EVIDENCE

Standing Committee on International Trade NUMBER 035 1st SESSION 42nd PARLIAMENT Thursday, September 29, 2016 Le jeudi 29 septembre 2016 Standing Committee on International Trade CANADA [Recorded by Electronic Apparatus] EVIDENCE September 29, 2016 Committee Edited Evidence * Table of Contents * Number 035 (Official Version) Official Report * Table of Contents * Number 035 (Official Version) Témoignages * Table des matières * Numéro 035 (Version officielle) 35 29 09 2016 2016/09/29 07:35:00 House of Commons Comité permanent du commerce international Standing Committee on International Trade CIIT Chair The Honourable Mark Eyking 42 1

(0735) [ English ]

The Chair (Hon. Mark Eyking (Sydney—Victoria, Lib.)) :

I call the meeting to order. Good morning, everybody. Welcome to the House of Commons Standing Committee on International Trade. We are a very active committee. Over the last year, we've been dealing with softwood lumber issues and many other U.S. issues. Besides softwood lumber, we had a lot of agricultural issues with chicken and dairy. Also we're dealing with the European trade Agreement that is getting tidied up now, which is on our plate. One of the biggest things we've been undertaking over the last year is the TPP, which is a huge agreement.

It deals with 12 countries, 40% of the world's GDP, and over 800 million people. Our committee consists of members right across the country. Not all members are here; some of them are still in Ottawa. I'm Mark Eyking and I'm from Cape Breton, and Tracy Ramsey and Dave Van Kesteren are from southern Ontario. Mr. Ritz is from Saskatchewan, Karen Ludwig is from New Brunswick, Madam Lapointe is from Quebec, and Mr. Dhaliwal is from B.C. This is our last province. We've saved the best for last. We also did a video conference with the territories.

We had over 125 briefs and 20,000 to 30,000 emails, which are still coming in. We're hoping to finish our consultations by the end of October and then put a report together for the House of Commons. This morning we're so glad to have representatives of the Province of Nova Scotia, Minister Colwell and MLA Farrell. We have roughly half an hour. The floor is yours, with no set time. Usually presenters use five minutes, but it's whatever way you want to cut it. We're very interested, Minister, about your recent trip to Asia and your sense of that. We'll appreciate your insights on the opportunity that is there.

The floor is yours. Welcome.

Hon. Keith Colwell (Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia) :

Thank you very much. If I could, Mr. Chair, I would like to start with a prepared statement, and then maybe we can have an open dialogue after that, if that's all right.

The Chair :

Sure.

Hon. Keith Colwell :

Mr. Chair and members of the committee, ladies and gentlemen, thank you for allowing me to appear before you during your visit to Halifax. I am very pleased to be joined this morning by my legislature colleague Terry Farrell, the member for Cumberland North. As Minister of Fisheries and Aquaculture and Minister of Agriculture, I take every opportunity to advocate for the importance of trade in the sectors I represent.

As the report of the One Nova Scotia Commission pointed out, trade is critical to the future wealth and prosperity of our province, and indeed, in two successive throne speeches, the Department of Agriculture and the Department of Fisheries have identified it as one of the key economic drivers in the province of Nova Scotia. Since the release of the report, we have been working very hard with our partners in the sector and government to meet the goals that it set out and to double the value of exports in our seafood and agriculture sectors within a decade.

I am pleased to say that thanks to the hard work of the people in those sectors, the great Nova Scotians, we are seeing success. Last year, the agrifood sector saw its exports increase by 21% to $385 million. Wild blueberries played an important

part in that, and Mr. Farrell will have a few words on that in a moment. That success means quality. Nova Scotia-grown and made products are finding their way onto store shelves and kitchen tables around the world. We want that to continue. We see the success in the seafood sector as well. In 2015, our seafood exports grew by 33%, to more than $1.6 billion, almost reaching the goals in the One Nova Scotia report in just two years. I am proud to be able to say that Nova Scotia is Canada's number one exporter of seafood. Naturally, we want to see that success continue.

To do that, we need to ensure that fair access for our products continues in markets around the world. That is why ensuring that agreements like the trans-Pacific partnership protect and advance Canada's interests is so important to our agriculture and seafood sectors. That is also why it is important that we work vigorously to oppose any moves to unfairly close borders to our products.

Recently there has been a lot of concern within our government and the lobster industry about the efforts in the European Union to have North American lobster declared an invasive species and ban the imports of live lobster from Canada and the United States. Since we are Canada's leading seafood exporter, including $200 million in live lobsters in 2015, every market is important to our lobster industry. The potential loss of the European market, which accounted for over $66 million in live lobster exports for Nova Scotia last year, would be detrimental to our sector.

We want to see fair access for Canadian lobster exports maintained. We are disappointed and concerned with the recent opinion by the European Union's scientific forum recommending further consideration of Sweden's request that North American lobster be labelled an invasive species, possibly leading to an import ban. Nova Scotia will continue to support Global Affairs Canada, the Department of Fisheries and Oceans, the Canadian Food Inspection Agency, and the Canadian lobster industry in their efforts to ensure that the European Union makes decisions on this issue that are based on fact and not speculation.

It is still quite some time before the EU makes a final decision, so our efforts remain critically important. At the same time, we are working hard with industry and our government partners to develop other export markets for our high-quality, premium seafood products—markets like Asia, which is covered by the TPP. In Asia, our seafood exports totalled $407 million in 2015. We see the potential for continued growth in that market as its share of the world's middle class continues to grow between now and 2030.

As I said a few moments ago, our success depends on ensuring that we are successful in every market we can reach. It also depends on our ability to ensure that the stability of our domestic markets for agriculture products is not adversely affected by an agreement like the TPP. As Minister of Agriculture, I have been very clear with our federal counterparts that trade agreements must not compromise our successful supply management system. Supply management has allowed producers of agricultural products to ensure that good jobs are available in our rural communities.

It has also ensured that domestic markets have a dependable supply of fresh local products for consumption.

(0740) I urge the federal government to continue to balance the export gains that are possible through trade agreements with our national interest in preserving the advantages of the supply management system. That includes ensuring that producers are adequately supported in countering any negative impacts of trade agreements like TPP. We want our exporters in agriculture and seafood to succeed. We want that success to keep our rural and coastal communities vibrant. That will happen in free trade that's balanced with fair access for our products. I would now like to allow my colleague Terry Farrell to say a few words about the importance of the wild blueberry to Nova Scotia.

The Chair :

Go ahead, Mr. Farrell.

Mr. Terry Farrell (Member for Cumberland North, Legislative Assembly of Nova Scotia, As an Individual) :

I want to thank you, Mr. Chair and the members of the committee, for giving us the opportunity to be here today. I'm very grateful for that. I'm the member of the legislature for Cumberland North. Cumberland County is the hub of wild blueberry production and processing in the province. It's at the forefront of change, development, and growth in the industry. It's home to the biggest and most successful producer and exporter of wild blueberries, Oxford Frozen Foods. I know you're going to hear from their representative, Mr. Hoffman, later today.

They've been instrumental in making Nova Scotia wild blueberries the most important export fruit crop in Nova Scotia. In 2015, our province exported over $122 million worth of wild blueberries. That's 32% of all of Nova Scotia's agrifood exports. Blueberry producers, large and small alike, have really stepped up their game. Our government is supporting them to employ best practices, and this has resulted in greatly increased productivity. We're ready to compete on world markets. Unfortunately, one of the results of this increased productivity has been low prices.

This has resulted in a very difficult year that has seen many of our growers leaving crops in the field. To counter this recent trend, we need government support to help us gain increased access to markets in places like Asia. This is how we're going to increase demand and reward producers for their hard work and innovation. This is something the industry has talked about publicly, and I know you're going to hear later this morning from members of the Wild Blueberry Producers Association of Nova Scotia.

We are all actively encouraging the federal government to use its leverage in Asian markets to gain more access for our blueberries. This is what will start expanding market access through trade agreements. I know how hard Minister Colwell and other members of our government are working with industry and other government partners, such as the federal government, to make this happen. On behalf of the communities and the producers in my riding, I also encourage the federal government to make that a priority. Thank you once again for having me here today.

(0745) The Chair :

Thank you, gentlemen. We only have about 10 minutes, so I've decided to just give each party a few minutes to ask a question to the minister and Mr. Farrell. Ms. Ramsey, do you want to start? Take a few minutes; there's no set time. Each party can ask a question, and maybe Mr. Colwell will wrap up.

Ms. Tracey Ramsey (Essex, NDP) :

Thank you for your presentations and for joining us here this morning. It's great to hear about Nova Scotia agriculture. I come from a rural riding myself. You mentioned the lobster ban. Are you concerned that something similar will happen with TPP countries, that a non-tariff barrier may come up that would impact that sector?

Hon. Keith Colwell :

Could you repeat that, please?

Ms. Tracey Ramsey :

When you were speaking about the invasive species—and I believe you referenced Sweden and the issue you're having in regard to the European agreement—do you fear or have similar concerns of a ban in TPP countries for this same invasive species?

Hon. Keith Colwell :

It doesn't appear to be an issue at this present time, and I don't think it will be, but again, who knows? It's hard to say. We're really concerned about the European Union. Hopefully we'll be successful with the federal government and the other provinces all working together to make sure that the ban doesn't happen. It is going to affect the U.S. as well, because a lot of our lobsters are shipped into the U.S., where they are then shipped to Europe as U.S. lobsters. This is unfortunate, but it does happen. Hopefully, we'll be able to reverse that trend over time. It is a serious issue for us.

It's one of those issues on which, realistically, is there science to back it up? We hope there isn't.

Ms. Tracey Ramsey :

I have one other quick question. How many dairy farms do you have here in Nova Scotia? Can you speak to the threat that they would face under the TPP with the supply-managed sector being open? I know you mentioned the compensation. We're unclear whether the current government will honour the previous government's commitment, but I wanted to get a snapshot of dairy farms here in Nova Scotia.

Hon. Keith Colwell :

I can't give you the exact number of farms, but they represent the biggest sector in Nova Scotia. It's $564 million a year, I believe, in the rural economy. Dairy has a huge impact on Nova Scotia, but it's more than just the financial part of it: we should be looking in more at food security. I'm talking about safe food and also the supply of food. If, for instance, something happened at the border between New Brunswick and Nova Scotia, we would run out of food in two weeks. Realistically, our grocery shelves would be cleaned out in two days.

That's a serious factor, and that could happen, for all kinds of reasons. There was a goal set of 20% self-sufficiency within five to 10 years. I think we have to go further and faster than that to ensure that we meet our goal. It's a serious concern not only in Nova Scotia but right across the country, and people aren't talking about it. One thing I will say about Nova Scotians is that they're really stepping up to the plate. They're interested in buying local food and local produce. We have much better control of the quality, the food safety that goes with it, and the supply.

We're working closely with the agriculture and fishing industries to see if we can't get a sustainable food supply, well above 20%, for Nova Scotia.

The Chair :

Thank you. Thank you, Ms. Ramsey. We go now to the Conservatives.

Hon. Gerry Ritz (Battlefords—Lloydminster, CPC) :

Thank you, Mr. Chair. Keith, it's good to see you again. I know you continue to work hard. I was interested in where you went in Asia and the reception you had there. I know it's usually top shelf. They really appreciate the quality and consistency of supply from Canada. I know you're focused on food availability here in Nova Scotia, and you would export beyond half of what's produced here. Having a diversity of markets certainly strengthens our position when it comes to demanding a better price. I'd like to hear about where you were and what discussions you had.

(0750) Hon. Keith Colwell :

I recently came back from Hong Kong and China. We're planning to go to China again in October and November. We still have to make sure I can get out of the legislature to do that, but the premier's office has given me the go-ahead, so that's a good indication.

Hon. Gerry Ritz :

Yes, the big food shows are on then.

Hon. Keith Colwell :

I want to thank you for the great work you did in China as Minister of Agriculture, and for the fine working relationship we had. It's a great market for us. We've seen our seafood trade, particularly in lobsters, grow by 200% to 300% a year, and we mean to continue that trend. We really have to look at those markets. The markets are demanding higher quality now than they were before. We're working on a lobster quality project in the province now with three or four companies, for live lobster. There has been a concern that lobster quality wasn't as high as it should be.

We're working on that now and we've worked on a new brand that we announced in China. We haven't announced it in Nova Scotia yet, but we announced it in China and Hong Kong when we were there. It went over very successfully, and the new brand is 45N 63W. It identifies a location in the centre of Nova Scotia, actually a very historic site. It's the site of a disaster at the Moose River gold mine that happened in the 1930s and was the subject of CBC's first live news broadcast. We're going to move a monument to that location and do some other things to make that a very special place.

Luckily, it's on crown land, so we can do the things we need to do there. Only companies that have high-quality products will be allowed to use the brand, companies with a consistent quality assurance system. We're working on that system now. We feel that we can penetrate the market even further. One of our major customers has demanded this process, and they've guaranteed us in writing that they're going to give us a higher price than they've ever consistently paid before. That is a major change in the marketing process. Nova Scotia set the standard for Canada with Alibaba.

We're the first ones to go to Alibaba with lobster sales, and the first year we did, they charged us $65,000. We sold $2.2 million's worth of lobster in 24 hours and we ran out of lobster.

Hon. Gerry Ritz :

When I was there, they did a little auction on their Internet site and sold 250,000 pounds of Canadian lobster in nine minutes. It was unbelievable.

Hon. Keith Colwell :

There's no question. I've held up lobsters.... You weren't there when I did that, but I held up a lobster and the room was full of people. No matter what they were doing, they went right to whoever was holding up the lobster to see the lobster. It was really something else. It goes to the culture there. All ladies get married in red wedding dresses, so if you have a red lobster sitting on the table during your wedding, it's a big event. The bigger the lobster, the more valued it is. Last year we did the same promotion, and Alibaba only charged us $6,000 to do it.

They've seen the real value in Nova Scotia lobsters. We export 95% of all live lobsters in the country, so we are the lobster export people. That's why we're so concerned about the EU sanction, but Asia has tremendous potential. One thing I still can't get over is that if you say to somebody in Asia to come visit us, just in a casual conversation, they come and visit and they bring a delegation and they want to spend money. It's very positive. We've seen great success there and we're going to expand on that.

The Chair :

Thank you, Mr. Ritz. We'll go over to the Liberals. Ms Ludwig, go ahead.

Ms. Karen Ludwig (New Brunswick Southwest, Lib.) :

Good morning, gentlemen. Thank you very much for your presentations. I represent a riding across the bay. I represent New Brunswick Southwest, and we're also very proud of our lobster production, so it's great that we're all on the same page. I have a number of questions and I'll try to fit them in. Regarding the lobster production itself, certainly Nova Scotia has done an amazing job of promoting Nova Scotia lobster. How closely are you working with the other provinces in this region to promote jointly seafood production, and lobster in particular?

(0755) Hon. Keith Colwell :

We're working very closely with them. Your minister, Rick Doucet in New Brunswick, is very passionate about his lobsters, and he claims they're better than Nova Scotia's. That's an ongoing discussion.

Ms. Karen Ludwig :

Rick and I would agree on that.

Hon. Keith Colwell :

The minister on P.E.I. is the same. We work very closely together, the three of us. Actually, we met a week ago in Charlottetown to discuss lobster and other fisheries and agriculture issues. It's good to see that both of them now are, as Newfoundland is, agriculture and fisheries ministries, because it's a lot better for all of us when we're working together. We're striving to get a really strong Atlantic working relationship, including New Brunswick, P.E.I., Newfoundland, and Quebec, because we all share the same areas and we have the same problems.

I can tell you that when we go to markets like China or any place in Asia and they come and sit across the table from us and say they want a containerload a week of this product, we can't supply it. I think all of us together would have a very difficult time to supply it. This is one thing that we have to start working on closely. We need to see what products we have. Maybe New Brunswick can supply two containers over a year. Maybe we can supply eight, Newfoundland can supply two, and Quebec can supply two. That way we can get to the marketplace. It's all Canadian product.

We have to start doing that in a closer and closer working relationship. It's a very good point. We are doing it now.

Ms. Karen Ludwig :

My next question is about owner-operator fleets. Melanie Sonnenberg from the Grand Manan Fishermen's Association, who I'm sure you're familiar with, told us about her concerns over the threat to the owner-operator model. There are a lot of people either offshore or from other jurisdictions operating boats within the local area. As Mr. Farrell said, in the seafood industry and particularly in blueberries, any jobs in the local communities are absolutely critical in rural areas. That would be one of Melanie's big concerns.

Any changes to the owner-operator model are a threat to the local operators and local people who would be hired within those regions. Otherwise the jobs are from outside, and potentially the fish are going outside as well. Are there any changes that you would like to see within the owner-operator model? Is Nova Scotia comfortable with the model that is there right now?

Hon. Keith Colwell :

I think the owner-operator model is one of the key elements in the fishing industry in eastern Canada. It has to be preserved, but it also has to have a use-it-or-lose-it tag on it as well. A lot of the owner-operators sit at home and sell their quotas. That's not the idea of the owner-operator fleet. We also have to have the large companies doing the offshore fishing and the other part of it. It is a whole realm of things that go together. We need to add value. We need to do more processing in each one of our provinces. I think that we should not be competing with each other on certain products.

Ms. Karen Ludwig :

Absolutely.

Hon. Keith Colwell :

If New Brunswick is better at processing something because they have more supply than we do, they should be the province that does most of that, but not all of it. I think we want to see more processed locally and more value added locally. If you use Iceland as an example, the lowest-value product of a codfish in Iceland is the fillet. That's the highest-value product here. The codfish here typically is worth $45 for one codfish.

Ms. Karen Ludwig :

How prepared is Nova Scotia in particular for innovation and adaptation within the seafood sector or agriculture sector? You sound as though you're doing well. What can we do as a government, in terms of services, to help further support that?

Hon. Keith Colwell :

The one thing that we need to put in place—and this applies to both sectors, but more immediately so to the fisheries industry—is automation in our processing facilities. We have to have automation. We can't get enough employees, but we need highly skilled people in an automated environment. We have, for instance, one shrimp processing facility in Nova Scotia. There are very few employees, but they're very highly paid. That company is one example, and we have many, as New Brunswick and the rest of Atlantic Canada—

(0800) Ms. Karen Ludwig :

Excuse me. Sorry. Can I just ask one quick question, Mr. Farrell? Are you doing any value work within the blueberries, or are you exporting raw blueberries primarily?

Mr. Terry Farrell :

Can you repeat that, please?

Ms. Karen Ludwig :

Is there any value-added processing that you're doing right now with the blueberries, other than than shipping out or exporting raw blueberries in their purest form?

Mr. Terry Farrell :

Absolutely. Oxford Frozen Foods, I believe, is the largest processor and freezer of wild blueberries anywhere, if I'm not mistaken.

The Chair :

Thank you very much. If you want to make a few closing comments, then go ahead, Mr. Colwell.

Hon. Keith Colwell :

Thank you very much for inviting us here today. It is very important that we work more closely with the federal government to improve our exports, which create a lot of jobs, and to make sure we have food security in the provinces and in the country. I appreciate the work the previous government did with Nova Scotia and what the present governments are doing with Nova Scotia in helping Nova Scotia achieve its goals. Last year was the first year that we saw a growth in our population and the numbers of employed people go up. That's a very positive sign.

I've already talked about automation in our fish processing operations as an area in which we need to move more quickly. There's lot of fish that's shipped because we can't process it. We can add that value. Not only do the owner-operators add tremendous value to the community, but so do all the other harvesters. We also need to process that product here and add value. We have some people who are very successful and we're doing more and more of it, but we really need help from the federal government to help finance innovation in that area. Thank you.

The Chair :

I thank you again for coming and I wish you good luck with your next trip to Asia. I think that's where we were planning on going in the following year. I'll suspend for five minutes so that the next panel of witnesses can come forward and get ready to go.

(0800) (0810) The Chair :

Good morning, folks, and welcome to the House of Commons Standing Committee for International Trade. As you know, our main focus is on the TPP and Asia. Our committee has been fairly busy over the last year. We're dealing with softwood lumber and still tidying up the European trade agreement. We always have ongoing issues, especially with the U.S., our biggest trading partner. We have softwood lumber and agriculture issues, and we're still in a process of—I don't know whether to call it negotiating or fighting over it. The TPP is a big deal. It's 40% of the world's GDP and 800 million consumers.

It's a deal that will affect every Canadian one way or another, whether you're buying a product or selling it. We have quite a busy and active study that we're doing here. We went to every province; this is the last province. We've also had video conferences with the territories and, of course, we are reaching out to all stakeholders. There have been a couple of hundred witnesses, and we also have had individuals. In my 15 years, I've never seen so much interest from average Canadians. We already have over 20,000 emails.

We're going to continue this process until the end of October, and then we're going to work for a few months to put our study together and then present it to the House of Commons. As you know, we're keeping a close eye on the United States. The election is in full swing. You don't usually see the presidential candidates talking as much about trade in the debates as they are in this one, so we have to keep an eye on that as well. My name is Mark Eyking, and we have MPs on our committee from right across Canada. Some of them aren't here—they had to stay in Ottawa—but we have Ms. Ramsey and Mr.

Van Kesteren from southern Ontario, Mr. Ritz from Saskatchewan, Ms. Ludwig from New Brunswick, Madame Lapointe from Quebec, and Mr. Dhaliwal from B.C. We had a great night last night enjoying Nova Scotia hospitality and food, and I'm sure you guys represent a lot of it. We ate seafood and we ate agriculture products, and we're going to go out to the Stanfield airport. Stanfield's is my brand of underwear. What can I tell you? Too much information, too much information, I know. Sorry about that, Ms. Ramsey.

Without further ado, we're going to start out with my favourite organization, the Nova Scotia Federation of Agriculture, which I've been a member of for many years. Mr. van den Heuvel, you have five minutes.

Mr. Chris van den Heuvel (President, Nova Scotia Federation of Agriculture) :

Thank you very much, Mr. Chair. It's certainly great to see a good Cape Breton face sitting across from me today. Thank you very much to the entire committee for having us here. We appreciate your time and efforts. I'm going to get into a brief introduction, and then I'll turn it over to Victor Oulton, who is our CFA director for the Federation of Agriculture. My name is Chris van den Heuvel. I am the president of the Nova Scotia Federation of Agriculture and a dairy farmer down in Cape Breton. Nova Scotia has a strong and diverse agricultural industry.

Not only is the industry diverse, but many of the individual farms are diversified as well. The agricultural industry in Nova Scotia is made up of farms that supply the domestic markets with dairy, poultry, and horticultural crops, and those that rely on export markets, such as blueberries, mink, beef, potatoes, and Christmas trees. The province also has many commodities, such as apples and carrots, that supply both the domestic and export markets.

The Nova Scotia Federation of Agriculture commends the federal government for doing its best to maintain a balanced position across the various agricultural sectors in the CETA and TPP trade agreements. However, in order for farmers to fully access the opened markets, support programs need to be put in place so our farmers can meet their market demands. On the other hand, producers of commodities that are facing more access by foreigners into the Canadian market, especially the supply-managed commodities, need to be compensated for future losses.

When it comes to international market access, the main priority of the Nova Scotia Federation of Agriculture is to ensure that there are support systems in place for the farmers and commodities that are facing changes to market access. One area of change is for the supply-managed commodities. TPP has allowed market access for all supply-managed commodities of between 2% and 3.25%. When I have spoken with the other commodity associations, each has painted a picture of what their respective reductions in quota will look like.

For example, Turkey Farmers of Canada has said that if turkey enters Canada as all-breast meat, which is the expectation, the impact will be equal to the entire yearly production of Nova Scotia and New Brunswick combined. That is a huge loss. The supply-managed industries need to be compensated for these losses that they will face when trade agreements are ratified. The farmers in these commodities have invested in quotas in order to be able to produce their respective commodities, and these farm businesses rely on the security of the supply management system and base their business plans on it.

Farmers producing under supply-management systems must be compensated not only for their loss in quota, which they have purchased, but also for future losses as a result of imports. Though it can be calculated, since maximum import percentages are known, it will take time for these commodities to adjust to the difference in their production levels. The federal government must come through to fully mitigate the hurt to these sectors that are negatively impacted by these deals.

Collaboration, as Minister Colwell alluded to earlier, is key and very important when it comes to determining what programs will be effective and how they should be implemented. We recommend that any mitigation programs be put in place in consultation with the commodity organizations that will be affected by the trade negotiations. Now I'll give it over to Victor for a few words.

(0815) Mr. Victor Oulton (Director, Nova Scotia Federation of Agriculture) :

Aside from the supply-managed commodities, other domestic commodities face inadequate treatment in comparison to similar products being imported. Horticulture products that are produced in Canada for the domestic market are subject to CFIA testing to ensure that chemicals not approved by PMRA are not present in the product. However, it is our understanding from the horticulture producers that imports do not face the same rigour of testing. Many of the countries that Canada imports produce from have access to pesticides that PMRA doesn't allow in Canada.

This creates a competitive advantage for the imported goods over the domestic products. Let me be clear: I'm not saying that Canada should allow access to these other pesticides. There are good scientific, justified reasons that we do not use these pesticides. However, a minimum standard for imported goods that is at least as high as the standard for domestic products needs to be in place to protect and support horticulture producers in this country. NSFA also has priorities as related to the export market. The TPP and CETA trade agreements open doors to the export market for many commodities produced in Canada.

While access to these markets will benefit the rural economy in our province, farmers will only benefit if the appropriate programs are in place. The AgriMarketing program is an example of a current program that will benefit these commodities that are interested in the export market. The program is designed to build and promote Canada's availability to expand domestic and export markets.

Considering the significant export potential of the trade agreements that have come into place since the fund was established, the AgriMarketing program needs to be renewed, and ideally increased, to access these markets to their full potential. An example of how this program has worked even prior to the trade agreements can be found in the wild blueberry sector. The AgriMarketing program and its predecessor program helped the commodity grow and expand into other programs. Without this program, the industry would not have the access to the markets they have today.

Also, the wild blueberry farmers and processors see a return on investment on their levies, since AgriMarketing requires matching funds. The program has also allowed for promotional campaigns in various export markets, including Korea, China, Japan, Germany, and France.

(0820) The Chair :

Can you guys just wrap up there, please?

Mr. Chris van den Heuvel :

In

summary, programs to support farmers facing market access need to be in place. Any program in place should not cancel out any other programs. For example, if a farm produces both a supply-managed commodity and an export commodity, it should be compensated for losses in one while being able to access any available products for market development in another. The worst thing that can be done is to essentially punish a farmer because they mitigated their own risk by diversifying their farm business. We thank you very much for the opportunity to bring our remarks to you today. We'll be glad to answer any questions if you have any.

The Chair :

Thank you. We're going to move over to Stanfield Airport, which is my second home, I think. Every week I go through it and I have to commend the work you guys have done on the parking lots and the new gates. It's a pretty busy spot. I'll never forget the time George Bush came and visited and appreciated all the work that happened at Stanfield Airport after 9/11. It was quite a feat you guys pulled off. Go ahead, sir. You have the floor.

Mr. Ian Arthur (Chief Commercial Officer, Halifax International Airport Authority) :

Thank you very much, and thank you for having the Halifax International Airport Authority attend this trade committee. Good morning. My name is Ian Arthur. I am the chief commercial officer at the Halifax International Airport Authority. I'm here today on behalf of the airport authority's president and CEO, Joyce Carter, and our chair of the board, Wadih Fares. The airport authority is responsible for the management and development of Halifax Stanfield International Airport, one of Atlantic Canada's most critical pieces of transportation infrastructure.

It is my responsibility to provide aeronautical and non-aeronautical revenue development for the airport authority. Halifax International Airport Authority, or HIAA, as we are known, has made significant investments over the past decade to improve its position with regard to passenger and cargo traffic to and from Atlantic Canada.

Those investments, including air terminal building expansions and upgrades, state-of-the-art passenger-processing technology improvements, new cargo infrastructure, and a critical extension to our runway, have provided the foundation for the airport's growth and its significant economic impact on the economy, the province, and the region. That impact for 2015 was $2.7 billion. The importance of international trade is significant to the airport. International trade agreements, such as the Canada-Korea Free Trade Agreement in effect since early last year, are instrumental in moving Nova Scotia seafood to Asia.

Our business arrangement with Korean Air Cargo is a product of that agreement. They have two flights a week, and that's 200 tonnes of fresh, live seafood leaving our airport to Incheon, which is the main airport for Seoul, Korea. We have also signed a sister airport agreement with Incheon, which is the third-largest cargo airport in the world, so we are doing many things to market there and share data with Incheon. It is through Incheon and Korea that Nova Scotia's products get shipped all over Asia.

Agreements such as NAFTA, CETA, and the proposed TPP are of particular interest to HIAA in that they can reduce trade barriers and open doors for Nova Scotia's products around the world. From the airport's perspective, it's the ability to move high-value, time-sensitive products that are best served by air shipment, and this is really what the airport does. It is critical for us to help play a growing

part in the economy that's benefiting all of the citizens of Nova Scotia and the region. From the airport's perspective, I'm confident that I don't have to spend time providing the committee with the details of the current state of the Atlantic Canadian or Nova Scotian economies. I'm not an economist by trade, but we need opportunities to move our natural resources, particularly fresh seafood, to markets around the world quickly and efficiently to obtain the best price in the markets where our products are highly valued.

We need to lower or remove barriers to expedite the processes to allow access to these high-value global markets. We need preferential access to the TPP markets. That would be beneficial. There are many better qualified than I am to provide technical detailed analysis for the potential growth represented by the TPP proposal. That said, I do know this: in 2015, goods valued at $450 million were exported from Halifax International Stanfield Airport. Of that number, $150 million was seafood. The lobster industry is $2 billion, and 85% of that comes from Nova Scotia.

Of that, $1.5 billion goes south of the border by truck. Fifty percent of that is processed, 50% is live seafood, and that seafood is then exported around the world. The time that it takes to get to market and the quality of the seafood at the other end are of concern to the Nova Scotia government.

(0825) Lastly, much of that live product is marked as U.S. product. We know that the vast majority of lobster bound for these markets is reconfigured.

The Chair :

Can you just wrap up, sir?

Mr. Ian Arthur :

Yes. In

summary, Halifax International Airport Authority encourages the Government of Canada to enthusiastically pursue trade agreements such as TPP, ensuring that they provide access and opportunities that best serve Canada's social and economic development. Thank you very much.

The Chair :

Thank you, sir. We'll now go from the Stanfield airport to Stanfield's Limited. Go ahead, sir.

Mr. Jon David F. Stanfield (President, North America, Stanfield's Limited) :

There are too many Stanfields. Good morning. I am Jon Stanfield, president of Stanfield's Limited North America. We are an apparel manufacturing company primarily focused on men's, women's, and industrial safety base layers, or what we call underwear. We have several brands that we manufacture and sell into the North American market. Stanfield's Limited is our Canadian operation. It is based in Truro, Nova Scotia. Our company was founded in 1856, and has been manufacturing products from the same factory in Truro, Nova Scotia, since 1882. It has been family owned and operated since its inception.

I'm here to speak today on behalf of our company. The apparel industry was a thriving industry in Canada prior to the free trade agreement and NAFTA, which was finalized in 1992. Since this time, the industry has seen employment numbers drop dramatically. Canada also has relationships with such LDCs, or least-developed countries, as Cambodia and Bangladesh, which has also led to a manufacturing exodus due to these countries' low-cost labour pool. Fundamentally, there has been a general shift to offshoring manufacturing in our sector.

There are very few companies in Canada like Stanfield's that continue to manufacture branded apparel products. When NAFTA was enacted, governments of the day needed to determine which industries they were and were not going to support. Unfortunately, apparel manufacturing was not supported. Subsequently jobs left the country. A solution was to have agreements with LDC nations allowing product to flow in duty-free. Low-cost labour, poor infrastructure, and possibly poor oversight of working conditions has led to abuse and fatalities.

In some circumstances, Stanfield's Limited has produced certain products in Bangladesh. It has not been our choice but the choice of our customers, our retailers, who want the lowest price possible. Canada needs to have access to more open markets for its goods and services. We are a small but mighty nation, and we need to have access to markets to increase trade, allowing Canadian companies to grow and expand internationally. Canadian companies need new markets to have a sustainable future. Canada alone is too small, and scale is only gained through global access. TPP is one of those opportunities.

Will some industries suffer? Yes. Do we need human rights assurances and good, clean, healthy working conditions in partner nations? Yes, absolutely. Stanfield's Limited, through its U.S. subsidiary Performance Apparel Corporation, created a partnership with a Vietnam-based manufacturer several years ago, prior to even contemplation of this agreement. Our vision was that this country would eventually become part of a trade pact like this, and it would have a positive effect on our businesses in both the U.S. and Canada.

Vietnam, as an example, has greater infrastructure, a large employment pool, and is more willing to invest in equipment and technology than are other LDC nations. Our company's objective is to produce as much of our apparel products as we can in Canada. We still produce more than 80% of our branded products in Canada, mostly for the Canadian market. Our challenge in small-town rural Nova Scotia is human capital, by which I mean employment. Our main challenge for the future of our company is to be able to hire people, but we cannot find the skilled labour we require.

You might think sewing is a mundane role, but it's definitely a skill. For every 10 people we hire here, one may make it, and that is not sustainable. Companies like Stanfield's need access to a labour pool. As much as Canadians felt that the temporary foreign work program was a bad program, the TFW was actually a perfect fit for our unique challenges in rural Nova Scotia. It gave us access to a skilled pool of sewing labour. It allowed us to continue to produce a larger portion of our products in this country. These people were gainfully and willingly employed, paying taxes in our province and in our country.

As I look forward, I see our company having to import more products from foreign sources, which takes our money. It leaves the country. As well, it will lead to lower employment levels as we scale the business properly. Inside of TPP, along with trade, I would like to see access to human capital or labour become transferable between the participating nations. It would allow companies like ours to choose to import product or choose to import labour. I believe this to be very important to our future in Nova Scotia. I encourage movement of people through a type of foreign worker program with the TPP nations.

I encourage government to cut the red tape in a needs-based assessment for certain industries. I believe apparel is a specialized and underappreciated job engine in this country.

(0830) When we sign these types of trade deals, we need to seriously look at the LDC nation scenario. We need to shift policy away from these types of countries whose track records on working conditions have not been good. LDC countries' access to Canada has only led to a flood of low-cost, cheap products coming into Canada, hurting those who wish to stay and produce here. There are no advantages otherwise, and it should stop. Canada should participate in the TPP to increase our access to new and emerging markets in the Pacific Rim.

It will allow for the flow of goods back into Canada from nations that are investing in technology, innovation, and manufacturing. It will allow for Canadians to lead the way with these investments, as we have done in the past. Finally, I encourage the government to allow for duty-free and easy two-way access to labour in Canada, thus allowing us to choose where we manufacture. In the end, trade is global, and human capacity and capital are mobile. Canada must participate. Thank you for your time, and I appreciate the opportunity to say a few words.

The Chair :

Thank you, sir. Thank you all, panellists, for your briefs. I'll just remind everybody that this is the House of Commons, and we operate in two official languages. If you need translation, then there are translators. You might get questions in French. We are going to take

part in a dialogue with the MPs, and we're going to start with the Conservatives. Mr. Ritz, you have the floor.

Hon. Gerry Ritz :

Thank you, Mr. Chair. Thank you, gentlemen, for your presentations here this morning. As you can see, there are a lot of different viewpoints on whether we should or shouldn't, and how far, and what should be covered and what should not be covered. The deal is there in principle, and we're looking at ratification of the next steps and so on. They were great presentations. Thank you so much for giving them. I'd like to start with you, Jon, if you don't mind, just because you're on my list that way. Your last statement was that Canada must participate. I fully agree with you. We can't be left behind.

It is a global marketplace, whether we like it or not, but we do have to make sure that Canadian employees and Canadian employers do not experience excessively negative effects through our participation. You also made the statement that scale is developed through global access. When you talked about movement of goods and movement of people, I was quite intrigued. The whole TFW process has been a thorn in government's side in some aspects, but it has been the boon that makes things work on the other side. As governments, we recognize the benefit of it, but how do you put forward a process that everyone agrees to?

The fallback or safety valve has always been the provincial nominee program. Were you able to make use of that? In moving forward, when you start talking about more skills and so on, it falls back to the provincial nominee so that these people become citizens at the end of the day.

(0835) Mr. Jon David F. Stanfield :

We have not accessed that program. We accessed it once when we could not find a department head for our textile department. We went through that program and brought a person in from Pakistan who had skills in that area. I think that largely it all comes back to the availability of labour. We might not need them for 12 months, but we do need them for a certain time frame, and that's probably a federal program.

Hon. Gerry Ritz :

Yes, it's the temporary portion of the—

Mr. Jon David F. Stanfield :

I thought it was not right that the whole thing blew up when the Royal Bank was using foreign workers. There are companies like ours that live in rural areas and need access to labour. Maybe it's not the use of temporary workers, but there is some other moniker that could be used for a federal program or the movement of labour inside of TPP so that we could have access to a labour pool for x amount of time.

Hon. Gerry Ritz :

Within the TPP there is a labour standards

chapter that also allows you to bring in expertise or export expertise from here to your shop in Vietnam on a temporary basis, and it's the same thing coming back. That's in there, so you do have that labour mobility to a certain extent. Whether it will be fine-tuned enough for you, we'll find out. I was intrigued by the tonnage that's going through the airport. That's phenomenal. Do you have a capacity ceiling you're looking at that will lead you to say, “We are getting close, and we have to expand and do more”?

There will be more markets than just the Korean distributorship as we start looking at Malaysia and Vietnam and different things like that too. Is there a glass ceiling that you're looking at?

Mr. Ian Arthur :

Next year, with the good work that Nova Scotia has been doing with their Asia outreach strategy, we have a significant opportunity. If we can get some agreements in air service through the Chinese authorities and through Transport Canada, then we have a significant opportunity with direct air service to Shanghai. We also have Qatar, which is flying a Boeing 777 in once a week. They're looking at expanding. Next year we are looking at significant growth. We will go from 300 tonnes a week to upwards of 600 tonnes a week of live lobster. There is a glass ceiling, and we are investing $5.5 million in a cargo pad.

We're building it so we can facilitate that quickly, and we will also need more refrigerated space in the future.

Hon. Gerry Ritz :

Sure. Part of the problem is the seasonality of some of these products as well. You have big peaks, and then valleys, so it's hard—

Mr. Ian Arthur :

It's all year round.

Hon. Gerry Ritz :

Yes, which is great. All of your workforce at the airport would be unionized?

Mr. Ian Arthur :

The vast majority, yes, 85%.

Hon. Gerry Ritz :

We're hearing from all the unions and we'll have some here later today. They hate this. They don't want this. You're the devil for actually taking

part in it. How do you work with your unionized employees who seem to have dug their heels in and are saying, “No way, no how”, and yet you are very bullish about moving forward?

Mr. Ian Arthur :

Well, I don't think our employees are necessarily part of the union groups that would oppose—

Hon. Gerry Ritz :

The numbers are claimed.

Mr. Ian Arthur :

Yes. Essentially we're a facility, so our employees work to facilitate all the airplanes, whether passenger or cargo, that are coming through. The more business for them, the more work they get. They're pretty happy about that.

The Chair :

Thank you, sir.

Mr. Gerry Ritz: I'm not done.

The Chair: Mr. Ritz, I know you're on a roll, but we have to stop it. We're going to move on now to the Liberals for five minutes. Mr. Dhaliwal, you have the floor.

Mr. Sukh Dhaliwal (Surrey—Newton, Lib.) :

Thank you, Mr. Chair, and thank you to the panel members. My question is to Mr. Arthur. You mentioned about moving goods efficiently. If we ratify TPP, do you see any improvement in border security in the process? Is there something that you would like to see happening?

(0840) Mr. Ian Arthur :

That's a great question. Border security is of utmost importance, and security at the airport is reliant upon the countries that actually have security in their own country. We have great arrangements with the United States and most of Europe. It's really important to ensure that there are security agreements between Canada and whatever countries we're going to trade with to ensure that whether it's goods or people, we know what or who they are and we know that they're not coming here to do harm. That's absolutely critical in the aviation industry, as you can imagine.

There are all sorts of goods that are shipped through facilities worldwide that are not what they say they are. The good news is that we have 24/7 security at our shipping facilities and all shipments are scanned and reviewed. Yes, it's of utmost importance.

Mr. Sukh Dhaliwal :

Okay. Thank you. Mr. Stanfield, congratulations. You are one of the oldest successful ventures here locally. My concern is competing with the world. Most of these competitors are producing overseas. You had to go to Bangladesh because your customers forced you to do that. In the present climate, how would you remain competitive when all the larger brands rely more on production overseas?

Mr. Jon David F. Stanfield :

That's a good question, and it's one that we face every day. Our competitors are all very global. They have manufacturing platforms throughout the world. What we have available to us in Canada is a quick turnaround and distribution play. We were vertical from the year 1 forward, so we can turn around product very quickly and get it into the Canadian market quickly. However, the cost structure in certain areas of our business is much higher than it is for those businesses in LDC nations. I think the flattening point could be part of the TPP process.

If some of the benefits of LDC nations are lessened or lowered, companies can utilize the TPP or other trade agreements, whether it's the European agreement or this agreement, to gain access to markets, whether for labour or for products, and import them to allow them to be more competitive in the marketplace against low-cost nation producers, I think that will benefit our company. I think we'll then have a choice to produce the same amount of products in Canada that we do today.

If not, we're going to be producing less, and once you get to a certain level, all of the products will be imported and all of the jobs will be gone on the manufacturing side. That's significant when you think about rural-based small towns.

Mr. Sukh Dhaliwal :

Mr. Ritz said that under the TPP you will be able to bring in a workforce as well. Are you keen to get the TPP ratified and take advantage of the terms of that agreement?

Mr. Jon David F. Stanfield :

Yes, I think so, as long as the skilled labour includes the people who sew, because that's a skill. In the modern world, that's not a skill. A skill is how you integrate technology into your mobile phone or how you integrate technology into a car and these types of things, but maybe not how you sew underwear. The important thing there would be that skills are not tightly defined but broadly defined by industry, versus a specific avenue.

The Chair :

Thank you, Mr. Dhaliwal. We're going to move to the NDP now. Ms. Ramsey, you have the floor for five minutes.

Ms. Tracey Ramsey :

Thank you so much for your presentations. A couple of themes came through. There are some serious gaps between the TPP and what is needed in communities here in Nova Scotia and across Canada in terms of supports, not just for agriculture but across every other sector as well. We've heard that consistently. The other thing is the perception that we can't be or aren't trading in TPP countries. We're 97% tariff-free with TPP countries already. This 3% is the gap we're looking at. There's a very serious price to pay for dropping the tariffs on that 3%.

Essentially, in terms of farming, we've pitted beef and pork farmers against dairy farmers. It's is a horrible situation for us to see playing out in Canada, which has the best agriculture in the world, as far as I'm concerned. Another thing is the money. An economic impact study came out a few weeks ago from the government. It predicts that we'll see 0.127% GDP growth by the year 2040. That would represent $4.3 billion. Ironically, that's the exact same amount that's promised to supply management in the first 15 years of CETA and the TPP. It's essentially cancelling it out.

This isn't the finance committee, but I think we can do the numbers and say that at the end of the day we won't end up seeing the benefit in Canada. Potentially we need to look at other markets, such as Japan, as we've heard here. Mr. van den Heuvel and Mr. Oulton, in New Brunswick we heard a prediction that half of all the Atlantic dairy farms would be wiped out with the TPP. I'm wondering if you could speak in terms of Nova Scotia as to what the impact would be on the supply-managed sectors if they aren't compensated.

If that money doesn't come forward, what would that look like in Nova Scotia for supply management?

(0845) Mr. Chris van den Heuvel :

Thank you very much. That's a great question. As we've said, on the turkey side and on the poultry side, the impact is literally wiping out the entire industry. As far as turkey is concerned, the amount of access that's been granted is equal to the entire production of Nova Scotia and New Brunswick. On the dairy side of things, farm gate sales in 2015 were $120 million in the dairy industry. If we have to give up, between CETA and the TPP, the approximate 6% to 7% that's out there, that represents a little north of $7 million in our province alone. Equate that to a per-job basis.

What's an average wage for a farm worker? It's $30,000 to $35,000. That means 200 jobs wiped out in Nova Scotia year over year. It's a significant impact.

Ms. Tracey Ramsey :

Also, then, the loss of family farms is very significant. I come from a rural riding. I know the impact of that loss on communities and on the spin-off jobs that exist because of farms and communities. Simply, towns exist because of the farming. Thank you for that. Mr. Arthur, are you familiar with the intellectual property

chapter in the trans-Pacific partnership agreement?

Mr. Ian Arthur :

I would have to say no. Technically, no, I'm not.

Ms. Tracey Ramsey :

This is one of the chapters that's of great concern. I won't go into the anti-union rhetoric like my colleague, but the concern in this

chapter is the extension of patent provisions for drugs. What that means for Canadians is that they will pay more, the cost to the provinces will be higher, and people will be less able to afford medication. I assume that this would impact not just your employees, but you as well. This is one of the major themes that we hear in push-back around this deal: the cost to Canada. We're already second-highest in the world in drug costs, and any increase to that would seriously cripple our communities and our ability to maintain health in Canada. This is one of the main themes that people oppose. I have another question. Are you familiar with

chapter 9, the investor state dispute settlement chapter?

Mr. Ian Arthur :

I'm not the technical person on the TPP.

Ms. Tracey Ramsey :

Actually, I'm just asking. It demonstrates the point that this deal is massive. It's 30 chapters, with six that have to do with trade in the way that you two gentlemen are speaking of, and that most Canadians can support. It's the other 24 chapters that are are of great concern to public health, public safety, and jobs in our country. The

chapter on investor state dispute settlement has been used against Canada repeatedly, to the tune of $190 million. Currently, we have cases of $500 million and more that are facing us, mostly around environmental issues. Essentially, it challenges the government's ability to regulate. When we try to put in legislation, as they did in Quebec to stop fracking, they're sued by companies in the U.S. for doing that. These are the concerns we're facing, so I encourage you to read the full agreement, and I know it's quite a bit to undertake. I am pro-trade. I would like to see access to the markets that would benefit from that 3%. What I'm concerned about is the rest of the country.

(0850) The Chair :

Your time is up, Ms. Ramsey. Madame Lapointe is next.

[ Translation ]

Ms. Linda Lapointe (Rivière-des-Mille-Îles, Lib.) :

Thank you, Mr. Chair. Good morning, and welcome to all the witnesses. I am pleased to have you with us today. You represent people from a variety of industries and that is very interesting. Mr. Stanfield, I will start with you, but I have questions for the other witnesses. You talked about duty-free trade. Where do you mainly sell your products? You also said that Canada should continue to support opening new markets. The fact that your company is vertically integrated is a fantastic thing. It lets you respond quickly when you have products manufactured outside Canada. That becomes a real competitive advantage.

How can that be taken even further, to continue to keep jobs here in Canada? In addition, we were told earlier about how innovation and automation could be applied. How can the Canadian government help you do better in those areas?

[ English ]

Mr. Jon David F. Stanfield :

We principally sell our products in Canada, but basically in North America. How can we utilize our quick-to-market strategy to expand our business? Well, we own two U.S. companies as well. We have about 225 employees in the U.S and two factories, one on the east coast and one on the west coast. The U.S. market looks to Canadian producers like a quick access point. The value of the Canadian dollar is obviously helping us. We have strong relationships in the U.S. We are also orienting ourselves to the U.S. market because it's simply a massive market. We also believe we have a compelling story to sell to them.

I think expansion into the U.S. market will benefit us in the future beyond where we are today. About half of our business is done in U.S. dollars now. As part of the TPP, and also because the United States is part of that, we can use cross-docking with third party logistics people to help land products in there faster with our brand, or whatever brands. The vertical integration will help us in creating better relationships and quicker-to-market terms with the U.S. Our markets for our products remain principally in North America.

I don't think we're going to be able to back-sell products into the TPP, but we would be able to use the leverage of the manufacturing folks back into our company. The CETA agreement will provide us much more benefit for our products going to that market due to the currency exchange in the same way as in the U.S. They will orient to a lower-cost country, and in this case it is Canada, because of our currency. We can also provide a great skill set. We have great technologies and innovation in our factory to help us expand.

In answer to the last question, yes, I believe that at some point in our future robotics could be part of what we do in technology to replace the human touch in high-volume areas. For instance, there are six processes in making a brief. Those could be done through robotics, so that's an investment. That would be how the Canadian government could help companies like ours, and rural Nova Scotia, to adapt to the market, lower our costs, and make us more competitive.

[ Translation ]

Ms. Linda Lapointe :

Thank you. My next question is for Mr. Arthur. You told us earlier that you ship a lot of live products, but not just that type of product. Given the quotas, how well are you able to meet Asian demand for live products? One thing you mentioned earlier was shortages when it comes to refrigeration. Do you think you will be able to continue to meet the demand?

[ English ]

Mr. Ian Arthur :

Thank you. It's a good question. We do believe we can satisfy the Asian demand simply because a lot of product is shipped south of the border and then redistributed. We currently ship $150 million in live lobster. We believe that the potential for growth is an additional $400 million to $500 million per year. Refrigeration is really an easy problem to solve in that all we really need to do is build another facility. We have developers who are interested in doing that, so we will be looking to expand as we continue to see more freighters come in.

I must say that while these freighters are of vital importance, Air Canada, WestJet, and Cargojet are our largest shipping partners. Cargojet has dedicated freighters, but Air Canada and WestJet ship in the belly of passenger planes, so we do a lot of belly shipments as well.

(0855) The Chair :

Thank you, Madam Lapointe.

[ Translation ]

Ms. Linda Lapointe :

Thank you. I am sorry, but my allotted time is up.

[ English ]

The Chair :

Now we're going to move on to Madam Ludwig. I know it's difficult sometimes. Our main objective as a committee is to listen and extract as much information as we can from the witnesses and to try to stay away from a debate with them. There's nothing wrong with making suggestions to our witnesses about information that's out there, but I encourage you not to have that debate going on. It makes it very awkward for the witnesses. Madam Ludwig, go ahead, please.

Ms. Karen Ludwig :

Thank you. Good morning, gentlemen. You gave excellent presentations. They were very different, but as my colleague mentioned, there were some similar themes. My first questions are to Mr. Stanfield. You mentioned that you have offshore manufacturing in Bangladesh. Do you sell direct from Bangladesh or is the product coming back to Canada and then being redistributed in Canada and the U.S. primarily?

Mr. Jon David F. Stanfield :

The products would be distributed only in Canada because they're duty-free, so if we were to look at the U.S. market and a cross-dock, we would look at a more preferred nation there, but Canada is probably one of the most preferred nations of manufacturing apparel products into the U.S., from our perspective and our cost base. When we partnered with Vietnam, for instance, over there, they have about 18% duties, so if that were to come off, it would make us much more competitive in the market. With our sources, we were first on the ground over there, so that would be helpful.

All of those monies saved can obviously be reinvested in the business, whether for technology, innovation, expansion, or acquisition south of the border. We're quite proud that we have our head office here in Truro, Nova Scotia, and we run two U.S. operations as well. We would use those dollars to reinvest.

Ms. Karen Ludwig :

Thank you. I'd like to continue with you on this line of questioning. I heard what you said about labour and access to labour and the challenges you face there. As my colleague Mr. Ritz mentioned, we have had significant challenges regarding the temporary foreign worker program. Are you familiar with the Atlantic growth strategy?

Mr. Jon David F. Stanfield :

I'm not really.

Ms. Karen Ludwig :

I would encourage you to reach out to your local MP in Truro. I believe it's Bill Casey .

Mr. Jon David F. Stanfield :

Yes.

Ms. Karen Ludwig :

I could reach out for you. In the Atlantic region we are encouraging businesses to look at their needs and the skills they require, and also to look at the markets in terms of immigration. In this region, we have a pilot to increase employer-led immigration by 2,000 to help fill some of the gaps that you mentioned, particularly in rural Atlantic Canada. I just wanted to mention that. Of the TPP countries, which one is your greatest threat in terms of a country importing to the U.S., which I believe is the primary market for your products?

Mr. Jon David F. Stanfield :

I don't feel threatened by the deal, because we've been in Nova Scotia for 160 years. We've been through free trade agreements that allow countries access by Canada. I think that the world has been levelled to a certain degree, and we have to be competitive in nature to solve a unique problem with each individual customer, whether that's making it in Canada for a Canadian customer, or making it in Canada for a U.S. customer, or making it overseas for a Canadian customer, or cross-docking—landing it in the U.S. for a U.S.-based customer.

We have all kinds of avenues we can pursue, so I wouldn't say that any of these countries is a threat to our business or really a threat to our industry. Our industry was rebalanced in 1993, and it was pretty much decimated across the country then. In sum, the more access we have to labour and the more access we have to markets as well, the more beneficial it will be.

(0900) Ms. Karen Ludwig :

Thank you. We've heard from the agricultural sector and the seafood sector, and certainly the garment sector is new. We've not really heard from anyone to the extent that you've presented, so that's very informative in terms of the access to new markets, the need for diversification, the need for innovation, and certainly the support of government programs. My next questions are to the presenters for the Nova Scotia Federation of Agriculture.

You had mentioned the need for support programs to add changes to market access and not to penalize farmers for looking to diversification on the export side, and how adaptable farmers are is definitely is a theme that we've heard across the country. Are there product lines that potentially the dairy farmers could also be producing alongside, but to a greater extent? We saw quite a bit of that, actually, in P.E.I.

Mr. Chris van den Heuvel :

Product lines for export, you mean? The problem with export as far as dairy is concerned is that we're forced to export at the prices that we have set domestically, so that actually creates a disadvantage for us when we export product. There certainly are value-added lines that we could be getting into—the ice creams and yogurts and those types of things—rather than just fluid milk. I don't want to say the word “negative” because it's not negative, but one of the things I mentioned about the supply-managed systems is the fact that we have to sell worldwide at our domestic price, so that makes it difficult.

The Chair :

Thank you. That wraps up your time. We're going to go to our last MP on this panel, Mr. Van Kesteren . Go ahead, sir.

Mr. Dave Van Kesteren (Chatham-Kent—Leamington, CPC) :

Thank you, Chair. Mr. Stanfield, you said 1993. I assume you mean that once NAFTA was enacted, it stabilized the industry?

Mr. Jon David F. Stanfield :

No. That would have decimated the industry.

Mr. Dave Van Kesteren :

Decimated. But you were able to rebound. How did you do that? I applaud you as a family.

Mr. Jon David F. Stanfield :

I don't know. It's probably that history and blood and all of those types of things keep us in Truro and keep us in the province of Nova Scotia. Really, my father sat on the tribunal for NAFTA and he left that tribunal for two reasons. One was that he had to go and rebuild the company with the decision that we were making. Our decision at that point in time was to acquire in the U.S., which would allow us to expand quite quickly, so we bought a company in 1993 and 1997.

We did that very rapidly, and it took our revenues to 50% in Canada and 50% in the U.S., so that really levelled our playing field and allowed us to continue to grow through the rebalancing of what NAFTA did to the apparel trade. In the same time frame, a lot of manufacturers in Canada at the time—the majority of the other players, other than men's suits, which is a specialty out of the Quebec market—quickly went to Bangladesh and these other nations to gain probably profitability and margin, while we felt a commitment to Canada and a commitment to the province was the better route for us to take.

A more strategic play for us was to remain here and produce as much as we could in Canada and also use our monies and margins that we gained through selling our products to acquire various brands across various channels and in different countries.

Mr. Dave Van Kesteren :

As I said, I applaud you for that and I congratulate you for what we all know as an important and iconic industry here in Canada. I want to go to the farmers for a minute. I've had some discussions with our chair, Mr. Eyking . Mr. Eyking and I of course share a background. His parents came from the Netherlands, as do mine. I asked him how in the world a Dutchman wound up in Cape Breton. His dad saw that there was a population there that needed to be fed, and that's what economics is all about: supply and demand, willing buyers and willing sellers.

He told me the history and how they produced products that were needed by the local population. I haven't much time left and so I'd better clam up myself, but I wonder if you could give us a snapshot of agriculture in Nova Scotia, primarily in Cape Breton, and what other opportunities you have. As Mr. Eyking pointed out, there were produce crops, and I think they did quite well.

(0905) Mr. Chris van den Heuvel :

Thank you very much. I'd like to reiterate what some of the other speakers have said here today. We're certainly not opposed to the TPP and CETA agreements. We commend the government for the opportunity. There is room for growth, especially on the export side, around blueberries and things like that, and some of the products that we excel at growing here in Nova Scotia. We have the right climate, the right ground, the right work ethic, and the right attitude around—

Mr. Dave Van Kesteren :

I wonder if I could just lead you a little. We know about that and I'm really happy about that, but we saw in Prince Edward Island, for instance, they're going soybeans and corn. Maybe you could just expand on that.

Mr. Chris van den Heuvel :

There's tremendous opportunity there. There has been a decline in agricultural operations in Nova Scotia. There's huge potential in the amount of fallow land that's there for things such as soybeans. Clean, green technology is huge, giving farmers the ability to produce clean renewable energy through anaerobic digesters and wind technologies and things like that. There are tremendous opportunities there for farmers.

The Chair :

Your time is pretty well up. That ends this first panel here today. I thank you, gentlemen, for coming and presenting very different perspectives from the very different industries that you represent. Thank you for coming, and thank you for the good dialogue with the MPs. We're going to suspend for just five minutes, because we're running a little short on time to get the next crew on deck. Thank you.

(0905) (0915) The Chair :

Welcome, gentlemen, and welcome to anybody who has joined our proceedings for the House of Commons trade committee. Our main focus and the study we're right in the middle of right now is the TPP, which is a big agreement amongst 12 countries. Forty per cent of the GDP is there, and there are 800 million consumers. I think it's a deal that affects all Canadians in various ways. There's a lot of interest, and that's why our committee is doing consultations right across the country. We've been in every province and in communication with the territories.

We've had over 200 briefs, witnesses and, of course, many individual Canadians want their input. We've had over 20,000 emails. We're going to continue to do this up until the end of October, and after that we're going to put our study together. Then we'll present it later on in the year, or maybe at the start of the following year, to the House of Commons. Trade is big for Canada, as you know, and especially with all the concerns down in the United States with their election, trade is a big topic. Our committee also deals with other issues.

We have a trade agreement with Europe that's being completed, and we also have issues ongoing with our big trade partner with softwood lumber, as well as some agriculture issues. Our committee comprises members from right across the country, so we have good representation on the committee side. We're going to start with Mr. Burke, a friend and a neighbour of mine from Cape Breton, who handles a lot of fish products. It's good to see you here, sir. You have the floor.

Mr. Osborne Burke (General Manager, Victoria Co-operative Fisheries Ltd.) :

Thank you, Mr. Chair, and members of the committee. I'm pleased to have the opportunity to come here today and speak to your committee. I'm a general manager at a local fishermen's co-op in northern Cape Breton, so we're in a rural area. We're a major employer in our county, and this year marks 60 years of operation. We were incorporated back in 1956, and started out as more or less a fresh-fish operation and progressed into a ground fishery. We all know the history of the ground fishery.

In the early 1990s that closed out, but the co-op members and the board had the wisdom to switch gears very quickly and get into shellfish, both processing of lobster—we're the only company in Cape Breton that processes lobster—and into snow crab, as the two primary ones. We also handle other species such as halibut. We're into Jonah crab, rock crab, and mackerel, so there's a variety of species. In 2015, we basically purchased about $20 million's worth of product from our local fishermen.

That spans about 100 miles of coast and seven small harbours, from 10 vessels to 35 vessels, and our sales were in excess of $26 million. In the past few years we've started to look into other markets, because primarily our market is the U.S. We spent a number of years travelling on trade missions, notably Brussels for four years now. China would be year two, times two, because I had just come back when Minister Colwell and Premier McNeil were there. We were in Hong Kong as well, and China. We also obviously travel to the big show in Boston.

We decided to make a decision to start to move some of our sales and some of our product into the Asian market, which I think is a heck of an opportunity for us, and to look at diversifying a bit so we don't have all our eggs in one basket, so to speak. With regard to free trade agreements in general, whether NAFTA or CETA, which we've heard about for a number of years, or TPP, in the seafood industry and in terms of our export industry, it's certainly positive anytime we can reduce tariffs and reduce restrictions. There's always a caution, as a Canadian citizen, that there could be other impacts.

As we heard earlier from agriculture, there are positives and negatives. Hopefully with wisdom, governments can provide protection for the industries, because there are going to be winners and losers, as there are in any kind of an agreement. For us, in terms of tariffs, we're doing business now or have shipped to five of the 12 countries involved, namely Vietnam, Singapore, Japan, the U.S., and Canada. When I look at Vietnam, there is potential to reduce the tariff by 34% on processed lobster. It's significant.

Even in the case of Japan, we're talking 4% on snow crab products—and they are a big consumer of snow crab—or 5% on lobster, and there is 3.5% or so referenced on halibut there and in some of the other countries. There is potential for reducing those tariffs and to increase our opportunities to export. Some of the challenge we have as we go forward and increase our production levels occurs because we're in a rural community. The vast majority of processing facilities in Nova Scotia are in rural communities. I can only think of maybe two that are near Halifax, so it's near and dear to the coastal communities.

The labour force is a continual challenge, seasonal portions of it, at least for us. There are peaks and valleys and landings. That will be an ongoing challenge. We have used foreign workers in the past from the temporary foreign worker program. It is extremely costly and entails a lot of red tape. Our local workers were supportive of that because without the foreign workers in a couple of those years, I don't know how we would have pulled it off. Certainly going forward, we see that as a challenge as we increase the trade.

We have people of the age of 70 to the age of 16 working at times in our processing facility, and we're competing with the local fishing industry, which is growing in leaps and bounds. We're competing with the tourism industry, so especially in our April to October season we're extremely challenged by the workforce situation.

(0920) If we look at CETA, which hopefully we will finalize somewhere along the way, as the minister mentioned earlier, we see that this whole proposed Swedish-EU ban on lobster needs to be taken very seriously as an example of what could happen in another trade agreement. Lobster is part of a list of species. The rest are all non-commercial under this proposed ban, but lobster is tagged on with the rest. There's real argument from industry to separate lobster on this EU ban. If it isn't separated and the committee decides to go ahead on flawed science, it all goes as one package.

There's no passing part of it and not the other. I throw that caution out to every member here to really raise that issue with anyone and everyone that we can. There's intergovernmental involvement, both provincially and federally, and everybody working on it. Hopefully, we won't see something similar under the trans-Pacific partnership agreement.

(0925) The Chair :

Can you wrap it up, Mr. Burke?

Mr. Osborne Burke :

Yes. One of the MPs asked earlier about Atlantic Canada working together on the trade mission. Whether it's in Brussels, Boston, Hong Kong, or Qingdao, the four Atlantic provinces are sharing costs and working together. Even though we may be competitors at times, we work as partners because we'll never be able to supply the volume that's in the Asian market. If 10% of the Chinese population all bought one lobster, there wouldn't be any left. There are opportunities for value-added and opportunities to build relationships, which take time in the Asian market, but also opportunities to sell a high-quality, high-value product there.

The Chair :

Thank you, and thank you for your work. To milestone your association, it's been 60 years. It's made a big difference for the fishers. It's also made a big difference by working on the Atlantic Canada strategy. Talking about Atlantic Canada strategies, we have Mr. Poschmann, who is with the Atlantic Provinces Economic Council. Go ahead, sir. You have the floor for five minutes.

Mr. Finn Poschmann (President and Chief Executive Officer, Atlantic Provinces Economic Council) :

Thank you, Mr. Chairman. Good morning. I'm delighted to be here in front of the members. I'm Finn Poschmann, president of the Atlantic Provinces Economic Council, a charitable think tank with the wonderfully simple mandate of promoting the economic well-being of the Atlantic region. We've been around since 1954, and my favourite underwear is Stanfield's. Trade, international trade, and investor protection deals are not always big deals, not always big political footballs. We have a trade deal with Chile, for example, signed 20 years ago, and nobody has ever noticed it much.

Meanwhile, our world is criss-crossed by a web of bilateral investment treaties, about 3,000 of them. Canada is signatory to dozens of them, not all enforced. They're not always big political or economic issues. They facilitate doing business and moving people, goods, and services across borders. We have two very big current deals awaiting ratification, and they are big political footballs; they're important to Canada. Canada should be cheering these deals enthusiastically.

I'm referring to the Comprehensive Economic and Trade Agreement with the EU and the trans-Pacific partnership, the topic of our discussion today. Many of us have mentioned CETA in passing, and I'll do the same. CETA is important to us because it improves market access for our goods and services in Europe, and it also improves prices and product choices here. It'll bring more competition into public procurement, and, even better in my view, it will put a little bit of a dent in the supply management system, and I think that's good.

Most of CETA can be provisionally applied, but it's not legally binding until it's been ratified by individual EU member states. That process has been horrendously complicated by Britain's decision to leave the EU, and the deal is under attack in many countries from the left and the right. Opponents in the EU are concerned about Canada weakening their environmental and labour standards, so I think we need a charm offensive on behalf of Canadian trade in Europe. It's hard to say whether prospects are worse for TPP.

As we've heard, TPP would boost markets nicely for our sea products and other agricultural goods and it would provide a bit of a boost to our ports and transport sectors. Canada came late to the TPP negotiations. We were under some encouragement from Australia and New Zealand, which saw that the deal would be easier to sell in the U.S. if Canada was in. Those countries also wanted dairy market access in Canada, and they will get a little bit of it. Over the course of 20 years, the deal will slightly increase our supply of milk for industrial processing, with only a small impact on the retail market.

That's a good start, too. The barriers to TPP ratification are not here in Canada. For the moment, they're in the United States. President Barack Obama's administration had enthusiastically backed TPP, and they negotiated it. President Obama secured trade promotion authority, or fast track, in Congress with bipartisan support, with the full expectation that the deal would eventually pass. When Hillary Clinton was Secretary of State, she said the TPP was the gold standard of trade deals; not everything Donald Trump says is wrong.

While her comment about the gold standard was probably hyperbolic, no trade deal is perfect. They always represent a muddied middle ground of negotiations between economic and political parties. It's a good deal nonetheless, because it opens markets under broader and better terms for Canadians already selling into many of the Asian markets.

(0930) The TPP, as I've hinted, certainly is not perfect. With respect to intellectual property, I agree that there are patent extensions as well as copyright term extensions that I don't think do anybody much good. Mostly with respect to patents, it's not a very big shift for Canada, but I can't say that we needed it either.

The Chair :

Could you wrap up, sir?

Mr. Finn Poschmann :

I will. I think it's a good place to do so. The current game is in the U.S. political system. We have among the current presidential candidates no sincere champions of the deal post-January 2017. There is a narrow window between the election and January when the President of the United States could push for ratification in the Senate. That would be politically very ugly, but it is plausible. It's another case for a charm offensive, because if the U.S. president is willing to take that risk before mid-January, then Canada should be there enthusiastically backing and cheering on.

The Chair :

Thank you, sir. We have Janet Eaton. It's great to see you here, Janet. I heard you had some vehicle trouble and you made it here a little late.

Dr. Janet Eaton (Representative, Common Frontiers Canada) :

Just a little.

The Chair :

Your timing is still perfect, because we had an opening here. If you have put yourself together after your car troubles, could you give us a few minutes to tell us about yourself and your ideas on the TPP?

Dr. Janet Eaton :

Sure.

The Chair :

Are you good to go?

Dr. Janet Eaton :

In all the confusion, I did leave my briefcase and my notes in the tow truck, but I'll just—

(0935) The Chair :

Just speak from your heart, and when you get close to five minutes, I'll tell you, but take whatever time you need.

Dr. Janet Eaton :

Did you want some background on me?

The Chair :

Just a little background, but try to keep it under five minutes, and then we'll have dialogue with the MPs. Go ahead. You have the floor.

Dr. Janet Eaton :

Well, I guess I've always considered myself an academic activist. I've done some teaching on globalization issues and community political power and on environment and sustainable society and those types of courses. I've also worked for the last 20 years in the global justice movement. I've worked with Sierra Club Canada for years, and I actually represent Sierra Club Canada on the Common Frontiers group, whose brief was submitted to this committee. Common Frontiers, as the brief indicated, is a network of many groups across the country from environment, faith-based, union, and international development groups.

I've been working in that group for probably 15 years now. This group works across the Americas. It's always had concerns about neo-liberalism. It does research and education work and it works in Latin America on the social, economic, and environmental impacts of neo-liberalism. In our brief, we begin by commenting on our concerns with neo-liberalism and the existing free trade model because of its impact on democracy, sovereignty, environment and sustainability, equity, and a number of other issues.

We view the issues stemming from the TPP and the mega trade agreements within the broader context of neo-liberalism, as I said, under which free trade agreements are one of several tools that seek to shift power away from citizens in a democratic society. We actually have recommended in our brief against the signing of the TPP as it is. We're particularly very concerned about the investor state agreement, which I'm sure you've heard much about from other groups as well.

As you would know, our government is concerned about it because they have done something to help ameliorate that condition in regard to the CETA agreement with Europe, but not so with the TPP. We feel it has many aspects that really need to be reconsidered. We also believe that within the whole area of neo-liberalism, we see constantly from day to day, week to week, the analyses coming out that it is a failed system and that it has not worked well. Even yesterday there was a report from the IMF suggesting that neo-liberalism has failed.

The way we approached the subject was to consider some of the impacts on what you might call the different sectors, and I'm sure you've heard from all those sectors at this point. We were concerned about the impact on local governance because, if we're looking to a future where perhaps there is some kind of financial, economic, or environmental collapse, we're going to have to be working from the bottom up. We're going to need our local economies.

If you've looked at the analysis of Professor Jane Kelsey from Australia, who's one of the top-notch lawyers in this field, she points out all of the areas where this agreement has impacts on the ability of municipalities and municipal governments to legislate and also suggests that it will have a severe impact on local economic development strategies. That is a concern, particularly in some parts of Canada.

We know that local agriculture, for example, is absolutely crucial, but we know that within this agreement, if you're over the $300,000 benchmark, it could inhibit local farmers, for example in this province, from being able to supply certain larger public institutions, and that's just one example that I'm aware of locally.

The Chair :

You have half a minute to wrap up your final comments.

Dr. Janet Eaton :

We go through some of the issues with free trade in general, some of the theoretical issues, and cite some of the literature, and then we look at some of the concerns around the global economy and whether it could be at this point in a sort of a downward nosedive. We really need to have some alternatives on the back burner.

Our brief really speaks to the recommendations as to how we could make free trade fairer, and it also hints at the fact that we would do that within the concept of a transformed economy, which will have to look at a number of different models, which might suggest such a thing as a think tank to make sure that we have some back-burner policies if the global economy gets worse than it is right now.

The Chair :

Thank you. That finishes the panellists' briefings. Now we'll go to dialogue with the MPs. Each one will get five minutes, and if they keep it tight, we can get this done in time. We're going to start off with the Conservatives. Mr. Van Kesteren, you're first. Go ahead, sir.

Mr. Dave Van Kesteren :

Thank you, Chair. Thank you all for being here. Finn, we saw each other a few weeks ago. Mr. Burke, I say congratulations on what you're doing. Against my better judgment, I'm going to engage you this evening, because I'm intrigued by what you're saying. I really am. I'm a free-market thinker. I believe in the free-market system. I think we would agree that system has brought about more wealth and betterment, but there have been challenges. Everybody knows that, but the world is a better place because of free trade and the free exchange of ideas that follows that.

I'm not an academic and I'm certainly not going to engage you in this way. I'm open to new ideas and I think we have to be careful. What's interesting about your presentation is that you talk about some other things we haven't heard about yet—for instance, a global meltdown. It's not been talked about too much, but there are those—and I know Mr. Poschmann and I had a brief discussion about that—who think that the globe is in a very precarious state at this particular point and that there is always that possibility. My question is this.

As a free-market thinker, I completely believe in the unguided hand and how we see that marvellous spread of the economy as it moves. If you take that away, what are you suggesting? Are we going to have think tanks determine how we now proceed with a new economy and a new strategy? Can you elaborate on that a bit?

(0940) Dr. Janet Eaton :

One of the things we talk about in the brief is that free trade as it was envisioned years ago, in terms of comparative advantage and whatnot, was defined by Ricardo within certain constraints, such as a national economy and a balance in trade and so on, and that is not able to happen in a globalized situation. I agree that we need markets. That they should be as free as they have been in the last decade under neo-liberalism, I think is very questionable.

I agree that many parts of the world have improved because of a market economy, but I think many of us, even 15 years ago, were warning that it was a little too free and open. It was accompanied by deregulation, by privatization, by a diminution of the public service sector, and so on. As you say, it is possible to cite many advantages, but what you don't often hear as much about are the disadvantages. Particularly as a group that works across the Americas and through Latin America, we've seen the poverty that existed there under neo-liberalism, and it's quite stunning.

Just because the Brazilian president has been evicted for what some people feel are unjust reasons.... The conservative government that's taken over is very crime-ridden and is pulling back on all of the progressive moves that have been made since Lula Da Silva got in some years ago. If you look at that closely, it's not a very pretty picture. I'm just saying that we haven't really looked at the downside of this whole free-market neo-liberal model. What we do know is that it is leading to runaway climate change and to contamination of ecosystems. Many of our ecosystems are starting to actually collapse.

If we look at the coral reefs in Australia and other places, we see climate-change issues. Some people actually feel the climate-change issue now has reached a point where it's almost beyond being able to—

Mr. Dave Van Kesteren :

I have to cut you off, because I'm out of time. Wouldn't you agree, because we've had this discussion with fishers—I'll use the correct term here—that in an advanced economy, many of those things you talk about don't take place anymore because we've corrected those things, such as, for instance, overfishing? We've learned our lesson and we now set the example, so as economies progress, we can set the standard rather than being the nation that leads the globe into the pit.

Dr. Janet Eaton :

Well, we see poverty even in developed societies, and we see the democratic and sovereignty aspect being set aside, as we've experienced right here in Nova Scotia with the Digby Neck quarry investor state issue. We find that is really unacceptable at this point. Just to say more about this investor state side of things—

(0945) The Chair :

Sorry, the time is up.

Mr. Dave Van Kesteren :

I was afraid we'd get into too long a time. Maybe we'll get a chance to talk about it later.

Dr. Janet Eaton :

Yes. Sorry about that.

The Chair :

When I cut it off, I'm not really cutting off the witnesses; I'm cutting off the MP's time. I have to keep it around five minutes so everybody can get a shot. We're going to move over to the Liberals. Madame Lapointe, go ahead, for five minutes.

[ Translation ]

Ms. Linda Lapointe :

Thank you, Mr. Chair. Good morning. I would like to welcome the witnesses who are with us this morning. It was a pleasure to listen to your comments, which were very interesting. My question is for you, Mr. Porschmann. What do you think might be the consequences for Nova Scotia of the TPP being ratified without Canada's participation?

Mr. Finn Poschmann :

Thank you for the question. [ English ] The question is about the impact on Nova Scotia in the absence of TPP. It's a really interesting question. In dollar terms, our Atlantic exports from the region, Nova Scotia exports, are overwhelmingly dominated by energy products, by petroleum products, flowing into the U.S., primarily through New Brunswick. That's where the giant numbers are with respect to the Atlantic region's trade, and Nova Scotia is part of that.

The losses if we're not in it—or otherwise put, the missed gains—are in the seafood sector primarily, both in product and in improved tariff access or lower tariffs in the Asian markets. The percentages in potential tariff reductions seem small, but they're going to matter. The potential opening in Vietnam is fascinating. If you look through the schedule, you see that Vietnam looks to be among the really big winners in the system. Ratification has been held up by the government in Hanoi for reasons unknown to me, and I'll leave it to others to figure out Hanoi's internal politics.

However, the gains primarily for us are in seafood and other agricultural products.

[ Translation ]

Ms. Linda Lapointe :

Thank you. From another angle, if the TPP were not signed and Canada went back to the bargaining table, what aspects would you like to see changed, apart from the length of patents, that you mentioned a little earlier?

[ English ]

Mr. Finn Poschmann :

I'm not sure I would look for a lot. If we had our druthers and our preferences.... It's sort of difficult to picture, because you'd have to bring a lot of people around the table to do it again and give up things or provide access that they didn't before. The time period over which tariff rates are phased down, say in Japan, is very long. It's very incremental, and this applies in some relatively protected sectors in other countries. If we were going to do something, it would be to push for faster reductions.

However, of course, the paces of tariff reduction in those countries were agreed to exactly because that was where they were drawing their bottom line. Reopening doesn't look like a whole lot of fun, and whether we can picture such a scenario in the medium term really depends on what happens in the U.S. and the approach that a future U.S. president will take, because without the U.S. at the table, the agreement pretty much loses its steam.

[ Translation ]

Ms. Linda Lapointe :

Thank you. My next question is for Mr. Burke. You said earlier that your challenge is finding workers. How can the Canadian government help you find qualified workers? Is this in innovation research? Where do you see possibilities in this regard?

[ English ]

Mr. Osborne Burke :

In finding workers, our only experience to date was the temporary foreign worker program. It's a very costly process. Typically, we need support for about 10% of our workforce in the rural areas. Reduce the amount of red tape and the requirements on the temporary foreign program. We look to it as a supplement to our existing workers. For example, we're facing peak periods of product being landed, whether it be lobster as the stocks increase or snow crab, and we just don't have the workforce to deal with it, but we don't need it 12 months of the year necessarily.

Where we can, we're employing local workers, but there are challenges in rural economies, and the population is not there. Under the current program we pay $1,000 per applicant. To bring 10 workers from Thailand costs us almost $40,000 before they work one hour. That's a challenge for a small business. Reduce the cost. Reduce the red tape. We have to pay the same wages. We have to pay housing. We have to pay medical and dental insurance. Contrary to what may be reported in the media, it's a costly process that we prefer not to use.

Longer term, some automation but also immigration to our rural communities may help. We need new blood, more people. We have schools that are closing. The opportunity is here with these free trade agreements to increase production, but we need more people in our rural communities.

(0950) The Chair :

Thank you, Mr. Burke. We have to move on. We are going to the NDP now, and Ms. Ramsey, you have the floor.

Ms. Tracey Ramsey :

Thank you very much for your presentations. I think you can see the challenges that we're up against. There is this thought in the general public that we'll see big economic gains out of the TPP, but there are many studies, including our own economic impact study, that show that is not the case and that the growth will be negligible for Canada. There are studies by Tufts University, the C.D. Howe Institute, the Peterson Institute for International Economics, and again, our own economic impact assessment. When we look at those, of course we want to look at the provincial implications as well. Mr.

Burke, you have highlighted many issues—you talked about the Swedish issue with the non-tariff barrier that exists—and yet we keep going into these trade agreements without actually fixing those problems for folks who would benefit. Certainly, we hear from you that you would. I think that is what's driving this conversation on the global stage. Ms. Eaton, you said that the International Monetary Fund has released a document entitled “Neoliberalism: Oversold?” It was quite surprising to a lot of folks, but it is part of the larger conversation that we're having.

I want to ask you about the ISDS provision specifically, because many countries around the world are rejecting this. Brazil and India will not sign an agreement with ISDS provisions. We're the most sued country in the world under these provisions in

chapter 11 of NAFTA. I wonder if you can speak to what's happening globally and whether you feel that we could push back here in Canada against the provisions that have worked against us.

Dr. Janet Eaton :

Thank you. Yes, globally you've mentioned that many countries in the world now are starting to look to renegotiate their investor state agreements, their BITs—their bilaterals—and their free trade agreements that have this

chapter in them, and that's for obvious reasons. What we found is that many of them signed onto these with very little understanding. The developed world came in and it looked good. Once all of these cases started to emerge, they had second thoughts, and so that's going on. What we're finding in Canada is that a high number of these cases are attacking our environment legislation or health, and people are concerned that our legislation, which has been democratically put in place, is being unfairly challenged by an offshore court before using our own domestic court.

We find that this offshore investor state tribunal is not at all like a public court. It's made up of three people who are trade lawyers, and they're not paid a regular salary. In other words, they're not on a permanent court and have no tenure. They don't even have a permanent base of knowledge. They don't have a permanent location. They come into a hotel room, often, and stick a sign up as to which base they're with.

The other thing about it is that the protections that the corporate sector is offered—things like national treatment and expropriation—because of that lack of a permanent base of knowledge and because of what some people consider a bit of bias with the international trade lawyers, are often based on decisions that are made in a more arbitrary way. I noticed that when I started to examine what happened with the Digby Neck quarry case, which I participated in for the early stages and which was not permitted by the joint panel. Then a case was brought back by Bilcon, the company, and that's still going on.

The federal government is trying to have that whole thing set aside because it was so unfairly judged. It was determined that it should have been a domestic court that examined this particular issue that came up—

(0955) Ms. Tracey Ramsey :

Yes, we have such a progressive court system here in Canada. It's shocking to think that we're going to use this other court system that doesn't have jurisprudence.

Dr. Janet Eaton :

Yes.

Ms. Tracey Ramsey :

We don't know who's there or what role they're playing.

Dr. Janet Eaton :

Exactly. There's conflict of interest as well. That's been highly identified in reports in Europe.

Ms. Tracey Ramsey :

We've had open mike periods in every city that we've gone to, and nearly every person has spoken about ISDS and their concerns. Average Canadians, I think, have concerns—

Dr. Janet Eaton :

They do.

Ms. Tracey Ramsey :

—about this provision in deals, and they are calling for it to be rejected as well.

Dr. Janet Eaton :

Right. If you have a look at our recommendations, many of them do go to not moving forward as long as there is an ISDS segment. We cite the UN expert, Alfred de Zayas, who has done a 40-some-page report for the UN General Assembly. He's an expert on international order and democracy. He says that this agreement should be subservient to international law. That international law says that business agreements should be subservient, and that's not happening.

Ms. Tracey Ramsey :

We heard from the Grand Manan Fishermen's Association that they're concerned about ISDS, too.

The Chair :

Ms. Ramsey, your time's up. Sorry. You have to move on and try and keep to the five minutes. Madam Ludwig, go ahead.

Ms. Karen Ludwig :

Thank you for all your presentations. I'm glad, Ms. Eaton, that you made it here this morning. Even without your notes, you've done exceptionally well.

Dr. Janet Eaton :

Well, thank you.

Ms. Karen Ludwig :

Mr. Burke, I represent a riding that is heavily engaged in the fishery section. I represent islands. We have lobster. We have scallops. We also have agriculture. We also have science services. It's a diversified economy in New Brunswick Southwest. Much of your position has been discussed, and it's definitely reinforced across the country. I have a couple of questions for you. When it comes to market diversification, is your organization, the Victoria Co-op Fisheries Limited, working together with other organizations across the region to promote not only Nova Scotia products but Atlantic Canadian products?

Mr. Osborne Burke :

Yes, especially in the trade shows. As an example, we're off to Qingdao, with Seoul, South Korea, coming up, and then Shanghai. At most of these shows, we are sending off product—lobster and snow crab. That will be shared in the Atlantic Canadian booth. There is a chef shared by the four Atlantic provinces. There are partnerships with Agri-Food Canada and the four provinces. As an example, we are providing lobster and snow crab. Not everybody is going to bring that, but all the provinces generally have that product, so there is a sharing of product.

If somebody comes to the booth and speaks to me, we may not have a particular product, but one of our counterparts does. It's a very team-oriented approach, as we are not threatened. We work every day with Cape Bald Packers from New Brunswick. They buy side by side with us. We ship. Some days they are stuck and need someone to pick up their lobsters. There is a lot of that coordination and co-operation, big time, happening in the Atlantic Canada provinces.

Ms. Karen Ludwig :

I really compliment you on that model. I've had years of teaching international trade and product development, and often your competition can be your greatest ally, sometimes even the competition abroad. There are partnerships available. Although we think of ourselves as literally a big fish in the pond for lobster, on an international scale we are a small market.

Mr. Osborne Burke :

I'm quite familiar with Grand Manan and with Melanie, Bonnie, and all the group, and with Klaus when he was there.

Ms. Karen Ludwig :

Ms. Eaton, I need some help in balancing out the spectrum of comments that we've had. Certainly in a number of comments people have spoken indirectly—yours were directly—about neo-liberalism, but they were also talking of binaries and polarization of issues, to somehow find a common ground that we can share with Canadians to move forward with or without this agreement. There are costs to ratifying it, and there are also costs to not ratifying it. This morning, just after the presentations, I spoke with Mr.

Colwell, the agriculture and aquaculture minister here, and I asked him what the implications would be on the provincial side for Nova Scotia if the other countries went ahead, particularly the U.S. and Japan, and ratified the agreement and Canada did not. Would it rectify some of the issues that we see on the polarized end regarding the concerns about health care, pharmacare programs, and the cost of drugs? Yes, the cost of drugs, as we've heard from a number of different witnesses, will rise significantly, but Mr. Colwell's point was that for every $1 in export, it's the equivalent of $7 in return.

As a province, the argument may be from a provincial level that looking for those who are the most in need and the most vulnerable is often taken care of, to some extent, by a provincial or federal government. If we had less revenue drawn from the international trade market and we had a lower price or a consistent price in medicare costs, how could we balance that out? We now have a social service network that may not have the same support that it would have if we had higher exports in international trade.

(1000) The Chair :

I'm sorry, but just before you go there, your time is up. My understanding is that in the next round Mr. Dhaliwal is going to give you his time. If you want to continue with that conversation, go ahead, because the Liberals have five more minutes.

Ms. Karen Ludwig: It was a big question.

Dr. Janet Eaton :

Yes, it is a big question, and I think there's one aspect here that hasn't been considered and which I was alluding to earlier, which is that there are two different dominant paradigms that we're looking at here. If we are talking about limits to growth and any possibility of collapse, then we need to be viewing things from a systemic paradigm. Right now, some people would suggest that the dominant one is more of a mechanistic paradigm that is not looking so much at the interconnections, the relationships, and the systems thinking, although that's starting.

Just to get back to what would happen, I want to say that some of the things I'm talking about are an end-of-growth model. There is a lot of literature on the end of growth. That's why we're talking about the limitations of a dominant neo-liberal model that's based on free trade in order to create more growth. There are suggestions coming from the financial sector and from the general economic sector that this is not going to be able to go on. I alluded to some of the economists who are talking about the fact that there will be no more growth.

Even Larry Summers, who advises the Liberal Party, is saying that we're into “secular stagnation” for 10 years. Another famous economist, Gordon, is saying it could be 25 years. Paul Mason, an economic journalist in the U.K., is analyzing the Kondratev curves, the 50-year curves illustrating how we go down into depression and we come out. He's saying that we aren't going to come out of this, partly because of technology and robots, but partly because of the limits to growth too. There is a lot of literature on that as well.

Ms. Karen Ludwig :

Dr. Eaton, excuse me. If you were at the end of a wharf and having a conversation with one of Mr. Burke's fishers, who at the very basic level is out there harvesting fish for sale, and the argument potentially is that we're going to limit the market because we see some of the other issues.... That's my juxtaposition. That's my challenge right now: trying to explain to someone—let's say, a fisher at the end of a wharf—why we need to change that market, because of such.... It's a very hard argument to have.

Dr. Janet Eaton :

It is a hard argument, and you can't do it unless you look at the literature and the analysis and the modelling. It is coming from economists and others who are working under the assumption that we have reached the end of growth and who are looking at alternate models such as planned degrowth and co-operative localization, which are inhibited to some extent by trade agreements and by grassroots movements around the world. This has to be understood.

The other thing is that Peter Victor, an economist in Canada, I think at York, has done modelling showing that we can exist in this country totally within a domestic economy without really altering our services or our general well-being—not that we necessarily want that, but we may need to slow down growth. It may be that we don't need these mega-agreements, because they're putting us in a vulnerable position. For example, the U.S. has crafted these agreements. They decide who gets in on them, and then we get engulfed in their foreign policy.

Part of the TPP is the Asia “pivot”, which is the foreign policy that the U.S. has adopted to isolate China. So there's a lot more to this. A lot of people say it's not as much about trade as it is about the other aspects, and they say it's an initiative for more global control beyond our borders.

(1005) Ms. Karen Ludwig :

Thank you so much. Mr. Poschmann, in April the C.D. Howe Institute suggested that if Canada does not ratify the TPP, welfare costs in Canada would increase to $1.7 billion by 2035. They also suggested that for a number of sectors, such as automobiles, the losses predicted under TPP cannot be avoided by Canada's staying out. How would you respond to that?

Mr. Finn Poschmann :

There's a contradistinction there. If we're not in TPP, the losses have a dollar value but not a huge dollar value, which is the flip side of saying that within TPP there are gains but they're not huge dollar gains. As to the auto sector, I agree fully. If the TPP goes forward and Canada's not in it, then the market structure changes between the Asian producers and what they make