Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
OTTAWA, Thursday, May 19, 2016
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:30 a.m. to study foreign relations and international trade generally (topic: bilateral, regional and multilateral trade agreements: prospects for Canada).
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: The Standing Senate Committee on Foreign Affairs and International Trade is examining this morning, and is authorized to do so, such issues as from time to time arise relating to foreign relations and international trade generally. Under this mandate, the committee will continue to hear witnesses today on the topic of bilateral, regional and multilateral trade agreements: prospects for Canada.
To date, we have heard many witnesses from many fields, and I'm pleased today to continue our study with Joy Nott, President of the Canadian Association of Importers and Exporters; Brian Kingston, Vice President of Fiscal and International Issues at the Business Council of Canada; and Stuart Trew, Senior Editor of The Monitor at the Canadian Centre for Policy Alternatives.
Your biographies are known to us and have been circulated, I believe, so, for efficiency, I'm just going to turn to our speakers to give their opening statements and then encourage you to leave time for questions from senators. Welcome to the committee. I'm going to take you in the order I introduced you from the agenda paper, so I turn to you, Ms. Nott, for your opening remarks.
Joy Nott, President, Canadian Association of Importers and Exporters: Thank you, Madam Chair and members of committee, for giving us the opportunity to be here today to have input on this important topic.
As you heard, my name is Joy Nott and I'm President and CEO of I.E. Canada, known as the Canadian Association of Importers and Exporters. I.E. Canada is a national trade association that has been speaking on behalf of the Canadian trade community for almost 85 years. Our members include importers, exporters, Canadian manufacturers who both import and export, wholesalers and distributers, retailers and supply chain service providers. Our members employ over 1 million Canadians and generated $270 billion in 2010 in annual revenue for the Canadian economy. We represent some of the largest importers and exporters in Canada, as well as small- and medium-sized businesses. Our members import and export across most commodities and product lines, literally everything from coffee beans to car parts.
In brief, I.E. Canada members strongly support trade agreements such as TPP and CETA. That said, there are strategic considerations that must be taken into account when Canada considers signing an agreement of this magnitude, and it becomes even more important when considering an agreement with multiple economies at once, especially the likes of the United States and Japan.
In the business world, supply chains are tightly integrated. There is very little distinction in a boardroom between an import and an export when strategizing for business in a global supply chain. Rather, companies view their supply chains as a continuous flow of materials, components and finished goods back and forth through a supply chain until the finished goods reach their customers. It's the continuous flow of goods and materials that companies base strategic decisions on and monitor, not discreet import and export transactions.
Traditional government policy, however, does not match that business reality. Imports and exports are generally viewed as two discreet operations, where imports are generally seen as bad for the economy and exports are seen as good for the economy. That simplistic thinking actually hurts Canadian traders, and many exporters cannot compete in today's global economy without first importing materials.
There is a pending Federal Court case highlighting the sentiments towards importers that is being closely watched by our members, which involves Bri-Chem. It's a Federal Court case where the crux of the case is CBSA is being admonished by the Canadian International Trade Tribunal for being administrative bullies towards importers.
When private sector companies look to trade internationally, they develop integrated strategies that disregard whether or not an international movement is an import or an export for policy reasons. They look to the end result sought to guide their decisions, and they do not develop import strategies without considering export impacts and vice versa.
New trade agreements mean businesses need to make adjustments. For instance, the TPP will introduce new expenses into the supply chain as computer software and systems will need to be updated to track not only NAFTA qualifying status products but now TPP qualifying status products and materials as well.
Keep in mind that even though the rules of origin for NAFTA and TPP might be identical for a specific good, the goods themselves are not interchangeable in the marketplace. Contracts that demand NAFTA qualifying goods will not be satisfied with TPP qualifying goods fulfilling them, even though Canada, the United States and Mexico are parties to both NAFTA and TPP.
Members also lament about how interprovincial trade within Canada is broken, so entering large trade agreements will only complicate matters. Members have said to me that they wish for the good old days when tariffs were high, non-tariff trade barriers were few and trade was far more transparent than it seems to be today.
In summary, it is important to note that I.E. Canada strongly supports and welcomes trade agreements. World affairs leave a certain amount of doubt that the TPP deal will ever see the light of day. The U.S. primaries lead many to think that the TPP will never be signed. Brexit leaves many wondering the fate of CETA, and the word "protectionism'' hangs in the global winds.
Canadians can be as sophisticated as any traders on the globe given the right chances. Our members are free traders who need the Canadian government to help open new markets for them through economic and free trade agreements. That said, we wish to stress that any free trade agreements must be managed strategically post-implementation to ensure the results sought at the time of signing are actually achieved. Our members are committed to consultation with officials to address their concerns.
We hope these comments help to reaffirm the importance of the impact that trade agreements have on Canadian companies. With that, I welcome your questions.
The Chair: Thank you. Just for the record, you referred to a court case. Do you have further details that you can provide other than just saying a CBSA case?
Ms. Nott: Not here specifically in my speaking notes, but I can certainly forward them.
The Chair: Thank you, just so we can have the right reference.
Ms. Nott: Absolutely.
The Chair: I will now turn to Mr. Kingston.
Brian Kingston, Vice President, Fiscal and International Issues, Business Council of Canada: Thank you, Madam Chair. Honourable senators, thank you for the invitation to take part in your study on international trade.
The Business Council of Canada represents the chief executives and entrepreneurs of 150 leading Canadian companies from all sectors and regions of the country. Our member companies employ 1.4 million citizens, account for more than half the value of the Toronto Stock Exchange, contribute the largest share of federal corporate taxes and are responsible for most of Canada's exports, corporate philanthropy and private sector investments in research and development.
Canada's engagement in the global economy, facilitated by multilateral, bilateral and regional trade agreements, sustains our standard of living and the prosperity of the nation. Given our small population of 35.8 million people and a market representing just 2 per cent of the global economy, Canada has no choice but to seek new markets abroad for our goods and services.
To support global trade liberalization, Canada has established an excellent track record of engagement and success at the WTO, and at the same time, we have pursued regional and bilateral trade agreements with most of our key trading partners. We have done this because the gains from trade are clear: Trade liberalization has dramatically increased Canada's exports and imports, two-way investment and living standards. For the past quarter century, merchandise exports alone have contributed a third of our gross domestic product, and we have imported roughly the same value of goods. Since implementing our first comprehensive FTA with the United States, GDP per capita has expanded by nearly 150 per cent.
Yet since 2000, Canada's position as a leading trading nation has eroded. Our share of global merchandise trade has fallen from 4.3 per cent to 2.5 per cent in 2014. We lost ground to China, South Korea, Russia, Hong Kong, Italy and the Netherlands. Over the same period, Canada's share of global commercial services trade also slipped from 2.6 per cent to 1.7 per cent.
With that, I would like to take the remaining time to make five suggestions for Canada to modernize its trade policy and reverse this trend.
Number one, focus on scale. Canada's trade policy should reflect the reality that large firms drive international trade. The propensity to export increases with firm size. The share of Canadian businesses that export is just over 1 per cent for small businesses, defined as businesses with 100 or fewer employees, but 43 per cent for large firms, those with 500 or more employees. Large firms are not only more likely to export; they are also responsible for a disproportionate share of Canada's exports. In 2014, the top 10 exporting enterprises were all large and accounted for almost a quarter of total exports. If we want to improve our trade performances, we must help more SMEs achieve the scale required to become global exporters.
Number two, ratify and implement CETA and the TPP. When and if free trade agreements come into force with Europe and the members of the Trans-Pacific Partnership, Canada will have free trade with more than 60 per cent of the global economy, giving Canadian companies preferential access to nearly 90 per cent of existing export markets. This would make Canada the only G7 nation with free trade access to the U.S., the Americas, Europe and the Asia- Pacific region, including three of the world's four largest economies.
Number three, develop a China strategy. In the words of David Mulroney, our former ambassador to China, there's a China-sized hole in our trade policy. China is and will remain Canada's second largest two-way trade partner after the United States, and we must develop a comprehensive strategy that includes negotiating a bilateral free trade agreement. According to estimates in a recently released paper that we commissioned, a bilateral free trade deal with China would generate $7.8 billion in additional economic activity within 15 years.
Number four, diversify to emerging markets. According to the Bank of Canada, the growth potential of emerging market economies is projected to be about four times that of the world's advanced economies. Emerging markets now account for 80 per cent of global growth, but only 12 per cent of our exports go directly to fast-growing emerging markets while 85 per cent go to slow-growing, advanced economies. Concluding trade agreements with India and the members of ASEAN would help facilitate trade diversification in high-growth emerging markets.
Finally, adapt to new forms of commerce. Canada must do more to remain relevant in a world where economies have become deeply integrated. Outdated trade policies such as protectionist tariffs inhibit the ability of firms to link into efficient, integrated supply chains.
According to a study we will release soon by Dan Ciuriak, former deputy chief economist at Global Affairs — I believe you have heard from him already — unilaterally removing barriers to imports and adopting an open policy for services and foreign direct investment would boost growth, attract investment and position Canada as a centre of trade activity. The study estimates that unilateral free trade would generate $47 billion a year in economic activity by 2035, equivalent to a 1.7 per cent increase in Canada's GDP or almost three times larger than the projected gains of CETA and TPP.
With that, I'd be happy to answer any questions you have. Thank you.
The Chair: Thank you, Mr. Kingston. I now turn to Mr. Trew.
Stuart Trew, Senior Editor, The Monitor, Canadian Centre for Policy Alternatives: Honourable chair and senators, thank you for the opportunity to be here and present on behalf of the CCPA. As you said, I'm the senior editor of the CCPA's regular publication The Monitor. If anyone wants to flip through it, I've brought a copy. I've also been working with Scott Sinclair at the Trade and Investment Research Project within the CCPA. It has been active since 1999. Previously, I was a trade campaigner with the Council of Canadians. I have about 10 years' experience looking into some of these agreements, mostly the impacts on non-trade related issues, impacts on the environment and labour rights. I'm prepared to talk about the impact of recent trade agreements like the CETA and the TPP on pharmaceutical regulation and costs in Canada, but for the sake of time limits, I have no confidence I'll be able to get through it all. I'm just going to focus on investor-state dispute settlement within these two recent agreements.
You have already heard at this committee, I think quite recently, from opponents and proponents of Canada's inclusion of investor-state dispute settlement in its trade agreements. You can count the CCPA firmly in the first category. We are opposed to this process. Unlike some previous witnesses, we do not have a vested interest in the outcome of this debate other than we strongly believe that democracy is weakened by giving international investors — almost always large firms or wealthy individual investors — the right to compensation when public interest regulation interferes with their private commercial objectives.
NAFTA's investment chapter was meant to provide U.S. and Canadian investors in Mexico some safeguards against the perception of corruption and political interference in the courts. Instead, over the past two decades, Canada has become the most sued NAFTA party and the most sued developed country in the world, with many claims attacking environmental protection measures, natural resources policy and things that aren't necessarily related to trade.
Two rather disturbing losses expose the ISDS system, the investor-state system, for the arbitrary mess that it is. The Bilcon case involved a quarry development in Nova Scotia that was rejected after a federal and provincial environmental assessment process said no. Although no Canadian court had ruled on the matter, a NAFTA tribunal determined that the EA process had violated Canadian law. The majority on the tribunal felt the criterion of community core values, which it construed erroneously as the primary basis of the recommendation against the project, was outside the panel's legal mandate. The arbitrators also condemned the environmental panel's decision to recommend against the project outright without suggesting changes that might have mitigated its negative impacts and allowed Bilcon to proceed.
The minimum standard of treatment protections in NAFTA and other treaties, including CETA and the TPP, on which Bilcon's case was partly based, have been rightly criticized as inherently subjective, allowing arbitrators to apply their own preferences and prejudices. Without a doubt, the Bilcon ruling validates these concerns. The tribunal was not qualified to judge whether or not Canadian law had been broken and lacked, with the exception of the dissenting member, even a basic understanding of the legal context within which the decisions it was asked to rule on were made. This is according to environmental law professor Meinhard Doelle.
In another recent loss for Canada, Mobil Investments, in a case with Murphy Oil, was awarded an initial $18 million in compensation for having to pay into a research and development fund in Newfoundland and Labrador as part of a deal that all companies make to drill for offshore oil and gas in that province. The company is seeking ongoing damages as long as the policy stays in place. Here's an example where the government tells us that investor-state dispute settlements cannot force a country to change its policy, but in this case we are liable for damages as long as the policy stays in place. That is effectively the tribunal asking us to change the policy.
The province and the federal government believed in that case. with good reason, that the research and development conditions in Newfoundland were carved out of NAFTA — they were excluded as part of our annex 1 reservations for non-conforming measures — and argued as much before the panel, but in 2012 the panel rejected Canada's case, with two out of the three panelists claiming that these reservations applied only to non-conforming measures exactly as they existed in 1994.
What government worth its name would agree to freeze its natural resources policy in time for all eternity? Why should we have to pay companies to regulate them differently or, more effectively, when the circumstances require it?
The federal government would have us believe it's working on improving the deficiencies in investor-state dispute settlement through the updated CETA investment chapter, the European trade deal investment chapter. We should note that the TPP version of the investment chapter merely expands the NAFTA model. Here I'll just state briefly that the attempt in CETA to affirm the government's right to regulate does not go far enough.
A recent report co-published by the CCPA explains how the establishment of an investment court and a list of permanent arbitrators would not alter the underlying logic of investor-state dispute settlement cases such as the Lone Pine Resources challenge to Quebec's moratorium on hydraulic fracking under the St. Lawrence River or the Vattenfall lawsuit in Germany against that country's decision to phase out nuclear power would still proceed on arbitration based on the same flawed rules as in NAFTA and other investment treaties.
There is little economic upside to investor-state dispute settlement. Canadian firms using it to challenge regulatory decisions in other countries have a very poor success rate. There is little evidence showing the existence of an investment treaty with investor-state dispute settlement leads to increased investment into or outside of Canada. This is international experience as well. There's no real evidence linking these to increased investment flows.
Finally, Canadian courts are fully capable of handling any domestic dispute related to property rights, and corporations have other means for insuring their investments abroad without resorting to investor-state dispute settlement.
You've probably heard this before: There's no chance for our government to challenge a corporation under this system. This is a one-way road. You get sued by the companies, and you either lose or you don't lose. There's no winning in the case of the government. You're challenged on a policy and you lose or you don't lose.
As such, we recommend the ISDS process be removed from CETA and the Trans-Pacific Partnership and that Canada consider a comprehensive review of these provisions in international trade and investment agreements.
Thank you very much.
The Chair: Thank you. Your comments have certainly generated a list of questioners.
Senator Downe: Mr. Kingston, I'm interested in your comments that trade deals are best for large corporations because they do most of the exporting.
As you know, many Canadians are concerned that government after government has signed trade deal after trade deal, and again we see factories closing and jobs disappearing. People are wondering where the benefits are in these deals for average Canadians. Communities that used to survive on permanent plants are disappearing. The low dollar may assist in that.
On the other hand, we have many major corporations avoiding paying their fair share of taxes in Canada, which is reducing the funding available for Canadian governments to provide social services and programs.
So what is the incentive for the government to continue with these trade deals, in your opinion?
Mr. Kingston: Thank you, senator. Just as one clarification in terms of agreements being good for large corporations, I wasn't saying that. I was saying that when you look at Canada's international trade, the large majority is done by large corporations.
Senator Downe: That's what I thought you said. I misspoke, then, because you indicated that the bulk of exports are by large corporations.
Mr. Kingston: That's right. The point I was trying to make was that if you want to increase Canadian exports, for example, facilitating large company exports is the best way to move the dial on that. The other way to get at that is to help small firms grow into large global exporters, which you don't do through a trade deal; that's done through domestic policies.
In terms of your comment around what trade agreements do for average Canadians, I think the evidence is overwhelming. We've seen our standard of living increase exponentially since we implemented the Canada-U.S. FTA in 1989. Both imports and exports have grown substantially. It's hugely beneficial.
When you look at which companies export, we find a lot of the time large companies have small firms in their supply chain in very large numbers. When we look at a large company export, there are multiple inputs that go into that, and much of the time it's SMEs from across Canada taking part.
On the fair share point around taxation, in response to this, we obviously followed the tax controversies in the U.K. very closely. We survey our members every year. We do something called the Total Tax Contribution to determine how much tax they do pay, and I can tell you they do pay their fair share. Large corporations pay a significant amount of tax. I'd be happy to share that report with the committee.
Senator Downe: I don't doubt they pay a significant amount of tax, but we've seen, and you mentioned the U.K., the insignificant amount of taxes corporations like Starbucks and Amazon are paying in the U.K. Why would it be any different in Canada? Are you telling me it's different?
Mr. Kingston: Absolutely, yes.
Senator Downe: Then I look forward to seeing that and would be interested in pursuing that. It's certainly good of the corporations to do that when they don't do it anywhere else. I look forward to reading the report.
When you talk about NAFTA, you're absolutely correct that the U.S. component has been very successful with Canada, but if you look at the Mexico portion of that, it has been a disaster for Canada. Our trade deficit has declined dramatically.
In your opinion, what other deal that has been signed recently has been good for Canada other than our trade with the United States?
Mr. Kingston: Thank you for the question. One point on that: yes, we have signed a number of trade deals where we've seen the trade balance has been a deficit, and a lot of people point to that as an example of the deal being bad for Canada. The point I'd make is we can't just look at merchandise exports; we have to look at services and investment. EDC has done recent work on foreign affiliate sales. Canadian foreign affiliate sales exceed our total merchandise good exports by well over $100 billion, so looking purely at goods export deficits doesn't take in the complete picture. A country like Canada should never expect to have balanced trade with every country it does a trade deal with. We have to look at the global trade context and see what products Canada is exporting and the value-added into those products.
Senator Johnson: Good morning. I have a question for Ms. Nott and Mr. Kingston.
According to Jim Balsillie, the former Chairman and Co-CEO of Research In Motion Canada, Canada lacks the innovation and intellectual property assets to benefit from the TPP. What do you think of this point of view?
Ms. Nott: I'll defer primarily to Mr. Kingston on this one particular point. I E. Canada tends to focus on the tariff and non-tariff trade barriers that impact the movement of goods across the border, so intellectual property and that sort of thing is something that we generally don't canvass our members directly on.
The one thing I will say in response to that before handing it over to Mr. Kingston is the fact that our members have made it very clear that aside from IP, there are a number of other concerns that are talked about relative to the TPP. The overwhelming message from our members is that if the TPP indeed goes through, Canada cannot afford not to be at the table. There may be aspects of it that not everybody likes, but not being in the game is not an option. With that, I'll hand it over to Mr. Kingston.
Mr. Kingston: Thank you. Yes, Jim Balsillie has made the point frequently that Canada is lacking an innovation strategy. I think that's a fair point, and I think the government is working on that right now.
Where I have difficulty with some of his comments is I don't understand the link between an innovation strategy and a trade agreement such as the TPP. Global IP rules are shaped in a global context, and Canada has played a key role in that over the years. If you look, for example, at the IP provisions in CETA, they're very similar to what's in the TPP, yet Mr. Balsillie has an issue with the TPP and not CETA. I have difficulty understanding his logic behind that, but I would definitely agree that an innovation strategy is absolutely something we should be considering.
Senator Johnson: Thank you. Another presenter we had was Jim Stafford, and in his commentary in the Globe in February 2016, he wrote that free trade agreements will not help Canada improve its Asia-Pacific trade performance. He stated that the governments of several countries in that region — for example, South Korea, Japan, Malaysia and Vietnam — implement economic and trade strategies that distort trade. Do you agree or disagree with this assessment and why?
Ms. Nott: I guess I'll start there. I would have to say that generally, my members would disagree with that. Keeping in mind that our membership represents a wide range of products that are both imported and exported from the country, a large subsection of our membership is agri-food. When it comes to agri-food, for example, our free trade agreement that was signed with South Korea was seen as being a real positive and market opener, and it level set Canada's export capabilities with the United States.
When you talk about other sectors, you may not get as robust an appreciation for deals like the Korean deal. It's very difficult to answer that with one specific nailed-to-the-table answer. It depends on which exporter or which importer you're speaking to and what their industry sector is, because they're not all created equal.
Mr. Kingston: I would also disagree with that. You just have to look at Australia and New Zealand and what they've done in the Asia-Pacific region in terms of aggressively negotiating bilateral trade deals, particularly with China exports, which increased exponentially in some sectors. Obviously, New Zealand and the dairy sector is a great example. They're exporting so much dairy to China right now that they're attempting to go back and re-negotiate the safeguards because the volumes have gone through the roof.
I think there are a lot of good examples of countries that have negotiated well-thought-out trade deals in the Asia- Pacific region that have been extremely successful.
Senator Johnson: That's very interesting.
Mr. Trew, in a recent report by one of your researchers Alexandre Maltais entitled TPP and Cultural Diversity, it questions why Canada agreed to weaker protections for cultural industries in the TPP and in other trade treaties, including NAFTA and the pending Canada-EU FTA. Could you elaborate on some of these concerns for us and how you believe our cultural industries can be affected by the TPP?
Mr. Trew: I apologize; I wish I could elaborate in more detail. I have read the report. I would encourage the committee to look at it, if they can.
If my memory recalls, it has to do with the wording around the cultural exemption. In both the CETA and the TPP, Canada did not take its traditional position in NAFTA, which was to broadly carve out its cultural industries, its cultural regulations, Canadian content rules and those kinds of things. They are protected, to some extent, in both agreements, the TPP and CETA, in a different way. There is in the TPP an odd exception to the exception that I believe Michael Geist pointed out in one of his blog posts recently.
Canada is chipping away essentially at some of those protections through the TPP as they relate to, if I'm not mistaken, services like Netflix. It is basically making it difficult in the future for Canada to re-regulate in this sector since we're making final decisions in the TPP that will become the law of the land in perpetuity, essentially very difficult to change. That's my weak understanding of that paper. I apologize I can't speak in more detail to Alexandre's paper.
[Translation]
Senator Rivard: About ten years ago, we learned a new word, "Euro-skeptics.'' In the most recent European elections, last year, the Euro-skeptic candidates earned over 25 per cent of the vote. We know that in exactly 36 days, on June 23, Great Britain will vote on whether to remain in the European Community.
Concerning free trade between Canada and the European Union, do you think that Great Britain's withdrawal from the European Community could affect Canadian businesses? If so, will the impact be large or small?
[English]
Mr. Kingston: That's an excellent question, and absolutely the U.K. potentially withdrawing from the EU would have an impact on the total benefit of the agreement. It's the second-largest economy in the European Union. I can tell you that business would still be very supportive of the CETA and would still want to see that agreement go ahead because of the size and scope of the market, but there is no doubt that it would be a significant impact for the U.K. to leave.
[Translation]
Senator Rivard: Do you think that Scotland, which chose to remain in the United Kingdom, could hold another referendum should Great Britain decide to withdraw from the European Union? Would Scotland want to remain in the European Union, if that were the case?
Mr. Trew: I don't know whether I can answer that question.
[English]
I appreciate that there is Euro-skepticism growing in Europe. I have seen articles about how Britain's exit would or not affect the CETA in particular and some concerns there. I have also seen concerns from Romania and other countries around Canada's ongoing visa requirements and how that might affect their final vote on the CETA when it comes before the council and then eventually before the Parliament.
If I can opportunistically seize on this question, there is ISDS skepticism, more investor state dispute settlement skepticism in Europe than there is in Euro-skepticism, and it expands the political spectrum. We've seen millions of people signs petitions opposed to the CETA because of these investment protections in it, and that's not going away because of the reforms the government worked out around this investment court system I talked about. We've seen persistent concerns about that, and it's something to think about here in Canada. It could actually end up destroying or resulting in the Parliament in Europe voting against the agreement when it comes before them at some point in the next year.
Senator Oh: Thank you, panel. What are the provincial governments doing in respect of increasing trade and investment with the TPP region? Are you all working together with the provincial governments?
Ms. Nott: I can only speak for I.E. Canada, and I can say that I.E. Canada traditionally has not worked all that closely with specific provincial governments. I do know that in the province of Ontario, for example, it's not the government per se, but the Toronto Chamber of Commerce has a very robust program to assist small- to medium-sized Canadian companies to get their legs under them to help them to export, not specifically to the Asian region but just exporting from Canada period, to all regions.
When it comes to I.E. Canada and our opportunities to work with government, again, because we tend to focus on the international border, we're more federally focused.
Maybe Mr. Trew or Mr. Kingston would have more a provincial comment.
Mr. Kingston: We have recently witnessed an increase in provincial premier visits to various countries as part of trade missions. I think that's an encouraging sign. Premier Wynne has been quite active. In terms of the Asia-Pacific region, obviously British Columbia leads in terms of exports to that region, but we would like to see provinces being more active.
To make a plug for one issue concerning provincial trade, one thing that would facilitate that is free trade within our country between provinces. I know ministers are working on that, but if we saw an agreement on internal trade, that would help Canada in terms of its overall export performance.
Senator Oh: For instance, Ontario has done so many trade missions, but the deficit of Ontario is the highest of all the provinces.
Mr. Trew: I apologize. I don't know much about what the provinces are doing beyond seeing the trade missions in the news, which I think are probably more effective at increasing exports in the long run than some of these trade agreements, but I don't have much more besides that.
The Chair: We'll have to hear some witnesses who can talk about trade within Canada, province to province. That point is coming up quite often. Rather than trade from a province outward, it's between provinces that we've heard concerns expressed.
Senator Pratte: My question is for Mr. Trew, and maybe other witnesses would like to comment also. I noticed CCPA has published a couple of reports on the impact — and I think you alluded to those reports earlier — of TPP on the health care system, particularly through increased drug costs.
I don't have your expertise at all, and I haven't studied this agreement in detail, but I tend to be a little bit skeptical, because with all earlier trade agreements, some groups and think tanks have announced that they would spell the end of health care as we know it, and the public health care system is still here and mostly intact, with all its strength and some weaknesses. I am a bit skeptical when anyone announces that we will see our health care system privatized and our health care system will be weakened. Would you care to elaborate as to what is this thesis behind the danger for our health care system with the TPP?
Mr. Trew: Absolutely, and thank you for the question. With respect to health care and previous debates around NAFTA and the FTA with the United States, we have to remember that the reason there is such a strong health care carve-out or exception in the NAFTA is because of pressure from groups like the CCPA and others who could see the danger unless we could safeguard our health care system in some way. There was a lot of pressure at that time to change the language in the agreement, and it did result in quite a strong protection in the NAFTA, which Canada has, to its credit, dragged out into subsequent trade agreements, including to some extent the TPP and the CETA. It does consciously recognize that these agreements, without protection for health care, would tend to undermine our public system, and therefore, we have to put up some kind of carve-out or exception in the deal.
With respect to the TPP and the CETA, the intellectual property rights chapters are quite similar as they relate to pharmaceutical regulations, pharmaceutical drugs. There will be a patent term extension or a patent term restoration for the time it takes to get marketing approval for a drug, and this can be up to about two years.
The government has recognized, I believe at a Commons health committee last week, that there will be costs. It doesn't know exactly how much those costs will be, but a study from Marc-André Gagnon at Carleton University suggests it will add about 287 days, that restoration period, to the length of a patent, which keeps generics off the market for just long enough that they would add upwards of between $600 million and $1 billion annually to the price of medication in Canada. Drug prices in Canada are already among the highest in the OECD. I think they are the fourth highest in the OECD, which is quite outrageous.
We've also seen that investment from the brand name sector has been declining over the past 10 years, so even though we see drug prices going up, we see that, as a percentage of their sales, their investment in Canada has gone from 12 per cent in the late 1990s to about 4 to 5 per cent now. So there are really just costs to making this change in the TPP and CETA.
If I could allude to something that was said earlier in these presentations, these aren't necessarily international standards. Canada meets all of the international standards and exceeds them, in many cases, with respect to protection of intellectual property rights. These are U.S. and Japanese standards in the case of the TPP, and these were E.U. standards in the case of the CETA. This was them being imposed upon Canada, above and beyond what the international norms are, and they will have permanent costs.
Senator Pratte: And possible solutions to that? I know your position would be simply not to ratify the TPP, but, besides that? I guess amendments to the TPP are nearly impossible, but are there any safeguards?
Mr. Trew: That's a good question. I don't have a very good idea, but I imagine that there would be efforts to contain costs through pricing. Through the federal agency that regulates drug costs, there could be efforts to do that, but I don't know to what extent those efforts would then potentially come under trade challenge from the TPP.
Senator Housakos: I have a comment and a couple of questions. My first comment is with regard to the view that some of our colleagues might have that corporations are not huge contributors to the overall trading scheme in this country and also are giving the unfortunate impression that corporations are major culprits for tax havens and being tax cheats. For the record, I want to make it clear that some of us have a different view. We actually think that corporations in this country are strong contributors to the economy and contribute tonnes of revenue to the treasury of the country. They create millions of jobs for Canadians, and, both in direct and indirect taxation, they help this country to be as strong and as viable as we are. I think that's important to highlight.
My question is to anyone on the panel, and I guess Mr. Kingston and company can answer it. Is trade balance is the only mechanism — you alluded it to a little bit in your comments earlier — to judge the success of an agreement? Can you give us a number of more elaborate examples of where we have trade agreements with smaller countries where the trade balance might not be in our favour but where, nonetheless, there are some net benefits to Canadian consumers and others from those agreements?
Mr. Kingston: That's an excellent question. You have to look at a number of different factors outside of trade balances, as I alluded to before. Foreign affiliate sales are important. Investment services is a critical area to look at. The OECD has done some really interesting work on value-added, so if you look at Canada's exports, how much of our exports are we actually adding value to in Canada before we export? This was driven a lot by — I'm sure you recall — the study of the iPhone and how much of the value of the iPhone was actually created in China and how much was created in other countries and our traditional export statistics capturing that.
If you look at value-add content, nearly a quarter of our exports include foreign content, so that just underlines the importance of imports as well as exports. When we look at our trade agreements, we need to not think of a deficit as a problem because those inputs are obviously going into products that we eventually send outside of Canada.
Ms. Nott: I would concur with what Mr. Kingston was just saying, and I would also add that when you look at how tightly integrated supply chains actually work around the world, just to leverage what he was saying, Canada often does a small portion of a very elaborate and long fabrication process, I'll call it. Sometimes, in order to be able to contribute to a very long, complex supply chain, Canada needs to be able to have a fair and balanced import policy that allows Canadian companies, most of which tend to be the small to medium who plug into the large multinationals, as he was alluding to earlier, to plug into these global supply chains. I can't stress enough that when decisions are being made around boardrooms, thinking about borders, maybe to Senator Downe's earlier comments, tends to focus more on what the tax strategies are about flowing goods in and out of countries as opposed to duty or any of the traditional international trade thoughts about duty or market access. In today's environment, market access is pretty much a given when you start looking at these supply chains.
I guess the most important thing to take away from my comment is that, if we want Canada and companies in Canada, given our overall size as a country, to be able to plug into very large and robust supply chains, we have to have statistics and collect numbers and judge success by more than just traditional trade balances. I can't say enough about those foreign affiliate sales. They create jobs in Canada, and it's something that seems to just be transparent when we talk about success or failure of a trade agreement.
Senator Housakos: With regard to how we come to these agreements, all trade agreements are driven, in large part, by government and the executive branch, with the civil service and the bureaucrats. All the time, when trade agreements come to their conclusion and are signed-off on, they are brought to Parliament for pretty much a rubber stamping. I was wondering about your thoughts on whether there is not a bigger role for Parliament to play in setting out the parameters of future trade agreements and being able to give the Canadian public and the Canadian business community a larger scale for them and their input on these types of negotiations. It seems to me that, given the fact that they're driven by government exclusively, there might be a propensity to miss certain elements of the marketplace or not take them into sufficient consideration or certainly put emphasis on what a government at a particular moment thinks is more important than not. I'm just wondering whether there isn't a better mechanism and a bigger role for Parliament to play in terms of the process of setting up the parameters of a negotiation instead of the agreements usually coming to Parliament when they are already locked and signed and good to go.
Ms. Nott: I don't know exactly how to respond to what it would look like if Parliament were to be brought into the process earlier on than once a trade agreement was already finished being negotiated. I don't know what it would look like if Parliament had an active role during the negotiations. I can't envision what that would look like.
Senator Housakos: I'm implying prior to the negotiation stage, a preliminary stage, set the parameters and guidelines. Then have the negotiation because, inevitably, in a negotiation, you can't negotiate in public.
Ms. Nott: There was an exercise undertaken a few years ago called the Global Market Actions Plan, the GMAP, where trade associations were asked to canvass our members and then feed into that to help the government at the time to determine in which markets, regions, products, industry sectors there were potential opportunities. To my knowledge, that's one of the few times that kind of two-way dialogue took place. That then, I'm assuming, helped the elected officials to determine which free trade agreements and which negotiations they wished to prioritize.
Mr. Kingston: In terms of stakeholder engagement, although the TPP has been criticized for not being transparent enough through the negotiation process, the negotiators actually adopted a new process that I had never seen before, where they actually held stakeholder events on the margins of negotiating rounds. I thought that was a pretty innovative way to do it, and they were quite well attended. Having attended a few rounds, though, I did notice that Canadian participation tended not to be nearly as significant as American participation. I think there are ways to do it, to bring people into the process and keep them up to speed on these deals, and I think the TPP was a good starting place for that.
Senator Ngo: This question is for the three of you. A lot has been said about the potential benefit of the TPP. My question is: Are there any negative consequences that might potentially occur for Canada as a result of this agreement's implementation?
Mr. Trew: I can enthusiastically jump into that, and thanks for the question.
The CCPA has put out and will continue to put out a series of reports on exactly what we believe to be the negative consequences. Most of the time, they do not relate to trade flows, although we will have a report coming out fairly shortly that looks at things like the trade balance and the impact on the quality of Canadian exports.
There is a good chance that the TPP will, as Jim Stanford pointed out before in other agreements we've had — Korea, for example — will lock in our existing trade patterns with the region. It will increase raw resource exports and increase the amount of high-value added goods we import. This is the effect we and I think a lot of others expect, and it will repeat itself with the TPP.
We will look at less job-intensive industries potentially benefiting and more job-intensive industries, like manufacturing, decreasing. We saw that this was something that the ICT report that just came out in the United States identified as being the result in the U.S., as well; they will see an overall benefit to the economy, but the sectors that will get hit will be manufacturing and high job-intensive sectors. That will have an impact here.
There will be other costs. I think someone mentioned the pharmaceutical costs. That's a real cost — dollars — that will come out of the pockets of drug users and public and private health insurance plans. That will be a permanent long-term cost that is actually higher than the tariff savings we can expect companies to get from these agreements.
There are costs to environmental and public-interest regulation from this investment protection, because they will continue to put a chill on what governments believe they can and cannot do to regulate in the public interest. It essentially gives companies a right to be compensated for policies that interfere with their investments and profits. That's a major concern, internationally.
Those are a few of the negatives that do outweigh the minimal gains we will get.
Ms. Nott: I would add by saying that the small- to medium-sized members that we have couldn't answer that question. In many cases, they don't actually have a tangible understanding as to whether TPP will have a positive or negative impact on them. In many cases, they look at something like TPP and the thousands of pages that a text like that is, and they do not even know where to begin. They then have to do the cost-benefit analysis in their head of whether it is worth it to hire a trade professional to look at the documentation and their business and do a match to see if there is any positive or negative.
Not only with TPP but trade agreements right now in general, when you talk to small- to medium-sized companies, the general sentiment is that free-trade agreements are like taking cough syrup: It doesn't necessarily taste good, but you have to do it. That's just what it is. Those are my words, not theirs, but I think it paints a pretty succinct picture.
I am told repeatedly there is not robust enthusiasm for these deals, but I am also repeatedly told to make sure that if the deals go through, we're there, because if we're not there, we can't plug into those supply chains that I was talking about earlier and then we are bypassed on the global map as far as investment, jobs or anything. We are completely bypassed. So make sure we're there, but there's not a lot of robust enthusiasm.
Mr. Kingston: To add to that, regarding the TPP, a number of studies have been done on what the benefits will be. Some of the criticisms have been highlighted, but you have to look at agreements on net: What is the net impact? The net impact is clearly positive. Dan Ciuriak estimated $3 billion a year, which is relatively modest, but his analysis doesn't include the potential for the TPP to allow other countries to accede to it, and we've already seen a number of other Asian countries signifying their interest in wanting to join.
Think about a country like Indonesia joining — 255 million people with a growing middle-class. If we're outside of that agreement and we decide 10 years down the road that we're interested, we will get a far worse outcome than being part of the agreement at the founding level. You have to think about the future of these deals, not just a single moment in time.
Senator Ngo: If that's the case, I will raise another issue here. There is an ongoing Maritimes and Ontario dispute. Do you foresee any impact this escalating dispute could have on our trade exports in the regions of the TPP?
Mr. Kingston: Any sort of conflict would have an impact on trade. There has been discussion, and some people try to make the point that the TPP is a pivot or a counter to China. Our perspective is not that. We don't see TPP as an anti-China trade agreement; in fact, we have been advocating for Canada to engage closely with China at the same time as working with our TPP member countries.
Senator Ngo: The TPP — disputing the areas — you have the Philippines, Malaysia, Indonesia, Korea and Japan. So Canada is involved in that.
Ms. Nott: Most companies that are involved in complex international trade usually have risk-mitigation strategies in place that help them to manage when situations like you're talking about come up. If those circumstances in the South China Sea were to become more problematic and were actually interfering with trade, most companies that reply on complex integrated supply chains in order to run their companies always have a plan B. If it means they need to pivot and move certain flows of goods, products or services away from a particular area because of natural disaster, political unrest or any sort of supply-chain risk that has arisen, it's pretty seamless for most companies. They veer away from stream A and plug into stream B. Stream B often costs more, and that's why it's stream B and not stream A. But that's something that risk-mitigation strategies and calculations take into account.
The Chair: Before I go to the second round, Mr. Trew, you pointed out some of the difficulties in our perception for the TPP and CETA, and you've highlighted them.
Could you comment on your position on WTO? It was going to be an international venture to create a level playing field with the same rules for everyone. That was the target. Its benefits were to raise many countries that are just developing to get in and to create a better, level playing field. Agriculture became the sticking point, and much of it unraveled. But there has been some movement in WTO. When we get witnesses and government witnesses, they say it's still the target to work toward a regime that is worldwide.
People who support TPP and CETA say that, by and large, it fits into the framework of the WTO and where it's heading and its objectives. You have said there are negatives. I want to know what your position is on WTO. Do you believe that the direction of WTO was adequate to address some of your concerns?
Mr. Trew: It's a very important question. I haven't been following the WTO as closely as these other agreements, and that is a sign of where this government has gone in that it has removed its priority from the WTO and moved toward the CETA and the TPP. These are places where countries are trying to set rules for global trade outside of the WTO, where they feel there has been too much resistance to some of these directions. For example, with the WTO, there would be resistance to moving where Canada has gone on intellectual property rights in the TPP and CETA. This is the reason you see these countries going outside the WTO.
It is the same with investment. The WTO countries have said that they don't want to deal with investment protection within this body, so you have these other bilateral agreements popping up.
I think the WTO, though, is probably where Canada should be putting its effort and where it should be trying to develop global rules in a much more open and transparent way. I wouldn't exactly call it democratic but, compared to the TPP and the CETA, it is a place where you do have rules being developed in the open. You don't get behind closed doors and decide at the executive level — for example, this question came up — that this is where we as a government think this is where we should be going. These are our red lines and no one will ever see them; we're just going to have Parliament say yes or no to an agreement. The WTO shows us a way where you could, more or less in the open, develop trade rules that would potentially benefit everyone involved.
I apologize that I don't have a good answer about where the current negotiations, for example, on trade facilitation and environmental services are going.
The Chair: What I'm hearing is the WTO has not been abandoned. It has been stalled, and it wasn't stalled by Canada. Canada, through various governments, has been very supportive of the WTO, but the world community could not move WTO, so other mechanisms were looked at.
I guess what we're going to have to struggle with is whether they are similar and can feed into WTO if and when there's enough of a consensus in the world community to really invigorate WTO. I think Canada, along with many other countries, finds itself in a bind of not being able to move WTO and trying to find other mechanisms to avoid being sidelined. I think that's the debate: to be in or out of TPP or a CETA agreement. That's the struggle.
Mr. Trew: For sure.
The Chair: I appreciate your input on that.
Senator Downe: Mr. Kingston, I want to refer to your earlier comments. You're representing the Business Council of Canada, of course, and your association is aware of various reports about corporations not paying their fair share of taxes, and that's why your monitor members of your association. Is that correct?
Mr. Kingston: Yes. The original controversies that arose in the U.K., for example, led us to look at what large corporations pay in terms of their taxation — not just corporate tax, but personal and sales tax and so on. We've now been collecting that data for three years, going on a fourth year.
Senator Downe: I'm glad to hear that. As you indicated, you're aware of the controversy around the world of corporations not paying their fair share. There seems to be some confusion whether that's happening or not.
The second part of my question deals with an ongoing concern about corruption and exports. What procedure do you have in place if one of your members is caught in corruption in relation to trying to get contracts overseas? Do you expel them from your council?
Mr. Kingston: As a council, we don't have a formal process for investigating members, for example. That's up to domestic regulations, so we don't play a role in that.
Senator Downe: Is SNC Lavalin a member of your council?
Mr. Kingston: Yes.
Senator Johnson: Mr. Trew, according to the Canadian Centre for Policy Alternatives, under what conditions do you think Canada should be negotiating free trade agreements?
Mr. Trew: Thanks very much for the question. Again, going back to the WTO, I think the senator's earlier proposal about having Parliament involved early on in the process was an excellent proposal. I don't see any reason why that couldn't be the case.
These agreements obviously deal with much more than tariffs. They're dealing with domestic regulation of the financial sector and other services. They deal with public services, government procurement and intellectual property rights. These are all areas of public policy that, under normal circumstances, are debated in the House of Commons, refined at committee if everything is working accordingly and then passed through the Senate.
This doesn't happen in a trade agreement. You have essentially a done deal presented. Most of the input that leads to that agreement has come from business sectors. There is occasionally, as there was in the Canada-Europe trade agreement, some discussion with non-governmental organizations, but these were not recorded for public purposes and they were clearly not taken into account in the final agreement.
I think if the process for developing an agreement were more open, you would end up with deals that look very different from the ones Canada has been signing since NAFTA, essentially.
Senator Johnson: Interesting. Thank you.
The Chair: How would that process work when trade agreements, or, in fact, any international agreements, are by and large a place where people can be very honest about their position relative to each other but not necessarily would want that in a public discourse around the world? Particularly with the kind of instant press we now have, how do you sit down and get to a consensus? Ultimately, in any trade agreement, as I understand, you don't get everything you want. How do you then get to a position that you can negotiate — in particular with 12 countries sitting around the table, or in the WTO, all the countries — if you can't have an honest dialogue and some give and take? Instantly, if you give away something I want, I'm going to be in the press.
How can this sort of pre-consultation be anything but being very attuned to what your public needs and where the public is going? I'm playing devil's advocate with you now: I don't think they can be shoulder to shoulder in the actual negotiation.
Mr. Trew: I appreciate the questions. I feel like we're kind of entering a bigger discussion about the ideology behind the free trade regime. What are the priorities a country places into these agreements? The agreements are structured in a very specific way. Right now, they are designed to be negotiated behind closed doors, trading off this and that.
I think a better process would look at the impact of the past 30 years on the Canadian economy and how we integrate our trade policy with an industrial strategy. That's come up a few times on the panel. I think previous witnesses, for example, from the Canadian Manufacturers & Exporters, have said these deals aren't working; they're not increasing exports.
How do we think about the economy more holistically, and what can government do here to improve our export performance and not sign these agreements? Great, we've signed another deal. What now? Let's move on to the next deal. Meanwhile, we've made serious concessions on intellectual property and other areas that have nothing to do with our export performance.
There has got to be a better process, and it probably doesn't involve the kind of behind-the-scenes negotiating in which negotiators with a mandate from the executive, informed by very specific private interests, come up with an agreement that suits them but that might have significant impacts on the workers of both countries involved — or in the TPP, all 12 countries involved. I think the process itself is quite problematic. and a new process would probably result in a new way of thinking about trade that incorporates the impact on the climate and workers. What's the overall impact on our public well-being? Not necessarily these minimal, bottom-line issues of 0.6 per cent growth.
The Chair: Mr. Kingston or Ms. Nott, do you have anything to add to that?
Mr. Kingston: Yes. My fifth point was around how we think about what Canada does beyond bilateral and regional trade agreements. If we do have TPP and CETA in force, I believe we will have free trade with 13 of our 14 largest trading partners, Brazil being the exception. You do have to question whether we should continue to negotiate trade deals with smaller and smaller markets.
What I would recommend, in that case, is that we think about unilateral free trade. We have historical protections in place that really serve no purpose anymore. They were designed to protect industries for reasons that may have been valid 40 or 50 years ago but are not the case today. We can think about doing that. That's a unilateral action.
There could be a broad consultation process on how to go about it, and all evidence points to that positioning Canada as a global export hub. It would attract investment and increase jobs here in Canada. I think that would be a future-looking Canadian trade policy.
Ms. Nott: If I can just jump in there, I think my members would very much agree with what Mr. Kingston said. We've had casual conversation in something called the advocacy council, a table similar to this where members discuss issues overall, and one of the things discussed was exactly that sort of concept.
Jurisdictions like Hong Kong and Singapore are very tiny but strategic. When you look at Canada's population size in North America, where we are a large land mass but a small population, the analogies come up. Why can't we be the Hong Kong/Singapore of North America?
To your point and to the point Mr. Trew made, and I also read the testimony of Mr. Wilson from the Canadian Manufacturers & Exporters association, there is truth to that. If Canada truly wants to do something tangible — and when I say tangible, I mean using existing yardsticks, to say that we're measuring exports and that's our indicator of success. All other indicators are foggy, that's an indicator of success — if that's what we're looking to do, then maybe we need to break out of the current mold and do something bold.
Senator Ngo: I want to follow up on the answer from Ms. Nott. You say that Canada has to be in the TPP. I put another question: What would the repercussions be for Canadian businesses if the TPP came into effect without Canada?
Ms. Nott: I can tell you that in a lot of cases, all kinds of strategizing has been going on because of the various things happening in the TPP and the United States presidential primaries right now. I've had members go into the boardroom to strategize and look at what happens if this candidate wins and becomes President versus that candidate. I don't know if anybody has asked what would happen if Canada is not in the TPP and it goes through.
I can tell you, based on my personal opinion as I have not polled my members on this, that a lot of members would be moving their businesses just south of the 49th parallel. Not being in the TPP means you're out of it. When there's a ball game going on, you can stand in the parking lot and know there's a ball game happening inside the park. It doesn't help just to know there's a ball game going on. That's the simplistic answer.
Mr. Trew: I have a brief point, and perhaps it has come up in the committee already. A C.D. Howe Institute report came out a few weeks ago that suggested they found much more modest growth to the economy. If Canada is part of it, I think it was a 0.068 per cent boost by 2025. That's almost nothing. They found that if Canada stayed out, it would be a 0.026 per cent negative impact to the economy, which again is almost nothing. In terms of whether we're in or out, it's marginal at this time.
Mr. Kingston: First, to reiterate my earlier point, the C.D. Howe study does not consider that the TPP is designed to grow and include more countries. Even if you take the 0.06 per cent, we don't know what the TPP will look like in 10 or 15 years, so the impact could be significantly larger.
Second, to use a recent example of what happens when we're outside a deal or we delay, look at what happened with the KORUS FTA . Canada was close to getting an FTA with Korea. We delayed. The U.S. went ahead with their deal, and Canadian pork exporters lost the market to the tune of $200 million or so. We eventually did get a deal, but once you lose that market access it's hard to go back into a country to say, here we are; we're back in the game; we want to be your supplier. It's too late.
If we are outside the TPP, Japan is the big prize, and we would miss that market, which would be extremely problematic.
Senator Oh: My question is similar and about trade between the TPP and Canadian companies. I travel frequently to different exhibitions and trade shows in the Pacific Rim. I always hear comments that Canadian companies are too naive, not aggressive enough and too conservative. Even if we sign all the deals, as you mentioned earlier, maybe you and the government could work together to help these companies export. We are too comfortable just exporting south and not aggressive enough to go further. Would you agree?
Ms. Nott: I would make two comments. I do agree; and it's based on two things. Look at Canada's educational system compared to other jurisdictions like Japan and Germany, where starting as early as elementary school, a part of their curriculum addresses business concepts, meaning not selling milk on the corner to the neighbours. The business concepts introduced very early on in mainstream education address international trade and get people thinking globally right from the time they're young. Our educational system doesn't do that.
The other thing I would say is that Canada is very fortunate geographically to be next to what is still the largest consuming market in the world, although for how much longer who knows. Geographically, we're blessed to be next to the United States. In a recent round table we had with some trade associations and a leadership session with EDC, one of the concepts that came up was trade tourism. There's a difference between trade tourism and trade missions. With trade missions, the politician is out front and a group of Canadian businesses following. There's certain merit in that, and there's argument around that merit as well.
For trade tourism, take CETA as an example. I had a conversation a couple of weeks ago with somebody about Bulgaria. Somebody said to me, "I've never even been to Bulgaria. You're asking me to take my company that I've built from the ground up, where I employ 350 people, and consider Bulgaria. I've never been to Bulgaria.'' I think a lot of Canadians go where they feel comfortable. For most Canadians, holidays are south of the 49th parallel. They don't necessarily pack up and go to Bulgaria for a vacation; therefore, it's a foreign idea for them to take their business there. That's a big part of it. Something tangible we could do is encourage trade tourism, as bizarre as that sounds.
Senator Johnson: It's a good idea.
The Chair: We've come to the end. We've probably canvassed a lot of areas further than what you anticipated when you first agreed to come before us. It's very useful that we engage in this. This is certainly one aspect of parliamentary involvement. We hope that some of the echoes of what you've said will be in our report on trade and the broader economic issues that we are dealing with.
Ms. Nott, Mr. Kingston and Mr. Trew, thank you for your input. It has been extremely valuable to our study.
Senators, we are adjourned.
(The committee adjourned.) |