Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 23 - Evidence - Meeting of May 4, 2017
OTTAWA, Thursday, May 4, 2017
The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures, met this day at 10:30 a.m. to give consideration to the bill.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is meeting this morning to continue our examination of Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and to its Member States and to provide for certain other measures.
We are pleased to welcome to the committee department officials from Immigration, Refugees and Citizenship Canada, Mr. David Manicom, Associate Assistant Deputy Minister, Strategic and Program Policy; and Ms. Lisa Bokwa, Director, Visa Policy, Admissibility Branch.
From Innovation, Science and Economic Development Canada, we have with us Mr. Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategic Policy Sector; and Mr. Denis Martel, Director, Patent Policy Directorate.
Accompanying Innovation, Science and Economic Development Canada is Ms. Caroline Charette, Director, Canada-European Union Comprehensive Economic and Trade Agreement (CETA) Secretariat from Global Affairs Canada. She will not be making a presentation but will be accompanying that department.
I see many other department officials to call on if there are any specific questions.
I will turn first to Immigration, Refugees and Citizenship Canada. Is there an opening statement that you would like to make? Welcome to the committee, Mr. Manicom.
[Translation]
David Manicom, Associate Assistant Deputy Minister, Strategic and Program Policy, Immigration, Refugees and Citizenship Canada: Thank you for inviting me to appear before this committee. I am here today to speak to you about the department's decision to lift the visa requirements for Romania and Bulgaria.
[English]
I know that some believe this decision is tied to the Comprehensive Economic and Trade Agreement.
Canada's visa policy decisions are made based on a comprehensive assessment that weighs the overall benefits of lifting the requirements against the risks. The established criteria in our visa policy framework includes socio-economic trends, migration trends, travel document integrity, border management, safety and security, human rights, and bilateral and multilateral relations.
Trade and bilateral relations are a factor in our visa policy decision making. They are one among the key criteria I just described.
In the case of Romania and Bulgaria, our evaluation spanned two years. In 2014, Canada committed, under the Strategic Partnership Agreement, to allow visa-free travel for all European Union member states, and this was a reflection of Canada's interests in deepening Canada-EU ties. This launched an in-depth process, which benefited from excellent collaboration from both Romania and Bulgaria, as well as the European Commission.
Officials from my department and officials from Global Affairs Canada, the Canada Border Services Agency, and the Royal Canadian Mounted Police, participated in multiple discussions with visits to both countries to gather information to complete these assessments. We also consulted key partners, including the United States, to gather information on potential risks.
Following these assessments, IRCC and our Government of Canada partners concluded that both countries fared well against our visa policy criteria — the criteria I have mentioned — and to qualify for an exemption from the visa requirement. We found that both countries have secure travel documents — this is quite essential to our risk evaluation — that they manage their borders effectively and cooperate well with Canada internationally on migration and security matters.
That being said, as with all visa decisions, some risks were identified in our assessment. This is why we have elected to use a phased visa lift.
Between now and the intended full lifting of visa requirements on December 1, 2017, some eligible lower-risk Romanian and Bulgarian travellers will benefit from a partial visa lift via the expansion of the Electronic Travel Authorization, or eTA, program as of this week, May 2017. Those eligible to apply to this program are Romanian and Bulgarian citizens who have held a Canadian visa in the past 10 years, or who hold a currently valid United States non- immigrant visa.
The intention behind the phased lift was to provide additional time for the Canadian, Romanian and Bulgarian governments to build policy and program enhancements that would support a smoother transition to full visa-free travel.
As always, Canada reserves the right to separately suspend, either partially or fully, visa-free travel from either country in the event of an unsustainable increase in irregular migration or other circumstances that would be detrimental to Canadian interests.
Madam chair, visa-free travel between the European Union and Canada in the future will create many opportunities to increase trade and travel between our nations and further facilitate the strong cultural, educational, familial and business relations that exist between Canada and the entire European Union.
[Translation]
The decision to lift the visa requirement was the result of a comprehensive assessment of benefits and risks.
Thank you, Madam Chair. I would now be happy to answer any questions from the committee.
[English]
The Chair: Thank you. That completes your presentation.
We'll turn to Innovation, Science and Economic Development Canada.
Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Innovation, Science and Economic Development Canada: Thank you so much, Senator Andreychuk and honourable senators, for your welcome.
It's nice to be back here at your committee. We greatly appreciate the opportunity to discuss the proposed amendments to the Patent Act here today.
[Translation]
In the intellectual property chapter of CETA, Canada agreed to make two changes to the Canadian pharmaceutical regime. The first is to implement an additional period of protection for pharmaceutical products, which will be done through a "certificate of supplementary protection.'' The second change is to ensure that all parties in pharmaceutical patent litigation have equivalent and effective appeal rights.
[English]
These commitments are being implemented by amending the Patent Act in a manner that maintains the balance in the Canadian patent system between promoting innovation and investment for new medicines and ensuring timely access to affordable generic drugs.
Let me say a few words on the certificate of supplementary protection regime. This regime will benefit patentees for a portion of their patent term spent in research and development and regulatory approvals and help bring innovative drugs to Canada earlier. The term of this protection will be capped at a maximum of two years in order to enable timely access to affordable drugs. In addition, an exception is provided to allow Canadian generic companies to manufacture drugs for export during the period of protection. This export exception will mitigate the impact of the additional protection on the global competitiveness of the economically important Canadian generic industry.
The commitment to provide equal and effective appeal rights is intended to correct situations in which innovative pharmaceutical companies could not appeal rulings of lower court decisions. The system is being implemented in a manner that will also strengthen and streamline pharmaceutical patent litigation by ending the practice of what is known as dual litigation. Regulatory amendments will replace the current summary proceeding in patent litigation arising under the regulations with full actions that will result in final determinations of patent infringement and validity. Such changes will provide greater certainty for parties in patent litigation, provide protections for patent holders, ensure timely entry of generic drugs, and produce more complete and considered case law.
[Translation]
The provisions of this bill related to pharmaceutical intellectual protection all work together to achieve a balance between promoting investment and innovation, ensuring Canadians benefit from access to innovative drugs and low- cost generic drugs, while also ensuring the public interest is served through considered and efficient litigation processes.
[English]
This committee has heard that details of the certificate of supplementary protection regime and, in particular, the pharmaceutical patent litigation regime will be addressed in regulations. The issues addressed by these regulations are highly technical and subject to change as both science and the law continue to evolve. Dealing with these issues in regulations will allow the government to quickly and efficiently respond to such changes as necessary.
Work on the regulations has been ongoing for more than two years. During this time, members of the innovative and generic pharmaceutical industries, as well as others with expertise in this area, were extensively consulted.
These consultations moved in lockstep with progress towards conclusion and ratification of the agreement and development of implementing legislation. At times, this meant that certain policy issues could only be addressed after certain other steps in the treaty and legislative processes had concluded. At all times, efforts were made to be as transparent as possible, without jeopardizing overarching objectives.
This input was fully considered and, where appropriate, stakeholder concerns were addressed in the regulations. As the new regimes are implemented, we will monitor the system to ensure they work as contemplated and fulfill Canada's policy objective, and we will continue to meet with stakeholders to ensure their emerging concerns are understood and considered.
[Translation]
Thank you for your attention and we will be pleased to take any questions you have.
[English]
Senator Downe: I have some questions for both panels, so I'll start with Innovation, Science and Economic Development Canada.
It's my understanding that the industry consultation related to the pharmaceutical intellectual property changes in CETA are still under a non-disclosure agreement. This has been going on for almost two years. As you may be aware, at our April 13 meeting, two of the key stakeholders with interest in this issue have called for a more open and transparent consultation process prior to gazetting. Considering their concerns to open up the consultation, what prevents you from doing this?
Mr. Schaan: I'll start by simply indicating that the normal process by which regulations come into effect is that you will, on passing this law, allow for a regulation-making authority for our minister. Our minister will then use that regulation-making authority to post regulations. To ensure we have a timely and considered approach to those regulations, we have, as you've indicated, been working closely with both sides of the equation, as well as with a number of other interested parties, for two and a half years.
Given that the law is not yet final and that at this point we have no regulation-making authority, that's the degree by which we've continued to ensure that those most affected will be deeply involved and have understood the regulations that will come to pass.
Senator Downe: When CETA is passed and receives Royal Assent, what happens then? I'm concerned about lifting the disclosure.
Mr. Schaan: As soon as the law is passed, the regulations can be made public. At that point, anything that is in the law will be available for comment. Any of the preceding conversations of the drafts and other things will remain under the non-disclosure agreement.
Senator Downe: Between Royal Assent and the publication of regulations, there is no chance for further discussion of draft regulations; is that what you're telling us?
Mr. Schaan: There's a possibility for public comment or for public consideration of those draft regulations. There will be public notice of those regulations. As I say, those parties most impacted have had access to both the RIAS and the regulations for quite some time now.
Senator Downe: Besides Innovation Medicines Canada and the Canadian Generic Pharmaceutical Association, who else is involved in these consultations?
Mr. Schaan: We've consulted primarily with the industry side, given they're the ones that will live this out. We've also conducted conversations with previous members of the judiciary and with the IP bench to ensure that we've thought through how this actually plays out in real court proceedings.
Senator Downe: Other than the two I've named, could you provide a list of who else you've consulted?
Mr. Schaan: I believe we would be able to make that available as a grouping, yes, but not individual names.
Senator Downe: Why not individual names?
Mr. Schaan: We would have to check with those individuals.
Senator Downe: You can do that? If they say yes, you can give them to us?
Mr. Schaan: Yes.
Senator Downe: I would appreciate that. So you will ask them and then, subject to what they say, you will provide the names; if not, you'll just give a generic list?
Mr. Schaan: Yes.
Senator Downe: Thank you.
My next question is for Immigration, Refugees and Citizenship Canada. A few years ago, the Czech ambassador to Canada at the time went around Ottawa, making clear to everybody he met — including coming to my office — that it would be difficult for their government to approve CETA if the visa issue wasn't lifted. For a host of reasons, it wasn't lifted. Romania and Bulgaria made the same comment and had the same concerns.
For many years, Canada has required Romanians and Bulgarians travelling to Canada to apply for a visa. I'm looking at a document from Europe, and I'll quote it:
The biggest problem for granting the visa waiver relates to the rates of visa refusal and of violation of immigration rules. The threshold of the rate of violation of immigration rules is set at an average of less than 3 per cent over 3 years; the visa refusal threshold is set at an average of less than 4 per cent over 3 years.
Then I looked at the chart connected to that, and it indicates the visa refusal rate for Bulgaria in 2014 was 18.4 per cent and 14.5 in 2015; the visa refusal rate for Romania was 16.7 and 14.5. How do you address the concerns to lower those rates?
The Chair: Senator Downe, could you give us the document?
Senator Downe: I have it in only one language, but I can get it to you.
The Chair: No, I don't mean give it to us. Could you tell us which document, for the record?
Senator Downe: It has a very long title. It's on the European Home Affairs site, Home Affairs News: ". . . assessing the situation of non-reciprocity with certain third countries . . . .'' I can give you the website, chair.
The Chair: Is it a Canadian document?
Senator Downe: No, it's a European document, as I indicated, but I have the website.
Mr. Manicom: I'm sorry, Senator Downe, but at the very end, I did not catch your question.
Senator Downe: The visa refusal rates for Romania and Bulgaria, as quoted in this document, are higher than what Canada normally accepts. How do you try to get those down? What are you doing with the Romanians and Bulgarians?
Mr. Manicom: The visa refusal rates will not be pertinent once the visa is lifted. There are a number of factors taken into account in making the visa lift decision. We have quantitative indicators, such as the visa refusal rate, which Romania and Bulgaria exceeded. We have other quantitative indicators, such as the immigration violation rate, which is a 3 per cent threshold, for which Romania was below; and an asylum claim rate threshold of 2 per cent, for which Romania was at 0.3 per cent. They were above some of the quantitative indicators and below others. In making the decision, those were folded together with many other factors as I discussed earlier, and I would be happy to discuss those additionally.
With regard to lowering the visa refusal rate, effectively we are talking about, generally speaking, not security risk in the context of these two countries but overstay risks or as tendency to make asylum claims. We will be working closely with both countries, and especially the Canada Border Services Agency, to make sure we're improving information sharing, information to the Romanian and Bulgarian publics about their rights and privileges in travelling to Canada, and ensuring robust police agency cooperation to try to mitigate those risks.
Senator Downe: The violation rate for Romania you quoted — I said it was 3 — was 2.4. What was the violation rate for Bulgaria?
Mr. Manicom: It has varied from year to year. The most recent full year I have is 2016, which was 2.2.
Senator Downe: And 2015 was?
Mr. Manicom: It was 4.1.
Senator Downe: Based upon the 2015 visa refusal rate and violation rates, Bulgaria would not normally qualify, other than we need their support for CETA?
Mr. Manicom: No, I would not agree with that statement, senator, because in no visa lift do we simply apply those three numerical thresholds in an on/off, red light/green light sort of way. They are all balanced against other situations. For example, the asylum claim rates are extremely low for both countries. Both countries have improving economies. Romania's unemployment rate is below that of the EU average. They are rapidly become fully developed countries. They have made huge strides, particularly in Romania, with regard to improved human rights, reduced corruption inside their society, and strong outreach to their minority communities. These are all factors, as well as the benefits to Canada from the visa lift: increased travel, increased trade, increased people-to-people ties. In no circumstance do we simply take those three statistical thresholds and apply them as the only indicators.
Senator Downe: The asylum rates would be low, though. Because they required a visa, that would be part of the pre- screening. Now that the visa is lifted, you can assume the asylum rates will go gone up, just as has happened in Mexico.
Mr. Manicom: We have very high asylum rate claims for many countries where we have visas: China, Nigeria, Turkey and so forth. The asylum rate measure effectively calibrates the risk of those who successfully get through our visa screen and get to Canada in one way or another, either applying with fraudulent materials or concealing their true intent or entering through the United States — a variety of ways.
Generally speaking, we continue to have quite high asylum claim rates for many countries where we have a visa. Romania and Bulgaria had very low ones.
It isn't at all to suggest that the visa refusal rates are not a concern to us; they are. They were certainly one of the factors in the balance. The dropping immigration violation rates and the very low asylum claim rates were two reassuring quantitative measures. I think the socio-economic development in the countries is another factor, and certainly our overall trade and diplomatic relationship with the European Union was a factor in the balance, absolutely.
Senator Downe: Was the department instructed by the government to lift these visas?
Mr. Manicom: Was the department instructed by the government? The department is part of the government.
Senator Downe: The cabinet, the Privy Council Office?
Mr. Manicom: I'm not going to talk about cabinet discussions or discussions with the Prime Minister's Office. The decision was taken by the Government of Canada.
Senator Downe: You're aware the Prime Minister directly called the leaders of these two countries, advising them that their visas would be lifted as a quid pro quo for approving CETA?
Mr. Manicom: No. I'm aware of the Prime Minister's communications with European leaders, as the department supported him in these engagements. Upon the recommendation from the Minister of Immigration, the Prime Minister communicated to his counterparts that Canada's visa policy assessments have been completed and that Canada had concluded that both Romania and Bulgaria were eligible for visa exemptions.
Senator Downe: What is your snapback provision? At which point do you reinstall the visa? Do you make that public?
Mr. Manicom: No, it's not public at this time. I don't think it will be made public. It will be, again, a calibrated set of measures, of indicators, in the overall context of the relationship.
The extent to which the so-called reimposition measures will be made public or not I think will be part of our ongoing visa policy review, which we're undertaking this year, but at this time we think that would probably be counterproductive.
[Translation]
Senator Saint-Germain: I have two quick questions for Mr. Manicom. Thank you for the clear information you provided. I understand that the role of embassies and consulates with respect to visas is to have them lifted. I also understand from your remarks that, since visa requirements for Romania and Bulgaria have been lifted, another series of factors apply to protect national security, specifically the role of CSIS, the role of customs officers and your department's role, along with other measures you have for nationals of countries with no visa requirements. In the interest of clarity, can you please briefly explain the other measures you use when nationals of countries with no visa requirements want to enter Canada?
Mr. Manicom: Thank you. That is a very interesting question. The situation is actually different now when a visa requirement is lifted, now that the electronic travel authorization system is in effect. This system allows citizens of visa- exempt countries, specifically Swiss, French and Australian nationals, to request electronic verification. That enables the Government of Canada to verify individuals' identity using our criminal and security databases. It is not exactly the same thing as requesting a visa, which involves submitting a lot of paperwork and perhaps an interview to discuss the purpose of travel. It is not the same thing, but it gives Canada the opportunity to make sure the person is not already known to the RCMP, for instance.
This system will be in place as an intermediary step between the two countries. Electronic authorization will be given only to citizens who have had a Canadian visa in the past or who currently hold a U.S. visa. That will give us six or seven months of testing to determine where the risks are before the visa requirement is completely lifted in December.
Each person must of course go through customs or could be sent for a secondary interview to be questioned at greater length in the case of negative indicators.
Senator Saint-Germain: My next question is for Mr. Schaan. You talked about supplementary certificates for obtain pharmaceutical patents. We know that there are numerous steps and significant waiting periods in obtaining a patent. Have you determined whether there will be a significant increase in applications? Will there be a considerable impact on waiting periods? Are you considering measures to reduce the waiting periods as much as possible?
Mr. Schaan: Do you mean the waiting period for new products entering Canada?
Senator Saint-Germain: Yes, that is right. I am referring to the new supplementary certificates to obtain pharmaceutical patents.
Mr. Schaan: For generic medications or innovative ones?
Senator Saint-Germain: Either one. For both.
Mr. Schaan: My answer is for both. Under the new protocol, the supplementary protection certificate provided an additional two years of protection at the end of the patent. There is also a measure in the regulations that provides for the timely entry of products into Canada as required.
[English]
We put in place a measure to ensure that one of the conditions of receiving the certificate of supplementary protection is timely access for Canadians.
We've also put in place mitigating measures in terms of timely access for generics. One of the measures is that the period of protection is capped at two years to allow for the generic to be able to enter without too much delay following the extension of the patent.
In terms of the actual regulatory approval process, there are also measures in what we're calling the right of appeal implementation in the ending of dual litigation that should allow for timely access and finality in patent hearings through the new process that we're putting into place, which again doesn't change the full regulatory process by which Health Canada approves new medications but will allow for greater certainty in the market for players to be able to enter into Canada rapidly and quickly.
Senator Marwah: My questions would probably be best addressed by the CETA Secretariat of Global Affairs Canada, Ms. Charette.
The process has been begun for the U.K. to leave the EU, and there is a possibility that the increasingly populous movements will spread to France and Germany, and now they're talking about Italy. As you know, these government populous movements are largely anti-trade and euro-skeptic. If this does come to pass, are there any negative ramifications to CETA or to Canada? If there are negative ramifications, do we have any provisions to protect us?
Caroline Charette, Director, Canada-European Union Comprehensive Economic and Trade Agreement (CETA) Secretariat, Global Affairs Canada: Thank you, senator, for your question. I'm sorry; I was not necessarily expecting those questions, so I'll try to answer from memory and from previous discussion, but maybe not as comprehensive an answer as I would have preferred to give you.
With the approval of CETA by the council, every member state, 28 member states, including the U.K., expressed their support for CETA and their approval. We also received approval by the European Parliament, with a very strong majority that was close to 60 per cent if not more.
At this point in time, we are very confident that we have the support of all member states, including the U.K., which remains a member of the European Union until they complete their process.
We've already received a national ratification by one member state. We expect to have national ratification in the coming months by another five or six member states that have indicated they are ready to move on with ratification.
This is the situation under which we have to operate right now.
If there's a broader context globally of more discussion about the pertinence of the EU, that discussion will take place in the European Union and will not necessarily have a direct impact on CETA at this moment.
Senator Cordy: Thank you to our witnesses.
We heard yesterday from the Retail Council of Canada, and they are wondering when the tariffs are going to be removed because, as retailers, they order months in advance. They would like to know that. I wonder if you could answer that question.
What goes along with it would be: When do you anticipate that the changes to the Canadian law and the regulations be implemented? I think that would have an effect. Do you have any timeline in place?
Ms. Charette: On the removal of tariffs and as it concerns the Retail Council of Canada, on day one of provisional implementation of CETA, we say that 98 per cent of tariffs will be duty-free.
Senator Cordy: As soon as it receives Royal Assent?
Ms. Charette: No. As soon as we have agreed with the EU on provisional application and we decide which date is going to be the provisional application.
After we receive Royal Assent, we will need to do some regulatory changes. I think those have been referred to. The Treasury Board will look at those. In parallel with that, we will have a discussion with the commission to agree on a date for provisional application.
Once the regulations have been approved by the Treasury Board, we will be able to do a provisional application. It's on that day that tariffs will be removed on almost all products, except a certain number that have some phase-ins. But it's really 98 per cent of tariffs duty-free on day one.
Senator Cordy: Do you have any sense of how long this whole process will take? I'm sure you can't say that it will be October 15, but do you have a general sense of how long it will take to go through the regulatory process and to get all of the regulations in place?
[Translation]
Ms. Charrette: Once the bill before this committee receives Royal Assent, we will go ahead with the regulatory amendment process to implement the agreement. These amendments will be submitted to Treasury Board for approval and will then be published in the Canada Gazette. We will advise the European Union as soon as possible once the implementation process has been completed in order to confirm the provisional implementation date.
The government has on numerous occasions stated that it would like Canada and the European Union to implement CETA as quickly as possible. The prime minister said that before the European Parliament. We are currently working towards implementing it very quickly, possibly in the spring or summer. I hope we can do it as soon as possible after Royal Assent. I cannot, however, presume to say when the bill will be passed, when it will receive Royal Assent, and when Treasury Board will make its decisions.
[English]
Senator Cordy: Once you publish the regulatory changes in the Gazette, will you have public consultation? A lot of people we've heard from understand that we can't change the CETA; it's either yes or no from Canada's perspective. But we had a suggestion yesterday from the Chief Operating Officer of the Fraser River Pile and Dredge, and it was a recommendation only, once CETA has passed.
Will you be having consultation with some of the people perhaps who appeared before our committee or perhaps other individuals who are greatly affected by this bill? Perhaps their concerns could be dealt with within regulations. Will there be public consultation?
[Translation]
Ms. Charette: I think all the departments involved in the regulatory amendments have already consulted the various stakeholders. Since the period of time between Royal Assent and implementation is expected to be quite short, a decision will have to be made as to an exemption to the prior publication of regulations. That decision will be made by Treasury Board on a case-by-case basis.
[English]
Senator Cordy: Would you look at observations that have been made by this committee and the House of Commons?
Ms. Charette: I'm sorry. I don't understand the question.
Senator Cordy: If we were to pass this bill and if we were to include observations, would you take those into consideration?
Ms. Charette: I'm sure that all departments responsible for the different regulatory changes will take into consideration observations made by this committee and other committees. Absolutely.
Senator Gold: My question is really a follow-up to Senator Cordy's question.
A number of witnesses have advised us that they were not consulted or that they were not aware that the agreement would touch upon industries or sectors with which they were involved.
[Translation]
Certain groups have appeared before us, saying that they had not had the opportunity to talk to you about the impact of the agreement in their specific field. For these groups, is a process being considered to give them the opportunity to express their concerns?
Ms. Charette: As to general consultations on CETA, I would remind you that, at the start of negotiations, multiple public consultations were held in the provinces and territories. The results of those consultations were considered throughout the negotiation of the agreement. Once the regulations are implemented, I think the various departments responsible for the various regulations will still be open to feedback from all the interested parties at any time.
Senator Gold: Thank you.
[English]
The Chair: There were consultations throughout. I was impressed that there were more consultations with stakeholders at an earlier time on an agreement, but the agreement leaves a lot to regulation. One consultation about your sector, your involvement, what your issues are, is not quite the same as once the government decides that that sector will be involved and how it will be implemented in Canada.
Once burnt, twice shy. I've forgotten the name of the act now, but it concerned generic drugs that we were desperately trying to get to Africa. There were all kinds of consultations about how to do it, et cetera, but then we got to the regulations. I think we had only one shipment of goods, and that was going to be the act to deliver a lot of good on behalf of Canada there. The regulations were the problem.
Groups do say that they are heard. What they're not sure about is whether they were listened to and did any of their ideas get into the regulations themselves.
The worry is around the pharmaceuticals. Yes, they have been heard, but, as you have said, Mr. Schaan, they are the ones that will be the key to the implementation, both on behalf of Canada, because there is some worry about the costs, and access to Europe and vice versa.
Has there been consultation on regulations, and have they seen some drafts? I don't want to see them. I want them to know. They gave you advice about how you can make your agreement work. I want to know: Did their ideas get in there? I'm not asking for breaches of confidentiality, but I would like to hear from you today because they are saying they have no feedback. And that's not transparency; that's not accountability.
It doesn't violate confidentiality if you give them broad, general — I've worked enough in camera situations to know that you don't give facts, but you can give some conclusions. Has there been that kind of free, open and respectful dialogue?
Mr. Schaan: Thank you for the question.
In the process of coming to the conclusion of the pharmaceutical regulations to implement CETA, we've actually been through a relatively extraordinary process of consultation for the last two and a half years. Starting, in fact, when I appeared before this committee in April of last year and gave general principles of how we were looking to approach the implementation, in lockstep, we've actually been working under a non-disclosure agreement with both sides of the parties that will be those most impacted given the technical nature of this. Starting with general principles and moving all the way through to the draft regulations and the draft RIAS, both parties under the non-disclosure agreement have had considerable access to the process to be able to understand what those regulations will look like.
In terms of the degree to which their concerns and issues have been heard, I would say that, throughout the process, we have duly considered the very significant submissions that have been made by both Innovative Medicines Canada and the Canadian Generic Pharmaceutical Association. They are highly technical, and we've consulted with those with specialized knowledge. While stakeholders disagree with some government policy decisions, those disagreements were made clear, and where we felt that there was a policy case to be able to shift in the regulations, we have done so.
The Chair: But do they know? My difficulty is that you say that you will craft the regulations, and then there's the public registry of those regulations. It's too late by then. They have to fight to get the regulations changed. Words mean things, so you can talk about the topic, but once you craft regulations, there may be some problems.
The Senate has a long history of amending acts because certain words were used in drafting that didn't really accomplish the task. It's very true about regulations. So much of the bills these days are going into regulations that it's important that we have some more input into the regulations, not, "Thank you, we will draft them,'' and that's it. By the time they are published, we don't have any scrutiny and neither does the industry.
Mr. Schaan: With respect to the technical nature — and I think my colleague may want to jump in — as I say, the non-disclosure-agreement technical discussions have included those most implicated and most understanding of the regulations. It has been a thorough and considered process over the last two and a half years to work on drafts and to work not just from a principles perspective but with actual text.
The Chair: I guess my point is that there will be very little satisfaction both for the industry and for this committee if, after they're published, they're not workable or don't meet the needs of the industry and the public, because it will be after the fact to say, "I told you so.''
This is, in some way, a caution to you that we will be scrutinizing those regulations individually and perhaps even as a committee.
I don't want to monopolize this discussion because I have a second round I want to get to.
Senator Eaton: I had a follow-up question to Senator Downe about immigration.
I think I remember that the visas were put in place because of the number of Roma coming to this country claiming asylum; is that correct?
Mr. Manicom: Not directly, senator. We have always had a visa on these two countries.
Senator Eaton: If, all of a sudden, there is a jump — and you probably answered this question of Senator Downe's, but I'd really like to hear it again — in asylum seekers from some countries in Europe, after CETA is signed, we could reimpose visa requirements, could we not?
Mr. Manicom: Yes. Canada has the right to reimpose at any time, and with our new Electronic Travel Authorization mechanism and our ability to disaggregate between those of higher and lower risk, we could partially impose a visa.
Senator Eaton: What do you mean by "partially''?
Mr. Manicom: We are partially lifting the visa on those two countries as of this week, where we allow those who have a previous Canadian visa or a current American visa to apply for an Electronic Travel Authorization rather than a visa.
Senator Eaton: Which means what?
Mr. Manicom: Which means that like the citizens of all visa-free countries — Australia, Japan, Switzerland and so forth — who are now required to apply for an Electronic Travel Authorization, which costs $7 and takes a couple of minutes for most people — it enables to us verify against Canadian databases with regard to known criminality, known prior asylum claims and so forth. It's a light screening mechanism that we are applying to all visa-exempt travellers, except for Americans. We could partially reimpose, for example, if we had a rise in asylum claimants resulting from ethnic minority populations, such as the Roma.
Senator Eaton: So the CETA agreement is not going to stop Foreign Affairs and Immigration from saying, "The asylum seekers have gotten too much, so we want to put the visa requirement back on.'' You could do that?
Mr. Manicom: Yes, we could. There is no link between CETA and the visa lift.
Senator Downe: There is no link between CETA and the visa lift, except that it was a condition of Romania and Bulgaria approving CETA. It's a provisional agreement, as you understand, which means that the area that the European Union has exclusive competence on can be agreed to, but all of the member states have to ratify the remaining part because it's not the exclusive mandate for the European Union. To put the visa back on these countries, if they have not ratified as one of the 28, the second part of CETA, could be a problem.
What percentage, roughly, of recommendations on restoring visas are rejected by the cabinet or the minister's office? If you don't know, you can send it to us. When you do deals, we all understand that there's a give and take, and this was obviously part of our give. If the numbers jump, as Senator Eaton has indicated, and the department recommends it, but the government has an overarching concern about trade, then Canadians will be exposed to whatever security concerns there are.
In the case of Mexico, the government had a firm number. They told the Mexicans that if asylum seekers exceed this number — it's been in the media, although the government has never announced it — then we'll put back the visa. Has the government told these two countries what the number is? I don't need to know the number. I'm wondering if they've been advised of that, and, secondly, the percentage of recommendations that are rejected by the cabinet.
Mr. Manicom: The answer to your first question is no, no number has been communicated to the government.
Senator Downe: We gave a number to Mexico, but we have not given a number to these two countries?
Mr. Manicom: That's right.
I don't think there's a way to answer your other question, senator, because as you know, when a memorandum to cabinet is developed, it is developed in consultation with all affected departments. Memoranda, before they arrive in cabinet, often are the result of quite extensive interdepartmental discussion about the weighting of benefits and risks.
Our department's visa policy framework in and of itself takes into account these other elements outside the pure visa risk. It is a comprehensive or global assessment in and of itself.
I don't know if anyone in the department — certainly I don't know myself — knows over the last number of decades what percentage of MCs relating to visa lifts were successful in cabinet. I'm not sure that number would be all that meaningful because many initiatives don't get to cabinet because there's not yet a consensus with departments.
All of that is to say that Canada does reimpose visas at times; we keep a close watch on the trends. But when we decide to reimpose, we rightly encounter, in our opinion, the same balancing of factors. At times the security asylum claim, overstay rates and the threat to the integrity of our managed migration system on which the public confidence in migration rests are so big that other considerations don't weigh heavily enough in the balance and we reimpose a visa.
I was about to state with regard to Senator Eaton's question that we have a wide variety of countries in Europe with challenges in integrating their ethnic minority populations. Some of them we currently have visas on — Romania and Bulgaria; some we don't — Hungary, the Czech Republic, Slovakia and Slovenia. In some of those instances, the rate of asylum claims by those ethnic minority populations is very low, from the Czech Republic; and others are quite high currently — Hungary.
These trends are difficult to read, and we certainly watch them closely to see whether the trends at some point will cause sufficient damage to the overall interests of Canada that we should consider reimposition.
Senator Cordy: The CETA intellectual property changes that deal with dual litigation impact the Federal Court system because they deal with pharmaceutical cases. Did you talk to the Chief Justice of the Federal Court or any members of the Federal Court in terms of the implications that this would have for them?
Denis Martel, Director, Patent Policy Directorate, Innovation, Science and Economic Development Canada: The answer is yes, both the chief justice and a current member of the judiciary. This was done with some members of the IP bar to make sure we respect the jurisdiction of the executive and the judiciary. It was done in a safe zone. But they are fully aware of those changes and they have seen a draft regulation as well. They will be able to implement them as soon as CETA is ratified.
The Chair: On behalf of the committee, I would like to thank you for coming today to give us more information about the areas of concern that have been raised by the witnesses that have come before you.
You've heard comments that we understand we can't change the CETA agreement and are directing our comments to the implementation of Bill C-30. I'm sure you have read our trade report, but implementation is a very grave concern for this committee, that when we sign trade agreements, they are implemented in a broader economic view, if I can put it that way. I don't promise you that this will be the last time that you will be asked to come before us, but it has helped us in our study today. Thank you.
Honourable senators, we are pleased to welcome our next witness, Ms. Adriana Vega. She is the Director of International Policy at the Canadian Chamber of Commerce.
I understand you have an opening statement, and then we can turn to questions. Welcome to the committee.
Adriana Vega, Director, International Policy, Canadian Chamber of Commerce: Thank you very much, Madam Chair, and thank you to the members of the committee for inviting the Canadian Chamber of Commerce to participate in this exercise. It's a pleasure to be here today.
I'm also joined by my colleague, Peter Casurella, with apologies for the last-minute addition. He's joining us today representing the Lethbridge Chamber of Commerce in Alberta. He is part of our chambers network which informs our process at the chamber. It's always great to hear from them.
Our organization, as you probably know, has been a long-standing supporter of the Comprehensive Economic and Trade Agreement, or CETA. I do apologize if you've heard some of the information that I will say here today, but I will try to keep my remarks fairly brief.
CETA is a modern agreement and an extremely positive one for the Canadian economy. We have said this before, but it bears repeating, that the chamber commends the tireless work and vision of politicians like Jean Charest and Ed Fast who carried on lengthy negotiations and took Canada close to the mark. In the time that followed, Minister Freeland put Canada in a position of strength, overcoming big hurdles in the lead-up to the signing of this agreement.
Canadian businesses have been very well served by our government and our past and current trade negotiators. The chamber holds a high regard for Mr. Steve Verheul, our chief CETA negotiator.
The CETA agreement is extremely timely. Global growth in trade has nearly halved since the Great Recession in 2008, and the global outlook for free trade has dramatically changed over the last few months.
Worryingly, at a time when free trade is most needed to boost growth, the WTO has identified over 1,000 new trade restrictive measures imposed across the G20 nations. This is a very critical development for a trade dependent nation like Canada. CETA is the right kind of measure needed to reverse this trend, to grow trade and to deliver concrete economic results for our country.
As a bloc, Europe is already Canada's second most important trading partner, and CETA will provide a framework to support this already dynamic and successful relationship between Canada and the EU.
Once implemented, the CETA agreement will eliminate tariffs on almost all Canadian export products to the EU, about 98 per cent of tariff lines. This, on its own, deserves an expedient passage of Bill C-30. Yet the agreement's provisions beyond tariff reduction are what we see as the most significant elements.
Freer trade in services and digital trade, reduced impact of regulatory barriers, policy certainty and greater flexibility in the movement of skilled professionals will have a much greater impact in boosting and supporting transatlantic trade in the years to come. This defines CETA as a modern agreement, as it caters to the complexities of modern trade.
With 500 million consumers, the EU is the world's largest single market for goods and services. CETA will give Canada a competitive advantage in that market, as it is the first free trade agreement signed between the EU and a G7 nation.
Our focus must now shift to implementation, as discussed in the session before this. Here in Canada we think a concerted effort needs to take place to make the most out of this top-of-class agreement.
Our members also look forward to a subsequent regulatory framework that incorporates commitments made under CETA, such as on IP, as was discussed, following full public consultation. Senator Cordy and Madam Chair, you raised this before.
This committee could further stress the importance for government to continue to work closely with business, to develop trade promotion strategies and to disseminate information across Canada on what this agreement means to all businesses across the country. If there are ways in which the chamber may partner with relevant players to do so, we stand at the ready to help make this agreement a success.
The Chair: Thank you.
Perhaps you could explain your process, because the chamber is in small cities, large cities, all across Canada. Did you contact your members first and seek their advice, and did you do it sector by sector or simply globally saying there is an agreement going on with Europe and what do you think? In other words, did your process help smaller centres, smaller and medium businesses, to understand that this process with Europe may be an opportunity that they could hook into? We've heard testimony that these trade agreements are signed. Larger industries and businesses know how to leverage themselves through them, but it makes little impact on smaller centres and smaller businesses, and their horizons do not open beyond the ones they're working with now.
Ms. Vega: Absolutely. Thank you for the question.
As you know, the chamber does have a network of chambers across the country, over 400 chambers of commerce across all the different provinces. We have various ways in which we can consult the membership when it comes to various policy files. In fact, we have a number of committees that focus on different aspects, and small and medium enterprises do form part of those committees.
At the chamber we have an SME Committee, for example. In the International Affairs Committee, which I manage, we also have representation from chambers of commerce and they, in turn, also have SMEs in their membership.
Our consultative process does follow an annual general meeting where we bring policy recommendations forward and then advocate those recommendations to the federal government, among which expanding trade and economy market access tend to feature permanently. These are the "asks'' we're hearing from our grassroots communities. So we do bring those forward.
When it comes to agreements like TPP or CETA, these are ongoing conversations we have with our chambers network. Our International Affairs Committee will meet and hear from our members, including those who represent smaller chambers, and we incorporate those comments into our conversations with the federal government.
So I would say yes. We don't particularly have a structured consultation method when it comes to a trade agreement, but we have the ability to do surveys, to go to our policy representatives in the regional chambers and hear from them on what this means.
However, I will say that there is some concern among the smaller chambers on making sure SMEs have access to information. We look forward to continuing to work closely with government and come up with partnerships or ways in which we can engage to make sure all the businesses across Canada have access to the agreement.
The Chair: That's access to the agreement. Does the chamber have an implementation strategy of its own?
Ms. Vega: At the moment —
The Chair: As a key, you're the ones that know about the agreement and you know your membership. So do you have a strategy of how you will help them leverage rather than wait for the government?
Ms. Vega: Absolutely. We were part of the consultation group that went to the government. We have consistently been saying to the Trade Commissioner Service, "What are some of the strategies and where we can partner to do this?'' Some of the chambers who are part of our network are more focused on business development, for example, and have partnered with government to host events and to disseminate information.
On our side, I think our role is more as a community coordinator and making sure that our members are well connected to the agencies in government that can help and enable them. We're open to further consultation and to hear comments from the network as to how best we can help them achieve this. For now, it has been mostly a matter of hearing from them, inputting into this government and acting as that liaison.
Senator Gold: I have two questions. Can you comment on the recent report of the Parliamentary Budget Officer to the effect that the actual economic gains of CETA are going to be perhaps more modest than some of its proponents have suggested? I wanted to know what your view was on what the actual economic benefits will be in the aggregate.
The second somewhat related question is this: In Canada, speaking to your members and the different chambers, are there sectors of the Canadian economy you're concerned might suffer a negative impact from the increased competition or availability of goods and services from Europe? Are there areas that you are concerned about, and do you have recommendations to us or to the government for mitigating those possibly negative impacts?
Ms. Vega: Thank you, senator.
On the economic benefits question, it is very interesting times when it comes to free trade. As we have seen and as I mentioned in my remarks, the growth in global trade has dramatically decreased. Commodities prices have been depressed. It's a difficult time to make long-term predictions on where this will go. It's always difficult to compare what a scenario would look like with or without a CETA.
However, I do think the relationship is there. The economic relationship between Europe and Canada is very strong. We have very strong trade relationships with European countries, so the CETA is a good way forward not only to provide this framework but to promote even greater engagement between Canadian companies and European businesses that perhaps would not have happened otherwise. I have seen reports that perhaps the economic benefits will be more modest, but I don't think we can draw a conclusion over the next 20, 30, 40 years.
We have had NAFTA for over 20 years, and I think broadly we can say that the benefits have by far outweighed the costs. And coming from an agreement that is modern and caters to modern trade between nations like Canada and the EU, this can be a positive overall agreement for the long term.
To your second question on the sectors, at this moment in time there is growing awareness that free trade does generate a lot of winners, but there is divided opinion on whether this actually raises all boats at the same time, universally. There's room for discussion on those who will be affected by free trade. The consultation process on CETA was thorough.
I do understand that some communities or sectors will be affected by increased competition. For example, we've heard on the dairy sector that the government has taken extensive consultation with them. There are some provisions on creating funds for innovation to allow them to compete, and there are phase-out periods of time. At this moment in time we're not particularly concerned over a specific sector. I think our concern is mostly focused now on what the actual regulatory framework will look like, but we're quite happy with the agreement and with the bill.
The Chair: I think we've come to the end of the questioners. You've summed up that your support is there, with all of the qualifiers, if I can put it that way, but you're optimistic that you want to continue working on it. Thank you for coming on behalf of 400 Chambers of Commerce.
Senators, we will now go in camera for a few minutes.
(The committee continued in camera.)