CIIT Committee Report

DISSENTING OPINION

NEW DEMOCRATIC PARTY OF CANADA

INTRODUCTION

The NDP thanks the Committee members, staff, analysts, witnesses, and the tens of thousands of Canadians who participated in this year-long, cross-country study of the Trans-Pacific Partnership Agreement (TPP).

The NDP believes that promoting trade and commerce with the Asia-Pacific region is important to Canada’s economic prosperity. We support deepening trade relations with key partners in the region to create new opportunities for Canadian exporters, which would generate job creation and economic growth for Canadian workers and communities.

The terms of this multilateral agreement are far broader than simply tariff reduction. It affects public regulation of investment, intellectual property, and even immigration. Furthermore, independent analysis suggests Canada would lose tens of thousands of jobs, primarily in our auto and dairy sectors, if the TPP comes into force.

Of course, the United States’ decision to withdraw from the TPP clearly means the agreement cannot enter into force as it was negotiated. While some have suggested the terms of the agreement could be amended to remove provisions requiring U.S. ratification, it would be foolish for Canada to ratify such a revised agreement.

The U.S. was the architect of the TPP, with Canada joining many years and negotiating rounds later. Canada’s late entry required acceptance of all previously negotiated terms. As evidenced in the Committee’s report and will be expanded upon in the NDP’s dissenting opinion, the final negotiated text contains numerous provisions that are an affront to the Canadian public interest.

It’s difficult to believe that after a year of study, consultation and analysis, the Liberal government is still not prepared to reject the TPP. The NDP calls on the Government of Canada to formally withdraw from the TPP, and to pursue an alternative agenda for strengthening and deepening trade relations in the Asia-Pacific region.

COMMITTEE PROCESS

The NDP cautions the government from using committees as their tools for conducting government consultations. While it’s laudable for committees to undertake comprehensive studies that aim to publicly engage Canadians on key public policy issues, it was evident throughout this process that our Committee was not equipped to undertake the broad, meaningful consultations that Canadians were promised and deserve.

Examples of this include: email servers unequipped to accept the tens of thousands of incoming submissions from Canadians; lack of resources to translate all submissions into both official languages, which is contrary to Committee standards of bilingualism; inability to travel to the Territories or beyond one city per province; Canadians largely unaware that our Committee was travelling to their province or community due to little notice and no advertising; and Committee hearings held outside of Ottawa that provided no video or audio feeds.

Furthermore, a key tenet of a public consultation is the notion that the public’s input can shape the decision-making process on the policy matter at hand. While our Committee has the ability to report to Parliament on our consultations, it has no power to directly impact government policy-making.

TRANSPARENCY

The NDP has long called for greater transparency in trade agreement negotiations. The previous Conservative government was widely criticized for negotiating the TPP behind closed doors. This is unacceptable for a deal of such magnitude, which affects so many areas of Canada’s economy and society – including several areas of policy that have never been subject to trade agreements before. The government must lift the veil of secrecy on trade negotiations.

“I'd like to note that our work to educate Canadians about the TPP was no easy task, as the details of this agreement were kept secret until the full text was published less than six months ago. Our only means of information was reading the tea leaves of leaked documents and mining information from inside sources. From when the TPP was published, on November 5, 2015, until it was signed, on February 5, 2016, Canadian experts and the public had less than 90 days to assess the impact of over 7,300 pages of this agreement. I had intended to bring the whole 7,300 pages with me today for reference, and it would have cost me over $1,100 in printing alone.” –Meghan Sali (Digital Rights Specialist, OpenMedia)

A recent report by the Senate Standing Committee on Foreign Affairs and International Trade outlined several possible mechanisms to increase transparency in trade negotiations, including establishing a formal consultation process when defining a negotiating mandate and reporting throughout the negotiation process to the relevant House and Senate standing committees.

The NDP urges the Liberal government to follow through on their commitments to set a higher standard for transparency in trade negotiations. We did not see this with the Canada-EU agreement, but will continue to push for better as the government embarks on FTA negotiations with China and continues to negotiate the Trade in Services Agreement (TiSA).

GOVERNMENT CONSULTATIONS

Despite the Committee’s study being called a public consultation, the Committee’s report gives little attention to the input provided by members of the public. The report provides no analysis or breakdown of the nearly 50,000 emails and letters received by the Committee. It is worth noting that every individual who spoke at the public participation sessions expressed concerns with the TPP and in most cases opposed the agreement outright.

Furthermore, despite Global Affairs Canada receiving over 30,000 public submissions between October 19, 2015 and June 24, 2016, the Minister of International Affairs failed to provide the Committee with any analysis or breakdown of the results of these consultations.

The level of government consultation was a frequently raised issue during the Committee’s study. While many industry groups reported feeling well consulted, many other groups felt the opposite to be true and in some cases groups reported that their requests to meet with government officials were denied. Multiple witnesses made the valid observation that it was pointless to suggest possible changes to the TPP given that the government already made it clear there would be no changes to the final text.

The government’s continued failure to uphold its commitments to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) when it comes to trade agreements is also of deep concern.

“The government should immediately consult with all First Nations, especially those who will be directly affected, on the potential impact of TPP on First Nations rights, especially the right of self-determination.” – National Chief Perry Bellegarde (National Chief, Assembly of First Nations)

In future negotiations, the government should consult the public at a point in time when the agreement can still be changed. Consultations should be broad, meaningful and proactive. They should engage Canadians from all sectors and backgrounds – not just well-connected industry groups. Finally, the government must take seriously its duty to obtain free, prior and informed consent from Indigenous peoples before signing onto trade agreements.

INVESTMENT PROTECTION & ISDS

The NDP believes investor-state provisions that privilege corporations in a way that conflicts with the public interest do not belong in trade agreements. These provisions allow foreign investors to bypass domestic court systems. Arbitration tribunals, which lack accountability, can order governments to compensate investors who are allegedly harmed by public policies or regulations.

Under NAFTA’s Chapter 11 investor-state provisions, Canada is the most sued country. More than 70% of claims under NAFTA since 2005 have been brought against Canada. Litigation is costly and the threat of litigation alone has prevented Canadian governments from regulating in the public interest (‘regulatory chill’).

The fact that the TPP has to specifically carve-out tobacco control measures from its ISDS rules demonstrates the potential implications of such provisions on countries’ abilities to adopt public health and environmental measures. Witnesses repeatedly raised such concerns with the Committee, believing that the TPP’s investment protection rules are an affront to Canadian sovereignty.

INTELLECTUAL PROPERTY RIGHTS

Many Committee witnesses raised concerns over the TPP’s sweeping changes to intellectual property (IP) rights related to copyright, patents and trademarks. Many of these provisions would benefit big U.S. corporations, not Canadian consumers or innovators. In addition to strong testimony documented in the Committee report from witnesses such as Michael Geist, Jim Balsillie, and various health and labour groups, the Committee received briefs and submissions from dozens of other concerned Canadians representing broad cross-sections of society.

Prescription drugs

The TPP locks in a series of IP policies (data exclusivity, patent term extensions) recently implemented by the Conservative government that will ensure Canada continues to have the second highest per-capita drug costs in the OECD. The Health Annex of the TPP contains provisions that will seriously undermine the ability of governments that attempt to use bulk purchasing to improve their bargaining position and get better drug prices from large pharmaceutical companies.

Digital rights

The TPP obliges member countries to create criminal penalties for individuals who circumvent ‘digital locks’ and rights management information such as people who use software to copy their DVDs onto their computers. It will also prevent governments from requiring that data be stored on Canadian servers in Canada. This means there will be nothing to stop sensitive Canadian data from being stored on servers in the U.S., where the Patriot Act grants access to U.S. authorities.

AUTO MANUFACTURING JOBS

It’s been estimated that the TPP will result in the loss of 20,000 Canadian automotive manufacturing jobs. This is due to revised regional value content rules for auto parts and automobiles, and asymmetrical tariff phase-out terms for Canada and the U.S.

Many witnesses highlighted the need to reject TPP provisions that fail to respect the integrated nature of the North American auto sector. In addition, the Mayors of twenty Ontario communities have come together to urge the Liberal government to protect auto sector jobs by not undermining the competitiveness of a sector that directly employs more than 115,000 people.

DAIRY SECTOR

Continuing in the same vein as CETA, the TPP will chip away at Canada’s supply management system. Allowing additional imports will result in thousands of job losses and deep revenue cuts for Canadian farmers and producers.

The previous Conservative government had promised a $4.3 billion compensation package for supply management farmers affected by CETA and the TPP. The Liberal government finally announced a $350 million package for dairy farmers, which falls far short of compensating the sector for the losses they will incur.

Absent in the Committee report is mention of the TPP side deal requiring Canada to work towards harmonizing food safety regulations regarding dairy with the U.S. Witnesses warned this could lead to milk produced from cows treated with Bovine Growth Hormones gaining access to Canada.

TEMPORARY ENTRY FOR BUSINESS PERSONS

Chapter 12 of the TPP expands loopholes that allow companies to bring in temporary foreign workers without a permit process or study of labour market impacts. The Committee report summarizes well the concerns raised by trade unions that these provisions will lead to foreign workers replacing Canadian skilled workers on Canadian job sites.

These provisions are unprecedented. According to Canada’s Building Trades Unions, “[n]ever before have hands-on workers like people in the building trades been directly named or affected in a Canadian trade deal.” Canada should have followed the U.S.’ lead and refused to sign onto these provisions.

FOREIGN TAKEOVERS

The TPP dramatically reduces the number or foreign takeovers that are subject to any review by more than doubling the threshold from $600 million to $1.5 billion. This will mean less input from Canadians, less transparency, and less assurance that foreign takeovers are in the best interests of Canada.

NDP RECOMMENDATIONS

1. That the Government of Canada formally withdraw from the TPP, and focus on negotiating bilateral trade agreements with strategic partners in the Asia-Pacific region.
2. That the Government of Canada seek to resume negotiations with Japan for an economic partnership agreement.
3. That the Government of Canada draw on the consultations conducted by the Committee to encourage and promote increased trade for Canadian small and medium-sized enterprises within existing market opportunities in the Asia-Pacific region.
4. That the Government of Canada increase the visibility of the services and tools available to Canadian companies, particularly small and medium-sized enterprises, seeking to extend their activities to international markets.
5. That the Government of Canada establish and coordinate a “one-stop shop” where Canadian small and medium-sized enterprises would have access to the range of resources dedicated to them.
6. That the Government of Canada address non-tariff barriers that inhibit fair access to TPP markets.
7. That the Government of Canada respect and uphold its UNDRIP commitments by obtaining the free, prior and informed consent of Indigenous peoples in Canada before signing any future trade agreements.
8. That if the Government of Canada pursues an alternative multilateral agreement with TPP signatory countries, they conduct broad and meaningful public consultations with Canadians, including industry, labour and civil society; provinces, territories and municipalities; and First Nations, Inuit and Métis communities.
9. That the Government of Canada provide greater transparency during trade negotiations by directly engaging Canadians through consultations and providing regular briefings to Parliamentarians.
10. That prior to the conclusion or signing of any future trade agreement, the Government of Canada commission an independent study of the agreement's expected costs and benefits.
11. That prior to the conclusion or signing of any future trade agreement, the Government of Canada release any studies or analysis of the expected impacts of the agreement on Canadian jobs and GDP.
12. That the Government of Canada promptly disclose all costing estimates relating to potential increases to prescription drug costs to all provinces, territories, individual Canadians and employers resulting from proposed changes to patent laws in both CETA and the TPP, as well as details of financial compensation that should be paid to Canadian provinces, territories, individuals and employers.
13. That the Government of Canada implement strategies to encourage investment in research and development by pharmaceutical companies in Canada.
14. That future trade agreements do not include investor-state arbitration provisions that permit foreign corporations to bypass domestic courts.
15. That the Government of Canada protect future policy flexibility at all levels of government to expand public services or return privatized sectors to the public sector without the threat of litigation.
16. That the Government of Canada defend intellectual property rights that benefit Canadian consumers and innovators in all future trade and investment agreement negotiations.
17. That future trade agreements do not include provisions related to the Temporary Entry of Business Persons.
18. That future trade agreements respect the integrated nature of the North American auto industry.
19. That the Government of Canada collect and annually assess data on foreign takeovers of Canadian companies valued under $1.5 billion which are not subjected to a net benefit analysis of the takeover’s impact on Canadian national interests.
20. That the Government of Canada strengthen the Investment Canada Act to protect Canadian jobs and ensure that foreign takeovers of domestic companies provide a net benefit to Canada.
21. That if the Government of Canada pursues an alternative multilateral agreement with TPP signatory countries, the final text include commitments to strong and enforceable currency disciplines.
22. That the Government of Canada fully defend supply-managed sectors in all future trade agreement negotiations.
23. That the Government of Canada make the protection and promotion of standards in environment, labour and human rights core elements of any and all future trade and investment agreements, including by subjecting any proposed agreement to comprehensive environmental, human rights and labour impact assessments, along with implementing effective regular monitoring and enforcement mechanisms after an agreement comes into force.