dispersed, and their gains are small. On the other hand, losers may be concentrated in certain industries, professions, or geographic areas. As a result, losers are likely to be more vocal and better organized than winners.

On balance, there seems little doubt, however, that the Canadian economy and Canadians have benefited enormously from the trade liberalization embodied in NAFTA. But it's almost impossible to prove. This is because there is a very long adjustment process that takes place when you put in a major trade liberalization like the NAFTA, and there are clearly a multitude of other major changes going on in the international economy that buffet an economy.

It's not possible I think to isolate those changes arising simply from the NAFTA liberalization. It's beyond the capabilities of economic scientists. I'm an economist, and I think most of us would agree.

As a result, it allows the proponents of trade liberalization to inflate the benefits, and at the same time it allows opponents to overestimate the costs. So you get a very acrimonious debate and there's no real way to sort it out.

One thing is clear I think in terms of the NAFTA. When the precursor to the NAFTA, the Canada-U.S. Trade Agreement, was being negotiated, the real benefit that was hoped for was that Canada would be able to retain the access to the U.S. markets that already existed in the face of rising protectionism in the U.S. Congress, although that's not how the agreement was sold.

That goal has been accomplished. While the removal of trade barriers has allowed some expansion of trade, the real benefit to Canadian trade has come from the increasing surety associated with the trade that was already substantially free prior to the CUSTA/ NAFTA. The former guaranteeing of existing market access has led to increased investment in NAFTA-related activities by both Canadian and foreign investors. The most important thing I think that came out of NAFTA and CUSTA was that we actually kept what we had. Any expansion has been gravy.

We must also remember that trade agreements are a set of rules for the conduct of trade and other aspects of commercial relationships and nothing more. They don't bind countries into giving special consideration to the needs of their trading partners or to take account of their trading partners' sensibilities when setting domestic policies. I think one often senses that Canadians feel some unspoken covenant has been broken when trade disputes such as those pertaining to softwood lumber or U.S. farm subsidies arise as a result of domestic U.S. actions--in other words, that somehow or other the U.S. should be more endowed with a NAFTA spirit. That's simply unrealistic.

Trade agreements are political compromises between the need at times to be able to respond to requests for protection from those suffering from short-run economic hardship or long-run deterioration in their international competitiveness and the desire of firms that wish to engage in international commerce for strong rules to protect their investments from some capricious acts of foreign governments. The NAFTA is such a compromise.

Despite the detrimental effects of unilateral U.S. actions, the Americans tend to live within what has been agreed in the NAFTA or the WTO. Of course, there will be disagreements about whether the rules are being abided by, but that is why there are dispute mechanisms. The U.S. and Mexico tend to abide by the rulings of dispute panels.

Of course, one can always hope to improve the rules. However, given that NAFTA lacks a renegotiation clause, attempts at improvement are really forced to take place within the WTO. For example, the U.S. has agreed to negotiate on dumping at the next round of WTO negotiations--and of course dumping is at least at part of the heart of the softwood lumber problem--and there are ongoing discussions at the WTO on farm subsidies.

Trade negotiations pertain to the long run. In November it was agreed that there will be a new round of WTO negotiations. These negotiations will stretch well into the latter part of this decade, despite optimistic deadlines for a mid-decade conclusion, and will be followed by a decade or longer phase-in.

I think sometimes that those aggrieved by some current trade action think that trade negotiations should bring them some relief. This is not realistic. If one can use an analogy from hockey, trade disputes are like a referee's call under a contentious rule. The call could certainly affect the outcome of the game, as in softwood lumber, but no amount of protest or acrimony will lead to a change in the rules for this particular game. New rules can only be negotiated for next season by the league as a whole, hopefully with the idea of making the entire league a more viable operation. This is the role of trade negotiation--it doesn't solve short-run problems.

So what's the bottom line for the current North American relationship? It's probably about the same as what should be expected from a trade agreement. Without the political will to move to an arrangement with a range of common institutions and policies, and with the limitations of sovereignty that they would impose, there can only be marginal improvements. It may be possible to reduce the threats to market access proposed by contingent protectionism mechanisms such as dumping and countervail, and maybe some further limits could be placed on things like farm subsidies, but probably not a great deal more. This means that at times trade relationships will be strained and Canada must be vigilant and prepared. It's not always going to be friendly.

Canada is the most successful trading nation of the major developed economies. Our expertise and research capacity to deal effectively with complex trade issues, we think, however, is often overstretched. Whatever expertise we have is concentrated in a few government departments, perhaps a few large law firms, and some academics and some universities. Canadian firms have little expertise in these areas. Further, Canadian investment in education and training in these areas is miniscule and uncoordinated. This means that rather than being vigilant and prepared, at best we are reactive and present arguments that are not fully developed. Often we must rely on foreign experts to prepare our cases.

Our experience suggests that being proactive in presenting solutions on trade problems would often carry the day, that in the long run solid arguments win out over those that are flawed, and that having competent people on the ground in international organizations yields good results.

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While the people Canada can currently field are often excellent, they are too few and far between and have too little support and resources. So our ending would be that to maximum the benefits from the NAFTA-based relationship we have with the U.S. and Mexico, Canada needs to expand its capacity to deal with trade issues; otherwise our partners are sure to gain at our expense.

Thank you.

¸ (1430)

The Acting Chair (Mr. John Harvard): Just before we go to Dr. Martin, could you expand on that last sentence? “Canada needs to expand its capacity”--what do you mean by expanding capacity?

Mr. William Kerr: For a country that is so trade-successful and therefore so trade-dependent, we're very short of expertise in this country about trade. I'm in the education business. I know how little is put into the particular kind of education that builds international trade expertise in economics or in business or in law. What I see quite often is that what little expertise we have is very stretched, particularly in government, and that probably we don't make as good arguments at international trade negotiations or in international trade disputes as we could. Further, we are quite often dependent on going, say, to Washington lawyers to actually prepare the cases we have to make.

So I think we probably under-invest in these things.

The Acting Chair (Mr. John Harvard): Doesn't trade abhor a vacuum? If there's a vacuum there, will something not come in to fill it?

Mr. William Kerr: I've been doing this for 20-odd years, I guess, and I don't see the vacuum being filled.

A voice: Are you alone?

Mr. William Kerr: I'm sometimes very frustrated, I guess, because I think we could do better.

I can only go somewhat on my own experience. Before I came to Saskatoon three years ago, I was at the University of Calgary for 20 years. We had a professional management program in Calgary that catered--and this was in economics, not in business--largely to oil executives. I introduced a course that dealt with trade agreements and trade disputes, and I think those mid-life executives thought this was something they really found valuable and really wanted to learn.

There are, in actual fact, very few such courses, much less degrees or research establishments or anything to deal with international trade.

Wayne may want to comment.

The Acting Chair (Mr. John Harvard): Mr. Robinson.

Mr. Wayne Robinson (Director, Marketing and Professional Development, Estey Centre for Law and Economics in International Trade): In Canada, unlike the United States—where every time an administration changes, the trade policy expertise in that institution changes, and those people who have gained valuable expertise in international trade negotiations move into the private sector and private sector people move into the administration—we don't work like that. Our trade policy expertise, by and large, resides inside the Department of Foreign Affairs and International Trade and scattered through one or two other departments.

The capacity for those people to do any forward-thinking research is pretty limited because they're so busy putting out fires. The whole field of trade policy has moved from one in which we were negotiating the reduction of tariffs in the GATT into the WTO, where we're negotiating very complex rules and regulations for governing trade.

Our capacity in Canada to do any kind of forward thinking is limited, as Bill said, to a very few universities and a couple of research facilities. There are only two research facilities I'm aware of in Canada that actually focus on international trade policy. One is the Centre for Trade Policy and Law, in Ottawa, which is a part of two universities, both the University of Ottawa and Carleton University; the other is the Estey Centre. We're only two and half years old and we're independent. We're not associated with any university at all.

As we move into North American integration, as we move into negotiations on the free trade of the Americas, and as we move toward the WTO, I think there has to be more independent research done, more forward-thinking research done, by other than government and people within private sector associations.

The Acting Chair (Mr. John Harvard): Mr. Martin, thank you for your patience.

¸ (1435)

Mr. Keith Martin: Thank you, Mr. Harvard, and thank you, Mr. Kerr and Mr. Robinson, for being here today.

This morning we heard from David Orchard, who suggested that we remove ourselves from NAFTA and go back to the rules that predated NAFTA, that we were better off at that time. What would your response be to that comment?

My second question is, how do we ensure that we have a better rules-based mechanism to ensure that Canadian traders and Canadian exporters are able to compete with the United States in that we have an improved dispute resolution mechanism? Should we rely on the WTO? Does the WTO's dispute resolution mechanism need to be improved? How do we level the playing field and ensure that we have a rapid, expeditious resolution to differences between our countries in terms of trade issues?

Mr. William Kerr: It would seem to me, in responding to the first part of your question about whether we should withdraw from NAFTA and go back to what we had before, that, first, it's not possible because what backs up the NAFTA, of course, was the GATT, now the WTO. So that's greatly changed.

Certainly the WTO has been much strengthened from the GATT that existed when we negotiated the NAFTA, but having said that, we are a very trade-dependent country--whether that's going to be trade dependent with the United States or trade dependent with other countries--but right now, and for the foreseeable future, most of our trade success is going to come in the United States.

What the NAFTA does, more than anything else, I think, is ensure that we have consistent surety of access into the U.S. markets. I think it's stronger than what can be provided at the WTO, and I think this is the most important thing. I think NAFTA didn't live up to expectations as much as we would have liked, although in hindsight we should have expected this.

There is no renegotiation mechanism in the NAFTA at all, so we can't go forward, and it certainly appears that it's been a one-shot deal. Whatever we got out of the NAFTA is it, and if we're going to go forward elsewhere, we have to go to the WTO or maybe see whatever comes out of the FTAA. I think we did well to get what we got; we have pretty good security of access, notwithstanding that there are going to be disputes like softwood lumber, but that's all within the rules we've negotiated.

In terms of the other question, I think it comes back a little bit to what Wayne was saying, in a sense, that we need to be putting.... The way you make progress in international trade negotiations, as far as I'm concerned, is to be one of the countries that puts forward very strong, well-reasoned ideas for improving those trade agreements. I think 20 or 30 years ago we were probably a lot better at doing that, and more able to do that, than we are now. This is partially because they were then largely questions of taking down tariffs, and now we're having to talk about how do we regulate international trade in biotechnology, or how do we regulate all sorts of biological products or e-commerce, a whole bunch of these things that are really much more complex issues that come back into domestic policy and conflict more with domestic policy than just taking down tariffs did.

I think we may have more total expertise to cover that broad base, but it's spread a lot thinner now. For instance, the United States has agreed to negotiate on dumping at the WTO. I think Canada should be there with an extremely strong positive proposal and say, this is how we should fix this. But we don't, right? Our people do very good work, but they're overstretched.

Mr. Keith Martin: So I take it from you, Professor Kerr, just to reiterate, that we need to be proactive; we need better institutional competence in these areas. It means redressing issues within our educational system to buttress programs to give us the trained individuals to do this.

I want to get back to Mr. Orchard's comments, because there are people who were here this morning, and some are still here today, who found his arguments extremely attractive in terms of going back to the way it was before the NAFTA. He believes the NAFTA has actually compromised our trade.

You're an expert in this. You both are. What would you do again in the future in terms of enabling our Canadian producers and traders to be more competitive with the United States? Does that involve a reduction in taxes in Canada, a removal of rules and regulations, or the buttressing up of our education system? What do we need to do to improve our competitiveness, which will address our Canadian dollar and hopefully strengthen it?

¸ (1440)

Mr. William Kerr: Basically, I disagree. I think we are the most successful trading country. We're very successful in taking advantage of NAFTA, so I don't see it as a big problem.

Mr. Keith Martin: We're more so now than we were 20 years ago?

Mr. William Kerr: I think so, yes. Our exports are up considerably. When you export more, you're always going to import more. I don't think you can make all sectors more competitive. Changing trade and changing competitiveness are going to create some winners and some losers.

On balance--although right up front I say we can't prove it because it's so complex--we've done very well out of NAFTA, and I think the figures prove it. I don't think we're uncompetitive; we do very well. We're always going to have some industries that lag behind, but in general we're doing very well.

Mr. Wayne Robinson: I don't know of an industry that's ever become more competitive by hiding behind a tariff wall, or any kind of wall. The way you become competitive is to compete in the world markets. You have to have competition to make you more competitive. NAFTA does that, and the WTO strives to do that. Going back to where we were before, paying high tariffs going into the United States, would be a giant step backwards. I don't understand the reasoning, personally.

Mr. Keith Martin: I would agree with you. I'm basically asking a question from a point of view that found a great deal of attraction with the audience that was here this morning. This is an effort to give experts an opportunity to counter the arguments Mr. Orchard was putting forth this morning.

Mr. William Kerr: When you enter into an international agreement, you may temporarily have to give up some of your sovereignty, but you can always bring it back. These are voluntary organizations. We can abandon NAFTA if we want to.

Mr. Keith Martin: Some would argue we'd be better off by abandoning the NAFTA.

Mr. William Kerr: Then we'd fall under the WTO rules, which have changed significantly since we negotiated NAFTA. The WTO rules do not provide us with as much security of access to the U.S. or Mexican markets as the NAFTA does. NAFTA also clearly gives the U.S. some security of access to our markets, and if they're competitive.... There are questions of relative subsidies and so forth, and those we clearly need to address.

Mr. Keith Martin: A group of farmers were here this morning, and they said that subsidies are not the issue for competitiveness for our farmers. They said that what they need to do is have better control, involvement, and access to ownership in the change from resource--say, canola--to the end product.

Mr. William Kerr: I think there's an honest subsidy issue in terms of who expects to get the value from what we would call the supply chain. Certainly, if you own the whole supply chain, you're going to extract the value.

Mr. Keith Martin: There are no obstacles to that, to your knowledge? Canadian farmers can, if they want to, mobilize and get control over a greater part of that supply chain.

Mr. William Kerr: That's right.

It's very interesting. Look at Denmark--and I don't want to carry this off somewhere. Denmark is the largest hog exporter in the world. Denmark is this tiny country sitting in northern Europe with no natural advantages. Their farmers have basically had to develop cooperatives that own that whole supply chain.

They have high costs in Europe--high labour costs, high land costs, and high feed costs--and they beat us to death in the Japanese market. Those farmers have that thing very well organized, and they extract the rent. But it's all done privately. It has nothing to do with the government. So yes, it can be done. There are examples of farmers being able to mobilize.

The Acting Chair (Mr. John Harvard): Thank you very much.

Now we're going to move on to--

Mr. Wayne Robinson: May I just make a couple of comments on the two questions that were asked? I'll be very brief.

With respect to NAFTA and going backwards, one of the things we have to realize is that the next round of WTO negotiations may fail. They may not go forward.

If that's the case, then we're going to be negotiating among trading blocks, the EU, APEC, certainly North America, and perhaps North and Latin America. If we're not in one of the those trading blocks, we could lose out significantly. I think there's an advantage in anticipating that the WTO may not go.

On the supply chain for farmers, before I came to Saskatoon a year and a half ago, I spent the last four years in the upper midwest. I was a senior trade commissioner at the Canadian consulate in Minneapolis. We covered Minnesota, North and South Dakota, Montana, Wyoming, Colorado, Nebraska, and Iowa in that territory. Those farmers made the same point. They're getting the subsidies, thank you very much. But they made the same point about the supply chain and not being held hostage to the large farm suppliers and processors.

Thank you.

¸ (1445)

The Acting Chair (Mr. John Harvard): Monsieur Rocheleau, go ahead.

[Translation]

Mr. Yves Rocheleau Thank you, Mr. Chairman.

Thank you for your testimony, Mr. Robinson. I would like to ask you two questions.

First of all, I find that your view of the situation is very positive and uncritical compared to the anguish, anxieties and frustrations that so many witnesses have expressed. I find it quite revealing that you yourself did not bring up the issue of American subsidies. It seems to me that the American government intervenes in many sectors, going against what they themselves have said, saying one thing and doing another. The issue of subsidies is a good example, particularly as regards agriculture. I'd like to know what you think of the American Farm Bill, which worries a great many of your fellow citizens here, in the Canadian west. That is my first question.

Allow me to make a few comments before I move on to my second question. You stated that there will be winners and losers with the new international trade system. You also talk about painful changes to come. You feel that the winners are often dispersed and that their gains are rather modest, whereas the losers are concentrated in a certain number of businesses, professions or geographical areas and that, as a result, they are noisier, better organized and more listened to.

I'm surprised to hear that kind of statement, because we know how the winners... When we talk about winners, I think of the president of Enron or the former president of Nortel. They are the winners. When we are aware of the role played by academics in general, by journalists, lobby groups, chambers of commerce in particular and also taxpayers, who are always tired of paying taxes while systematically forgetting about all the services they receive from the government, that is to say society, I'm surprised to hear such a speech at this point in time, with the problems that we have. There is a worldwide review that is happening, particularly since September 11—perhaps less so in the United States because the wound is still too fresh—which allows us to question the danger of thinking with a one-track mind, that is to say one that looks only to money and profits, period, as if there were no other concerns in the world. In developed societies such as ours, it's the role of the state that is called into question as well as the presence of social programs that assure some kind of balance and a fairer distribution of wealth. In fact, that's what differentiates North America from Africa or South America. There, they have neither social programs, nor a middle class as we have here, nor unions. All of this is called into question, and all of this is found in a state that is respected and, let us hope, respectable. How is it possible that we are content to discuss mechanisms?

[English]

If one can use an analogy from hockey, trade disputes are like a referee's call under a contentious rule.

[Translation]

In the case of the Americans, I consider that there is no referee. They are constantly both judge and defendant and they impose their rules of the game. I'd like to hear your comments on that, sir.

Thank you, Mr. Chairman.

¸ (1450)

[English]

The Acting Chair (Mr. John Harvard): I know that Mr. Rocheleau has given you a lot to talk about there, but we're really crushed for time, so I'm going to ask you to try to keep your answers as compact as possible. Thank you.

Mr. William Kerr: First, to respond to the question about the farm bill, you're quite right that although the Americans and lots of other countries say they don't like subsidies and they like free trade and all those kinds of things, they don't necessarily practise what they preach.

On the other hand, I think it's fair to say that in terms of greatly increasing their subsidies, which is going on now, the Americans are still largely, and probably wholly, within what they have agreed and we have agreed they can do at the WTO. So if they are indeed in excess of that, we will take it to the WTO and we will win. And there is a referee.

In terms of the relative size of the subsidies, in Canada we are way under in our commitments under which we could, if we wanted to, play the subsidy game and increase our subsidies without running into the WTO constraints. We could increase them significantly, multiples of what we do now. So I don't think anybody is particularly breaking the rules.

To respond to your other points, it seems to me that the reason we have international trade agreements is to protect us as best as possible from the capricious acts of other governments. In other words, Canadian firms that think they have a competitive advantage and can export somewhere will go out and make a large investment to try to capitalize on that investment, and if governments can act at will, basically, to close off the access they thought existed, that would be extremely detrimental. That's what trade agreements are about.

From my experience, I don't think that trade agreements, whether it's NAFTA or the WTO, have led to any significant problems, such as less unionization, the withdrawal of government from whatever, or the dissipation of social services. I don't think that in any of the agreements we've had to give anything away. That's just the way I feel about it. There are lots of other things that are buffeting the world, largely technological change at the moment, and that are much more pervasive--what they call globalization--than anything that's going on in a trade agreement. That's my short answer.

The Acting Chair (Mr. John Harvard): Did you want to say something, Mr. Robinson?

Mr. Wayne Robinson: No. In the interest of time, I think he has answered for both of us.

The Acting Chair (Mr. John Harvard): Thank you very much.

And in the interest of time, I'm going to forego my turn. I normally like to ask some questions, but it's Friday afternoon and we're really pressed for time, so we're going to move on.

Thank you, gentlemen. It's much appreciated.

Now we are going to go into the last lap, and we have three individuals: Mary L. Day; John McConnell; and Trevor McKenzie-Smith, who represents Oxfam. Please come forward.

I'll share with you a piece of information. I know that all of you have written texts, for which we are appreciative. I would suggest, though, that you avoid those written texts as much as possible for the sake of time. We're going to have to close this off at the bottom of the hour, which is 3:30. We have no choice. I have a plane that leaves at 4:20, and I'm cutting it very close. It would be nice to have at least a couple of questions, so act accordingly. But that's how we're going to do it. So we have 40 minutes for all three of you.

Do you want to start, Ms. Day?

Ms. Mary L. Day (Individual Presentation): Well, you catch me up short, but perhaps I'll make a few comments here.

I appreciate, Mr. Chairman and gentlemen, the fact that you fit me into a very busy afternoon. I have a lot to say, as you may have gathered from the brief that I submitted and that I hope you might look at.

¸ (1455)

The Acting Chair (Mr. John Harvard): And we will certainly. Your entire brief will become a part of our file.

Ms. Mary L. Day: I might then address other issues. You may notice that in my paper a great deal is said about economics. I've had a very expensive education at Saskatchewan, Toronto, and did doctoral studies at the university of London, England. I've taught in the philosophy departments of McGill and the University of British Columbia and now here for the last 20 years. So I've had a fairly expensively financed education, but I wish to speak as a garden variety, prairie housewife, if you will, on behalf of citizens who have an immense capacity to think. I've discovered in my dealings with grassroots citizens that they often are very considerably ahead of some of our government managers, and I say that with as much respect as I can muster.

Now there are two things in this world that we could deal with. One would be power and the other is reason. Because I'm committed to philosophy and love my discipline and worship old man Socrates, reason means more to me than raw power. In fact, I think if we reckon that might makes right, we don't believe in right at all. We now have people who worship power, which of course is represented by money. We have people who respect it, we have people who withdraw in horror from it, and we have those who are contemptuous of it. I'm afraid I fit into the latter category. Along with old man Socrates, I see the raw exercise of power to be something really reprehensible and I find it to be undemocratic.

I also would like to say that in my view economics has become the state church at which we are all expected to worship. Economists are our high priests. Economics has infiltrated every aspect of the common person's life. Instead of saying their prayers at night, people now go over their bank balances and total and tote up air miles and watch for the Dow Jones industrial averages and so on, instead of whatever things they used to do. There isn't a single person who gets by without having the monster of what's called the economic reality rammed down their throat.

I do not happen to believe in this reality, and I think it has no more reality than we choose to give it. As it happens, I feel that our government representatives have actually let us down by bowing to this form of power.

My issues raised here are an attempt to address the assumptions that go right through these points one to five of your key issues and questions. You may remember that this morning Mr. David Orchard also nailed you on the level of assumptions, and I would agree with him there that the assumptions are all wrong. It seems as if these are the aspects of our thinking that we are simply unwilling to address--that the assumptions are all wrong. That would be the substance of my brief, in short.

I've also mentioned in here.... I know Dr. Adamson this morning made a great long list of terrorist activities on the part of the American government. It's interesting that he covered those. The one mention that I had made here is of East Timor in 1974, when Canada stood by and watched the slaughter because the Indonesians were such good business partners. That's the level of courtesy I have no respect for.

I don't actually mean to be discourteous to you, but I consider much of what has been done in the name of economics to be sheer vandalism. I choose my words carefully, because a vandal is someone I think who wantonly destroys property, and that would seem to be what we are now doing in the name of economics to this precious planet. I don't think there are good reasons for it.

But as I mentioned in my brief, there are legal reasons for it. CEOs of large corporations are required to try to externalize their costs and make the taxpayers pick up the tab. If the government makes no effort to defend citizens' rights and to speak up on behalf of democratic principles of decency and order, then we are truly lost.

I mentioned the book by Canadians Patricia Adams and Lawrence Solomon, In the Name of Progress: The Underside of Foreign Aid. I feel that your reading material is sometimes rather limited. I've recommended some things here and this is one of them. The authors tried very hard to get CIDA to give them one example of a hydroelectric dam project that had actually worked fairly well and it could not come up with one. They have all turned into disasters, with 80,000 people displaced here and another 200,000 there, and Canada has financed these things at the taxpayers' expense. I regret this.

I've also quoted from this book in my paper. The authors said that after deciding to investigate the roots of the famine and drought in Ethiopia in 1984, they discovered that, “the world was helping to rescue victims of earlier aid efforts”. Under question number two you asked what other measures should Canada and the G-8 take to help Africa, apart from aid. I think that is a very peculiar sentence in which you unwittingly admit to some guilt.

The mainstream media interpretations that flew at us after 9/11 were simply embarrassing in the way they were constructed and in their assumptions. This is another thing—in a democratic polity, honest research is required. If I might make a point from fairly far into my brief, the second point that needs to be made in connection to terrorism is one that continues to bother many of us, though it doesn't turn up in the mainstream media. How do we define terrorism?

If we have decided in advance that no one of us, individually or collectively, could possibly be a terrorist, that no western state could possibly be a rogue state, and that the bad guys are always the other guys, and we are, by definition, lily-white, then we are not well placed to begin thinking. And the thinking needs to begin.

The evidence suggests that we, too, have crimes on our hands. I mentioned the one in connection with East Timor, when Canada, the United States, Australia, and others stood by and watched terrible things happen.

I'll read my summary paragraph, then, because I want to leave time for my colleagues.

To sum up, the real and serious problems are ones that you pass over in your assumptions, and it is here that we must look for the meaningful alternatives. This is the big step that needs to be taken. We need to re-examine the false premises on which our dysfunctional behaviours are based. Time is running out. The great leaps in science have always been sparked by challenging the prevailing assumptions. If our economic thinking cannot take up this urgent challenge, then it is not a respectable science and will soon be exposed as religious dogma and superstition—which indeed it is, in my view. It may take another scientific revolution to make the metaphysical corrections. I remain hopeful that this will occur before total ecological collapse.

The scientists, I guess, are giving us 30 years to figure it out. That means we don't put the brakes on in signing Kyoto agreements and so on. We need to seriously address these issues.

I have also paid homage to our native Canadians in the reference to the seventh generation, which is a critical thinking tool. It would do us a lot of good to learn from these people, who have watched while we have devastated what used to be their world too. It is time for us to have the grace to feel some shame on behalf of the people who have been leading us—who in fact have been followers—and to express some form of apology.

I think the Truth and Reconciliation Commission hearings in South Africa are a model for the western industrial world. People sat down together there and some of them said, “We did some of these terrible things”.

We need to get real in terms of addressing nature's claim on our affections. If the economy is a mere human construct, it can be renegotiated; it is not the final solution.

I am contemptuous of some of this thinking, I'm afraid, but I respect you for being willing to hear me out. I could get you a very fine bibliography if you were willing to read some good materials.

¹ (1500)

The Acting Chair (Mr. John Harvard): Thank you for that. I think we need that kind of advice from time to time, perhaps every day.

We're going to move now to John McConnell.

¹ (1505)

Mr. John McConnell (Individual Presentation): Thank you, gentlemen. I certainly am pleased you're doing this, and I would encourage more involvement of the Canadian public.

I'm going to roll along as fast as I can. There are three major points I thought I should impress upon you. First, setting a good example: Canada's representatives at the G-8 meetings should set a good example. Second, we should persuade other countries to apply and expand policies that will sustain the planet and improve human conditions. Third, we need to develop new partnerships and policies based on the United Nations charter and the Canadian Charter of Rights and Freedoms. This is needed for African development in all sectors.

This requires that Canadian citizens, parliamentarians, senior public servants, hired advisers, and lobbyists—who are playing an increasingly large role—be aware and well informed of the complexities of international issues, the development needs and hopes of people in Africa, and people's problems right here in the regions of Canada. This boils down, gentlemen, in my view, to one major question: will it be the quality of life for the many or the standard of living for the relatively few of the earth's people?

As we enter the 21st century, there are grave threats to the national world. There is extreme poverty, deprivation, and extreme wealth. There are tremendous human inequities in the world. There is deforestation, falling water tables, accelerating climate change, and three times the population of a century ago. The use of energy and raw materials, gentlemen, has increased at least ten times. The billion-dollar question could be, can we muster the ingenuity to challenge and change in time?

In our fascination with technology, many of our economic thinkers seem to have forgotten that our civilization, like those before, is entirely dependent on its ecological foundations, which are eroding and have now become global. The Worldwatch Institute, a credible organization that does work on the state of the planet, says we're entering the 21st century with an economy that cannot take us where we want to go if we wish to satisfy the projected needs of the world's population.

An improved early warning system is needed to inform world leaders of developing issues. At the early stage of problems, more use should be made of conflict resolution techniques and world bodies, such as the World Court. The United Nations should receive greater support. The cost of these world programs would only be a fraction of the cost of “fighting terrorism and wars”. Moreover, far fewer people would be killed.

Now a word on development. A sustained increase in international aid is needed. Canadian citizens and most of the people in our NGOs who work in Africa say more aid is needed for local food production, education, health, and environmental programs. To meet these goals, world leaders at the UN, World Bank, and in the United Kingdom agree that aid needs to be doubled from its current levels.

Canada should be increasing its aid by some 20% to 25% for at least a few years; however, the 8% more per year, which I understand is proposed, is a step in the right direction. What is also important is that there be a follow-through and a clear, concise statement about Canadian aid policy covering the next 10 years.

Now a word on the environment. For African countries to have sustained growth and better standards of living for people, considering the fragile ecosystems in Africa, policy experts from donor countries who are drafting policies and programs for African countries should know more about ecosystems, know the “what” to do and the “how” to do it, for more successful projects. There is a wealth of knowledge on African ecosystems and cultures among NGOs—and, I might add, people who have worked in Africa—that could be shared.

New policies and partnerships should also reflect more understanding of the long-term care of ecosystems and the responsibilities of people to care for ecosystems and live in harmony with nature's ways. I would stress that. We're certainly a long way from living in harmony with nature's ways and natural resources.

If market approaches are to provide solutions to African development, then both government and corporate market managers need to be aware of the risks to the earth's ecosystems and support accountable and transparent policies that reduce the destruction of ecosystems. As we all know, further destruction of the soils, forests, watersheds, and plant and animal species will increase extreme poverty and both public and corporate costs.

Corporations doing business in Africa should be paying far more attention to global environmental, economic, and social trends, and adjusting their market plans for new roles and strategies.

I'm not sure how I'm making—

The Acting Chair (Mr. John Harvard): You need to trim.

Mr. John McConnell: All right.

Just flipping along here, I'll make a few quick suggestions.

African food production for home use deserves a larger share of the aid dollar.

More funds for agricultural research and education should be provided and programs carried out in partnerships with rural communities—and I emphasize the “rural”. Rural women and teenagers should be allowed a key role in these programs.

The law on patenting of life forms, such as the patenting of parent seed materials, should be changed and improved. African farmers who have husbanded and saved these seeds, for up to hundreds of years in some cases, should receive compensation from corporations that profit from research where material from the original seeds is used.

Public funds supplied to NGOs for African rural programs, compared to other approaches of expending funds, provide much better returns for the dollars provided.

I might say, in case you don't have an opportunity to read about it, I've worked with a number of the NGOs who work in Africa. I've worked some time with CIDA. I've worked with the federal government. I've worked with the provincial government for some 30 years. My studies include economics, communications and human behaviour, and studies in cooperatives, and I'm still involved in a number of volunteer...including NGOs and community groups.

That gives you some of it, but...a little more?

¹ (1510)

The Acting Chair (Mr. John Harvard): No, I think we should move on to Mr. McKenzie-Smith and get a couple of questions in.

Mr. John McConnell: Fair enough.

The Acting Chair (Mr. John Harvard): Thank you, Mr. McConnell.

Now we'll turn to Mr. McKenzie-Smith.

Mr. Trevor McKenzie-Smith (Representative, Oxfam Canada): Good afternoon.

I'm submitting this report today for Oxfam Canada and the prairie region coordinator for Oxfam Canada, who could not be here as she is out of town.

In the interest of time, I'll read out the preamble of the document that Oxfam has provided and then simply list the key issues that Oxfam proposes for the G-8 discussion in Kananaskis. I'll leave many of the details in the document to be included in the final document—your document.

The title of our brief is “Taking Action on Africa: Proposals for G-8 Leaders”.

Africa today stands at a crossroads. The scale of poverty and suffering on the continent is daunting. Three hundred million people live on less than $1 U.S. per day. Life expectancy is 48 years and falling. More than one in three children are malnourished. More than 40% have no access to education. Twenty-eight million live with HIV/AIDS. For over 100 million, war is a part of daily life.

The crisis facing Africa today is a result of failures within Africa and outside it. Africa needs fair and accountable governance that works in favour of poor people at national, regional, and international levels. Global trade, investment, diplomacy, and even aid have too often worked against the interests of the poor. No “one size fits all” approach will solve the wide-ranging problems faced by African countries. Sustainable solutions require moving forward on a number of strategies simultaneously.

Despite the grim statistics, there are grounds for optimism. The spread of democracy and the growing strength of African civil society offer new tools for tackling the root causes of poverty and conflict. Recent efforts by African and G-8 leaders to work together are a step in the right direction.

The new partnership for Africa's development, NEPAD, as it stands today, suffers from a lack of input from African civil society and apparent failure to adequately incorporate lessons from past economic policy approaches. Yet we believe the G-8 should seize this opportunity to engage with the continent and should commit to concrete actions that will support lasting peace and development.

We believe the G-8 leaders should set the bar quite high, and Canada should continue to exercise strong leadership in preparing the ground for progress at Kananaskis. In this vein, Oxfam Canada has identified four key issues for the leaders to address regarding Africa. I'll just list these four: one, stop the trade in illegal and unethical exploitation of natural resources; two, as John mentioned, increase aid to Africa, especially for education, with a note on debt relief as well; three, declare a war on AIDS by immediately committing to an increase in funds; and four, improve the terms of trade for Africa.

Thank you.

¹ (1515)

The Acting Chair (Mr. John Harvard): Thank you very much, Mr. McKenzie-Smith. Thanks to all of you for your cooperation.

We now have about 15 minutes for questions. We'll turn to Dr. Martin.

Mr. Keith Martin: Thank you, Mr. Harvard.

Thank you all for coming here today.

Mr. McKenzie-Smith, to ensure that the money we have is going to be spent wisely, do you think we should ensure that NGOs that receive money meet a certain bar where a certain percentage of the moneys they receive must go to development abroad?

Secondly, if somebody gave a dollar to Oxfam, what percentage of that money is spent on overhead and what percentage of that money goes to help the people on the ground abroad?

Mr. Trevor McKenzie-Smith: As far as the first question, as I said in the beginning, I'm submitting this report for Oxfam Canada and for the prairie region coordinator. I myself did not write this document, so I shouldn't comment on that. Being a volunteer, as I am, I wouldn't know which percent of the $1 would be used on the field and which would not. In my volunteer capacity with Oxfam, I don't get paid, so....

Mr. Keith Martin: Thank you for volunteering. If it weren't for volunteers, a lot of these organizations wouldn't work, so my hat is off to you.

Mr. Trevor McKenzie-Smith: The point I'm making is that I would have to stick to the document I have, which I have provided for you guys.

Mr. Keith Martin: That's fair enough.

The Acting Chair (Mr. John Harvard): Ms. Day, you can't stay for another five minutes?

Ms. Mary L. Day: —[Editor's Note: Inaudible]

The Acting Chair (Mr. John Harvard): Sure, she can come up.

Ms. Mary L. Day: She's a better talker than I am.

The Acting Chair (Mr. John Harvard): I don't know whether that's possible.

Anyway, take a chair, madam, just in case it comes your way.

I'm sorry, Dr. Martin.

Mr. Keith Martin: No, that's fine.

The Acting Chair (Mr. John Harvard): Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Thank you, Mr. Chairman.

My question is mainly for Mr. McConnell. Are you satisfied with the approach and operations of the World Bank and the International Monetary Fund as regards African countries?

[English]

Mr. John McConnell: The short answer is no. They are improving. They're doing things better now than they did 10 or 15 years ago. They seem to be learning more about what the realities are in the countries they're working in.

¹ (1520)

[Translation]

Mr. Yves Rocheleau: We know that Africa has been systematically taken advantage of by colonizing countries and drained of a good portion of its wealth. However, paradoxically, Africa has a debt towards the western developed world. Do you agree with the concept of the very existence of this debt that poor countries have to the rich countries?

[English]

Mr. John McConnell: Again I would say no. Certainly what you've said describes a basic, major issue. There has been a great deal of exploitation, a great deal of political activity that was not in the interest of many of those countries but was pure materialistic ventures by the colonizing countries.

In my view, what's needed now is a long-term program. I don't think they're going to make major changes or improvements in the short run in Africa. But there has to be great emphasis on the role of women, the opportunities for women. Women have not had these opportunities. We all know--I don't need to go into the details, I don't think, with you, gentlemen--what has happened among many of those countries. Of course, it's happening to some degree in our western world too, but there's a real need for women to get more education.

I remember when I worked years ago with Margaret Catley-Carlson, the president of CIDA. She was saying that the greatest return for a dollar in international development is if you put it into something women have an opportunity to grow with. Of course, she was very strong to promote and encourage the idea of more education for women.

The Acting Chair (Mr. John Harvard): Thank you.

I have a question for the lady who's filling in for Mary Day--Kateri Hellman Pino, is it?

Back in the 1950s and 1960s, when Lester Pearson was our foreign minister--and he won, of course, the Nobel Prize and ultimately became the Prime Minister of Canada--it seemed, and maybe this is being nostalgic, those were the halcyon days of Canadian foreign policy-making. We seemed to be, if not at centre stage, near it. Now for some reason it seems, at least to a lot of people, that we don't have the same clout or we're farther away, if that's possible, from centre stage.

It may have something to do with the fact that the Cold War is over, that the United States is the only superpower in the world. We're a neighbour of the United States geographically, and of course economically we've become so much more integrated.

I guess my question is, do you think we can ever go back to what are perceived as “the good old days”? Or are they gone forever?

Ms. Kateri Hellman Pino (Individual Presentation): I think having clout on the international stage is not a function of how much money you have or how big you are. I think it has a great deal to do with your integrity, your independence, and Canada has given both away. Our foreign policy isn't a foreign policy. It's just “me too”—whatever the United States says, “me too”.

The Acting Chair (Mr. John Harvard): We're an echo?

Ms. Kateri Hellman Pino: Exactly.

The Acting Chair (Mr. John Harvard): Mr. McConnell, how would you address that question?

Mr. John McConnell: I'm sorry, I was writing something, so I didn't really—

The Acting Chair (Mr. John Harvard): Well, she was saying that really our foreign policy is an echo of that of the United States and that we could, if we wanted to, strike out on a very independent course based on integrity and a certain set of values.

Mr. John McConnell: Well, I agree. I agree 100%. With all respect to our good friends in the United States--and I've studied there and understand a fair amount of their points of view and so on--I feel there's a great need for Canada to quickly establish a much more independent approach.

One of your MPs has written a book, which I haven't had time to read yet. It's John Godfrey and the title is The Canada We Want.

Again I emphasize the need for us to have our independent policies. It has been alluded to several times that we'll get more respect and more understanding if we stand up for it. I believe too that the lawyers here mentioned there hasn't been in-depth skill and expertise in this whole area of dealing with the U.S. For some reason or other, some of those negotiators were boy scouts who really didn't hammer home a strong deal. We know our American friends are very good at playing cards and dealing.

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The Acting Chair (Mr. John Harvard): I don't know whether Mr. McKenzie-Smith wants to wade in on this issue as well. This issue has come up before at hearings elsewhere in Calgary, Edmonton, Vancouver. I've pointed this out, and this is just an opinion of mine, but if we are going to assert ourselves very aggressively and very strongly in engaging the Americans, my concern is not so much how the Americans may react to us, but how some Canadians may react. We have to worry perhaps more about those behind us than those in front of us. Do you agree with that, Mr. McConnell?

Mr. John McConnell: You take the Business Council on National Issues... or what is it called?

The Acting Chair (Mr. John Harvard): Mr. D'Aquino's office.

Mr. John McConnell: Yes, those gentlemen. With all respect to them, they understand the economic realities. It will be very difficult to change direction. But also, I must say—and my background is economics—there's a great narrowing of the philosophy of economics. Even Adam Smith, the original promoter of economic ideas, had seven virtues. The only one we're looking at these days, gentlemen, and I say this to my trading friends and the business people, is primarily prudence. That is not good enough.

The Acting Chair (Mr. John Harvard): Do you want to add something, Trevor?

Mr. Trevor McKenzie-Smith: Talking about foreign policy and the G-8, in my brief presentation I discussed NEPAD and the problems with that. Actually, I attended a conference in Edmonton, which was the G-8 and African Renewal Symposium. There were delegates there from African countries and civil society and just citizens like myself. In addressing foreign policy in something like NEPAD, there are many issues we are not looking at. Women and gender issues are not being addressed. Guarantees of democracy and the role of the citizen in African states are not being discussed in the NEPAD document itself. As mentioned in the presentation, input from African civil society into NEPAD hasn't taken place.

Groups such as Oxfam and another one, InterPARES, are getting information from our government or the African government and going back to Africa and telling people on the ground in Africa what's going on. They didn't even know this thing existed. We had to tell them it's happening in Africa. So if it's going to be an initiative by Africans for Africans, then I think it really should be, and that should be in the policy.

The Acting Chair (Mr. John Harvard): Well, your briefs will be given serious consideration. I wish time weren't finite, but it is. We started this Monday morning in Vancouver and it has been like this every day.

I want to thank all of you, and I wish we had more time, but we're going to have to move on. Thank you.

This meeting is adjourned.