Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 13 - Evidence - Meeting of November 22, 2016
OTTAWA, Tuesday, November 22, 2016
The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-13, An Act to amend the Food and Drugs Act, the Hazardous Products Act, the Radiation Emitting Devices Act, the Canadian Environmental Protection Act, 1999, the Pest Control Products Act and the Canada Consumer Product Safety Act and to make related amendments to another Act, met this day at 4:12 p.m. to give clause-by-clause consideration to the bill.
Senator A. Raynell Andreychuk (Chair) in the chair.
The Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is meeting today, and we are going to continue our study and examination of Bill C-13, An Act to amend the Food and Drugs Act, the Hazardous Products Act, the Radiation Emitting Devices Act, the Canadian Environmental Protection Act, 1999, the Pest Control Products Act, and the Canada Consumer Product Safety Act and to make related amendments to another Act.
Before we proceed, I want to welcome back Senator Dawson.
Hon. Senators: Hear, hear!
The Chair: He's gone through quite a difficulty with his usual good humour and tenacity, and we're just delighted to have you back. The committee will come back to its usual form. You keep us on an even keel when we take ourselves too seriously, and you contribute very well to the content of the committee. You've been missed, and we're glad you're back.
Senator Dawson: Thank you, chair.
The Chair: Now I'm going to turn to the Honourable Chrystia Freeland, Minister of International Trade. She is accompanied by Mr. David Usher, Director General, Trade Negotiations, Global Affairs Canada; Mr. Jason Flint, Director General, Policy, Communications and Regulatory Affairs Directorate, Pest Management Regulatory Agency, Health Canada; Ms. Kim Dayman-Rutkus, Director, Centre for Regulatory and Compliance Strategies, Regulatory Operations and Regions Branch, Health Canada, and Mr. John Moffet, Director General, Legislative and Regulatory Affairs, Environmental Stewardship Branch, Environment and Climate Change Canada.
We are particularly pleased, minister, that you are here. You have the conduct of this bill. Therefore, you are in charge of the policy and the direction of the government. We regret the delay, but democracy continues and we have votes. With this slight delay, we welcome you for the first time, I believe, to the committee. I'm not sure if it's the first time to any Senate committee, but welcome. The floor is yours for your opening remarks.
Hon. Chrystia Freeland, P.C., M.P., Minister of International Trade: Thank you very much, Senator Andreychuk. It's a special pleasure for me to be at Senator Andreychuk's committee because usually we see each at Ukrainian- Canadian events because we're both Ukrainian-Canadians from the Prairies.
I hope that we can focus, in this conversation, on the TFA, which is a really important piece of legislation, but I am happy to come back any time to talk about the other trade bills that are moving through our legislature. We have quite a busy trade agenda, sort of an amazing thing to be able to say in 2016, and I am very happy, at any time, to come to speak to this committee about it.
I'll also take this opportunity to let you know that I will be speaking to the House and introducing in the House on Monday, for its second reading, the Canada-Ukraine Free Trade Agreement.
Honourable Chair and committee members, I'd like to thank you for the invitation to appear before you. I had the honour to appear in Senate Question Period in June of this year, so I've been before the Senate but not in a committee. It's a real pleasure and privilege to be here with you in committee today.
I would like to talk about some aspects of Bill C-13. I'd like to talk about what this WTO agreement, known as TFA, will do. I'd like to talk about the very strong reasons I believe Canada should ratify it as quickly as possible, and I'll talk about why we need Bill C-13 to do that.
You will know that our government is strongly committed to pursuing a progressive trade agenda, both bilaterally and, very much so, in multilateral fora.
[Translation]
Canada is a medium-sized economy in a highly competitive global market. Our government knows that trade is vital to economic success in the 21st century. It creates jobs, promotes a strong middle class and ensures the prosperity of those who work hard to succeed.
We're working with our partners on establishing a new era for international trade. In this new era, transparency and openness are key concerns, workers' rights and environmental protection are essential components, and trade enhances economic growth and gives each person the chance to participate and benefit.
Free trade provides good job opportunities. One in five jobs in Canada is directly linked to exports. As the government and minister responsible for trade, we're firmly committed to creating new market accesses and strengthening the economy for all Canadians.
[English]
For this reason, our government is a very strong proponent of the TFA. The TFA streamlines, harmonizes and modernizes customs procedures around the world.
The TFA will make it easier for Canadian companies, in particular the small- and medium-sized enterprises, which are, rightly, a focus of our trade policy, to participate in the global economy. These enterprises are less equipped to deal with complex customs requirements, and so anything that streamlines those requirements makes it easier for small businesses to enter international markets.
Negotiations for the TFA began in 2004 and were concluded at the WTO Ministerial Conference in Bali in December 2013. As you will all recall, that was by the previous Conservative government. I'm happy to congratulate that government and all the WTO ministers for that major accomplishment, which was a real win for the global trading community.
We supported the TFA in opposition, and we support it today. Indeed, Canada is often strongest when one government is able to continue the work of a previous government. That's a real strength of our country. It's a strength that not all countries today are able to demonstrate. That's another reason I'm strongly supporting TFA, and I hope the Senate will as well.
There is also a real international imperative for us to get the TFA done. As you know, for the TFA to come into force, 108 WTO member countries need to ratify it. Right now, 96 countries have ratified the TFA. It's really important for Canada's status as an effective and energetic participant in the multilateral trade community and in the WTO to be one of the countries whose ratification of the TFA acts to brings it into force. I'm sad to report that we already are among the laggards and 96 countries have already accomplished it. Our Prime Minister committed at the G20 in China and again at APEC just this past weekend that our government would do its utmost to bring the TFA into force by the end of 2016.
I therefore commend the work done by my fellow MPs and now by you, honourable senators, in reviewing Bill C-13 to enable Canada to ratify the TFA and to be one of the countries whose work brings this very important agreement into force.
Through the ratification of the TFA, we will not only demonstrate that we are committed to reducing our own barriers to trade and to helping our own small- and medium-sized businesses to export, but also that we're committed to helping developing countries achieve greater prosperity through more efficient trade. I know some of the former diplomats on the committee are aware of those issues as well.
Let me talk a little bit about the specific benefits the TFA will bring for Canadian businesses, especially small- and medium-sized businesses. Then I will talk a little bit about the specific benefits for developing countries.
The TFA will specifically assist our Canadian SMEs by improving their access to information on foreign trade regulations, and advance customs rulings and appeal procedures. These measures will help create a more predictable and transparent trading environment, thus promoting increased export opportunities.
I have found, and I'm sure many of you have as well in talking to small- and medium-sized businesses, Canadian companies are entrepreneurial. They have great products, but when it comes to venturing into international markets, they often find that the red tape is what dissuades them from doing it. The TFA will be an important agreement in removing some of that red tape and helping our great companies get their great products out in the world.
[Translation]
The Trade Facilitation Agreement, or TFA, is also progressive because it will not only benefit Canada and Canadian SMEs, it will also help developing countries reap the benefits of trade. The WTO estimates that the TFA will reduce the costs of global trade on average by over 14 per cent. This means that global merchandise exports could grow to $1 billion.
[English]
I had to remind myself as I was going over this speech beforehand that's it's $1 trillion.
[Translation]
Of that amount, up to $730 billion is attributable to developing countries, specifically because the TFA will facilitate trade between them. There are at least two reasons for this. First, developing countries tend to be more affected by trade barriers. Businesses in developing countries tend to be smaller and less equipped to manage cumbersome customs formalities.
Second, developing countries tend to export a greater proportion of agricultural products, which must be processed more quickly at the border than manufactured goods. Customs clearance delays place agricultural exporters at a disadvantage.
The TFA will help the customs agencies of developing countries collect tariff revenue more efficiently as a result of the automation of procedures. Tariff revenue is a significant source of revenue for developing countries. According to the World Customs Organization, or WCO, tariff revenue amounts to 45 per cent of the tax revenue in the least developed countries.
The WCO finds that the TFA generates tariff revenue in three ways. First, it increases the trade flow. Second, it improves the traders' level of compliance. Third, it minimizes the revenue losses resulting from customs fraud and corruption.
[English]
That final point is an important element of the impact of the TFA, especially in developing countries. This will be an important tool in fighting corruption.
I would like to conclude my remarks by addressing a few specific aspects of Bill C-13.
Canadian border measures are already compliant with the vast majority of TFA provisions, I am pleased to report. We would have to be quite disappointed were it otherwise.
However, there are two specific provisions of the TFA where legislative amendments to Canadian statutes are required for compliance. The first is article 10.8.1, dealing with the treatment of non-compliant goods that can enter into Canada, and article 11.8, dealing with goods in transit, which are goods passing through Canada but not destined for sale or consumption in Canada. In Bill C-13, amendments are proposed to six statutes falling either under the responsibility of Health Canada or Environment and Climate Change Canada to comply with these two articles. I am pleased to be accompanied here by officials from those two departments, and I thank them for their hard work on this.
Let me underscore that the legislative amendments contained in Bill C-13 will not affect the government's ability to protect the health and safety of Canadians or to protect our environment. These measures have the strong support of my colleagues the Ministers of Health and of the Environment and Climate Change. This is a measure strongly supported by the government. As it happens, both of those two ministers have strong personal experience in the developing world, and so for personal reasons as well they are strong supporters of the TFA.
Bill C-13 will clarify and strengthen our ability to deal with non-compliant goods at Canada's border more effectively and in a more harmonized way. More importantly, non-compliant goods will be denied entry into Canada, and this will continue to be the case after the enactment of Bill C-13.
Madam Chair and committee members, by ratifying the TFA, Canada will send a clear signal that we support not only our own well-being, our exporters and the jobs that they create but that we also support progressive trade and Canada's active participation in the multilateral global community, and that we understand everyone should benefit from the increased growth and prosperity that trade brings.
There is particular significance to the fact that we're talking about this today as we approach the end of 2016, a year that has seen more protectionism and a greater backlash against globalization than at any time in my lifetime — probably any time since the Second World War, or maybe anytime since the 1930s. We're living in an era of nativism and protectionism, something I think is dangerous for the world and for Canadians. Our work on TFA sends a very important signal that Canada stands for the open society and open trade.
At a time when so many other countries are being torn apart by ugly and polarized politics, I'm pleased to be able to be here with you and strongly support the TFA, an agreement that was struck by the previous government. In working together on this across party lines, we are able to show that some issues are simply in the national interest and not a reason for partisan fighting, and that we as Canadian legislators are able to recognize that.
I thank you for your attention. I would call on this committee to help me, to help Canada and to help the world by ensuring that Bill C-13 can be enacted in an expeditious way so that we can ratify the TFA.
Thank you, honourable senators, and I'm ready to take your questions.
The Chair: Thank you, minister. have one question, and it's one I had raised previously. The Canadian Consumer Specialty Products Association had some worries that regulations could extend beyond the in-transit goods and that the bill, it would appear, didn't contemplate that; they felt it wasn't sufficiently stated. I had put the question to the officials, "Did you consult the Department of Justice about the fact that it's drafted to only go as far as the Trade Facilitation and Trade Enforcement Act of 2015 and not have any capability of being extended beyond it?'' They were not at that time, to my satisfaction, able to answer that question.
We asked that it be raised today, and I don't know whether you or one of the officials can address that point.
Ms. Freeland: That is a very technical question. I have been briefed in some detail on it, and I will start and then perhaps ask John Moffet from Environment and Climate Change Canada to speak to that, and David Usher from the trade team is available to elaborate.
I am firmly of the view, as is the government as a whole, and this is consistent with advice that officials have been giving since the TFA began its process through government. This is not a new perspective. The way in which that broad regulatory-making authority has been drafted to bring us into compliance with the TFA is consistent with how we approach these issues in general. To do anything different would depart from our standard and best practices as a government, and we see no reason in this particular case to do that.
John Moffet, Director General, Legislative and Regulatory Affairs, Environmental Protection Branch, Climate Change Canada: I would echo the minister's explanation that this is indeed a broad regulatory authority. Senator, to your question, a couple of parts:
First, this provision was indeed drafted in consultation with the Department of Justice, and as the minister explained, it is a general government practice, and in particular, it is a practice in the Canadian Environmental Protection Act, which covers numerous authorities and numerous types of environmental protection and contains numerous regulatory authorities, virtually all of which are drafted in a broad, enabling form to enable the government to respond in the most appropriate manner to an issue at hand.
To your specific question, this authority is not strictly circumscribed to the particular issue of transit. It is the authority that we need to be able to address the prohibition that is in article 11.8 of the agreement. Without this authority, we would retain a prohibition that has been in place long since before the Canadian Environmental Protection Act was first developed in 1988, which is a prohibition against importing cleaning products or water conditioners that contain prescribed nutrients. Absolute prohibition. The prohibition applies to imports, and you can't transit unless you import. There is a prohibition on importing and transiting these goods, so we need to be able to lift this authority.
That's why we are amending the statute, to allow us to develop regulations to remove the prohibition that currently exists in CEPA. It's not authority to create new restrictions on products. In fact, it's the opposite. It's the authority to lift a prohibition that is currently a blanket prohibition and lift it in specific cases.
Again, to be completely clear, it's not just restricted to transit, and that's because when developing regulatory authorities, as the minister explained, it is our practice to provide broad authorities that then will be tested by means of the particular regulation that is brought forward, which has to be pre-published in the Canada Gazette under the authority of the Governor-in-Council, subject to consultations. CEPA requires longer consultation than most government regulations, so at a minimum 60 days, potentially 90 days, subject to some trade agreements, before the regulation can be finalized. There is no ability being created here for the government by sleight of hand to introduce a broad new set of restrictions on cleaning products.
Ms. Freeland: I'd like to say for the record, and also perhaps by way of reassuring or satisfying some of the concerns of the stakeholders who are here, that the government has no specific plans to use this as authority for anything other than exempting the goods in transit by regulation.
David feels, John, that you have explained everything that needed explaining.
The Chair: There were some other questions we had and received written responses, but I think Senator Downe wishes to pursue some of them.
Senator Downe: I would like to follow up on your question, chair. You indicated, Mr. Moffet, that you drafted this in consultation with Justice. I'm assuming, for greater clarity, that Justice has agreed with the bill and signed off on it, that they have no problems or concerns about the bill?
Mr. Moffet: That's correct.
Senator Downe: In the Canadian Consumer Specialty Products Association's proposal for the amendment on section 118(1.1), they're talking about adding at the end of the section the following amendment, additional words, "for the purpose of in-transit goods.'' Did I understand correctly it's not your intention to do anything but that? Is that what the minister said?
Ms. Freeland: That is what I said, no specific plans to do anything else.
Senator Downe: The question is, why would we not add it if that's not the intention?
Mr. Moffet: At present, there are no plans. However, we need to come back to the reason why we develop broad regulatory authority in the first place, and that is that the general approach, when developing statutes on the part of the government, and as the minister has emphasized, and perhaps I can echo that this is an approach repeated regardless of the colour of the government, is to provide enabling authority.
We do not regulate by statute. Our statutes tend not to be hyper-prescriptive in the form, for example, of our neighbours to the south. We provide broad, enabling authority so that if an issue arises that was not specifically conceived of at the time of the development of the statute, the Governor-in-Council is given broad authority to address the issue within the confines of the statutory authority — again, however, subject to the obligation to consult, to develop a draft of a regulation, to consult with Canadians, to publish a detailed regulatory analysis, before finalizing the regulations. That's why the authority goes beyond strictly an authority that is circumscribed to transit.
To elaborate a little bit, senator, the other problem we have is that the term "transit'' is already defined in the early sections of the Canadian Environmental Protection Act, and it refers to another part of the act. CEPA was first developed in 1988, about a decade after the Department of the Environment was created. It stapled together a number of existing statutes and then was significantly amended a decade later. But it provides authority for nutrients, toxics, air pollution, vehicles, engines and ocean disposal, so it has a number of fairly disparate parts.
What we have at the beginning of the act is a definition of "transit'' that is applied specifically to one part of the act. If we use the term in this part, we have to go back and amend the definition and possibly also include another amendment to a different part of the act. In order to avoid a fairly convoluted set of statutory amendments, the government is proposing to provide broad authority to itself, notwithstanding the fact that, at present, there are no additional plans to use this authority.
Senator Downe: I guess the minister should be asked this as opposed to a public servant, but wouldn't an alternative be for the broad authority for the government, rather than leaving the authority with the Executive Order in Council — in Cabinet — that the government could come back to Parliament seeking additional powers they require. Why would you not consider that?
Ms. Freeland: May I ask one procedural question? I hear the bells now. What does that mean?
Senator Downe: It's not a fire alarm.
The Chair: It means that we have a vote in one hour, precisely at 5:37 p.m. Somewhere before that, I have to terminate to allow the senators to go back. Unfortunately, we have to put up with the bells ringing in the background.
Ms. Freeland: I was worried you would have to run and leave right away. That is quite interesting to have the bells going for a full hour. I commend your powers of concentration.
Let me offer some thoughts, and then I may ask John and David to comment further. I think it's probably worth underscoring that this is a bipartisan and time-honoured approach to how the enabling statutes like the CPA are drafted.
To give you the specifics, the actual legislative approach here on the TFA was begun and really mostly done by the previous government, because the TFA was passed in Bali in December 2013, and it was just the election that got in the way of it getting the necessary parliamentary approval. I was the trade critic in opposition. We would have supported it.
The approach here to granting broad regulatory authority to the government so that there is then space in the 60- to 90-day consultation period to get that detailed feedback after it is gazetted and then draft the specific legislation correctly is a time-honoured, decades-long approach of the government.
When we looked at the approach that had been chosen — and this was raised during the parliamentary process — we saw absolutely no reason to deviate from that process, in general. We felt even more strongly that the specifics of this issue were not a reason to develop an entirely new practice here.
Senator Downe: Thank you for that.
Ms. Freeland: Maybe John has a more specific comment to your question.
Mr. Moffet: The minister provided a clear explanation.
Senator Downe: It was really a policy question to the government as opposed to the public servants, and you stated your position. I wanted to know if there was any variation with the new government in how they were going to proceed, or the role of Parliament for public input, and you answered that.
I believe Senator Black may have asked on my behalf, but we received a number of answers to the questions we asked at a previous meeting, but we did not receive an answer to the question about any accidents or mistakes with these in-transit shipments. In other words, were any workers affected, any environmental problems and so on? The answer we received, I believe from Mr. Usher, was that he was going to follow up with his colleagues at CBSA, Environment Canada and Health Canada to try to find out that. Mr. Usher, did you have any luck on that?
David Usher, Director General, Trade Negotiations, Global Affairs Canada: If I may, minister.
Thank you, senator, for reminding me of that oversight. We are following up with those agencies now. I will try to get an answer to you ASAP. I am not aware of any accidents but will follow up with those agencies.
Mr. Moffet: Perhaps I could respond.
When Canada signed this agreement, there were a number of requirements in the agreement that caused the government to scour all statutes to ensure that we were able to comply.
From an Environment Canada perspective, of course, the overriding consideration, both from a departmental mandate and a statutory perspective, is protection of the environment. When reviewing the Environmental Protection Act, for example, we were looking for provisions that would be contrary to 118, the restrictions on transit, that did not have an environmental justification. This provision is one of the few that we identified as possible concerns.
Following subsequent analysis precisely along the lines that you identified, senator, in other words, is there, in practice, a risk that we need to worry about, this is the only provision in the act that we identified that was overly broad and that did not have an environmental justification.
Now, the authority to regulate, to remove the prohibition, is carefully designed with fairly broad authority to differentiate on the basis of classes of cleaning products so that we are not going to simply lift the prohibition entirely. We will be able to lift it in a way where we can reassure the government that we are confident we are only lifting it in circumstances where there is no environmental risk associated with the transit of these goods.
Senator Downe: I appreciate that. My question was very much about the elevated level of risk, but more importantly, what has happened in the last five years so we could protect going forward. How many accidents, if any? Mr. Usher is not aware of any. Maybe you have a perfect record and that settles my concern. We will look forward to the answer.
The Chair: You've generated a lot of interest here, Senator Downe.
Mr. Moffet: I may sound like I'm trying to be clever here, senator. I usually only try and do that with my kids, and it never works.
The transit of cleaning products and water conditioners containing proscribed nutrients is prohibited, so we actually have no experience with transiting of these goods. Nobody has been able to apply to transit because it is prohibited.
The real question, then, is just the normal transportation of these goods, has it resulted in accidents that resulted in harm to the environment? To our knowledge, that has not been the case. We have not been able to identify any data with respect to accidents resulting from transportation of these goods.
I do want to be clear, though, that the use of nutrients in various products is an environmental concern and remains an environmental concern. That's why we have retained this basic prohibition in the act. This is a problem in Lake Winnipeg and a number of other of Canada's freshwater bodies, but not resulting from spills from transportation of cleaning products.
Senator Downe: The accident I was referring to, and I should have been clearer, was a diversion into the Canadian economy. Something that is about to be passing through and somehow, through theft, crime or people misleading the government, those products end up in the Canadian marketplace, which was not the intention. That was part of my question as well. How often has that happened, if at all, in the last five years? That, again, is a security concern as much as anything, and the potential effect on the environment, employees and so on.
Mr. Moffet: Again, when we reviewed the potential consequences of lifting this provision, even in a circumscribed manner, we were not able to identify any of those types of risks. Do we already have a kind of black market that we would potentially be legitimizing? Do we have a record of accidents? We did not identify any of those risks, senator.
Senator Downe: I look forward to getting that confirmation.
Mr. Usher: Building on the points from Mr. Moffet, the products that are covered by Bill C-13 are not currently allowed to be in transit in Canada, so it's like trying to measure a negative. They are not allowed to come into the Canadian economy because the existing regulations do not allow for it. Bill C-13 will broaden the scope slightly to cover goods in transit, but goods that are non-compliant are denied entry at the border now by CBSA.
Senator Downe: You know far more about this than I do, but it was my understanding that some drugs, for example, that may not be allowed now could be allowed for in-transit under this legislation. Is that correct?
Mr. Usher: Yes, but you are asking for information on goods that would have come in even though they are not permitted to come it, and it is very difficult to find that information, if you understand what I mean.
Senator Downe: I understand, but that actually goes to the heart of the concern that I have. We are bringing in drugs that are not allowed in Canada and transiting them through Canada. Has there been an accident or a diversion? What is the risk to employees, Canadians and to the environment? I think we need that information before we can proceed with the bill.
Senator Eaton: Minister, congratulations for bringing home CETA. I'm sorry I was late and I didn't hear all of your remarks. Are we last the country to ratify the TFA?
Ms. Freeland: No, we are not. Ninety-six countries have already ratified it, and ratification of 108 countries is required for this agreement to come into force.
We are, if not the last G20 country, close to the last one, and I also believe we are, if not the last APEC country, close to the last one, so we are falling behind. Not to belabour the point too much, but now at every WTO ministerial meeting I attend, every G20 meeting, every G7 meeting and every APEC meeting, in the vast communiques that are issued at the end, inevitably one of the points is, "We call on all countries to ratify the TFA as quickly as possible.''
We will reach the point from which we won't be able to come back if the 108-country threshold for the TFA going into force is hit without Canada's participation. If that were to happen, then Canada, having strongly supported this agreement, would have turned out not to be a country that is able to get its act together to get the agreement to come into force. However, we did have an election in between.
David, as usual, is giving me a little bit more information. He says I'm wrong that 108 countries are needed; it's 110 and we are the only G7 country that has not ratified the TFA yet.
Senator Eaton: I understand perfectly what you're saying.
On another subject, we are part of something called the Global Alliance for Trade Facilitation and we're contributing $10 million to the GATT over seven years to help developing countries implement the TFA. What countries, today, would you call developing and what countries would we be helping in that regard?
Ms. Freeland: I spoke to this somewhat in my remarks. One of the reasons that I support the TFA so strongly and think it will be great when it comes into force is it has particular benefit, for example, for the countries of sub-Saharan Africa. Countries where red tape around trade is really crippling for their economies, is a particular barrier for the most vulnerable, for small businesses and for businesses that women run and where, also, these sorts of trade barriers become a very fertile ground for corruption.
Senator Eaton: What about countries like China or India, with whom we want to increase our trade?
Ms. Freeland: For sure. TFA is going to be a really big boost to the global economy and certainly very helpful with those bigger countries, but where I think it will have the greatest impact, particularly for vulnerable and poor people, is going to be in the poorest countries in the world.
Senator Eaton: I'm sorry. Are China and India members of the TFA? Have they signed?
Ms. Freeland: Yes, and Saudi Arabia has ratified. It's a long list of countries that have gotten there.
Senator Eaton: Thank you.
Mr. Usher: One thing that's unique about this agreement is developing countries indicate what sort of assistance they need. China might say, "We don't need any assistance. We have a good customs administration.'' But Lesotho might say, "Boy, we need lots of help.'' Canada's contribution to the global fund there helps meet specific requests from countries, and they will vary depending on their needs.
Senator Eaton: You make me want to ask another question. Are all the countries with whom we are in present negotiations, are about to open negotiations or have concluded notions members of the TFA?
Ms. Freeland: Yes. Let me also say that the WTO agreements are by consensus. WTO agreements are not reached unless all WTO members support the agreement. This was an agreement at the WTO Bali Ministerial Round.
The Chair: The final questions come from me.
Mr. Moffet, you explained to me why the regulation is stated as it is, and I accept that. Senator Downe asked a question, and those goods were not allowed in before, so therefore you can't track whether any risk occurred with the goods that can now transit through. Can you give me the list, again, of the cleaning products, et cetera?
Mr. Moffet: The particular provision that we're talking about applies to cleaning products and water conditioners.
The Chair: Cleaning products and water conditioners. They were not previously allowed in. Is that correct?
Mr. Moffet: If they contained a nutrient above a prescribed level.
The Chair: They were not, so your answer to Senator Downe was that you can't give him any statistics of any accidents, spills or difficulties because they were prohibited. Is that correct?
Mr. Moffet: That's correct.
The Chair: Okay. My question, then, is to Senator Downe. You say that we need more evidence. Can you say what more we need so that the witnesses are aware?
Senator Downe: No, I accept their answer. They cannot answer because these products were not allowed in before, but my question stands: Do they know of anything that happened in the last number of years that we should be concerned about? Has there any diversion of any of the in-transit items?
Ms. Freeland: They are not allowed in-transit currently, senator.
Senator Downe: I appreciate that, but I understand we are doing some in-transit items now, right?
The Chair: The point is you're not talking about these specific ones but about other that have been allowed to transit.
Senator Downe: I'm interested in the security and protection under the existing system. Let me try to be clear as I can. Have there been any problems recently? Has there been any black market work or accidents? Have things entered the Canadian economy that were not allowed to enter? And if so, is there an elevated risk with these new products coming in? What is there track record? That's the question I had.
The Chair: It goes back to the fact that we are only amending two sections in this bill because we are compliant in others. But your point is that there are now existing abilities to transit goods, and you want to know if there has been any difficulty with them, criminal or accidental, et cetera.
Senator Downe: Let me refer to the original question that came out at our second last meeting:
You talk about secure transportation and no diversion into the Canadian market. In the last five years, have there been any accidents or mistakes? Have some things that were bonded and were being transited through Canada accidentally ended up in the Canadian environment or marketplace?
That was my question. I don't have an answer to that.
Ms. Freeland: I'll offer not statistics but one example that my department has experience with that you could probably provide data on. We do have in some supply-managed agricultural products provisions for some of those products that are not allowed to be sold in Canada but can be transited through. This is not a statistical answer, but we feel we're pretty good at managing that program. These goods are not dangerous in any way — they're like chickens and cheese — but they are goods that we have chosen not to admit into our marketplace. We feel we have a pretty good grip.
Senator Downe: That's exactly my question: How good is that grip? We're going to be seeing new products. I take the minister at her word, but I would like to hear from government officials that, in the last five years, we had the three things happen and they were minor, or we had ten and it's out of control. We don't want to find out after we pass the bill that there is a problem with the current system. That's what I'm trying to get at. I am a little concerned that we got every other question answered except this one.
Ms. Freeland: Health Canada is going to ride into the rescue.
Senator Downe: With all due respect, chair, I'd like a government-wide answer rather than an ad-hoc "in our experience'' or "we think this.'' The government surely must know about things that are in in-transit. Are things entering the market that are not supposed to be entering the market, and if so, how many and what are they? We should know before we approve something else.
Jason Flint, Director General, Policy, Communications and Regulatory Affairs Directorate, Pest Management Regulatory Agency, Health Canada: With Bill C-13, the products we're talking about are a small number of incremental products that we're looking at providing in-transit ability for. It would be things like pharmaceuticals, pesticides —
The Chair: We're going back to the bill. Senator Downe is trying to put it into perspective. We understand those goods were not in transit and now we're going to allow them. He's saying that other capacities within the government, either by regulation or bill, are allowed to transit only. He is asking: Have there been any difficulties with those — not the ones we're going to exempt under this bill but others? We want to know what the history of the government managing existing transit goods is. That's the answer Senator Downe would like.
Mr. Flint: The point here as well is that for the additional products under this bill, there are regulation-making authorities granted that would allow us to provide assurances over even what's in the current system. So if we have concerns about pharmaceuticals or pesticides, we can look at additional labelling of goods in transit to help ensure they're not diverted and going into the marketplace. We can look at putting additional provisions around packaging to ensure they're securely packaged to avoid things like spills and accidents. If there are concerns about the additional products that are the subject of the bill —
The Chair: No —
Senator Downe: May I try to clarify? I am no expert, but I read in the newspapers about organized crime operating in ports. It's in the papers all the time. Are any of these products in transit being "hijacked'' and getting in? Does the government not know this? Are you advising us that we have no statistics about in-transit goods? Is it 100 per cent? Accidents happen, so maybe it's 87 per cent. But surely the government must know before you come to Parliament asking for additional bills and authorities. It boggles my mind that —
Ms. Freeland: The question about goods smuggled into the country is a little bit different from goods smuggled in through an in-transit procedure.
Senator Downe: I'm not talking about smuggling. It's in-transit and it suddenly disappears.
Ms. Freeland: I can't answer how many non-compliant goods get snuck into the country, if that would be a relevant statistic. For 2013, CBSA made over 25,000 seizures of non-compliant goods being smuggled in the country, and they were valued at around $340 million. They were quite different from the goods we're describing. These were firearms, prohibited weapons, devices, child pornography, alcohol, tobacco, currency, et cetera.
The Chair: I don't know why this has become so difficult. We know that things are smuggled in and diverted, et cetera. But as I understand it, Senator Downe's question is that we have some goods that are allowed into Canada for transit only. I shouldn't speak for Senator Downe, but he's tried a couple of times and I will try one more time. There are goods now allowed for transit. I appreciate that, with this bill, there may be tighter and better controls, but if we didn't have this bill, we still have goods transiting only, unless you tell me we don't.
Ms. Freeland: No, we have very many goods across very many territories in transit.
The Chair: Senator Downe wants to know: Of those that are in transit only and have been allowed up to this point, have we had any difficulties with them? Have there been seizures or criminal activity? Whatever information you have, that is what we asked for last week. We don't know why it has gotten to difficult. The answer should be from CBSA or Justice.
Ms. Freeland: We will find the answer comes from very many departments because there are many different regimes. I know just in the ones that touch me in the supply-managed agricultural products, there are a couple of different regimes. Some are managed by my department, some by Finance currently. It's a complicated system. There are lots of different goods across different sectors that this touches on.
I understand the question very precisely, and we'll give you an answer. It will probably be complicated, so we'll say, "For such-and-such goods regulated in such-and-such a way, this is what happened.''
Senator Downe: That would be wonderful. I'm interested in how it works. What are the problems and how many problems are there? That's it. Before we are asked to give this new authority.
Senator Black: As sponsor of the bill, I want to thank you all for the work you have done.
I want to intervene at this point. We're looking for best practices. What are the practices currently in place for goods in transit, and how is it working out? That's what we want to know.
But it's important that this committee understand that while that is interesting and important data, it does not touch the substance of this bill. It's interesting, and we want to learn it and we will learn it, but Bill C-13 doesn't talk about transiting chickens, firearms or anything else.
We need to keep our eye on the ball. This is what we're being asked to approve today. Yes, we will learn this information about past practices and hopefully it's as the minister and others have indicated, which is that we're doing just fine. That will be determined. But I wouldn't want to see us holding up the approval of the Trade Facilitation Agreement where 96 nations have approved it while we wait to see whether there is some kind of black market in chickens.
Senator Downe: Senator Black makes an excellent point, but it's not my point. My point is that we're being asked to approve the transit of new items through Canada, but before we do that, we must have confidence that these items won't be diverted into our environment and affect our workers. We have to be secure in the knowledge that the current system is functioning as it should, for all the reasons we've outlined. I won't go through them — diversions and hijackings. It might be perfect and there might be no mistakes. I assume there are some mistakes, but if the percentage is not too high, I would not be concerned. But if it is, I would be.
Senator Black: We understand.
The Chair: The question we have, if I'm anticipating what Senator Downe is saying, is how quickly can we get that information? I was prepared to go to clause-by-clause consideration and ask the committee if they're ready to go, but I'm hearing a slightly different comment from Senator Downe.
From the officials, through the minister, how quickly could we get some answer to that question? I appreciate that we don't need the statistical analysis, if I understand Senator Downe. He wants in writing that the government has addressed this issue of goods already in transit so we can put this bill in that perspective and that you can feel confident enough that what we have in this bill is better, but time will tell.
Ms. Freeland: Let me make a couple of specific points to that.
First, now that the parameters of the question are very clear, we will look at what kind of information we can gather in what kind of a time frame. We will also let you know what level of specificity we can deliver in what amount of time.
I will caution that, based on my trade knowledge and strictly from the perspective of my own department, there are very different regimes for different types of goods in transit. It is quite possible that there are many different regimes, and because they're different they will have different levels of leakage. I wanted to specify that.
But we will look into how much detail we can provide you and how quickly, and we'll let you know, Madam Chair, very soon. As I have said, it ought to be a priority for all of us to get this going as quickly as possible.
The other point worth spelling out is that, as Jason was suggesting, the actual specific regulation of how these specific goods would transit through the country is not spelled out in this particular bill. That is not how the process works. The specifics of that regulation will be worked out by the relevant departments as part of the gazetting and consultation process. Today's conversation and clause-by-clause review can offer some specific ideas and suggestions that we will be very happy to take into account.
Senator Downe: I just have a comment. The minister quoted statistics earlier from the Canada Border Services Agency.
Ms. Freeland: Yes, that was regarding goods smuggled into the country.
Senator Downe: But do they have any information on charges laid about in-transit violations and so on?
Ms. Freeland: Let us look into it. My reason for believing this is quite complicated, in addition to David's advice, is that from the specific areas I'm responsible for, I know there are different regimes, even for the same products.
The Chair: If there are no further questions, I would like to thank the minister for being available today to answer our questions.
Ms. Freeland: May I make a final remark?
The Chair: Absolutely.
Ms. Freeland: Two final remarks. First of all, thank you very much, senators, for the quality of discussion. I really appreciate, possibly more than you fully know, how nice it is to have a discussion that is totally focused on substance and has no ideological or partisan element in it. It's really great and it shows me why we're so lucky to have a Senate.
Second, I want to echo the final remarks that Senator Black made. Even as I thank you for some of the very specific, narrow-bore focus that is absolutely essential and is your job, I would really urge you in the strongest possible terms not to lose sight of the larger project here. The TFA is an excellent agreement. It is good for Canada, it's good for Canadian jobs, it's good for the world and it's good for the developing world. It is a great signal to the world that Canada is able to act, even when we change governments.
I also want to say that time is running out for us. If we don't get this done, it will be noticed.
Thank you.
The Chair: I guess we don't know when you might get back to us. We'll have to discuss how we proceed from here. You know what the concern is, and I hope you will give some thought as to how you can address Senator Downe's concerns on that particular issue.
Senators, we're at 5:15. The actual vote is at 5:37. If we started to deal with the issue, we might not finish in time. I'm wondering if we can vote and come back to continue the committee.
Senator Downe: I have a meeting in the Victoria Building at 6:30.
The Chair: But if we were able to address it as soon as the vote is finished? It gives you time to reflect on it and we can deal with it. So if the vote is at 5:37, as soon as that vote is finished, we would reconvene here. Would that be acceptable for the committee?
Senator Black: For clause by clause?
The Chair: The way it goes is I say "Shall we proceed to clause-by-clause?'' If there is agreement, we proceed to clause-by-clause consideration. We'll take it from there.
Senator Downe: We can do it now if you like.
The Chair: I am mindful of all the concerns. I have some that you have about the safety, but I think we have gone as far as we can.
Senator Downe: it would save us coming back.
The Chair: Minister, while you're still here, would you be prepared to undertake that you will provide as much information as you can back to this committee on this ongoing concern of in-transit goods in Canada? It's about this bill but it's also about the security and safety of Canadians. We know it's a very tenuous world we live in. It would be nice to think that everyone abided by the rules, but there is a valid point that Senator Downe makes about criminal activity, other activity, negligence sometimes, and it's not always within Canadian government control, because transit goods have a lot to do before and after they transit Canada.
This is an issue we want to look at in the broad context that we're looking at trade agreements. We've been narrowly focused on terms within the trade agreement. This committee has been trying to look at the value of trade agreements in a broader context of the economy. Therefore, anything you can give us — and if you would undertake to continually update us on this issue — if you can give us that assurance, it would be helpful to me and I think to the rest of the members.
Ms. Freeland: Yes, with two caveats: If there is an interest, and I think that it's a very valid and appropriate one, in a real scrutiny of what happens at our border, I would suggest you invite my excellent Saskatchewan colleague to come and speak to you about it. I would be happy to join him. I'm always happy to do things with Ralph. I can ask questions of his department and speak to you on their behalf, but the specific questions of border security that you seem to be addressing, senator, are issues for that department. That's caveat one.
Caveat two: This conversation has allowed me to really understand the spirit of the question, which is understanding how secure our goods are in transit in Canada. What kind of a grip do we have on these? With as much alacrity as possible, I can give you a sense of that, based on some specific examples. What I cannot commit to doing is give you a comprehensive, overall sense of all the different types of goods in transit and how much leakage we have.
Senator Downe: I'm not interested in that. You have it exactly right, minister: We want the first part, not the latter part. I appreciate mistakes are made. If it's 97 or 99 per cent, I'm not going to be too upset.
The Chair: I get your point. You want to be assured as a senator that we're doing due diligence, and we want the government to respond in the same way.
Ms. Freeland: I understand the spirit of that.
The Chair: If we really want to be efficient — I keep looking at the clock. Maybe it's my Ukrainian nature to get on with it, so I will thank the minister and the officials.
Senator Downe: Do we have to give notice of clause by clause?
The Chair: We have. It was in the notice.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-13?
Senator Downe: No.
The Chair: No?
Senator Downe: No, because I'm waiting for that information.
The Chair: I thought I heard you say you would.
Senator Downe: No, I'm sorry. The minister is getting back to us. I asked a week ago. I don't mind waiting another week for them to get the information.
The Chair: All right.
Senator Downe: I wanted to know that before I vote on the bill. That's just my view. It's a committee. People get to vote.
Senator Eaton: I asked somewhat the same questions you did last meeting about the transnational transportation.
The Chair: Okay. Minister, I have a dilemma and you have a dilemma. I'm weighing the issue of Canada's commitment to get this through and the senators' wishes to get the information they want, so I guess what I need from you is exactly when can we get some information, not the full gamut. What could you provide us rather quickly?
Ms. Freeland: I can let you know tomorrow how quickly I can provide information.
What I might also suggest, and Senator Andreychuk is very aware of this, it may be that we can wait another week. The reality is that we are up against an international deadline and against deadlines we don't control. It is unfortunate for Canada that the election came in the middle and slowed down the ratification of TFA. As soon as we formed government, one of the first things I did as minister was go to the WTO ministerial in Nairobi where it was brought forcefully to my attention that Canada was a laggard on TFA. So the reality is we really don't have time.
I've been moving this through Parliament as quickly as possible. I am happy to undertake, if you will take my word, to work on this as quickly as possible and in very good faith. I will speak on behalf of my ministerial colleagues at environment and Health Canada. They will make their officials available too for technical briefings for any senators who want them, and I'm happy to come back with the information as I get it. But I would urge you all in the strongest possible terms not to delay.
Senator Downe: The problem I have with that is I asked a week ago. We still don't have the information. There was some confusion. The question is very clear. I read it out here today.
I guess the question I have for the minister, and I appreciate the deadline, is twofold: If Canada ratifies after the 110, we're still members of it and I appreciate there is some face saving, as the minister indicated earlier, but does the minister anticipate 14 countries to ratify in the next week?
Ms. Freeland: Absolutely.
Senator Downe: Really?
Ms. Freeland: Yes. Everyone has been acting on this.
Senator Downe: So 14 countries will ratify it by this time next week to get to 110. That's impressive.
Ms. Freeland: We're not going to get it done by this time next week even if we proceed to clause by clause right away. We still have some procedures to go through, and I do believe that a delay of a week could mean that Canada is not in that ratifying group. I already think that we might not hit that.
I'm not going to make a claim here that Canada will be plunged into recession if we're not part of that group, but what I will say is it will say something about our commitment to multilateralism and our commitment to trade, which is very much at odds with what I think is the deserved reputation we have been effectively building.
I now understand your question, senator, very clearly. I regret not having been here myself last week because perhaps I would have understood it then and could have acted on it. I think it is an absolutely valid and important question, and I am absolutely prepared to personally undertake to get you the information as quickly as possible and possibly sort of in bits and pieces, not to give you everything but as much as we can as quickly as possible and continue to inform you.
I am very comfortable stating two things: It is established procedure of the Government of Canada to have goods in transit. This is not a new thing we're inventing. It's something that we do and it's certainly not perfect. I think nothing done by anyone other than God is perfect, but we're pretty okay at it. I'm also very prepared to say that for these specific goods, this discussion that we have and will continue to have can inform the rules that will apply specifically to them, and we have a vast variety of rules that govern different types of goods in transit.
The Chair: I'm going to exercise the discretion of the chair. We have to go vote. I will ask the minister and officials to reflect how quickly you can respond to the actual question.
I've gone quite a long way to talk to the proponent of the bill, who has the conduct of the bill, to get this information to us, and we're still not at that point. I think we need some heroics from the government side and the proposer to get that information as quickly as possible.
I assure that I will convene the steering committee to deal with this and address it as quickly as we can. It won't be next week; we will meet as a steering committee immediately to get that.
But we need a response. I'm not going to hold out for maybe as much as Senator Downe wants, but I do want on the record the issue of transit: How has the government, this one or the past one, dealt with that, and has it been a problem or are the regulations effective? If you can get a ministerial letter to us stating that, I think that would go a long way to comfort me. I think Mr. Moffet gave me comfort and assurance that you went through everything to find out how to do this bill. What we asked and didn't get an answer about is how goods are transited. Did you give reflection to that, so we could do this bill? So I see the tie. If the minister can address it and talk to some of her colleagues, the sooner you can get back to us, the sooner you get this passed.
Ms. Freeland: We will do that heroically. I do want to specify two things that I think are important for senators to bear in mind. I will say in two sentences: One, there are different regulations for different goods, so it's not a generic thing; and two, the specifics for these goods are not specified in this bill. That is going to come next.
The Chair: And we need that, but you know the point I want. I want the reflection of what you have done.
We're going to adjourn, and then the steering committee will pick it up from here, as I understand.
(The committee adjourned.)